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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 20-F
☐REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 – For the fiscal year ended December 31, 2025
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 – For the transition period from _________ to _________
☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 — Date of event requiring this shell company report __________
Commission file number 1-03006
PLDT Inc.
(Exact name of Registrant as specified in its charter)
Republic of the Philippines
(Jurisdiction of incorporation or organization)
Ramon Cojuangco Building
Makati Avenue
Makati City, Philippines
(Address of principal executive offices)
Atty. Marilyn A. Victorio-Aquino, telephone: +(632) 82500254; mvaquino@pldt.com.ph;
Ramon Cojuangco Bldg., Makati Avenue, Makati City, Philippines 1200
(Name, telephone, e-mail and/or facsimile number and address of Company contact person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Capital Stock, Par Value Five Philippine Pesos Per Share
New York Stock Exchange*
American Depositary Shares, evidenced by American Depositary Receipts, each representing one share of Common Capital Stock
PHI
New York Stock Exchange
* Registered on the New York Stock Exchange not for trading but only in connection with the registration of American Depositary Shares, or ADSs, pursuant to the requirements of such stock exchange.
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as at the close of the period covered by the annual report.
As at December 31, 2025:
216,055,775 shares of Common Capital Stock, Par Value Five Philippine Pesos Per Share
300,000,000 shares of Non-voting Preferred Stock, Par Value Ten Philippine Pesos Per Share
150,000,000 shares of Voting Preferred Stock, Par Value One Philippine Peso Per Share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes ☒ No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934: Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒Accelerated filer ☐Non-accelerated filer ☐Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐International Financial Reporting Standards as issued by the International Accounting Standards Board ☒Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
PCAOB ID: 01755Auditor Name: SyCip Gorres Velayo & Co. Auditor Location: Makati City, Philippines
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TABLE OF CONTENTS
CERTAIN CONVENTIONS AND TERMS USED IN THIS REPORT
3
FORWARD-LOOKING STATEMENTS
5
PRESENTATION OF FINANCIAL INFORMATION
6
PART I
7
Item 1.
Identity of Directors, Senior Management and Advisors
Item 2.
Offer Statistics and Expected Timetable
Item 3.
Key Information
[Reserved]
Capitalization and Indebtedness
Reasons for the Offer and Use of Proceeds
Risk Factors
Item 4.
Information on the Company
21
Historical Background and Development
Business Overview
22
Organizational Structure
41
Properties and Equipment
Item 4A.
Unresolved Staff Comments
42
Item 5.
Operating and Financial Review and Prospects
Operating Results
Liquidity and Capital Resources
70
Research and development, patents and licenses, etc
75
Trend Information
Critical Accounting Estimates
Item 6.
Directors, Senior Management and Employees
86
Directors and Senior Management
Compensation
94
Employees
99
Share Ownership
100
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Item 7.
Major Shareholders and Related Party Transactions
101
Major Shareholders
Related Party Transactions
102
Interests of Experts and Counsel
103
Item 8.
Financial Information
Consolidated Financial Statements and Other Financial Information
Significant Changes
107
Item 9.
The Offer and Listing
Offer and Listing Details
Plan of Distribution
108
Markets
Selling Shareholders
Dilution
Expenses of the Issue
Item 10.
Additional Information
Share Capital
Memorandum and Articles of Association
Material Contracts
109
Exchange Controls
Taxation
Dividends and Paying Agents
115
Statement by Experts
Documents on Display
Subsidiary Information
Annual Report to Security Holdings
Item 11.
Quantitative and Qualitative Disclosures About Market Risks
116
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Item 12
Description of Securities Other than Equity Securities
117
Debt Securities
Warrants and Rights
Other Securities
American Depositary Shares
PART II
118
Item 13.
Defaults, Dividend Arrearages and Delinquencies
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
Item 15.
Controls and Procedures
Item 16A.
Audit Committee Financial Expert
119
Item 16B.
Code of Business Conduct and Ethics
Item 16C.
Principal Accountant Fees and Services
Item 16D.
Exemption from the Listing Standards for Audit Committees
120
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchaser
Item 16F.
Change in Registrant’s Certifying Accountant
Item 16G.
Corporate Governance
Item 16H.
Mine Safety Disclosure
122
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 16J.
Insider Trading Policies
Item 16K.
Cyber security
PART III
126
Item 17.
Financial Statements
Item 18.
127
Item 19.
Exhibits
128
Exhibit Index
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Unless the context indicates or otherwise requires, references to “we,” “us,” “our” or “PLDT Group” mean PLDT Inc. (formerly Philippine Long Distance Telephone Company) and its consolidated subsidiaries, and references to “PLDT” or “the Company” mean PLDT Inc., excluding its consolidated subsidiaries (see Note 2 – Summary of Material Accounting Policies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for a list of these subsidiaries, including a description of their respective principal business activities).
Unless the context indicates or otherwise requires, “Board of Directors” or the “Board” refer to the board of directors of PLDT.
Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding.
All references to the “Philippines” contained in this report mean the Republic of the Philippines and all references to the “U.S.” or the “United States” are to the United States of America.
In this report, unless otherwise specified or the context otherwise requires, all references to “pesos,” “Philippine pesos” or “Php” are to the lawful currency of the Philippines, all references to “dollars,” “U.S. dollars” or “US$” are to the lawful currency of the United States and all references to “Japanese yen,” “JP¥” or “¥” are to the lawful currency of Japan. Unless otherwise indicated, conversion of peso amounts into U.S. dollars in this report were made based on the volume weighted average exchange rate quoted through the Bankers Association of the Philippines, or BAP, which was Php58.79 to US$1.00 on December 31, 2025. On April 27, 2026, the volume weighted average exchange rate quoted was Php60.68 to US$1.00.
In this annual report, each reference to:
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FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY
Some information in this report may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current beliefs, expectations and intentions as to facts, actions and events that will or may occur in the future. Such statements are generally identified by forward-looking words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,” “expect,” “may,” “will” or other similar words.
A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We have chosen these assumptions or bases in good faith. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual results may differ materially from information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in Item 3. “Key Information – Risk Factors.” When considering forward-looking statements, you should keep in mind the description of risks and other cautionary statements in this report.
You should also keep in mind that any forward-looking statement made by us in this report or elsewhere speaks only as at the date on which we made it. New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the statements in this report after the date hereof. In light of these risks and uncertainties, you should keep in mind that actual results may differ materially from any forward-looking statement made in this report or elsewhere.
Forward-looking statements involve inherent risks and uncertainties. The forward-looking statements included in this report reflect our current views with respect to future events and are not a guarantee of future performance. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. These factors include, but are not limited to, the following:
Our consolidated financial statements as at December 31, 2025 and 2024 and for the three years ended December 31, 2025, 2024 and 2023 included in Item 18. “Financial Statements” of this annual report on Form 20-F have been prepared in conformity with IFRS Accounting Standards.
As at December 31, 2025, our business activities were categorized into three business units: Wireless, Fixed Line and Others.
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
ITEM 3.KEY INFORMATION
A. [Reserved]
B. Capitalization and Indebtedness
C. Reasons for the Offer and Use of Proceeds
D. Risk Factors
You should carefully consider all of the information in this annual report and in the other documents we file with or furnish to the SEC, including the risks and uncertainties described below, before deciding to invest in or to maintain an investment in our securities. If any of these risks materialize, they could have a material adverse effect on our business, financial condition or results of operations and may cause the trading price of our ADSs to decline, potentially resulting in the loss of all or part of your investment. Additional risks not presently known to us or that we currently deem immaterial may also impair our business, financial condition and results of operations.
Risks Relating to Us
Increased competition in the telecommunications sector may diminish our market share and profitability, while changes in the competitive and regulatory landscape could further exacerbate adverse effects on our business.
Increasing competition among telecommunications services providers, including new operators, as well as small telecommunications companies, cable TV providers, and P2P resellers with VAS license from the NTC, could significantly impact our business and prospects by, among other factors, necessitating price reductions, hindering growth of our customer base and reducing usage of our services. Competition is intense for both mobile and fixed line services, with factors such as network coverage, service quality, product offerings, and price as considerations for subscriber preference, potentially requiring increased capital expenditures for capacity and coverage expansion.
The mobile telecommunications industry has experienced intense price competition as operators have attempted to expand market share, especially in light of a maturing voice and SMS market. Competition has now pivoted to data services, prioritizing customer experience over pricing. Our competitors in fixed line broadband, Globe Telecom, Inc. (Globe), and Converge ICT Solutions, Inc. (Converge), a pure fiber broadband provider, are heavily investing in expanding their respective fiber presence. Meanwhile, DITO Telecommunity Corporation (DITO) is aggressively expanding its footprint. In addition, we face competition from regional and niche service providers, including members of PAPTELCO, cable television operators offering broadband services, small and regional internet service providers (ISPs), and other community-based access providers, whose participation has increased as regulatory developments have lowered barriers to entry, particularly in underserved and rural areas.
Our ability to compete depends on factors like network coverage and capacity, government regulations and policies, service quality, pricing, product innovation, sales channels, and financial resources. Our competitive stance hinges on our ability to anticipate and respond to industry shifts, including technological advancements, regulatory changes, evolving consumer preferences, and economic trends. Failure to identify and respond to these challenges could adversely impact our business. In addressing the intense competition, we may need to adjust our pricing strategies and allocate resources to network upgrades, which could lead to lower revenues and higher costs. Moreover, the potential entry of new competitors and customer churn may require increasing marketing and capital expenditures, thereby impacting our overall profitability. We cannot assure you that the number of providers of telecommunications services will not increase in the future or that competition for customers will not result in the loss of customers, including due to our mobile and fixed line subscribers switching to other operators. Any of the foregoing events could reduce our profitability.
Developments in law, regulations and/or Government initiatives may increase competition and cause us to lose customers. In the past, the Philippine government has introduced various measures to encourage competition within the telecommunications industry and facilitate and enable the operation of new players, including a tower sharing policy, the Mobile Number Portability (MNP) Act which allows qualified customers to retain their mobile numbers when they move mobile service providers (MSP) or change their subscription package, and removal of mobile interconnect charges. In 2022, the Republic Act No. 11659 or “An Act Amending Commonwealth Act No. 146, otherwise known as the Public Service Act, as amended" (Amendment to the Public Service Act) effectively removed the 40% foreign ownership restriction on telecommunication companies resulting in increased competition.
More recently, in 2025, Republic Act 12234, or the Konektadong Pinoy (KP) Act came into effect and further reshaped the competitive landscape by liberalizing the data transmission sector and reducing regulatory barriers for new entrants. The KP Act establishes an open-access regime in the data transmission sector, removes the legislative franchise requirement for such services, mandates infrastructure sharing for items included in the regulators’ Access List, and introduces a Spectrum Management Policy Framework (SMPF) allowing periodic review, potential recall, reassignment and revaluation of spectrum holdings. Spectrum assignments may be subject to review for underutilization or concentration, and future assignments may be influenced by market-based or competition-driven considerations. These regulatory changes may heighten competitive intensity in the Philippine data transmission market, including the entry of new DTIPs, mandatory infrastructure sharing, expanded regulatory reporting obligations, enhanced competition oversight, and possible designation of significant market power (SMP) with corresponding ex-ante obligations. Compliance with eligibility thresholds, rollout commitments, performance standards, pricing disclosure, cybersecurity audits, and spectrum review processes may affect operating flexibility, capital allocation strategies, cost structures, and margins.
While Management does not expect the KP Act and related issuances to result in any immediate material impairment of existing assets, the long-term financial and operational impact remains subject to the finalization of the initial Access List, the implementation of the SMPF, spectrum review outcomes, regulatory classification under the DTIP framework, possible SMP designation, future regulatory issuances, and evolving enforcement practices. The Group continues to monitor these developments and assess their potential impact on its business, financial condition, results of operations, and cash flows.
In addition, the Data Rollover Bill, which mandates public telecommunications entities to carry over unused data allocations for both prepaid and postpaid users to the next billing cycle, was approved by the House of Representatives in December 2025 and is awaiting action in the Senate. This reduces breakage revenue, affects predictability of consumption behavior, and may diminish the effectiveness of volume-tiered plans. If the bill is passed, it may materially and adversely affect our revenue profile and product‑design strategies. The mandated rollover of unused data could intensify price‑based competition, pressure ARPU and require adjustments to network-capacity planning to accommodate more variable usage patterns. Failure to adapt our service offerings and systems to these requirements may adversely affect customer experience and profitability. We cannot guarantee that in the future, there will not be similar changes in law, regulations or Government initiatives that may adversely affect our competitiveness.
The rapid advancement of disruptive innovations by new and emerging technologies may outpace our ability to compete and/or manage the risk appropriately, resulting in a possible decline in demand for our services, significant changes to our business model and a material adverse effect on our business, results of operations, financial condition and prospects.
The growing use of mobile data in the Philippines, along with the widespread adoption of OTT services and video conferencing applications, have negatively impacted our traditional revenue sources such as SMS and domestic calling services in recent years. We also face growing competition from providers utilizing alternative wireless technologies and IP-based networks, including the Philippine Government's initiatives to roll-out its free WiFi services in select areas within various municipalities. Moreover, net settlement payments between PLDT and other foreign telecommunications carriers for origination and termination of international call traffic between the Philippines and other countries, which have been our predominant source of foreign currency revenues, are expected to continue declining as a percentage of our total service revenues.
While increasing mobile data usage positively impacted our data revenues and is expected to continue driving growth, there is no guarantee that such increase will fully offset the decline in revenues from our traditional services. We may not be able to maintain
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and attract customers more effectively than our competitors. We must also invest in additional capacity, infrastructure, cybersecurity, systems and personnel to provide high quality services that accommodate increasing mobile data usage. As a result, our capital costs could increase as we phase out outdated and unprofitable technologies and invest in new ones.
We may not be able to accurately predict further technological trends or successfully adopt or implement new technologies in our business. Some of our competitors may be more successful than us in the development and implementation of new technologies to address customer demand or improve operations, including services and platforms using artificial intelligence (AI). If we are unable to adequately advance our capabilities in these areas or fail to keep pace with others in our industry, we may be at a competitive disadvantage. In addition, there could be legal or regulatory constraints on our introduction of new services. If our new services fail to gain acceptance in the marketplace, or if costs associated with the implementation and completion of the introduction of these new services is higher than expected and require us to charge a higher price than what customers are willing to pay for such services, our ability to retain and attract customers could be adversely affected and we may not be able to generate a return on investments.
Developments in AI technologies, and its governing legal and regulatory frameworks, are rapidly evolving, and could significantly disrupt the telecommunications industry and subject us to increased competition, legal and regulatory risks and compliance costs, which could have a material adverse effect on our business, financial condition and results of operations. The full extent of risks related thereto is difficult to predict. We are integrating AI into pre-identified focused-areas of our operations. In 2025, we deployed AI‑enabled solutions across revenue assurance, customer engagement, and operational support functions, including fraud detection, smart voice and chatbot assistants for collections and customer interactions, and workflow automation to support credit evaluation, payment processing, and selected service inquiries. We have also introduced AI tools to augment employee productivity, with appropriate human oversight. As we continue to assess AI capabilities and associated risks, we are incrementally embedding AI to improve efficiency, enhance customer experience, and support data‑driven decision‑making. Certain AI initiatives are intended to support wireless growth and monetization strategies, including those related to 5G services. Our AI deployments remain selective and use‑case driven, and their long‑term impact and commercial benefits continue to be evaluated.
Market demand, acceptance of AI technologies and the business case for AI are uncertain at this point. Potential litigation or government regulation related to AI may also increase the burden and cost of research and development in this area, subjecting us to reputational harm, competitive harm or legal liability. Among other pitfalls, such tools may inadvertently generate or reveal confidential information, or may produce responses that are erroneous, biased, inaccurate, illegal or unethical. Failure to address perceived or actual technical, legal, compliance, privacy, security, ethical or other issues relating to the use of AI technologies could adversely affect our business and operating results.
Regulations relating to AI technologies may also impose on us certain obligations and costs related to monitoring and compliance. There is uncertainty around the regulation of AI technologies as the Philippine government is in the process of defining its own laws and policies amidst the creation of new AI-related laws in other jurisdictions. The Department of Trade and Industry has developed the National AI Strategy for the Philippines. Bills have been filed in Congress proposing the creation of an AI regulatory body and are pending with the Committee on Information and Communications Technology. PLDT has an Ethical AI Policy that governs its approach and initiatives involving AI.
The success of our business depends on our ability to maintain and enhance our brands.
We believe that our reputation and brands in the industry are crucial to the success of our business. To maintain and enhance our reputation and brands, we must continue providing relevant products and services, combined with the best customer experience, such that we not only maintain our current customer base but also attract new subscribers. If we are unsuccessful in maintaining our reputation and improving our brands, our business, financial position and results of operations may be negatively affected.
Our reliance on arrangements with technology vendors, other partnerships and/or joint ventures, and any disruptions to such arrangements may result in disruption to our business operations and adversely affect our supply of equipment and results of operations, financial condition, reputation and business prospects.
As part of our extensive capital expenditures program to enhance our fixed and wireless networks infrastructure and IT systems to fully support business requirements, we have entered into agreements with vendors, to upgrade and modernize significant portions of our IT infrastructure. However, we cannot guarantee that these initiatives will be completed on schedule, or at all, or as intended. Furthermore, we cannot guarantee that such initiatives will not result in service disruptions, network outages or other issues that may detrimentally affect our service delivery and consumer experience. This may adversely affect our business, financial condition and results of operations.
Due to our reliance on third party vendors, our business operations may be negatively impacted by global geopolitical and public health developments (such as COVID-19), which can disrupt supply chains, delay network construction, and impact service delivery. Any adverse changes in import policies, including increases in import duties and tariffs, or any embargo on imports
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from countries from which our vendors supply or countries supplying our vendors, may also adversely impact our business, prospects, results of operations and cash flows. Trade tensions between the United States and major trading partners continue to escalate following the introduction of a series of tariff measures by the United States and/or its trading partners. Economic and trade sanctions have been threatened and/or imposed by the U.S. government on a number of People’s Republic of China (PRC)-based technology companies, including Huawei Technologies Co., Ltd. (Huawei), a key vendor for our telecommunications equipment and software licenses, and with whom we have partnered with to develop and offer outcome-based cloud solutions. The United States has also in certain circumstances imposed and threatened to impose further sanctions, trade embargoes and other heightened regulatory requirements on the PRC and PRC-based technology companies. The United States government has brought enforcement actions against Huawei and companies who engaged in unauthorized transactions with Huawei. While our partnership with Huawei is not currently subject to such sanctions or trade embargoes, there is no assurance that the United States or other jurisdictions will not impose similar or more expansive restrictions that may materially and adversely affect or restrict our relationships or collaborations with our vendors, including Huawei and its designated entities, thereby adversely affecting our reputation, competitiveness and business operations.
Some of our third-party vendors may encounter financial difficulties or consolidate with other vendors. This may result in a shrinking of the already limited pool of qualified vendors which may in turn, materially impact the third-party vendors’ ability to fulfill their obligations and thereby impact our operations. The limited number of available vendors may also result in our dependence on a single vendor to provide critical services.
Our ability to generate revenues could be disrupted if our suppliers are no longer able or willing to supply us. In the event that any of our suppliers cannot or will not provide us with the required products, we may be forced to find alternative suppliers. There is no guarantee that we will be able to obtain our products or products of a similar quality from alternate suppliers, in part or at all. Failure to find alternative suppliers will disrupt our operations and hinder our ability to generate revenues.
Our vendors/suppliers may be affected by the effects of climate change and extreme weather conditions which could affect their ability to fulfill their commitments to us. This, in turn may disrupt our operations and business continuity.
The mobile telecommunications industry in the Philippines may not continue to grow.
The majority of our total revenues are derived from mobile services provided to customers in the Philippines, making us highly dependent on the continued development and growth of the local mobile telecommunications industry. We believe the country's mobile penetration rate reached approximately 125% as at December 31, 2025, based on the number of SIM cards issued. Given this penetration level, the market for SMS and domestic voice may be considered mature.
Data has emerged as the key driver for revenues. While data traffic on our network has increased, further market expansion depends on many factors beyond our control, including the continued introduction of new and enhanced mobile devices, the price levels of mobile handsets, consumer tastes and preferences, alternative means of access, and the amount of disposable income of existing and potential subscribers. Any economic, technological or other developments resulting in a reduction in demand for mobile services or otherwise causing the Philippine mobile telecommunications industry to stop growing or slow down its growth, could materially harm our business, results of operations, financial condition and prospects.
The franchises, licenses and regulatory approvals, upon which PLDT relies, may be subject to revocation or delay in issuance, which could result in the suspension of our services or abandonment of any planned expansions and could thereby have a material adverse effect on our business, results of operations, financial condition and prospects.
We operate our business in a highly regulated environment. We cannot assure you that there will be no adverse changes in applicable public ownership requirements or interpretations thereof, or that none of our franchises, permits or licenses will be revoked or fail to be renewed. Any such occurrences could have a material adverse effect on our business, financial conditions and prospects.
PLDT has obtained Certificates of Public Convenience and Necessity (CPCN) for its international gateway facilities, local exchange carriers, and interexchange carrier services. While CPCNs are typically co-terminus with the term of a public utility’s franchise, the NTC may amend certain terms of a CPCN, or revoke a CPCN for cause, subject to due process procedures. Following the enactment of the KP Act and the issuance of its Implementing Rules and Regulations (IRR), the requirement for a legislative franchise and CPCN for data transmission services was removed and replaced with a registration-based regulatory regime administered by the relevant government agencies. We cannot guarantee that the NTC will not impose additional obligations on us that, if unmet, could lead to the revocation of our licenses and/or a reduction in our total revenues or profitability. The NTC could amend applicable regulations or implement additional guidelines governing our interconnection with other telecommunications companies or the rates and terms upon which we provide services to our customers. In addition, any future expansions in our services, particularly in our mobile services, could subject us to additional conditions in the granting of our provisional authorities by the NTC and to increased regulatory scrutiny, which could have a material adverse effect on our growth and prospects. The occurrence of any of the foregoing could impose substantial costs on us, cause interruptions or
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considerable delays in the provision, development or expansion of our services, or materially reduce our revenues and profitability. There is no assurance that the regulatory environment will support increases in our business and financial activity.
We continue to hold various provisional authorities, CPCNs, spectrum assignments, and other regulatory approvals, some of which are transitional in nature and will expire between now and 2042. Certain CPCNs and provisional authorities have already expired; however, applications for renewal were filed prior to their expiry. Under Executive Order No. 292 (Philippine Revised Administrative Code of 1987) and Republic Act No. 11032 (Ease of Doing Business and Efficient Government Service Delivery Act of 2018), such authorizations are deemed effective until the regulator acts on the renewal applications.
Failure to maintain the necessary regulatory authority, approvals, or compliance status may materially and adversely affect our ability to conduct essential business operations, result in penalties, suspension of authority, or increased compliance costs, and adversely affect our financial condition and results of operations. See Item 4. “Information on the Company – Franchises, Licenses and Regulations” for more information.
Our business is subject to extensive laws and regulations, including regulations in respect of our public ownership, service rates and taxes, as well as antitrust laws. Any changes in such laws and regulations or interpretations thereto, or failure to comply with regulatory changes, could adversely affect our business, financial performance and prospects.
Our business is subject to extensive laws and regulations, including regulations in respect of our public ownership, service rates and taxes, in addition to antitrust laws.
Republic Act No. 7925, otherwise known as the “Public Telecommunications Policy of the Philippines” (R.A. 7925), requires a telecommunications entity with regulated types of services to make a bona fide public offering through the stock exchange of its shares representing at least 30% of its aggregate common shares within five years from: (a) the date the law became effective; or (b) the entity’s commencement of commercial operations, whichever date is later. Republic Act No. 10926 provides an exemption from the public listing requirement if the grantee is wholly-owned by a company that has publicly listed at least 30% of its authorized capital stock. PLDT is a publicly listed company and therefore in compliance with this requirement. Smart, as a wholly-owned subsidiary of PLDT, a publicly listed company, is not required to offer any of its shares to the public. Meanwhile, DMPI takes the position that it has satisfied the public offering requirement under R.A. 7925 and Republic Act No. 9180 (R.A. 9180), or the legislative franchise of DMPI (DMPI’s Franchise), by virtue of the fact that PLDT, a publicly listed company, holds a 99.6% equity interest in DMPI’s parent company, Digitel Telecommunications Philippines, Inc. (DTPI), which in turn, holds a 100% equity interest in DMPI.
The NTC regulates the rates we are permitted to charge for services that have not been deregulated, such as local exchange services.
We are subject to various national and local taxes, and regulatory fees imposed by LGUs through their respective ordinances. We cannot assure you that we will not be subject to new, increased and/or additional taxes or that we will be able to pass on such additional expenses to our customers. See Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion.
Moreover, we are subject to antitrust laws and regulations. Republic Act No. 10667, otherwise known as the Philippine Competition Act (Philippine Competition Act), came into effect on August 8, 2015, and prohibits practices that restrict market competition through anti-competitive agreements or the abuse of dominant position. The Philippine Competition Act also requires parties to provide notification and obtain clearance for certain mergers and acquisitions. Violators may be subject to administrative and criminal penalties. While our business practices have not in the past been found to have violated any antitrust laws and regulations, we cannot assure you that any new or existing governmental regulators will not, in the future, take the position that our current or past business practices have an anti-competitive effect on the Philippine telecommunications industry.
Smart is currently subject to an ongoing inquiry by the Philippine Competition Commission (PCC) involving multiple subpoenas, hearings, and continuing requests for information in relation to its operations as a public telecommunications entity (PTE), interconnection arrangements with other carriers, and International Simple Resale (ISR)-related matters involving DITO. As of this writing, no final ruling has been issued. See Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion.
In 2025, House Bill 178, otherwise known as the Automatic Refund for Internet and Telecommunications Services Outages and Disruptions Act, was transmitted by Congress to the Senate, where it remained pending. The bill would require PTEs, including ISPs, to automatically refund or adjust a customer's bill when they experience a cumulative internet service outage or interruption lasting twenty-four (24) hours or more within a month. However, the bill provides exemptions in the case of scheduled maintenance (with a 48-hour advance notice and not exceeding 48 hours per month), fortuitous events, or acts of third parties or subscribers. The implementation of House Bill 178 would require PLDT Group to implement granular, per-customer service-quality monitoring and undertake substantial adjustments to operations, processes, and network infrastructure, which could entail significant capital expenditure and operating expenditure, and may present challenges in meeting regulatory transition timelines.
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The KP Act lapsed into law on August 24, 2025. The IRR, published on December 1, 2025, establishes a comprehensive and liberalized regulatory framework that removes the requirement for a legislative franchise and Certificate of Public Convenience and Necessity (CPCN) for data transmission industry participants, and opens all segments of the data transmission network to competition. Under the IRR, entities classified as Data Transmission Industry Participants must comply with new eligibility, registration, reporting, and performance standards, including mandatory annual submissions, adherence to minimum quality-of-service benchmarks, separate accounting per network segment, and compliance with cybersecurity certification requirements. The IRR also requires access providers, including incumbent operators such as us, to publish Reference Access Offers on open, fair, reasonable, and non‑discriminatory terms, while granting regulators the authority to impose ex‑ante obligations on entities designated as having significant market power. Further, the forthcoming SMPF contemplates periodic spectrum audits and potential recall of unutilized or underutilized spectrum, which may affect network planning and asset utilization. These changes substantially increase compliance obligations and lower barriers for new entrants, thereby intensifying competitive pressures. The KP Act and its IRR may introduce operational, financial, and strategic challenges for incumbent players that may materially affect our business, results of operations, or financial condition.
House Bill 87, approved by the House of Representatives in December 2025 and pending Senate action, proposes to mandate a roll-over data allocation scheme requiring ISPs to carry over unused data to the next billing cycle and impose penalties for non‑compliance. The roll-over regime outlined under the bill, if enacted, would require extensive changes to data‑management frameworks, billing systems, and related operational processes to ensure accurate tracking, accumulation, and application of unused data entitlements. These requirements may result in significant capital expenditure and operating expenditure for the PLDT Group, and any failure to meet the prescribed standards or timelines may subject us to penalties or sanctions.
On September 29, 2025, the NTC issued Memorandum Order No. ###-##-####. The memorandum requires internet intermediaries under the supervision of the NTC, including us, to submit quarterly compliance reports on the implementation of R.A. No. 11930 or the Anti-Online Sexual Abuse or Exploitation of Children and Anti-Child Sexual Abuse or Exploitation Materials Act, including blocking and preservation of data traffic and any measures adopted to strengthen safeguards.
As part of its advocacy on online safety, PLDT has invested in a child protection platform to detect and access malicious sites and URLs, and continually monitors and submits reports as required. It also undertakes regular awareness campaigns on internet safety. However, there is no assurance that our users are fully protected against the dangers of the internet.
On January 26, 2026, the SEC issued SEC Memorandum Circular No. 7, Series of 2026 (effective February 1, 2026 after publication in two newspapers of general and national circulation), which covers PSE-listed companies and limits an individual's ability to serve as an independent director in the same company to a maximum cumulative term of nine years, with the maximum term for incumbent independent directors generally reckoned from calendar year 2012. An independent director who has served the maximum cumulative term is perpetually barred from re-election as an independent director of the same company, subject to a transitory provision allowing incumbents who have already reached the maximum term upon effectivity to continue until the 2026 annual stockholders’ meeting (or another date approved by the SEC). Covered companies that breach the maximum cumulative term limit are subject to a basic penalty of Php1,000,000.00 per independent director per year and a continuing penalty of Php30,000.00 for every month that the independent director holds the seat, and a third or succeeding offense for the same violation may result in the suspension or revocation of the company’s secondary or primary license. While the Company is taking steps to comply with the SEC Memorandum Circular and update relevant corporate policies to align with the amended guidelines, nonetheless, if not timely implemented, the Company may be exposed to penalties.
Regulators have been increasingly focused on online and mobile payment services, and other developments could reduce the convenience or utility of our payment services for users. Governmental regulation of certain aspects of mobile payment systems which PLDT utilizes could result in obligations or restrictions with respect to the types of products that we may offer to consumers, the payment card systems that link to our mobile payments systems, the jurisdictions in which our payment services or apps may be used, and higher costs, such as fees charged by banks to process funds through our mobile payments systems. We may be subject to more obligations and restrictions as more jurisdictions regulate payment systems. Moreover, if new regulations provide resources, preferential treatment or protection to selected payments and processing providers, we could be displaced, prevented or substantially restricted from participating in the relevant geographies.
Any adverse changes in applicable laws and regulations can have an adverse impact on our business, results of operations, financial condition and prospects. For additional details of the impact of regulations on our business, see “Franchises, Licenses and Regulations.”
Changes in regulations or user concerns regarding the privacy and protection of user data, or any failure to comply with data privacy laws, could adversely affect our business.
We are subject to various laws and regulations regulating data privacy matters, including Republic Act No. 10173, otherwise known as the Data Privacy Act of 2012 (Data Privacy Act). The Data Privacy Act regulates the processing of personal data in the public and private sectors, within and outside the Philippines. Pursuant to Republic Act No. 11934, otherwise known as the SIM Registration Act, we are required to maintain a SIM register of all our end users, exposing us to heightened risks of data breaches
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and cybersecurity attacks. Bills impacting privacy and the processing of personal data have been filed with the Philippine Congress. While these bills do not directly seek to amend the Data Privacy Act, if signed into law, these legislation could increase our compliance costs and impact business innovation. In addition, various foreign legislative or regulatory bodies continue to enact new or additional laws and regulations concerning privacy, data retention and data protection issues, including laws or regulations mandating disclosure to domestic or international law enforcement bodies, which could adversely impact our results of operations, businesses, brand or reputation with users.
Transfers of personal data across jurisdictions subject us to regulation by foreign authorities, which may require us to incur additional costs in complying with such regulations. The interpretation and application of privacy, data protection and data retention laws and regulations in each jurisdiction may be subject to change and such laws and regulations may be interpreted and applied inconsistently from country to country, complicating long-term business planning decisions. Complying with varying international requirements could cause us to incur substantial costs or require us to change our business practices or operating platforms in a manner adverse to our business. While the PLDT Group periodically conducts compliance audits and regularly holds privacy and information security training and awareness campaigns, it cannot guarantee that personal data breaches resulting from failure of our personnel to comply with PLDT policies will not occur. Furthermore, while PLDT periodically releases public advisories to remind our customers of safe online behavior, there is no guarantee that our customers will not be victims of data breaches.
If our current policies and practices are found to be incompatible with privacy, data protection or data retention laws, we may be fined or ordered to change our business practices in a manner that adversely impacts our operating results. Any failure, or perceived failure, by us to comply with any privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles, including the Data Privacy Act, could result in proceedings or actions against us by governmental entities or affected parties, loss of user confidence, damage to the PLDT brands and reputation, or the loss of users or advertising partners. Any of the foregoing could have a material adverse impact on our business operations, financial conditions and prospects.
Limitations in the amount of frequency spectrum or facilities made available to us could negatively affect our ability to maintain and improve our service quality and level of customer satisfaction, increase our costs and reduce our competitiveness.
Available radio frequency spectrum is one of the principal constraints on wireless network capacity, and our ability to provide high-quality mobile and data services depends on continued access to adequate spectrum resources.
While the NTC grants authorizations and assigns spectrum for specific services and service areas, the KP Act and its IRR introduced a reformed spectrum management regime that may significantly affect future spectrum availability and the conditions under which we operate.
Under the KP Act's IRR, the NTC is mandated to periodically review spectrum allocations, assignments, and utilization, and to undertake measures such as spectrum recall, restacking, or reassignment to ensure efficient and optimal use of this finite national resource. The forthcoming SMPF will establish new methodologies for spectrum valuation, pricing, assignment, and renewal, and will require the identification and potential recall of unutilized or underutilized spectrum within defined periods. These regulatory mechanisms may subject us to heightened scrutiny regarding the utilization of our current assignments and expose us to the risk of partial or full spectrum recall if our holdings are determined to be underutilized.
The KP Act's IRR also reinforces compliance obligations applicable to all data transmission industry participants, including the requirement to meet performance standards, maintain segment-level reporting, and ensure service availability consistent with quality-of-service benchmarks. Non-compliance may result in administrative penalties, suspension, or revocation of authorizations, including spectrum assignments. Moreover, as all network segments are exposed to greater competition under an open‑access framework pursuant to the KP Act, new entrants may seek access to digital infrastructure, increasing the competitive demand for scarce spectrum resources.
If the Philippine Government reallocates spectrum, imposes new conditions for its use, applies updated pricing or valuation mechanisms, or revokes or recalls spectrum previously granted to us, or if we are unable to acquire, retain, or fully utilize sufficient spectrum to meet customer needs, our ability to expand capacity, maintain service quality, and compete effectively in the market may be materially and adversely affected.
We may not be successful in our acquisitions of, and investments in, other companies and businesses, and may therefore be unable to fully implement our business strategy.
We have in the past made certain acquisitions of, and investments in, various businesses. As our traditional fixed line and mobile businesses mature, and as part of our strategy to grow other business segments, we may continue to make acquisitions and
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investments in companies or businesses to enter new businesses or defend our existing markets. The success of our acquisitions and investments depends on a number of factors, such as:
Any of our contemplated acquisitions and investments may not be consummated due to reasons or factors beyond our control. Even if we successfully consummate contemplated acquisitions and/or investments, we may not be able to realize any or all of the anticipated benefits of such acquisitions and/or investments and we cannot assure you that the consummation of such acquisitions and/or investments will not result in losses for a prolonged period of time. On the other hand, if we are unsuccessful in our contemplated acquisitions and investments, we may not be able to fully implement our business strategy to maintain or grow certain of our businesses and our results of operations and financial position could be materially and adversely affected.
We are exposed to the fluctuations in the market values of our investments.
Given the nature of our business and our foray into the digital business, we have made investments in various start-up companies which may take several years to become profitable or may not achieve profitability at all. For example, we hold an investment in MIH, an important player in the financial technology space and an integral part of our digital payment ecosystem. In accordance with IAS 28, Investments in Associates and Joint Ventures, we account for our investment in MIH using the equity method, whereby we recognize our proportionate share of MIH’s results. Our share in MIH losses amounted to Php935 million and Php2,277 million for the years ended December 31, 2024 and 2023, respectively. MIH turned profitable in 2025 and our share in MIH’s profit amounted to Php681 million for the year ended December 31, 2025. Credit ratings and the value of this investment and similar investments can be negatively impacted by liquidity, credit deterioration or losses, financial results, foreign exchange rates, or other factors. As a result, our investments could decline and result in a material impairment, which could have a material adverse effect on our financial condition and operating results.
If we are unable to install and maintain telecommunications facilities and equipment in a timely manner, we may not be able to maintain our current market share and the quality of our services, which could have a material adverse effect on our results of operations and financial condition.
Our business requires the regular installation of new telecommunications facilities and equipment, and the regular maintenance of such facilities and equipment, which are continually being undertaken. The installation and maintenance of these facilities and equipment are subject to a number of risks and uncertainties, such as:
Any of these factors could give rise to delays and/or cost overruns in the installation of new facilities or equipment or prevent us from deploying our networks and properly maintaining the equipment used in our networks, and hence affect our ability to maintain existing services and roll-out new services, for example, which could have a material adverse effect on our results of operations and financial condition.
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Our business relies on secure network infrastructure and computer systems, and any successful cyber attacks against them, or the perception of such attacks, may materially adversely affect our operations, financial condition, results of operations and reputation.
We need to constantly upgrade our cybersecurity capabilities to support our business needs and keep up with the rapidly changing cyber threat environment. As we rely on information and digital services to run our business and deliver value, we face the following challenges in an era of connectivity, digital identity, decentralized decisions, information monetization, transparency, and variable trust:
Our Cybersecurity Operations Group (CSOG) is responsible for managing cyber threats and attacks. While the Company has been able to contain the effects of past cybersecurity attacks on its network and system performance, and such cybersecurity attacks did not have any material financial, legal, reputational or regulatory repercussions for the Company, there is no assurance that we will be able to successfully safeguard our systems against all cyber attacks, particularly as cyber attacks have become more sophisticated and prevalent. Any successful attack on our infrastructure could result in legal and/or regulatory liabilities, disruptions to our business operations, damage to our reputation, and financial losses. See Item 16K. "CyberSecurity" for a detailed discussion of our cybersecurity measures.
Climate change could increase the likelihood of natural disasters and environmental legislation and regulations, which may damage our infrastructure and hinder our operations, and also spur the Philippine Government to introduce new regulations that result in higher compliance costs.
Climate change poses infrastructural and regulatory risks for telecommunications operators like us. Climate change may exacerbate the severity and frequency of natural disasters, such as typhoons, flooding and earthquakes. The occurrence of such natural disasters increases the likelihood of damage to our infrastructure and failure of our wired and wireless networks. Should severe natural disasters occur in quick succession, we may not have sufficient resources to repair and restore our infrastructure in a timely and cost-effective manner. Natural disasters could also affect and disrupt our supply chain, resulting in delays in the delivery of our supplies, and further hampering efforts to repair and restore our infrastructure. The cost of restoring and/or repair damaged infrastructure and any failure of our networks could have a material adverse impact on our operations, financial performance, reputation and prospects.
Climate change and resulting natural disasters may also affect certain communities’ livelihoods and adversely impact our customers' ability to afford our services.
The Philippine Government could introduce new and more stringent environmental legislation and regulations. The KP Act and its IRR impose specific obligations on data transmission providers during natural disasters and emergencies. During such times, we are required to design and maintain infrastructure in accordance with nationally and internationally accepted resiliency standards, ensure the prompt restoration of services, and provide temporary shared-access data services where feasible. The IRR also mandates strict outage reporting, including immediate notification to regulators for service interruptions caused by natural events such as typhoons, floods, earthquakes, or cable cuts. Failure to comply with these requirements may subject us to administrative penalties or sanctions, including the suspension or revocation of authorizations. These heightened obligations may increase our operating and capital expenditures as we work to meet strengthened compliance requirements.
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We are also now subject to expanded sustainability reporting obligations under the Philippine Financial Reporting Standards on Sustainability Disclosures, particularly PFRS S1 and PFRS S2. These standards require entities to disclose material sustainability-related and climate-related risks and opportunities in a manner aligned with global International Sustainability Standards Board (ISSB) expectations. PFRS S2, in particular, introduces extensive climate‑related disclosure requirements covering greenhouse gas emissions, transition risks, physical climate risks, scenario analysis, and the anticipated financial impacts of climate-related events.
In addition, Extended Producers Responsibility (EPR) Act (R.A. 11898) requires companies with assets exceeding Php100 million and generating plastic packaging waste to manage the full environmental lifecycle of their products and to recover or remove an equivalent volume of the plastic they introduce into the market. PLDT and Smart have strengthened their commitment to the EPR Act. The Group has engaged PCX Markets Philippines, Inc. as its Producer Responsibility Organization for the implementation of its EPR programs and reporting.
Our businesses require substantial capital investment, which we may not be able to finance.
Our projects under development and the continued maintenance and improvement of our networks and services, including Smart’s projects, networks, platforms and services, require substantial and sustained capital investment. Our consolidated capital expenditures, net of additions subject to sale and leaseback from tower companies, totaled Php60,336 million, Php78,246 million and Php85,083 million for the years ended December 31, 2025, 2024 and 2023, respectively. In 2026, we will continue to prioritize projects that support the growing demand from our customers, enhance our ability to deliver superior customer experiences, enable our corporate clients to grow their businesses, and respond to changing market preferences and emerging technologies.
Adverse changes in global financial markets could limit our ability to access capital or increase the cost of capital needed to fund our business operations. We have obtained and may seek external financing for a portion of our future capital expenditures. There can be no assurance that financing for new projects will be available on terms acceptable to us, or at all. If we cannot complete our development programs or other capital projects due to our failure to obtain the required financing, our growth, results of operations, financial condition and prospects could be materially and adversely affected. Furthermore, if we are unable to monetize our investments and generate the expected revenues, our cash flows and gearing may be negatively impacted.
If we face difficulties in funding our capital expenditures or if our capital expenditure requirements exceed our budget, we may opt to postpone our projects which may limit our ability to serve our customers or require us to negotiate with our vendors on revised payment arrangements. Any cancellations or amendments of agreements with vendors may cause us to incur penalties and adversely affect our business, reputation and share prices. See Item 5. “Operating and Financial Review and Prospects".
Our results of operations and our financial position could be materially and adversely affected if the Philippine peso significantly fluctuates against the U.S. dollar.
A substantial portion of our capital expenditures, a portion of our indebtedness and related interest expense and a portion of our operating expenses are denominated in U.S. dollars and other foreign currencies, whereas most of our revenues are denominated in Philippine pesos, with 15% of revenues denominated in U. S. dollars for the year ended December 31, 2025. Of our total consolidated debts, approximately 13% was denominated in U.S. dollars as at December 31, 2025.
A depreciation of the Philippine peso against the U.S. dollar would increase the amount of our U.S. dollar-denominated debt obligations, capital expenditures, and operating and interest expenses in Philippine peso terms. In the event that the Philippine peso depreciates against the U.S. dollar, we may be unable to generate enough funds through operations and other means to offset the resulting increase in our obligations in Philippine peso terms. Moreover, a depreciation of the Philippine peso against the U.S. dollar may result in our recognition of significant foreign exchange losses, which could materially and adversely affect our results of operations. A depreciation of the Philippine peso could also cause us to be non-compliant with the financial covenants imposed on us by our lenders under certain loan agreements and other indebtedness. Further, fluctuations in the Philippine peso value and of interest rates impact the mark-to-market gains/losses of certain of our financial debt instruments, which were designated as non-hedged items. While we have entered into hedging arrangements to hedge our exposure to foreign exchange fluctuations, such arrangements may not adequately protect us against a peso depreciation.
The Philippine peso may be subject to fluctuations due to a range of factors, including:
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Our debt instruments contain restrictive covenants which require us to maintain certain financial tests and our indebtedness could impair our ability to fulfill our financial obligations and service our other debt.
Our existing debt instruments contain covenants which, among other things, require PLDT to maintain certain financial ratios and other financial tests, calculated on the basis of IFRS Accounting Standards at relevant measurement dates, principally at the end of each quarter period. In addition, PLDT’s bonds contain covenants that limit our ability to take certain actions.
Our indebtedness and the requirements and limitations imposed by our debt covenants could have important consequences. For example, we may be required to dedicate a substantial portion of our cash flow to payments on our indebtedness, which could reduce the availability of our cash flow to fund working capital, capital expenditures and other general corporate requirements.
The principal factors that could negatively affect our ability to comply with these financial ratio covenants and other financial tests are the poor operating performance of PLDT and its subsidiaries, the depreciation of the Philippine peso relative to the U.S. dollar, the impairment or similar charges in respect of investments or other long-lived assets that may be recognized by PLDT and its subsidiaries, and increases in our interest expense. Interest expense may increase as a result of various factors including the issuance of new debt, the refinancing of lower cost indebtedness by higher cost indebtedness, the depreciation of the Philippine peso relative to the U.S. dollar, the lowering of PLDT’s credit ratings or the credit ratings of the Philippines, the increase in reference interest rates, and general market conditions.
If we are unable to meet our debt service obligations or comply with our debt covenants, we may need to restructure or refinance our indebtedness, seek additional equity capital or sell assets. An inability to implement these measures successfully could result in a declaration of default and an acceleration of maturities of some or all of our indebtedness, which could have a material adverse effect on our business, results of operations and financial condition.
Our subsidiaries could be limited in their ability to pay dividends to us due to internal cash requirements and their creditors having superior claims over their assets and cash flows, which could materially and adversely affect our financial condition.
A significant part of our total revenues and cash flows from operating activities are derived from our subsidiaries, particularly Smart. Smart has significant internal cash requirements for debt service, capital expenditures and operating expenses and as a result, may be financially unable to pay any dividends to PLDT. Although Smart has been making dividend payments to PLDT regularly since December 2002, there can be no assurance that PLDT will continue to receive these dividends or other distributions, or otherwise be able to derive liquidity from Smart or any other subsidiary or investee in the future.
Creditors of our subsidiaries generally have priority claims over our subsidiaries’ assets and cash flows. We and our creditors will effectively be subordinated to the existing and future indebtedness and other liabilities, including trade payables, of our subsidiaries, except that we may be recognized as a creditor with respect to loans we have made to subsidiaries. If we are recognized as a creditor of a subsidiary, our claim will still be subordinated to any indebtedness secured by assets of the subsidiary and any indebtedness of the subsidiary otherwise deemed superior to the indebtedness we hold.
We may have difficulty meeting our debt payment obligations if we do not continue to receive cash dividends from our subsidiaries and our financial condition could be materially and adversely affected as a result.
A significant number of shares of PLDT’s voting stock are held by four shareholders, which may not act in the interests of other shareholders or stakeholders in PLDT.
As at December 31, 2025, the First Pacific and its Philippine affiliates (together, the FP Parties), NTT Communications and NTT DOCOMO and the JG Summit Group, collectively, beneficially own 57.19% in PLDT’s outstanding common stock (representing 33.75% of our overall voting stock).
Additionally, all of PLDT’s shares of voting preferred stock, which represent 40.98% of PLDT’s total outstanding shares of voting stock as at December 31, 2025, are owned by a single stockholder, BTF Holdings, Inc. (BTFHI).
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The FP Parties, NTT Communications, NTT DOCOMO, JG Summit Group and/or BTFHI may exercise their respective voting rights over certain decisions and transactions in a manner that could be contrary to the interests of other shareholders or stakeholders in PLDT. See Note 3 – Key Information to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion.
We are unionized and are vulnerable to work stoppages, slowdowns or increased labor costs.
As at December 31, 2025, PLDT has three employee unions, representing in the aggregate 7,533 employees, or 53%, of the employees of the PLDT Group. This unionized workforce could result in demands that may increase our operating expenses and adversely affect our profitability. Each of our different employee unions require separate collective bargaining agreements. If PLDT and any of its unions are unable to reach an agreement on the terms of their collective bargaining agreement or if PLDT were to experience widespread employee dissatisfaction, PLDT could be subject to collective bargaining deadlocks, strikes, work slowdowns or stoppages. Any of these events would be disruptive to our operations and could have a material adverse effect on our business.
On February 14, 2024, the Supreme Court resolved the consolidated Petitions relating to a Compliance Order from the Department of Labor and Employment (DOLE), in connection with the non-payment of statutorily required monetary benefits, including the 13th month pay by certain PLDT contractors to their employees, as well as the regularization of 7,344 contractor employees. The Decision set aside the Secretary of Labor's orders for PLDT to regularize the 7,344 workers of its contractors, except those workers performing installation, repair and maintenance services, whose regularization is subject to a remand of proceedings before the Regional Director of the DOLE. PLDT filed a Motion for Partial Reconsideration on April 4, 2024, and received MKP’s separate motion on April 16, 2024. The Supreme Court, First Division, in its Resolution dated November 5, 2025, which was received by counsel on February 24, 2026, resolved to deny with finality the motions for partial reconsideration filed by PLDT and MKP and held that no further pleadings, motions, letters, or other communications will be entertained. Accordingly, the Decision of the Supreme Court to remand the case stands. See Item 8. “Financial Information – Legal Proceedings” and Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion.
We cannot guarantee that PLDT or its subsidiaries will not be subject to similar proceedings or other labor-related regulatory activities, the results of which may have an adverse reputational and/or financial impact. While we believe that PLDT has a strong legal position in its pending labor cases, we note that labor tribunals are mandated to resolve cases in favor of employees in the case of any doubt.
The loss of key personnel or the failure to attract and retain highly qualified personnel could compromise our ability to effectively manage our business and pursue our growth strategy.
Our future performance depends on our ability to attract and retain highly qualified key technical, marketing, sales, and management personnel. The loss of key employees could result in significant disruptions to our business, and the integration of replacement personnel could be costly and time consuming, cause additional disruptions to our business and be unsuccessful. We cannot guarantee the continued employment of any of the members of our senior leadership team, who may depart our Company for any number of reasons, such as other business opportunities, differing views on our strategic direction or other personal reasons. Any inability to attract, retain or motivate our personnel could have a material adverse effect on our results of operations and prospects.
Adverse results of any pending or future litigation, internal or external investigations and/or disputes may impact PLDT’s cash flows, results of operations and financial condition.
We are currently involved in various legal proceedings. Our estimate of the probable costs for the resolution of these claims have been developed in consultation with our counsel and is based upon our analysis of potential results. See Item 8. “Financial Information – Legal Proceedings” and Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion. While PLDT believes that the positions it has taken in these cases have strong legal bases, the final outcome of these cases may prove to be different from its expectations. In addition, we cannot assure you that PLDT will not be involved in future litigation or other disputes, the results of which may materially and adversely impact its business and financial conditions. We have and may continue to incur significant expenses defending such suits or government charges and may be required to pay amounts or otherwise change our operations in ways that could materially adversely affect our operations or financial results.
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Our financial condition and operating results will be impaired if we experience high fraud rates related to device financing, credit cards, dealers, or subscriptions.
Our operating costs could increase substantially as a result of fraud, including those arising from device financing, customer credit card, subscription or dealer fraud. If our fraud detection strategies and processes are not successful in detecting and controlling fraud, whether directly or by way of the systems, processes, and operations of third parties such as customers, national retailers, dealers, and others, the resulting loss of revenue or increased expenses could have a material adverse effect on our financial condition and operating results.
Escalation of geopolitical tensions in the Middle East, including the Iran regional conflict, could disrupt global energy markets, supply chains, and financial conditions, which may indirectly adversely affect our business, financial condition, and results of operations.
Ongoing geopolitical tensions in the Middle East, including the Iran regional conflict, present risks to global economic stability. Any escalation of hostilities could disrupt international energy markets, shipping routes, and supply chains, leading to volatility in fuel prices, inflationary pressures, and tighter global financial conditions. Such developments may adversely affect foreign exchange rates, interest rates, and capital markets, and could reduce consumer and business spending in the Philippines.
Although our operations are primarily domestic, we rely on global supply chains for network equipment, technology, fuel, and other critical inputs. Disruptions arising from geopolitical instability, including sanctions, trade restrictions, or logistical constraints, could increase our operating and capital expenditures, delay network deployments or maintenance activities, and impact service delivery. In addition, heightened global risk aversion may increase borrowing costs or limit access to financing. Any of these developments could have a material adverse effect on our business, financial condition, results of operations, and cash flows. There can be no assurance that the Iran regional conflict or related geopolitical tensions will not intensify further.
RISKS RELATING TO THE PHILIPPINES
Political and social instability in the Philippines may have a negative effect on the general economic conditions in the Philippines which could have a material adverse impact on our results of operations and financial condition.
The Philippines has, from time to time, experienced episodes of political uncertainty and unrest, including recent public and political protests arising from alleged misconduct involving the current and prior administrations, as well as ongoing legislative and institutional controversies. Over the past two decades, the Philippines has also faced hearings and investigations into graft and corruption involving senior government officials, impeachment proceedings against two former presidents and a chief justice of the Supreme Court, the nullification of the appointment of another chief justice, allegations of electoral fraud, and instances of extra‑judicial killings. There can be no assurance that acts of election-related or other political violence will not occur in the future, and any such events could negatively impact the Philippine economy.
We may be affected by political and social developments in the Philippines and changes in the political leadership and/or government policies in the Philippines. Any major deviation from the policies of the previous administration or fundamental change of direction, including a change in the form of government, may lead to an increase in political or social uncertainty and instability. Such political or regulatory changes may include (but are not limited to) the introduction of new laws and regulations that could impact our business.
We cannot assure you that the political environment in the Philippines will be stable or that the current or future administration will adopt economic policies that are conducive to sustained economic growth or which do not materially and adversely impact the current regulatory environment for the telecommunications and other companies. An unstable political or social environment in the Philippines could negatively affect the general economic conditions and business environment in the Philippines which, in turn, could have a material and adverse impact on our business, financial position and financial performance.
Natural disasters, terrorist acts or acts of war could cause damage to our infrastructure and/or result in significant disruptions to our operations and financial condition.
Our business operations are subject to interruption by natural disasters such as flooding, typhoons, pandemics and epidemics, terrorist or other hostile acts, and other events beyond our control. The Philippines is particularly susceptible to natural hazards, including tropical cyclones, earthquakes and volcanic risks. Any of the aforementioned events could cause significant damage to our infrastructure upon which our business operations rely, resulting in degradation or disruption of service to our customers. While we maintain insurance coverage for most of these events, the potential impact of damage or loss of assets to our financial condition as well as liabilities associated with these events could exceed the insurance coverage we maintain. Our system redundancy may be ineffective or inadequate, and our disaster recovery planning may be insufficient for all eventualities. These events could also damage the infrastructure of the suppliers that provide us with the equipment and services that we need to operate our business and provide products to our customers. A natural disaster or other event causing significant physical damage
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could cause us to experience substantial losses resulting in significant recovery time and additional expenditures to resume operations. In addition, these occurrences could result in lost revenues from business interruption as well as damage to our reputation.
The Philippines has been subject to a number of terrorist attacks over the past decade. The Philippine army has been in conflict with the Abu Sayyaf organization which has been identified as being responsible for kidnapping and terrorist activities in the Philippines, and is also alleged to have ties to the Al-Qaeda terrorist network and, along with certain other organizations, has been identified as being responsible for certain kidnapping incidents and other terrorist activities particularly in the southern part of the Philippines. Furthermore, the Government and the Armed Forces of the Philippines (AFP) have been in conflict with members of several separatist groups seeking greater autonomy, including the Moro Islamic Liberation Front (MILF), the Moro National Liberation Front (MNLF) and the New People’s Army (NPA). There have been numerous bombing incidents in Mindanao and elsewhere in the Philippines, which have resulted in death and injury to the civilian population as well as military and security personnel. An increase in the frequency, severity or geographic reach of these terrorist acts, violent crimes, bombings and similar events could have a material adverse effect on investment and confidence in, and the performance of, the Philippine economy. Any such destabilization could cause interruption to our business and materially and adversely affect our business, financial condition, and results of operations. These continued conflicts between the Government and separatist groups could lead to further injuries or deaths by civilians and members of the AFP, which could destabilize parts of the Philippines and adversely affect the Philippine economy. There can be no assurance that the Philippines will not be subject to further acts of terrorism or violent crimes in the future, which could have a material adverse effect on our business, financial condition, and results of operations.
Territorial disputes with China and a number of Southeast Asian countries may disrupt the Philippine economy and business environment.
The Philippines, China and several Southeast Asian nations have been engaged in a series of longstanding territorial disputes over certain areas in the West Philippine Sea, also known as the South China Sea. The Philippines maintains that its claim over the disputed territories is supported by recognized principles of international law consistent with the United Nations Convention on the Law of the Sea (UNCLOS). Over the years, tensions have periodically risen in disputed features such as the Scarborough Shoal and other areas within the Philippine exclusive economic zone, with maritime incidents, diplomatic protests, and overlapping patrols contributing to regional uncertainty. These developments have the potential to affect trade flows, investment sentiment, and bilateral relations.
In addition, heightened tensions in the Taiwan Strait have emerged as a broader regional geopolitical risk. Given the Philippines’ geographic proximity to Taiwan and its strategic role in regional security dynamics, any escalation of cross-strait tensions – whether involving military activity, blockades, or disruptions to shipping lanes – could affect regional stability, trade routes, labor mobility, supply chains, and investor confidence. Such developments could indirectly impact the Philippine economy and may also disrupt the business environment in ways that affect our operations.
Should territorial disputes between the Philippines and other countries in the region continue or escalate further, the Philippines may experience disruptions across key sectors. These include potential impacts on the supply and prices of energy, food and other critical commodities; delays in the delivery of equipment and materials sourced from the affected routes; and volatility in capital markets, foreign-exchange conditions, and investment activity. Heightened geopolitical tensions could also give rise to more restrictive regulatory or governmental actions or reciprocal trade measures, particularly in the context of disputes involving China. Any such escalation may materially and adversely affect the Philippine economy and, in turn, our business, financial condition, and results of operations. There can be no assurance that these regional disputes or tensions will not intensify in the future.
If foreign exchange controls were to be imposed, our ability to meet our foreign currency payment obligations could be adversely affected.
In general, Philippine residents may freely dispose of their foreign exchange receipts and foreign exchange may be freely sold and purchased outside the Philippine banking system. However, the Monetary Board of the BSP has statutory authority, with the approval of the President of the Philippines, during a foreign exchange crisis or in times of national emergency, to:
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The Philippine Government has, in the past, instituted restrictions on the conversion of the Philippine peso into foreign currencies and the use of foreign exchange received by Philippine companies to pay foreign currency-denominated obligations.
We cannot assure you that foreign exchange controls will not be imposed in the future. If imposed, these restrictions could materially and adversely affect our ability to obtain foreign currency to service our foreign currency obligations.
The credit ratings of the Philippines may restrict the access to capital of Philippine companies, including PLDT.
Historically, the Philippines’ sovereign debt has been rated non-investment grade by international credit rating agencies. The Philippines has the following investment grade ratings of Moody’s (Baa2, stable) and S&P Global (BBB, stable).
The Philippine Government’s credit ratings directly affect companies domiciled in the Philippines as international credit rating agencies issue credit ratings by reference to that of the sovereign. No assurance can be given that Moody’s, S&P Global, or any other international credit rating agency will not downgrade the credit ratings of the Philippine Government in the future and, therefore, Philippine companies, including PLDT. Any such downgrade could have a material adverse impact on the liquidity in the Philippine financial markets, on the ability of the Philippine Government and Philippine companies, including PLDT, to raise additional financing, and on the interest rates and other commercial terms at which such additional financing is available.
Developments outside of the Philippines, including U.S. policies related to global trade and tariffs could adversely affect our business, financial condition and results of operations.
The current international political environment, including existing and potential changes to U.S. policies related to global trade and tariffs, have resulted in some uncertainty surrounding the future state of the global economy. Since 2018, the U.S. began to increase or impose tariffs on many products, particularly from China, among other jurisdictions, including, but not limited to, solar panels, steel and aluminum products, consumer electronics, and industrial chemicals. In 2025, President Donald Trump imposed tariffs of at least 10% on goods from a number of countries. In response, the European Union, China and other affected jurisdictions have introduced tariffs on U.S. goods. An escalating trade war may have material adverse effects on the power industry and our business may be impacted by these tariffs. Any further expansion in the types or levels of tariffs implemented has the potential to negatively impact our business, financial condition and results of operations. Additionally, there is a risk that the U.S. tariffs on imports are met with tariffs on U.S. produced exports and that a broader trade conflict could ensue, which has the potential to significantly impact global trade and economic conditions. Potential costs and any attendant impact on pricing arising from these tariffs and any further expansion in the types or levels of tariffs implemented could adversely affect our business, financial condition and results of operations. While there are ongoing discussions between the U.S. and China regarding tariffs, there is no certainty as to the timing and scale of reduction in tariffs, if any, and the overall impact on global markets. Thus, economic disruption in other countries, even in countries in which we do not currently conduct business or have operations, could also adversely affect our businesses and results.
ITEM 4. INFORMATION ON THE COMPANY
A. Historical Background and Development
PLDT was incorporated in the Philippines under the old Corporation Law of the Philippines (Act 1459, as amended) on November 28, 1928 as Philippine Long Distance Telephone Company, following the merger of four telephone companies under common U.S. ownership. In July 2016, PLDT changed its name to PLDT Inc. Pursuant to Section 11 of the Revised Corporation Code, which states that corporations shall have perpetual existence unless the corporation elects to retain the specific corporate term indicated in its Articles of Incorporation, PLDT has a perpetual corporate term.
PLDT’s original franchise was granted in 1928 and was last amended in 1991, extending its term until 2028 and broadening its franchise to permit it to provide virtually every type of telecommunications service. PLDT’s franchise covers the business of providing basic and enhanced telecommunications services in and between the provinces, cities and municipalities in the Philippines and between the Philippines and other countries and territories including mobile, wired or wireless telecommunications systems, fiber optics, multi-channel transmission distribution systems, VAS (including, but not limited to, the transmission of voice, data, audio and video), information services bureau and all other telecommunications systems technologies available. Our subsidiaries, including Smart, SBI and DMPI, also maintain their own franchises with a different range of services and periods of legal effectiveness for their licenses.
Our principal executive offices are located at the Ramon Cojuangco Building, Makati Avenue, Makati City, Philippines and our telephone number is +(632) 8250-0254.
Investors should submit any inquiries to the address and telephone number of our principal executive offices. Our website address is www.pldt.com. The information contained on, or accessible through, our website is not incorporated by reference into this Annual Report. The SEC maintains an internet site at https://www.sec.gov that contains reports, proxy and information
statements, and other information that we file with or furnish electronically to the SEC. For service of process in the United States, PLDT has designated Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711, as its authorized representative.
Capital Expenditures and Divestitures
See Item 5. “Operating and Financial Review and Prospects – Capital Expenditure Plans” for capital expenditures planned for 2026 and Item 5. “Operating and Financial Review and Prospects – Liquidity and Capital Resources” for information concerning our principal capital expenditures and financing for the years ended December 31, 2023, 2024 and 2025.
Between February 17, 2023 and December 21, 2023, PCEV entered into four new subscription agreements with Voyager Finserve Corporation (VFC) and Paymaya Finserve Corporation (PFC, and together with VFC, the Bank HoldCos) to subscribe to a total of 19.6 million Common B shares each at a subscription price of Php0.10 per share, representing 60% voting rights and 1.48% economic interest in the Bank Holdcos.
On December 13, 2023, PCEV, along with other existing shareholders KKR, Tencent, SIG, First Pacific Ventures Ltd. and Jumel Holdings, entered into a new subscription agreement with MIH to subscribe to US$80 million Class C2 convertible preferred shares of MIH. On the first closing, PCEV paid a consideration of US$28 million or Php1,563 million for 12.3 million MIH class C2 convertible preferred shares, thereby increasing PCEV’s ownership in MIH from 36.63% as at December 31, 2022 to 36.97% as at December 31, 2023.
On various dates in 2022 and 2023, Smart and DMPI signed Sale and Purchase Agreements with Edotco Towers, Inc., Edgepoint Towers, Inc., Unity Digital Infrastructure and Frontier Tower Associates Philippines, Inc., or the TowerCos, in connection with the sale of 7,569 telecom towers and related passive telecommunication infrastructure for Php98 billion. As of December 31, 2025, we have completed the sale of a total of 6,815 telecom towers, or 90% of the towers portfolio under sale, for a total consideration of Php88,387 million. For additional details on the sale and leaseback of the telecom towers, see Note 9 – Property and Equipment and Note 10 – Leases to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
On January 5, 2024, PGIH entered into a Share Purchase Agreement for the sale of 227 common shares of Multisys Technologies Corporation (Multisys), representing a 4.99% equity interest, for a total consideration of Php270 million. The sale transaction was completed and fully paid on January 12, 2024. As a result, PGIH retained ownership of 2,080 common shares representing a 45.73% equity interest in Multisys.
On March 24, 2024, PLDT invested Php754.5 million in Kayana to serve as a digital entity designed to harness the data assets of the MVP Group of Companies (MVP Group) and provide a platform for a Group-wide digitalization initiative, and further invested an additional Php85.5 million on September 27, 2024, resulting in a total equity interest of 60%. On September 30, 2024, Kayana entered into share subscription agreements with its shareholders, wherein PLDT subscribed to additional common shares valued at Php46.5 million and the remaining shareholders subscribed to additional shares valued at Php523.5 million. As a result, PLDT’s equity ownership in Kayana was reduced to 45%, leading PLDT to account for its remaining interest as an investment in associate. On September 1, 2025, Kayana entered into another share subscription agreement with its shareholders, wherein PLDT subscribed to additional common shares equivalent to Php594 million. PLDT’s equity ownership in Kayana remains at 45%.
On April 5, 2024, PCEV paid the subsequent consideration of US$15.3 million or Php857 million for 6.7 million MIH Class C2 convertible preferred shares and received warrants for 2.7 million MIH Class C2 convertible preferred shares valued at Php152 million, resulting in an increase of PCEV’s ownership in MIH from 36.97% to 37.66%.
On April 30, 2024, PLDT Inc. acquired 2,491,516 common shares of Radius, representing a 34.9% equity interest, for a total consideration of Php2,116 million.
On April 2, 2025, PGIH entered into a Share Purchase Agreement for the purchase of 228 common shares of Multisys, representing a 5.01% interest, for a total consideration of Php257.5 million. The transaction was completed on April 5, 2025. Following this acquisition, PGIH owns 2,308 common shares representing a 50.74% equity interest in Multisys.
B. Business Overview
OVERVIEW
We are one of the leading telecommunications and digital services providers in the Philippines, serving the fixed line, wireless and broadband markets. Through our three principal business segments, Wireless, Fixed Line and Others, we offer a wide range of telecommunications and digital services across our extensive fiber optic backbone and wireless and fixed line networks.
As at December 31, 2025, we served 67.8 million users through the provision of mobile, fixed line and data services.
Our common shares are listed and traded on the PSE and our ADSs are listed and traded on the NYSE in the United States.
Our three business units are as follows:
Wireless. Our Wireless business segment focuses on driving the growth of our data services while managing our legacy business of voice and short messaging services (SMS). We generate data revenues across all segments of our wireless business, whether through the access of mobile internet via smartphones, mobile broadband using pocket WiFi or home WiFi using fixed wireless broadband devices. We provide the following mobile telecommunications services through our wireless business: (i) mobile services, (ii) fixed wireless broadband services, and (iii) other services.
Fixed Line. We are the leading provider of fixed line telecommunications services throughout the Philippines, servicing retail, corporate and small and medium-sized enterprises (SME) clients. Our Fixed Line business segment offers data, voice, and miscellaneous services. We also offer secure data center, multi-cloud, cyber security, data and AI solutions through ePLDT Inc. and Vitro Inc. (Vitro), our ICT subsidiaries.
Others. Our other business consists primarily of our interests in digital platforms and other technologies, including our interests in MIH and Kayana.
We had a market capitalization of approximately Php272,230 million, or US$4,631 million, as at December 31, 2025. We had total revenues of Php218,388 million, or U$$3,715 million, and net income attributable to equity holders of PLDT of Php28,662 million, or US$488 million, for the year ended December 31, 2025.
STRENGTHS AND STRATEGIES
Strengths
We believe our business is characterized by the following competitive strengths:
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We also create and launch platforms, services and solutions in the area of digital financial services through our associated companies MIH, Maya Philippines, Inc. and Maya Bank, which was awarded the sixth and last digital banking license in 2021.
Strategies
The key elements of our business strategy are:
We offer a broad range of telecommunications and ICT services. We plan to capitalize on this position to maximize revenue opportunities by cross-selling our products and services, and by developing convergent products that feature the combined benefits of voice and data, broadband, wireless, data center, cloud, managed services, and other products and services, such as our content portfolio which includes videos, streaming services, entertainment, music, shopping channels, and games.
In line with the KP Act and its IRR, we will comply with applicable open access and Reference Access Offer requirements as may be prescribed by regulators, while continuing to focus our commercial strategy on differentiated, VAS delivered through service quality, innovation, and customer experience.
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OUR BUSINESSES
Our business activities are categorized into three business units: Wireless, Fixed Line and Others.
We monitor the operating results of each business unit separately for purposes of making decisions about resource allocation and performance assessment. See Note 4 – Operating Segment Information to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Wireless
Our wireless business focuses on driving growth in our data services while managing our legacy business of voice and SMS. We generate data revenues across all segments of our wireless business, whether through the access of mobile internet using smartphones, mobile broadband using pocket WiFi or home WiFi using fixed wireless broadband devices.
We provide (1) mobile services, (2) fixed wireless broadband services, and (3) other services, through our wireless business, with mobile services contributing 98% of our 2025 wireless service revenues, and fixed wireless broadband and other services contributing the remaining 2% of our 2025 wireless service revenues. Mobile data usage has surged in the past several years and now accounts for 83% of our mobile service revenues. Wireless revenues, gross of intersegment transactions, contributed 47% of our consolidated revenues for the year ended December 31, 2025 as compared to 49% in 2024 and 2023.
Our mobile services, which accounted for 98% of our wireless service revenues for the year ended December 31, 2025, are provided through Smart and DMPI with 59,891,520 total subscribers as at December 31, 2025 as compared to 58,989,807 total subscribers as at December 31, 2024, and 57,827,126 total subscribers as at December 31, 2023. Based on corporate public disclosures, our estimated mobile subscriber market share stood at 42%, 45% and 47% as at December 31, 2025, 2024 and 2023, respectively.
As at December 31, 2025, approximately 96% of our mobile subscribers were prepaid service subscribers. The predominance of prepaid service reflects one of the distinguishing characteristics of the Philippine mobile market, allowing us to reduce billing and administrative costs, as well as to control credit risk.
Our mobile internet revenues, which primarily consist of our mobile data service revenues, increased to Php76,344 million in 2025 from Php75,061 million in 2024 and from Php71,268 million in 2023, primarily due to the increase in video streaming, gaming and social media data usage by our subscribers driven by the enhanced product offerings, marketing promotions and content partnerships. Migration initiatives also resulted in higher numbers of LTE and 5G device and data users. Our mobile internet revenues contributed 96%, 95% and 94% of our mobile data service revenues in 2025, 2024 and 2023, respectively.
Mobile data traffic on Smart’s network increased from 4,898 petabytes in 2023 to 5,359 petabytes in 2024 and 5,550 petabytes in 2025, 13% higher compared to 2023.
The following table summarizes key measures of our wireless business as at and for the years ended December 31, 2025, 2024 and 2023:
December 31,
2025
2024
2023
Systemwide mobile subscriber base
59,891,520
58,989,807
57,827,126
Prepaid
57,534,812
56,731,489
55,667,880
Postpaid
2,356,708
2,258,318
2,159,246
Fixed Wireless Broadband subscriber base
457,290
446,082
439,815
Growth rate of mobile subscribers
1
%
2
(13
%)
Growth rate of Fixed Wireless Broadband subscribers
(41
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(1) Mobile Services
We offer prepaid and postpaid mobile communications services all over the country under the brand names Smart and TNT, each of which focuses on the needs of specific market segments. With a continuous and in-depth consumer understanding program, each of our brands commits to providing relevant products that will cater to the communications, entertainment and services requirements of its respective target market segments.
Smart launched new products and network capabilities in 2025. Smart upgraded its core network and provisioned the 4G base for Voice over LTE (VoLTE) and enabled Video over LTE (ViLTE).
Smart Prepaid data, call and text cards are sold in denominations of Php100, Php300 and Php500, while TNT Prepaid cards are sold in denominations of Php50, Php100 and Php300. Our eLoad’s over-the-air reloads, which range from Php10 to Php1,000, are available through the Smart app, Smart and PLDT online stores, e-wallet providers such as Maya, e-commerce platforms such as Lazada and Shopee and via Smart eLoad retailers nationwide. The stored value of a prepaid card and eLoads remain valid for 365 days regardless of the denomination, pursuant to the MC No. 05-12-2017 issued by the NTC and the DICT.
Smart also provides open-access data offers with its Giga Power, Magic Data, All Data and Power All services. These data packages provide access to any app or website and are priced from Php50 to Php499.
In view of the SIM Registration Act, we recognize a prepaid mobile subscriber as active upon registration of the SIM card. Beginning in the fourth quarter of 2023, we consider a prepaid mobile subscriber as churned if the subscriber does not reload within 180 days after the full usage or expiry of the last reload and does not latch to the network within 180 days.
In the fourth quarter of 2025, Smart launched hyper-personalized offers via Customer Value Management and social media channels to upsell users. In 2025, Smart also launched the multi-eSIM which converts any smartphone into an eSIM-capable device and Smart Travel eSIM which enables Smart subscribers to use their eSIMs while abroad. The Smart Prepaid brands also heavily promoted 5G with the 5G Max launch.
“Smart Infinity” is our premium mobile postpaid brand, priced from Php3,500 to Php8,000. With “Smart Infinity”, customers can enjoy local non-stop surf and uninterrupted local mobile services with the “Smart Infinity Limitless Plan”. This plan comes with a premium mobile device bundled with exclusive lifestyle perks and privileges accessible through a dedicated concierge.
Smart Postpaid offers Signature plans with data priority. Smart Signature subscribers receive real-time billing and usage alerts on Smart app and have access to exclusive rewards, events and latest smartphones. Smart also offers enhance postpaid Signature Plans+ priced from Php999 to Php2,499. It provides higher data allocations with Unlimited 5G promo for 12 months and unlimited texts and calls to all networks including landline in the form of small, medium, large and extra-large plans. In 2025, Smart Postpaid added Plan 799 to its portfolio of postpaid plans and launched the Junior Plan which caters to the youth market as their first postpaid plan. In the same year, Smart Postpaid also introduced call forking for Samsung devices. Plans ranging from Php499 to Php599 were also introduced with unlimited texts and calls to all networks including landline. These fixed monthly plans alleviate concerns of unwanted charges.
Smart Enterprise Postpaid is a mobile plan comprised of data, voice, and short message services, with a built-in data bill-cap feature that automatically protects the subscriber from unwanted excess charges, with plans priced up to Php2,500.
Postpaid plans may be availed with or without a device bundle at a fixed monthly subscription, defined by a standard contract period.
Other Mobile Services
For international roaming, we offer various data roaming packages such as GigaRoam with up to 100GB for 10 days on popular travel destinations like Japan, South Korea, Thailand, Saudi Arabia, USA and many more. Data roaming plans range from Php150 to Php9,999, and are open to both prepaid and postpaid subscribers.
Our SmartBro Home WiFi 4G devices start at Php599 with free unlimited WiFi valid for 30 days and connectivity of up to five devices, while Smart Bro Home WiFi 5G is offered at Php7,995 with 20GB open access data valid for seven days and connectivity of up to 10 devices.
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(2) Fixed Wireless Broadband Services
Prepaid Home WiFi (PHW)
PHW is a wireless internet service introduced to address the growing demand for affordable home broadband in the Philippines. It is a plug-and-play device powered by Smart’s network that can simultaneously connect multiple WiFi-capable devices. In mid-2025, PHW launched Big Data which offers large data allocations for sharing with the family at home.
In 2025, Smart launched its first postpaid plans for Fixed Wireless.
Wireless revenues are driven and influenced by the following key metrics:
Our active data users reached 43.2 million as at December 31, 2025, while mobile data traffic as at December 31, 2025 increased by 4% from December 31, 2024 to 5,550 petabytes. Data traffic on Smart's 5G network grew in 2025, increasing by 88% as compared to 2024. This growth was driven by aggressive 5G network roll-outs and 5G product offerings. As part of its program to sustain the growing data usages of subscribers and maintain network quality, Smart continues to roll-out new sites in various locations throughout the Philippines.
Our strategic brand-building campaigns and product innovations include aggressive 5G handset usage offers, and applications. To further stimulate and maximize the customer experience on 5G network, Smart offers various plans bundled with 5G capable handsets. Smart also offers device financing for prepaid devices including Apple devices for Smart Prepaid and TNT.
Brand building and customer engagement hit new strides with Smart App, Smart’s mobile app which enables Smart subscribers to manage their accounts and enjoy exclusive offers and special promotions. Other features and integrations also further enhance customers’ digital lifestyle.
Fixed Line
We believe we are the leading provider of fixed line telecommunications services throughout the Philippines, servicing retail, corporate and small and medium-sized (SME) clients. Our fixed line business group offers (1) data services; (2) voice services; and (3) miscellaneous services.
We had 3,689,997 fixed line voice subscribers as at December 31, 2025, a decrease of 21,374, or 1%, from 3,711,371 fixed line subscribers as at December 31, 2024, while our fixed line broadband subscribers increased by 362,142, or 11%, to 3,793,927 as at December 31, 2025 from 3,431,785 as at December 31, 2024. Revenues, gross of intersegment transactions, from our fixed line business were 60%, 58% and 57% of our consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively. Domestic voice revenues have been declining largely due to a drop in call volumes as a result of the availability of alternative calling options and over-the-top (OTT) services, as well as subscribers’ shift to mobile services. An increase in our data service revenues in recent years has mitigated such decline to a certain extent. Recognizing the growth potential of data services, we have put considerable emphasis on the development of new data-capable and IP-based networks.
Our fixed line network reaches all major cities and municipalities in the Philippines, with a concentration in the greater Metro Manila area. Our network offers extensive connections to our customers with the FTTH and fiber to the building (FTTB) installations. Our nationwide fiber backbone DFON extends to underground inland and submarine cables. It is a fully resilient network spanning the whole archipelago. Our international network is comprised of various regional and transoceanic submarine cable systems in which we have economic interests.
We offer postpaid and prepaid fixed line services. Our prepaid fixed line services are intended to be an affordable alternative telephone service for consumers under difficult economic conditions.
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The following table summarizes key measures of our fixed line services as at and for the years ended December 31, 2025, 2024 and 2023:
Systemwide fixed line voice subscriber base
3,689,997
3,711,371
3,766,105
Growth rate of fixed line subscribers
(1
(2
Number of LEC employees
9,264
9,543
10,035
Number of LEC subscribers per employee
398
389
375
Systemwide broadband subscriber base
3,794,136
3,432,149
3,269,726
Fixed Line broadband
3,793,927
3,431,785
3,268,996
Fixed Wireless Broadband
209
364
730
Growth rate of broadband subscribers
(43
(50
(67
(1) Data Services
Our data services include broadband, leased lines, Ethernet-based and IP-based services. These services are used for broadband internet and domestic and international private data networking communications. We also offer secure data center, multi-cloud, cyber security, data and AI solutions.
Recognizing the growth potential of data services and their importance to our business strategy, we have placed considerable emphasis on these service segments. Our data services segments registered the highest percentage growth in revenues among our fixed line services from 2023 to 2025.
PLDT Home serves 3.76 million fiber subscribers nationwide as at December 31, 2025. PLDT’s FTTH fixed line network has an extensive transmission and distribution network infrastructure, providing broadband availability to 19.4 million homes passed in 74% of the country’s towns and 91% of total provinces as at December 31, 2025. The number of homes passed refers to the approximate potential number of residences that could avail of broadband connectivity services provided through PLDT facilities.
PLDT’s robust FTTH infrastructure enables customers to enjoy symmetrical internet speeds of up to 10 Gbps, supporting bandwidth-intensive digital activities at home with various broadband solutions. In 2025, PLDT Home expanded into a new growth segment with the launch of Fiber Prepaid, addressing strong demand for flexible, prepaid connectivity solutions. PLDT Home also strengthened its postpaid offerings with the introduction of the Fiber Netflix plan, combining unlimited fiber internet, calls and entertainment in a single subscription. Further enhancing its broadband portfolio, PLDT Home integrated premium entertainment content, including Netflix, HBO Max and Cignal, into its high-speed plans. These value-added bundles continue to support PLDT Home's ARPU.
PLDT Home also elevated customer experience with the Speed Add-On, allowing subscribers to boost their existing plans to up to 1 Gbps for an additional Php500 per month. In parallel, all PLDT Home fiber plan speeds were boosted to deliver up to twice the previous speeds, providing customers with enhanced value and enriched digital experiences.
To further expand Filipinos’ access to reliable connectivity, PLDT Home rolled out its biggest Fiber Fest program in 2025, offering same-day fiber installations and exclusive digital experiences across Luzon, Visayas and Mindanao.
Aligned with the PLDT Group’s long-standing commitment to advancing the United Nations Sustainable Development Goals (UN SDG), particularly UN SDG No. 9: Industry, Innovation, and Infrastructure, PLDT Home continues to accelerate fiber rollout in underserved communities. In 2025, the company expanded its fiber network to previously unfiberized barangays in provinces such as Abra, Aklan, Northern Samar and Southern Leyte, helping to bring reliable connectivity to more Filipino households.
In 2025, PLDT Home Life transformed PLDT Home to offer a more complete “household experience.” Built around three everyday needs, entertainment, security and smart home living, all powered by reliable connectivity, PLDT Home Life allowed customers to layer upgrades onto their Fiber plans. For example, the reliability of data connection was strengthened with PLDT Home Always On, which keeps households connected even when fiber service is disrupted. Entertainment expanded through IPTV and OTT add-ons, giving access to blockbuster films, award-winning series, premium HD/4K streaming quality, and faster access to titles following theatrical release windows, AAA gaming titles through IGV Game Pass, and Fiber plans bundled with top-tier content streaming partners, Netflix and HBO Max. Home security was strengthened through the Eufy portfolio, while smart living initiatives, such as the Smart Home Starter Kit, accelerating connected home adoption.
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These upgrades enhanced performance and continuity, expanded content choices, and enabled a safer, smarter, and more modern home. More importantly, this direction laid the foundation for VAS to evolve beyond standalone bolt-ons into a curated ecosystem, one that is easier to discover, understand and adopt, supported by a unified customer journey and consolidated billing. Collectively, these initiatives reinforced PLDT Home’s promise of enriching everyday moments at home, with the VAS portfolio as a key driver of customer value, differentiation, and long-term loyalty.
PLDT Home Rewards remained a key driver of customer value in 2025, providing a simple and benefits-led way for subscribers to earn and redeem Crystals for treats, promotions and discounts from partner brands. Members earn Crystals by paying their PLDT Home bills on time and in full, as well as through plan upgrades and add-ons. Under the program’s clear earn structure, every Php50 paid is equivalent to one Crystal, an approach that helps sustain engagement, encourage consistent on-time payments across the subscriber base and reward loyal customers.
Customers can redeem Crystals to access exclusive deals and discounts from participating partners. This ensures that Home Rewards continues to deliver practical, day-to-day savings aligned with the needs of PLDT Home families.
The program’s value proposition was strengthened by PLDT Home’s fiber-fast and reliable network, ensuring that rewards engagement, whether through billing, upgrades or add-ons, was anchored on a consistently strong at-home experience. This connectivity foundation supported the steady growth of the Home Rewards program and positioned it for continued expansion of partnerships and offers beyond 2025.
Monthly charges for our home fixed broadband services vary depending on bandwidth, speed, market demand and the competitive landscape.
PLDT Enterprise is the corporate business arm of the PLDT Group. It provides integrated digital, connectivity, and ICT solutions to enterprises and government institutions in the Philippines and overseas.
Combining PLDT and Smart’s network leadership with the specialized capabilities of its operating subsidiaries, ePLDT, VITRO, PLDT Global, and Multisys, PLDT Enterprise offers fixed line and wireless connectivity, data center services, cloud and cybersecurity solutions, and digital platforms that support operational efficiency, service delivery, and digital transformation across multiple industries and sectors.
ICT, Cloud, and Data Center Capabilities
ePLDT, as the ICT subsidiary of PLDT, provides cloud, cybersecurity, data, and AI solutions to Philippine enterprises and public sector institutions. Its offerings are designed to address regulatory requirements, data security considerations, and varying business needs.
ePLDT operates a multi-cloud portfolio which includes the country’s first sovereign cloud, a locally hosted cloud infrastructure designed to ensure that sensitive data remains within Philippine jurisdiction. The portfolio also covers public, private, and hybrid cloud services, IaaS, SaaS, and CCaaS, as well as AI-enabled platforms.
These solutions are supported by professional and managed services. Professional services include cloud assessment, migration, optimization, and cybersecurity enhancement. Managed services involve the ongoing operation, monitoring, and maintenance of customer IT environments, allowing clients to focus on their core business activities.
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ePLDT’s service capabilities are reinforced by strategic partnerships with global technology providers across cloud computing, cybersecurity, and AI. These commitments earned ePLDT industry awards such as Microsoft’s Solutions Partner for Security recognition and Elite Partner status from leading global technology partners. These partnerships enable ePLDT to support a broad range of enterprise and government requirements while maintaining alignment with international technology standards.
In addition, in 2025, ePLDT launched Pilipinas AI, described as the country’s first sovereign AI solutions stack. This allows organizations to develop and deploy AI applications using locally hosted infrastructure, addressing data residency, security, and regulatory compliance requirements.
VITRO, the PLDT Group’s data center subsidiary, marked its 25th year of operations in 2025. Since establishing the Philippines’ first commercial data center, VITRO has developed a nationwide network of carrier-neutral facilities, allowing multiple telecommunications providers to interconnect within the same data center, improving redundancy and customer choice.
A key milestone during the year was the launch of VITRO Santa Rosa, the Philippines’ first AI-ready hyperscale data center. Hyperscale facilities are designed to support large computing loads, including AI-based and data-intensive workloads. VITRO Santa Rosa currently hosts ePLDT’s Pilipinas AI platform and supports enterprise and hyperscaler requirements.
As demand for large-scale and AI-driven computing continues to grow, VITRO continues to invest in data center design, operational resilience, and energy-efficient infrastructure to support long-term digital and economic development.
Beyond physical infrastructure, the Group continued to invest in workforce development through the VITRO Academy. Since its launch in 2025, the program has trained more than 400 students across three progressive levels focused on data center operations and related skills. From the inaugural graduating cohort, the majority advanced to paid internships, and selected top performers were offered full-time employment at VITRO. This initiative supports the development of local technical talent in a rapidly growing industry.
Core Services: Fixed, Wireless, Satellite, and International Connectivity
By integrating ICT, cloud, and data center capabilities with its core connectivity solutions, PLDT Enterprise delivers end-to-end fixed-line and wireless services to enterprises of all sizes across the Philippines.
Wireless offerings include:
In 2025, to strengthen mobile security, PLDT Enterprise introduced SmartSafe SilentAccess, a silent authentication solution that verifies user identity in the background without requiring one-time passwords (OTPs). The service aligns with regulatory guidance from the BSP on enhancing digital security in financial transactions. During the year, PLDT Enterprise became the first Philippine telecommunications provider to receive Open Gateway API certification from the GSMA, a global mobile industry association.
Network coverage was further expanded through 5G Fixed Wireless Access, an enterprise-grade solution that delivers high-speed internet to locations where fiber infrastructure is limited or unavailable.
Beyond its wireless services, in 2025, PLDT Enterprise also introduced satellite-enabled enterprise connectivity through Starlink, becoming the first telecommunications provider in the Philippines authorized to resell the service for enterprise use. This offering extends high-speed internet access to remote and underserved areas.
International connectivity was strengthened through investments in subsea cable systems, including the Asia Direct Cable (ADC), which reached operational and commercial readiness in the first quarter of 2025. ADC enhances regional connectivity and provides low-latency access to our leading VITRO data centers, including VITRO Santa Rosa. As a result of these investments, PLDT’s total international capacity reached approximately 100 terabits per second (Tbps).
Domestically, PLDT operates an extensive fiber optic network which supports enterprise and broadband services for small and medium enterprises, enabling business expansion and digital adoption nationwide.
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PLDT Enterprise also provides managed network services that integrate connectivity, monitoring, and operational management into a single service model. These services cover network design, deployment, ongoing optimization, and performance monitoring across multiple locations.
Digital Inclusion Across Enterprise Markets and Public Sector Support
To support digital inclusion, PLDT Enterprise partnered with the DICT, with support from the Private Sector Advisory Council (PSAC), to launch the Bayanihan SIM initiative. The program provides connectivity to students, teachers, and households in geographically isolated and disadvantaged areas (GIDAs), enabling access to digital education and essential online services.
During the 2025 national elections, PLDT Enterprise supported the command center of the Parish Pastoral Council for Responsible Voting. The support included nationwide connectivity and technology services that enabled real-time coordination, monitoring, and data transmission for the organization’s parallel vote count.
In support of government modernization and public safety initiatives, ePLDT led the rollout of Unified e911, a nationwide emergency response system developed in coordination with national government agencies. The platform integrates telecommunications infrastructure with a world class emergency services platform to improve response coordination and coverage.
PLDT Enterprise also serves customers across sectors including SMEs, large enterprises, financial institutions, retail organizations, and government agencies.
Internationally, PLDT Global continued to support carriers and multinational enterprises with digital and connectivity solutions, while Multisys delivered nationwide systems integration and software-as-a-service platforms supporting both public and private sector clients.
With its integrated portfolio of digital infrastructure, connectivity, and ICT services, PLDT Enterprise remains focused on supporting enterprise resilience, regulatory compliance, and sustainable growth. Through continued investment in infrastructure, partnerships, and talent, the Group is positioned to support the evolving digital requirements of businesses and government institutions in the Philippines and selected international markets.
Rates for Corporate Data and ICT Services
Charges for our corporate data service vary by customer.
Our voice services are delivered through our (a) local exchange service; (b) international service; and (c) domestic service.
Our local exchange service, which consists of the basic voice telephony business, is provided primarily through PLDT. We also provide local exchange services through our subsidiaries.
Basic monthly charges for the local exchange service varies according to the type of customer (business or residential) and location, with charges for urban customers generally being higher than those for rural/provincial customers.
We have been pursuing a number of initiatives to sustain our international service business, including: (i) rationalizing our inbound voice termination rates; (ii) managing unauthorized voice traffic terminating to our network; (iii) partnering with Saudi Telecom Company for inbound international long distance (ILD) traffic management; and (iv) growing international data sales by leveraging PLDT’s sub-sea cable ownership and PLDT Global’s reach.
In addition, PLDT Global is enhancing the presence of PLDT in other international markets by providing high quality communications infrastructure and innovative platforms to global carriers, corporate customers and distribution partners, enabling it to achieve its desired connectivity, reach and business relevance. With offices in key markets abroad, PLDT Global also delivers a full range of digital consumer and enterprise solutions that serve the evolving needs of Filipinos overseas and global enterprises.
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Our rates for outbound international calls are quoted in U.S. dollars and are billed in Philippine pesos. The Philippine peso amounts are determined at the time of billing. We charge a flat rate per minute to retail customers at any time on any day of the week.
Our domestic services are provided primarily through PLDT. This service consists of voice services for calls made by our fixed line customers outside of their local service areas within the Philippines and the domestic interconnect access charges by other telecommunications carriers for wireless and fixed line calls carried through PLDT’s backbone network and/or terminating to our fixed line customers.
Mobile substitution, OTT voice call alternatives and the widespread availability of free non-voice communications, such as e-mails, SMS, video conferencing applications and social networking sites, have negatively affected our domestic call volumes.
Rates for domestic calls traditionally were based on the type of service provided, such as whether the call is operator-assisted or direct-dialed. However, PLDT simplified these rates in recent years for calls originating from and terminating to the PLDT fixed line network and for calls terminating to fixed line networks of other local exchange carriers. PLDT also simplified its rates for calls terminating to mobile subscribers.
In addition, PLDT bundles the free PLDT-to-PLDT calls in some promotions and product/service launches to stimulate fixed line usage.
Miscellaneous services include the provision of facilities management, rental fees, and other services.
We sell and distribute our products and services through the following channels:
We sell our fixed line and mobile services primarily through our regional and key account partners who generally have their own direct sales forces and retail networks. We have field sales distribution partners and key account partners for fixed line services, and exclusive regional and provincial distributors and key account partners for wireless services. A number of our trade partners are likewise major distributors of smartphones and devices that are retailed in their own telecommunications outlets. Account managers from our sales force manage the distribution network and regularly update these business partners on upcoming marketing strategies, promotional campaigns and new products. Our distribution network encompasses approximately over one million retailers, a combination of directly served outlets and retailers using e-wallets and loading apps to sell SmartLoad. With the prepaid reloading distribution network extended to corner store and individual retailer levels, Smart’s prepaid service has become even more affordable and accessible to subscribers.
Our frontlines enable unique digital experiences through daily customer interaction. We offer enticing products and services based on the customer needs. We also cater to customers’ after-sales requests and inquiries. Our stores accept payment for bills, postpaid and prepaid sales.
Satellite branches are partner-owned Smart branded stores operating as auxiliary touchpoints for converged wired and wireless sales, aftersales and bills payment.
PLDT Enterprise, together with its operating subsidiaries, ePLDT, VITRO, PLDT Global, and Multisys, is responsible for the sales and marketing of fixed line, wireless, corporate data, and ICT products and services to corporate partners including large domestic enterprises, SMEs, the public sector, and international customers.
As part of our telesales, we reach out to our subscribers to offer the latest services, solutions and promotions. Our telesales agents, in partnership with different contact center providers, enable new connect application and existing subscribers to avail value-added solutions, upgrade and migrate their fixed line and wireless accounts, as well as recontract their expiring accounts over the phone. All orders are delivered directly to customer’s address for devices and handsets.
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Customers can conveniently access our services through our PLDT Home website and Smart Online Store, an end-to-end portal, where they can conduct various online transactions, including selecting fiber broadband or mobile subscription plans, availing of a wide array of the latest 5G and 4G mobile handsets, renewing or upgrading an existing plan, purchasing prepaid SIMs, network devices or Smart Home devices, or subscribing for e-load and various add-on promotions. All orders are delivered directly to the customers’ addresses, while fiber broadband is installed to their respective homes.
Smart App is a mobile application which allows users to link and manage multiple prepaid and postpaid accounts. With the Smart App, users can buy load, pay bills, subscribe to promotions, and earn Gigapoints. By offering various marketing promotions and events within the app, the Smart App has gained a lot of traction. Other online channels include My Smart website, Smart Chatbot, and Paywall which allow our mobile subscribers to avail of add-on promotions.
For e-Commerce, the PLDT and Smart flagship stores are now available in Lazada, Shopee, Tiktok and NextUpgrade. Our presence in these e-commerce platforms will further enhance the accessibility of our products to customers.
Others
Our other business consists primarily of our interests in digital platforms and other technologies, including our interests in MIH and Kayana.
MIH, Maya Philippines, and Maya Bank
MIH is the ultimate parent holding company of Maya Philippines, Inc. (formerly PayMaya Philippines, Inc.). In addition, MIH holds investment in Maya Bank.
Maya Philippines is registered with the BSP as an electronic money issuer, remittance and transfer company, operator of payments system, and virtual asset services provider. Maya Bank is one of only six digital banks in the Philippines licensed by the BSP.
Together, Maya Philippines and Maya Bank power the platforms under the Maya group, providing the next generation of integrated financial products to both consumers and businesses in the Philippines.
Maya continues to scale its consumer and business platforms to grow its ecosystem, expanding its portfolio of fully integrated financial services for its customers. As digital payments and banking adoption accelerate in the country, Maya’s approach enables it to drive financial penetration and reinforce its position as a leading player in the Philippines’ digital financial landscape.
In 2025, the Maya group achieved profitability, driven by topline growth, high-engagement savings activity, and disciplined cost management.
TECHNOLOGY INFRASTRUCTURE
Wireless Network Infrastructure
Mobile
Our mobile network supports 5G, 4G and other technologies. We continue to expand our LTE capacity, increase our 5G coverage, and roll out more physical sites to widen our coverage in order to sustain the growing demand for our services. We believe our mobile network covers 97% of the population and is present in 97% of the country’s cities and municipalities, as at December 31, 2025.
Fixed wireless services are also offered to residential and corporate clients through our high capacity mobile network. This complements our fibered fixed network as our fixed wireless services are able to reach areas that are not currently serviced through wired connections.
Fixed Line Network Infrastructure
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Domestic
PLDT’s fixed line infrastructure is comprised of the latest technologies, delivering voice, broadband and ICT services to home and corporate customers. We deliver voice and high-speed broadband to each home through our all-fiber network, FTTH, an IP-based platform. At present, FTTH can deliver 2.5 Gbps and up to 10 Gbps, and we have deployed FTTH in all cities and in the majority of municipalities in the Philippines. This network provides broadband availability to approximately 19.4 million homes passed, as at December 31, 2025.
PLDT provides enterprise and ICT services through its Carrier Ethernet network (CEN). PLDT’s CEN is based on Metro Ethernet Forum (MEF) 3.0, the latest standardized, carrier-class service and network. This highly reliable and resilient system provides high capacity and high-speed VPN services for all corporate customers. It supports enterprise requirements such as data storage, headquarter to branch connectivity, headquarter to disaster recovery site connectivity, cloud services and backhaul for mobile/LTE services. PLDT also uses the “Software Defined Wide Area Network” to deliver such enterprise services across different service providers and over the internet in a secured manner.
We also have an IP backbone (IPBB) network, composed of high-capacity, high-performance core and edge routers, with capacities of up to 100Gbps per port in key exchanges that provide IP connectivity to the different network elements built for PLDT, Smart and other subsidiaries and affiliates. It serves as a common and highly resilient IP transport platform for all our IP-based services. In 2020, the IPBB underwent a transformation project called the “Transport Network Transformation Project” (TNT Project), which significantly increased the network’s capacity and upgraded its routing technology to the latest technology, including segment routing and software defined network (SDN) technology.
All our networks are connected nationwide through PLDT’s nationwide fiber backbone, the DFON. DFON is comprised of transport nodes connected by terrestrial and submarine cable links configured in loops and appendages. The DFON loops provide self-healing and alternative segment route protection for added resiliency against single and multiple fiber breaks along the different segments. The DFON network also connects three of PLDT’s international cable landing stations. Following the implementation of the TNT Project, the DFON network gained added resiliency and network reliability as we implemented an automatic fail capability into the DFON network to automatically transfer traffic to other redundancy links in the event the DFON experiences downtime. The DFON is complemented by a terrestrial microwave backbone network to deliver services to remote areas unreachable by the fixed terrestrial transport network.
International
PLDT’s international network was designed and built to support IP-based international services, including voice, messaging, international enterprise solutions, and the Internet services of the PLDT Group. The international network also supports in part requirements of the international retail business run by PLDT Global in various locations in Asia, Europe and the United States.
For voice services, PLDT operates two IP voice gateways. PLDT’s facilities allow the exchange of traffic with foreign carriers and can reach foreign destinations (including fixed and wireless network destination “breakouts”, or specific areas within a country) worldwide.
The Company has international internet gateways to fortify PLDT Group’s infrastructure for internet and IP-based services, as well as connections of our fixed and wireless networks to content and internet services available from, and businesses connected to, the global internet. All these gateways employ high-capacity and high-performance routers. Together with ancillary facilities (such as security against network/service attacks), they provide premium and differentiated internet and/or IP services to all types of customers ranging from ordinary broadband to high bandwidth internet requirements of corporate customers, knowledge processing solution providers, ISPs and even other service providers. PLDT also operates offshore/ forward gateway routers in Hong Kong, Singapore, United States, and Japan to support optimized and direct access to content providers and businesses connected to the internet in Asia, as well as the continental U.S., which we expect to result in faster internet speed. All gateway routers utilize high capacity interface and transmission facilities.
To localize international internet content, PLDT employs local transparent caching network, and additionally, a network of content provider/distributor-supplied local caching servers at key locations. With these facilities, high demand content from popular content and content delivery network providers are available locally and are delivered to PLDT customers.
PLDT operates the Philippines’ most extensive international submarine cable network. As at December 31, 2025, PLDT maintains and operates three international cable landing stations in La Union and Batangas for international cables coming from the West Philippine Sea, and in Daet in the east for international cables coming from the Pacific Ocean. In May 2023, the NTC issued provisional authority to build new international cable landing stations in Baler, Aurora in the Northeast, which is targeted for completion in 2026, and in Digos, Davao in the Southern coastal borders of the Philippines, which was completed in 2025. These will provide telco carriers new alternative routes which do not traverse the usual West Philippine Sea Waters.
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In February 2025, ADC went into service and is expected to support new fixed and mobile services requirements.
PLDT is also working closely with other Asian carriers and Hyperscalers to build the Apricot Cable. The completion of the Apricot cable in 2028 will further augment PLDT's international capacity for data traffic, particularly to the U.S. and across Asia and the Pacific.
PLDT’s international automatic optical transport switching system and carrier ethernet network continues to provide effective redundancy and continuity of service to Hong Kong, Japan, Singapore, and the U.S. Mainland for premium enterprise clients. Additional dedicated submarine cable circuits were provisioned, and capacity of nodes upgraded, to support growing business requirements.
INTERCONNECTION AGREEMENTS
Since the issuance of Executive Order, or E.O., No. 59 in 1993, which requires the non-discriminatory interconnection of Philippine carriers’ networks, PLDT has entered into bilateral interconnection arrangements with other Philippine fixed line and mobile carriers. See Item 1. “Description of Business – Licenses and Regulations – Regulatory Tariffs” for further discussion.
PLDT has direct interconnection agreements with foreign carriers. PLDT also carries international calls terminating to Smart network where it has no direct interconnections.
FRANCHISES, LICENSES AND REGULATIONS
Franchises
The table below provides the expiry dates of franchises for our Company and subsidiaries, renewal of which are subject to the provisions of the KP Act:
Company
Expiry Dates of Franchises
PLDT
November 28, 2028
Clarktel(1)
June 30, 2024
Smart
May 19, 2042
SBI
November 11, 2047
DMPI
April 1, 2028
CURE
May 26, 2026
PDSI
January 26, 2026
Licenses
Pursuant to RA 7925, a franchise holder is required to obtain a CPCN/Provisional Authority (PA) from the National Telecommunications Commission (NTC) to provide specific telecommunications services authorized under its franchise. The NTC, an attached agency of the Department of Information and Communications Technology (DICT) regulates and supervises our business under the provisions of the Public Service Act (RA 11659, as amended), Executive Order (EO) Nos. 59 and 109, and RA 7925.
Material Effects of Regulation on our Business
In addition to the KP Act, other laws enacted by the Philippine Congress and issuances of certain Philippine Government Agencies regulate the manner in which we conduct our business, including:
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See Item 3. “Key Information – Risk Factors – Risks Relating to Us – Our business is subject to extensive laws and regulations, including regulations in respect of our public ownership, service rates and taxes, as well as antitrust laws. Any changes in such laws and regulations or interpretations thereto, or failure to comply with regulatory changes, could adversely affect our business and prospects.” for further discussion.
Regulatory Tariffs
Interconnect access charges are paid by one carrier to another for calls originating from a carrier’s network and terminating to another carrier’s network. Pursuant to NTC Memorandum Circular No. 05-07-2018, effective on September 1, 2018, PLDT’s interconnection charges for all calls is uniformly set at Php0.50 per minute.
PLDT has continually and actively negotiated with other legitimate Philippine fixed and CMTS carriers for interconnection based on the guidelines issued by the NTC and other authorized government agencies. These carriers include the major fixed and mobile players in the industry with nationwide operations, PAPTELCO and other non-PAPTELCO players, both of which usually operate in selected towns in the countryside.
By virtue of RA No. 11202 or the MNP Act, interconnection fees or charges are no longer imposed by MSPs for domestic calls and SMS made by subscribers. Thus, since January 2, 2020, no interconnect fees are charged for mobile domestic calls and SMS. This provision does not cover interconnection fees charged by fixed-line operators.
SEASONALITY
Our business is not subject to any material seasonal fluctuations.
COMPETITION
The telecommunications market is competitive. Including us, there are five major local exchange carriers, seven major international gateway facility providers and three major mobile operators in the Philippines. Some new entrants in the Philippine telecommunications market have entered into strategic alliances with foreign telecommunications companies, which provide them with access to technological and funding support, as well as service innovations and marketing strategies. To protect our market position, we need to continually invest in our network infrastructure to comply with regulatory obligations and to ensure that our services remain competitive. We also need to be able to identify market trends and customer preferences for our services to remain relevant. See Item 4. “Information on the Company – Competition” for further discussion.
Mobile Services
Currently, there are three major mobile operators, namely Smart, Globe and Dito. As at December 31, 2025, mobile market penetration in the Philippines was approximately 125%, based on the number of SIM cards issued.
Competition in the mobile telecommunications industry has remained active with greater availability of offers from telecommunications operators including increased data allocations and calls and texts resulting in declining yields. Competition has also increased in the postpaid space with more promotions involving greater handset subsidies. The principal bases of competition are price, including handset prices in the case of postpaid plans, quality of service, network reliability, geographic coverage and attractiveness of packaged services, including video content.
In recent years, the prevalence of OTT services, such as social media, instant messaging and internet telephone, also known as VoIP services, has greatly affected our legacy revenues from voice and SMS services. We are also facing growing competition from providers offering services using alternative wireless technologies and IP-based networks, including efforts by the Philippine Government to roll-out its free WiFi services to various municipalities in the country.
Data Services
In recent years, the market for data services has been the fastest growing segment in the Philippine telecommunications industry. This development has been spurred by the significant growth in demand for consumer and retail broadband internet access, enterprise resource planning applications, customer relationship management, knowledge processing solutions, online gaming and other e-services that drive the need for broadband and internet-protocol based solutions both in the Philippines and abroad. Our major competitors in this area are Globe and Converge ICT Solutions, Inc. The principal bases of competition in the
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data services market are coverage, price, content, value for money, bundles or free gifts, user experience, and customer service. PLDT remains committed to competing in this segment by leveraging on its overall strategy to focus on customer-centricity, maintain network leadership, broaden its distribution platform and increase its ability to deliver multimedia content.
Voice Services
Local Exchange
Although the growth of the fixed line voice market has been impacted by higher demand for mobile services, we have sustained our leading position in the fixed line market on account of PLDT's extensive fixed line and transmission network nationwide. In most areas, we face one or two competitors. Our principal competitor in the local exchange market, Globe, provides local exchange service through both fixed and fixed wireless landline services.
Fixed wireless landline services are delivered using mobile technology to a fixed device in the home with a tariff structure similar to that of a fixed line service such as the charging of monthly service fees. Our major competitor, Globe, offers services in limited areas of Metro Manila such as Makati and Las Piñas, the Visayas region and selected areas of Southern Luzon, such as Cavite and Batangas.
Revenues from this segment of the industry have significantly declined over the years with the advent of: (i) the popularity of alternative and cheaper modes of communication such as e-mail, instant messaging, social-networking (such as Facebook, Twitter and Instagram), including “free services” over the internet (such as Viber, Telegram, Line, Facebook Messenger, Zoom and WhatsApp, and similar services); and (ii) the establishment of VPNs for several corporate entities, which have further heightened competition.
With respect to outbound calls from the Philippines the significance of which has also reduced over the years, we generate revenues through our local exchange and mobile businesses, which are the origination points of outbound international calls. We also have introduced a number of marketing initiatives to stimulate growth of outbound call volumes, including tariff reductions and volume discounts for large corporate subscribers.
The number of inbound international voice calls into the Philippines continues to be negatively impacted by the popularity of OTT services due to improved internet access and the continued increase of smartphone adoption. One measure to slow down the decline in the remaining ILD traffic is PLDT’s strategic partnership with Saudi Telecom Company. Joint efforts on traffic sales management and anti-fraud programs have resulted in sustained business value for the ILD business.
Our domestic service business has been negatively affected by the widespread availability and growing popularity of alternative economical to free non-voice methods of communication, particularly OTT services, e-mail and social media, resulting in the change in the market’s communications habits as evidenced by the growing number of mobile subscribers in the Philippines. In addition, VAS providers have launched voice services via the internet to their subscribers nationwide.
While domestic call volumes have been declining, we have remained the leading provider of domestic service in the Philippines due to our significant subscriber base and ownership of the Philippines’ most extensive transmission network.
ENVIRONMENTAL MATTERS
Environmental Management and Stewardship
Environmental management is a key component to PLDT’s sustainability roadmap and commitment towards responsible business conduct. Beyond regulatory compliance, we strive to continuously embed environmental stewardship principles into our operations, risk management, value creation, governance, and disclosure frameworks.
Management Approach
The PLDT Board of Directors, through its Governance, Nomination, and Sustainability Committee (GNSC), oversees the Company’s environmental and climate-related management strategies and programs. Additionally, the Board Risk Committee maintains parallel oversight of these matters with respect to the inclusion of climate and nature-related risks into the Company’s top enterprise risks.
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Various Board-approved PLDT and Smart policies guide our environmental management approach, including our commitments on biodiversity, energy management, and water, as well as our CEO-approved Occupational Safety and Health & Environmental Commitments. These policies recognize the importance of environmental stewardship as a contributor to achieving business goals, as well as strengthening our alignment and compliance with environmental laws and regulations. These also foster alignment of values and commitments with our supply chain and business partners, reinforcing the PLDT Group Supplier Code of Conduct which enjoins suppliers to actively manage their environmental impact and ensure parallel compliance with regulations.
To ensure continuous improvement and transparency, we adhere to the ISO 14001:2015 (Environmental Management System) Standards, and align with relevant environmental principles, indicators, and disclosure standards of the United Nations Global Compact, the Philippine Financial Reporting Standards S2 on Climate-related Disclosures, Taskforce on Nature-related Financial Disclosures, and CDP, among others.
Operationalizing our commitments, PLDT and Smart Corporate Environment, Health, and Safety (CEHS), Property, Facilities, Asset Resilience Management (PFARM) and Network units implement environmental management processes and mechanisms to assess and manage our environmental impact, as well as ensure regular monitoring of the performance of all facilities, equipment, and generator sets across the country. These teams also create and implement risk mitigation plans for facilities located in or near ecologically protected areas, including reforestation initiatives and stakeholder consultation efforts.
In addition, the PLDT Group has also designated Pollution Control Officers (PCOs) assigned to each company facility to reinforce environmental performance review and facilitate reporting on operational progress on a regular basis to the Department of Environment and Natural Resources (DENR), the Laguna Lake Development Authority, and other national and local regulatory bodies. The PCOs monitor compliance with laws and regulations on air, water, and pollution.
Across the organization, we conduct various trainings and campaigns for employees to promote awareness and ensure understanding of the impact of workplace operations on the environment and in communities where we operate.
To aid in the review and evaluation of our performance, we undertake periodic audits of our environmental management system through trained Internal Auditors and International Register of Certificated Auditors (IRCA)-certified Lead Auditors facilitating the implementation of the Environment, Health, and Safety (EHS) audit program across the different sites.
In 2025, PLDT and Smart continued to enforce a Supplier Code of Conduct and complementing sustainability guidelines and EHS manuals. These mandate suppliers to actively manage their environmental impact and comply with applicable environmental laws and regulations as part of their supply chain management processes.
CEHS teams successfully renewed relevant ISO certifications, following a surveillance audit conducted by the Group’s independent certifying body BSI Philippines Inc. The audit concluded with zero nonconformity findings, affirming the robustness, consistency, and effective implementation of the integrated Quality, Environmental, and Occupational Health and Safety Management System.
This successful renewal builds on the milestones achieved in 2024, when PLDT earned certifications for various international standards, including the ISO 14001:2015 (Environmental Management System). Smart was likewise recommended for these same set of certifications.
Opportunities for improvement identified during the audit were proactively addressed to further strengthen system effectiveness, governance, and operational discipline. These actions reinforce the PLDT Group’s culture of continuous improvement and its sustained commitment to high standards of quality, environmental performance, and workplace safety across operations.
Beyond our own operations, we work with our supply chain to undertake regular assessments and stakeholder consultations to manage the environmental impact of our facilities and operations. We integrate environmental criteria in the screening performance of our suppliers and hold various engagements to foster alignment of the supply chain with our policies and standards on environmental management.
Climate Change
The PLDT Group continues to recognize climate change as one of its top enterprise risks. This considers the high-risk profile and vulnerability of the Philippines to the worsening impacts of climate change, including more frequent and severe typhoons and weather disturbances with consequential effects such as flooding. The effects of climate change increase the likelihood of damage to the Group’s physical infrastructure and network equipment, which can consequently disrupt operations and delivery of services.
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In 2025, we have expanded conduct of a comprehensive analysis to identify the impact of various climate scenarios on our assets and financials. Results guide continuing efforts to integrate climate and nature-related risk mitigation strategies into key aspects of our strategic planning, operational design, resource allocation, employee upskilling, and supply chain management programs.
Aside from managing physical impacts, the urgent need to address climate change in the Philippines may lead to the enactment of more stringent laws and regulations, which will further entail necessary investments, resources, and capacity-building efforts for the PLDT Group to remain compliant and competitive. We also continue to support the government in fostering a whole-of-nation approach towards climate action, helping ensure just transition of our key stakeholders and anchoring our climate strategies on human welfare.
Operational Resource Efficiency
In support of the Philippines' Nationally Determined Contribution under the Paris Agreement and the global ambition to achieve Net Zero by 2050, the PLDT Group developed a decarbonization roadmap that aims to reduce its Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 40% by 2030 against a 2019 baseline. Such target is underpinned by various initiatives that promote energy and operational resource efficiency, as well as the adoption of renewable energy and green technologies across our operations. These measures are also aimed at achieving resource cost-efficiencies and ensuring uninterrupted operations and delivery of services.
In line with Republic Act No. 11285 or the Energy Efficiency and Conservation Act, the PLDT Group continues to strengthen its energy efficiency and management initiatives across its network sites and facilities nationwide. We have established dedicated teams and internal experts to manage our energy management performance, including Certified Energy Managers and Certified Energy Auditors.
In addition, we have ramped up audits of the energy management performance of our critical network sites and base stations nationwide. These audits evaluate equipment performance, cooling systems, site layouts, and onsite energy practices to identify targeted improvements that enhance energy efficiency and strengthen network reliability. These also serve as capacity-building engagements for our field personnel, reinforcing their ability to apply energy management best practices on the ground.
As part of our broader efforts to optimize energy use and advance our decarbonization roadmap, we implement various energy efficiency measures, including the installation of direct current generator sets, solar panels, and photovoltaic cells. These have been designed to enable us to ensure wireless network coverage in remote areas, and reduce our dependence on diesel-fueled generators in cases of power failures and emergency situations. We have also put in place a company-wide mechanism for fuel requests, as well as active tools to validate electricity use and improve resource consumption efficiency.
Alongside energy efficiency initiatives, we have also been expanding supply partnerships to further increase the share of renewables in our energy mix, under the Department of Energy’s Green Energy Option Program and the Energy Regulatory Commission’s Retail Aggregation Program. For our fleet, we are advancing a rationalization program which is expected to contribute to reductions in our fuel consumption and GHG emissions.
Meanwhile, we also keep track of our water consumption and operationalize water efficiency efforts, recognizing water as a scarce natural resource. These include the use of advanced cooling systems in our data centers and the installation of rainwater catchment systems in key facilities. We also ensure that our wastewater is treated and disposed of in accordance with regulatory requirements, especially for facilities not served by local water utilities. Throughout the year, we also integrate water into our organizational campaigns to promote employee awareness on our consumption and encourage them to contribute to efficiency initiatives.
Circularity and Waste Management
Circularity and effective waste management are among the key focus areas of the PLDT Group’s environmental management roadmap. With the goal of reducing our overall waste generation, we implement mechanisms continuously to track our waste performance, set targets for programs that minimize waste, capacitate our employees, and leverage innovation and strategic partnerships in support of circularity.
To manage solid waste, we have deployed waste segregation mechanisms and refreshed waste bin systems to our facilities nationwide. In parallel, we continuously train our personnel to ensure adherence of each facility with national and local government regulations and waste collection schemes.
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To manage plastic packaging waste, PLDT and Smart have strengthened commitment to the Extended Producers Responsibility Act (EPR) as registered Obliged Enterprises. In accordance with the law, the Group has engaged PCX Markets Philippines, Inc. as its Producer Responsibility Organization (PRO) for the implementation of its EPR programs and reporting.
During the year, we continued to train our employees and enable communities to reduce waste that end up in landfills, particularly through our participation in the X-Trash Challenge of the Philippine Business for Social Progress and Basic Environmental Systems and Technologies. PLDT and Smart employees participated by segregating their waste and exchanging recyclables, such as plastics, paper, and metals for environmental points. Accumulated points were subsequently used to procure grocery packs, which were consequently donated to an indigent community in Quezon City.
To promote circular use of network assets and better organize workplaces, we have strengthened our 5S Program and launched “AYOS 5S” in 2025. Under this program, we conducted a full inventory of network assets such as cables, radio equipment, modules, electrical and electronic components, computers, routers, servers, and power racks. Functional and reusable decommissioned network equipment were segregated for redeployment in new rollouts, sold, and repurposed, while non-usable assets were properly retired in accordance with environmental regulations. This initiative not only strengthened waste reduction and circularity practices, but also generated substantial cost savings, highlighting the business value of efficient asset utilization and responsible waste management.
To manage our hazardous and electronic waste (e-waste), we have maintained partnerships with various hazardous waste transporters and treaters accredited by the DENR. These covered used lead acid batteries from company vehicles, as well as e-wastes generated within our facilities and own operations.
Beyond our organization, we continued to expand our “Be Kind. Recycle.” program to encourage employees, customers, and stakeholder communities to properly dispose and recycling their e-wastes. While PLDT and Smart may not be producers of electronics, we recognize that the delivery of our services contributes to the generation of e-waste. To address this, we have set a target to make proper e-waste disposal and recycling accessible to PLDT and Smart employees, customers, and the public nationwide. Through partnerships with commercial establishments, schools, enterprise clients, and local government units like Baguio City where we continue to support a TSD facility, we have increased roll-out of e-waste collection bins and activated over 200 community partners from June 2023 to December 2025.
INTELLECTUAL PROPERTY RIGHTS
We do not own any material intellectual property rights apart from our brand names and logos. We are not dependent on patents, licenses or other intellectual property which are material to our business or results of operations, other than licenses to use the software that accompany most of our equipment purchases and licenses for certain contents used in VAS of our wireless business. See Note 14 – Goodwill and Intangible Assets to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
C. Organizational Structure
See Exhibit 8. “List of Subsidiaries” for a listing of PLDT’s significant subsidiaries, including name, country of incorporation, proportion of ownership interests and, where different, proportion of voting power held.
D. Properties and Equipment
As at December 31, 2025, the PLDT Group owns three office buildings located in Makati City and owns and operates fixed line exchanges nationwide.
As at December 31, 2025, our principal properties, excluding property under construction, consisted of the following, based on net book values:
For more information on these properties, see Note 9 – Property and Equipment to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
These properties are located in areas where our subscribers are being served. In our opinion, these properties are in good condition, except for ordinary wear and tear, and are adequately insured.
The majority of our connecting lines are above or under public streets and properties owned by others. For example, for many years, the PLDT Group has been using the power pole network of Manila Electric Company (Meralco) in Metro Manila for PLDT’s fixed line aerial cables in this area pursuant to short-term lease agreements with Meralco with typically five-year and more recently one-year terms.
The PLDT Group has various lease contracts for periods ranging from one to thirty years covering various items of sites, buildings, leased circuits and poles used in our operations. For more information on the obligations relating to these properties and long-term obligations, see Note 10 – Leases, Note 20 – Interest-Bearing Financial Liabilities and Note 27 – Financial Assets and Liabilities to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
We expect that in 2026, cash from operating activities should enable us to fund our capital expenditures for the continued expansion and upgrading of our network infrastructure. We expect to make additional investments in our core facilities to leverage existing technologies and increase capacity. Our current estimate for consolidated capital expenditures in 2026 will be in the mid-Php50 billion range. See Item 5. “Operating and Financial Review and Prospects – Capital Expenditure Plans” for further discussion on our capital expenditures.
Item 4A. Unresolved Staff Comments
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements (and the related notes) as at December 31, 2025 and 2024 and for each of the three years ended December 31, 2025, 2024 and 2023 included elsewhere in this report. This discussion contains forward-looking statements that reflect our current views with respect to future events and our future financial performance. These statements involve risks and uncertainties, and our actual results may differ materially from those anticipated in these forward-looking statements as a result of particular factors such as those set forth under "Forward-Looking Statements" and Item 3. "Key Information – Risk Factors" and elsewhere in this report. Our consolidated financial statements, and the financial information discussed below, have been prepared in accordance with IFRS Accounting Standards. For convenience, certain Philippine peso financial information in the following discussions have been converted to U.S. dollars at the exchange rate at December 31, 2025 of Php58.79 to US$1.00, as quoted through the BAP.
A. Operating Results
Overview
We are one of the leading telecommunications and digital services providers in the Philippines, serving the fixed line, wireless and broadband markets. Through our three principal business segments, Wireless, Fixed Line and Others, we offer a wide range of telecommunications and digital services across our extensive fiber optic backbone and wireless and fixed line networks. See Note 4 – Operating Segment Information to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further information on each of these segments.
Key performance indicators and drivers that our management uses to monitor and direct the operation of our businesses include, among others, the general economic conditions in the Philippines; market trends, such as customer demands, behavior and satisfaction parameters; technological developments; network performance (in terms of speed, coverage and capacity); market share; and profitability.
In addition, our results of operations and financial position are affected by fluctuations of the Philippine peso against the U.S. dollar.
Key Factors Affecting our Results of Operations
The key factors that have affected and that we expect will continue to affect our results of operations are set out below.
Competition
The telecommunications market is competitive. Including us, there are five major local exchange carriers, seven major international gateway facility providers and three major mobile operators in the Philippines. Some new entrants in the Philippine telecommunications market have entered strategic alliances with foreign telecommunications companies, which provide them with access to technological and funding support, as well as service innovations and marketing strategies. To protect our market position, we need to continually invest in our network infrastructure to comply with regulatory obligations and to ensure that our services remain competitive. We also need to be able to identify market trends and customer preferences for our services to remain relevant. See Item 4. “Information on the Company – Competition” for further discussions.
Technology Developments and Capital Expenditures
Improvements in technology influence our customers’ demand for services and equipment. For example, demand for fixed line telecommunications services has been affected by continued significant growth in the mobile data services. The increase in broadband adoption has also proven to be a critical factor in facilitating the offering of value-added services to customers and the combination of products made available to customers.
In providing data services, we must constantly upgrade our access technology and software, embrace emerging transmission technologies and improve the responsiveness, functionality, coverage and features of our services. In the mobile data business, to provide our subscribers with new and better services, we must enhance our mobile network and extend 5G technology and bandwidth for mobile data transmission. In addition, as new technologies develop, equipment may need to be replaced or upgraded, and network facilities may need to be rebuilt in whole or in part, at substantial cost, to remain competitive. These enhancements and the implementation of new technologies will require increased capital expenditures.
Regulations
We are significantly affected by laws and regulations, particularly those relating to service rates, taxes, labor and antitrust, and may incur significant capital expenditures to ensure compliance with such laws and regulations. For example, the NTC regulates the rates we are permitted to charge for services that have not yet been deregulated, such as local exchange services. We are also subject to a number of local and national taxes. We are also subject to antitrust and labor laws. We have an on-going petition with the PCC with respect to our acquisition of the telecommunications business of SMC in 2016, as well as an outstanding petition pending resolution by the Philippine Supreme Court with respect to the regularization orders by the DOLE. For more details of the regulations to which we are subject and their impacts on our business, see Item 4. “Information on the Company – Franchises, Licenses and Regulations”.
Financial Instruments
While a certain percentage of our revenues are either linked to or denominated in U.S. Dollars, a substantial portion of our capital expenditures, a portion of our indebtedness and related interest expense and a portion of our operating expenses are denominated in foreign currencies, mostly in U.S. Dollars. As such, a strengthening or weakening of the Philippine Peso against the U.S. Dollar will decrease or increase in Philippine Peso terms both the principal amount of our foreign currency-denominated debts and the related interest expense, our foreign currency-denominated capital expenditures and operating expenses as well as our U.S. Dollar-linked and U.S. Dollar-denominated revenues. In addition, many of our financial ratios and other financial tests are affected by the movements in the Philippine Peso to U.S. Dollar exchange rate.
To manage our foreign exchange risks and to stabilize our cash flows in order to improve investment and cash flow planning, we enter into forward foreign exchange contracts, currency swap contracts, currency option contracts and other hedging products aimed at reducing and/or managing the adverse impact of changes in foreign exchange rates on our operating results and cash flows. We use forward foreign exchange purchase contracts, currency swap contracts and currency option contracts to manage the foreign currency risks associated with our foreign currency-denominated financial liabilities.
See Note 27 – Financial Assets and Liabilities – Financial Risk Management Objectives and Policies to the accompanying consolidated financial statements in Item 18. “Financial Statements” for a detailed discussion of our foreign currency exchange risk and hedging instruments.
43
Key Components of Results of Operations
Revenues
We generate revenues primarily from providing the following telecommunications services: cellular voice, SMS and data services in the wireless business; and local exchange, international and national long distance, data and other network, and information and communications services in the fixed line business. Revenue from contracts with customers for the provision of the aforementioned services comprise service revenue and non-service revenue. Services may be rendered separately or bundled with goods or other services.
In each of the years ended December 31, 2025, 2024 and 2023, the majority of our revenues are derived from our operations within the Philippines. Our revenues derived from outside the Philippines consist primarily of revenues from incoming international calls to the Philippines.
See Note 2 – Summary of Material Accounting Policies – Revenues from contracts with customers to the accompanying consolidated financial statements in Item 18. “Financial Statements” for a detailed discussion of our revenues.
Expenses
Our expenses comprise (i) general operating costs, (ii) depreciation and amortization expenses, (iii) cost of devices, accessories and contract-specific services, (iv) asset impairment and (v) interconnection costs.
General Operating Costs
We incur general operating costs comprising the cost of repairs and maintenance, employee compensation and benefits, fees for professional and other contracted services, selling and promotions, taxes and licenses, insurance and security services, rent, communication, training and travel, and other expenses.
Depreciation and Amortization Expenses
We incur depreciation and amortization expenses in relation to our property and equipment, lease for our properties and subscriber contract cost to fulfill.
Cost of Devices, Accessories and Contract-specific Services
Cost of devices and accessories comprise the cost of mobile handsets, phone units and broadband data modems and devices which we purchase for sale to customers. Cost of contract-specific services comprise the costs from third-party vendors that are directly identifiable and distinct to specific customer contracts where we are the principal, such as content, license, and maintenance/warranty costs.
Asset Impairment
Asset impairment primarily comprises impairment on trade and other receivables, inventories and supplies, contract assets, property and equipment and other non-current assets.
Other Income (Expenses) – Net
Other income (expenses) – net primarily comprises gains (losses) on derivative financial instruments, gains on sale and leaseback of telecom towers, interest income, equity share in net income (losses) of associates and joint ventures, financing costs, foreign exchange gains (losses), and other miscellaneous income.
44
Results of Operations
The following table sets forth a summary of our consolidated statements of operations for the years presented, both in millions and as a percentage of our revenues for the years presented. This information should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report. The results of operations in any period are not necessarily indicative of our future trends.
(amounts in million Php)
Revenues from contracts with customers
Service Revenues
212,186
97
208,382
96
201,832
Non-service Revenues
6,202
8,451
9,121
218,388
216,833
210,953
General operating costs
75,789
78,068
81,655
Depreciation and amortization
59,487
56,228
58,662
Cost of devices, accessories and contract-specific services
12,784
14,011
15,092
Asset impairment
3,970
4,321
4,432
Interconnection costs
16,010
13,718
10,418
168,040
77
166,346
170,259
81
50,348
50,487
40,694
Other Expenses – net
(12,658
)
(6
(9,943
(5
(5,984
(3
Income Before Income Tax from Continuing Operations
37,690
40,544
34,710
Provision for Income Tax
8,821
9,601
9,170
Net Income from Continuing Operations
28,869
30,943
25,540
Net Loss from Discontinued Operations
—
Net Income
25,499
The following table shows the contribution by each of our business segments to our consolidated statement of operations for the years presented.
Intersegment and Consolidation Entries
Consolidated
For the year ended December 31, 2025
103,316
130,810
(15,738
86,583
95,585
(14,135
Other income (expenses) – net
(4,587
(2,816
546
(5,801
Income (loss) before income tax
12,146
32,409
539
(7,404
Provision for (benefit from) income tax
2,709
6,810
(29
(669
Net income/Segment profit
9,437
25,599
568
(6,735
For the year ended December 31, 2024
105,734
126,490
(15,391
86,653
95,357
90
(15,754
(5,504
6,370
(988
(9,821
13,577
37,503
(1,078
(9,458
3,086
6,154
(9
370
Net income (loss)/Segment profit (loss)
10,491
31,349
(1,069
(9,828
For the year ended December 31, 2023
104,401
120,734
(14,182
82,827
102,352
(14,938
1,169
10,696
(2,251
(15,598
22,743
29,078
(2,269
(14,842
Provision for income tax
5,458
3,652
59
17,285
25,426
(2,270
(14,901
Continuing operations
Discontinued operations
45
The following table shows the breakdown of our consolidated revenues by service and non-service revenues for the years ended December 31, 2025, 2024 and 2023:
97,568
(699
96,869
95,619
(646
94,973
Fixed Wireless broadband
1,896
Other services
53
(53
130,355
(15,038
115,317
Voice(1)
31,226
(1,254
29,972
Data
99,068
(13,784
85,284
Home broadband
53,375
(17
53,358
Corporate data and ICT
45,693
(13,767
31,926
Miscellaneous
61
Total Service Revenues
(15,737
Non-Service Revenues
Sale of devices and accessories
5,748
455
Total Non-Service Revenues
Total Revenues
Service Revenues(2)
97,779
(790
96,989
96,246
(738
95,508
1,481
52
(52
125,994
(14,601
111,393
29,660
(1,560
28,100
96,269
(13,041
83,228
51,759
(18
51,741
44,510
(13,023
31,487
65
7,955
496
95,677
(683
94,994
94,007
(642
93,365
1,629
120,336
(13,498
106,838
26,686
(1,526
25,160
93,597
(11,972
81,625
50,876
(24
50,852
42,721
(11,948
30,773
(14,181
8,724
46
Comparison of Years Ended December 31, 2025 and 2024
On a Consolidated Basis
We reported consolidated revenues of Php218,388 million in 2025, an increase of Php1,555 million, or 1%, as compared with Php216,833 million in 2024, primarily due to higher consolidated revenues from data and voice services, partially offset by lower consolidated non-service revenues.
Our consolidated service revenues of Php212,186 million in 2025, increased by Php3,804 million, or 2%, from Php208,382 million in 2024. Our consolidated non-service revenues of Php6,202 million in 2025, decreased by Php2,249 million, or 27%, from Php8,451 million in 2024.
Consolidated service revenues, net of interconnection costs of Php16,010 million, amounted to Php196,176 million in 2025, an increase of Php1,512 million, or 1%, from Php194,664 million in 2024.
The following table shows the breakdown of our consolidated revenues by business segment for the years ended December 31, 2025 and 2024:
Change
Amount
47
49
(2,418
60
58
4,320
Inter-segment transactions
(7
(347
1,555
Consolidated expenses increased by Php1,694 million, or 1%, to Php168,040 million in 2025 from Php166,346 million in 2024, primarily due to higher depreciation and amortization, and interconnection costs, partially offset by lower expenses related to general operating costs, cost of devices, accessories and contract-specific services, and asset impairment.
The following table shows the breakdown of our consolidated expenses by business segment for the years ended December 31, 2025 and 2024:
51
(70
57
228
(83
(92
(8
1,619
1,694
Consolidated other expenses – net amounted to Php12,658 million in 2025, an increase of Php2,715 million, or 27%, from Php9,943 million in 2024, primarily due to the combined effects of the following: (i) higher net financing costs by Php2,668 million; (ii) net losses on derivative financial instruments of Php41 million in 2025 as against net gains on derivative financial instruments of Php1,641 million in 2024; (iii) higher net foreign exchange losses by Php514 million; (iv) lower interest income by Php197 million; (v) lower equity share in net losses by Php562 million; and (vi) higher other miscellaneous income – net by Php1,784 million.
The following table shows the breakdown of our consolidated other income (expenses) – net by business segment for the years ended December 31, 2025 and 2024:
917
(9,186
(144
1,534
155
4,020
(2,715
(27
Consolidated net income decreased by Php2,074 million, or 7%, to Php28,869 million in 2025 from Php30,943 million in 2024. The decrease was mainly due to the combined effects of the following: (i) higher consolidated other expenses – net by Php2,715 million; (ii) higher consolidated expenses by Php1,694 million; (iii) higher consolidated revenues by Php1,555 million; and (iv) lower provision for income tax by Php780 million. Our consolidated basic and diluted EPS decreased to Php132.38 in 2025 from Php141.80 in 2024. Our weighted average number of outstanding common shares was approximately 216.06 million for each of the years ended December 31, 2025 and 2024.
The following table shows the breakdown of our consolidated net income by business segment for the years ended December 31, 2025 and 2024:
(1,054
(10
88
(5,750
1,637
153
(23
(32
3,093
(2,074
On a Business Segment Basis
We generated revenues of Php103,316 million from our Wireless business segment in 2025, a decrease of Php2,418 million, or 2%, from Php105,734 million in 2024.
The following table summarizes our total revenues by service from our Wireless business segment for the years ended December 31, 2025 and 2024:
Increase (Decrease)
Service Revenues:
92
91
(627
415
Other services(1)
Total Wireless Service Revenues
(211
Non-Service Revenues:
(2,207
(28
Total Wireless Revenues
Our wireless service revenues decreased by Php211 million to Php97,568 million in 2025 as compared with Php97,779 million in 2024, primarily due to lower revenues from our legacy mobile services (voice and SMS), partially offset by higher revenues from
48
mobile data and fixed wireless broadband services. As a percentage of our total wireless revenues, service revenues accounted for 94% and 92% in 2025 and 2024, respectively.
Wireless service revenues, net of interconnection costs, amounted to Php96,527 million in 2025, a decrease of Php281 million from Php96,808 million in 2024.
Our mobile service revenues amounted to Php95,619 million in 2025, a decrease of Php627 million, or 1%, from Php96,246 million in 2024. Mobile service revenues accounted for 98% of our wireless service revenues in each of 2025 and 2024.
The following table shows the breakdown of our mobile service revenues for the years ended December 31, 2025 and 2024:
2024(1)
Mobile Services:
79,604
83
78,971
82
633
Voice
8,446
9,374
(928
SMS
6,401
6,761
(360
Others(2)
1,168
1,140
Total
Mobile revenues from our data services, which include mobile internet, mobile broadband and other data services, increased by Php633 million, or 1%, to Php79,604 million in 2025 from Php78,971 million in 2024 due to higher mobile internet revenues, partially offset by lower mobile broadband data revenues.
Data services accounted for 83% and 82% of our mobile service revenues for the years ended December 31, 2025 and 2024, respectively.
The following table shows the breakdown of our mobile data service revenues for the years ended December 31, 2025 and 2024:
Data Services:
Mobile internet(1)
76,344
75,061
95
1,283
Mobile broadband
1,677
2,255
(578
(26
Other data
1,583
1,655
(72
(4
Mobile Internet
Mobile internet service revenues increased by Php1,283 million, or 2%, to Php76,344 million in 2025 from Php75,061 million in 2024, primarily due to our mobile data offerings, such as Power All, Magic Data and Unli 5G offers. Smart continues to drive usage and top-ups via Smart App, the Smart Online Store, digital touchpoints and its retailer network. The increase in data traffic was driven by the 5G network expansion, growth of 5G devices, leading to higher 5G data usage.
Smart has also rolled out 5G offers and device financing through partnerships with credit card companies to drive more users on 5G. Smart also launched iPhones on prepaid to drive 5G adoption in the prepaid category.
Mobile internet services accounted for 80% and 78% of our mobile service revenues in 2025 and 2024, respectively.
Mobile Broadband
Mobile broadband revenues generated from the use of pocket WiFi, amounted to Php1,677 million in 2025, a decrease of Php578 million, or 26%, from Php2,255 million in 2024, primarily due to lower demand for pocket WiFi devices.
Mobile broadband services accounted for 2% of our mobile service revenues in each of 2025 and 2024.
Other Data
Revenues from our other data services, which include VAS and domestic leased lines, decreased by Php72 million, or 4%, to Php1,583 million in 2025 from Php1,655 million in 2024.
Mobile revenues from our voice services, which include all voice traffic, decreased by Php928 million, or 10%, to Php8,446 million in 2025 from Php9,374 million in 2024, due to subscribers’ shift to alternative calling options, digital teleconferencing solutions, and other OTT services. Nevertheless, our core modernization phase 1, which was finished in the fourth quarter of 2025 has enabled better voice services such as VoLTE, Voice over WiFi (VoWiFi) and ViLTE which has improved our voice revenues despite our 3G shutdown. Mobile voice services accounted for 9% and 10% of our mobile service revenues in 2025 and 2024, respectively.
SMS Services
Mobile revenues from our SMS services, which include all SMS-related services, decreased by Php360 million, or 5%, to Php6,401 million in 2025 from Php6,761 million in 2024, mainly on account of the decline in SMS volumes resulting from the increased adoption of alternative messaging solutions such as OTT messaging, social media and chat applications. Mobile SMS services accounted for 7% of our mobile service revenues in each of 2025 and 2024.
Mobile revenues from other services increased by Php28 million, or 2%, to Php1,168 million in 2025 from Php1,140 million in 2024 mainly due to higher other subscriber-related revenues.
Subscriber Base, ARPU and Churn Rates
The following table shows our mobile subscriber base as at December 31, 2025 and 2024:
Mobile subscriber base(1)
803,323
Smart(2)
21,713,502
21,759,728
(46,226
TNT
35,821,310
34,971,761
849,549
98,390
901,713
In view of the SIM Registration Act, we recognize a prepaid mobile subscriber as active upon registration of the SIM card. We consider a prepaid mobile subscriber as churned if the subscriber does not reload within 180 days after the full usage or expiry of the last reload.
The average monthly churn rates for Smart Prepaid subscribers were 2.5% and 2.2% in 2025 and 2024, respectively, while the average monthly churn rates for TNT subscribers were 2.3% and 2.0% in 2025 and 2024, respectively.
The average monthly churn rates for Postpaid subscribers were 1.2% and 1.1% in 2025 and 2024, respectively.
The following table summarizes our average monthly ARPUs for the years ended December 31, 2025 and 2024:
Gross(1)
Increase(Decrease)
Net(2)
(amounts in Php)
132
137
)%
123
112
105
719
729
670
688
50
Revenues from our Fixed Wireless Broadband services amounted to Php1,896 million in 2025, an increase of Php415 million, or 28%, from Php1,481 million in 2024.
Other Services
Revenues from our other services amounted to Php53 million in 2025, an increase of Php1 million, or 2%, from Php52 million in 2024.
Our wireless non-service revenues consist of sale of mobile handsets, broadband data routers and devices. Our wireless non-service revenues decreased by Php2,207 million, or 28%, to Php5,748 million in 2025 from Php7,955 million in 2024, primarily due to tighter credit parameters resulting in lower number of mobile handsets issued.
Expenses associated with our Wireless business segment amounted to Php86,583 million in 2025, a decrease of Php70 million from Php86,653 million in 2024. The decrease was attributable to lower cost of devices, accessories and contract-specific services, general operating costs and asset impairment, partially offset by higher expenses related to depreciation and amortization and interconnection costs. As a percentage of our total wireless revenues, expenses associated with our Wireless business segment accounted for 84% and 82% in 2025 and 2024, respectively.
The following table summarizes the breakdown of our total wireless-related expenses for the years ended December 31, 2025 and 2024 and the percentage of each expense item in relation to the total:
40,560
36,483
4,077
36,637
37,813
(1,176
Cost of devices, accessories and cost-specific services
7,693
10,480
(2,787
652
906
(254
85,542
85,682
(140
1,041
971
General operating costs decreased by Php1,176 million, or 3%, from 2024 to Php36,637 million in 2025, primarily due to lower expenses related to selling and promotions, compensation and employee benefits, and professional and other contracted services, partially offset by higher expenses related to taxes and licenses, and repairs and maintenance.
Depreciation and amortization charges increased by Php4,077 million, or 11%, from 2024 to Php40,560 million in 2025, mainly on account of higher accelerated depreciation recognized in 2025 for the modernization of certain technology equipment, combined with the depreciation of newly capitalized property and equipment, and higher amortization of capitalized leases arising from the sale and leaseback of telecom towers.
Cost of devices, accessories and contract-specific services decreased by Php2,787 million, or 27%, from 2024 to Php7,693 million in 2025, primarily due to lower number of units issued for mobile handsets and lower SIM printing costs.
Asset impairment decreased by Php254 million, or 28%, from 2024 to Php652 million in 2025, primarily due to lower provision for inventory obsolescence.
Interconnection costs increased by Php70 million, or 7%, from 2024 to Php1,041 million in 2025.
The following table summarizes the breakdown of our total wireless-related other income (expenses) – net for the years ended December 31, 2025 and 2024:
Other Income (Expenses) – Net:
Interest income
554
698
(21
Equity share in net earnings (losses) of associates and joint ventures
(11
(100
Foreign exchange gains (losses) – net
(12
775
(787
(102
Gains (losses) on derivative financial instruments – net
885
(912
(103
Financing costs – net
(9,941
(9,763
(178
Other income – net
4,850
1,901
2,949
Our Wireless business segment’s other expenses – net amounted to Php4,587 million in 2025, a decrease of Php917 million, or 17%, from Php5,504 million in 2024, primarily due to the combined effects of the following: (i) net losses on derivative financial instruments of Php27 million in 2025 as against net gains on derivative financial instruments of Php885 million in 2024 mainly due to lower depreciation of the Philippine peso relative to the U.S. dollar in 2025 as compared to 2024; (ii) net foreign exchange losses of Php12 million in 2025 from net foreign exchange gains of Php775 million in 2024 mainly on account of revaluation of net foreign currency-denominated liabilities; (iii) higher net financing costs by Php178 million; (iv) lower interest income by Php144 million; (v) equity share in net losses of associates of Php11 million; and (vi) higher other income – net by Php2,949 million, which includes reversal of excess LTIP accrual.
Provision for income tax amounted to Php2,709 million in 2025, a decrease of Php377 million, or 12%, from Php3,086 million in 2024, mainly due to lower net income before tax.
As a result of the foregoing, our Wireless business segment’s net income decreased by Php1,054 million, or 10%, to Php9,437 million in 2025 from Php10,491 million in 2024.
Revenues generated from our Fixed Line business segment amounted to Php130,810 million in 2025, an increase of Php4,320 million, or 3%, from Php126,490 million in 2024.
The following table summarizes our total revenues by service from our Fixed Line business segment for the years ended December 31, 2025 and 2024:
76
2,799
1,566
Total Fixed Line Service Revenues
4,361
Total Fixed Line Revenues
Our fixed line service revenues increased by Php4,361 million, or 3%, to Php130,355 million in 2025 from Php125,994 million in 2024, primarily due to higher revenues from our data and voice services.
Fixed Line service revenues, net of interconnection costs, amounted to Php114,122 million in 2025, an increase of Php2,447 million, or 2%, from Php111,675 million in 2024.
Our data services, which include Home broadband, corporate data, and ICT, posted revenues of Php99,068 million in 2025, an increase of Php2,799 million, or 3%, from Php96,269 million in 2024, primarily due to higher revenues from Home broadband and ICT services, partially offset by lower revenues from corporate data and leased lines. The percentage contribution of this service segment to our fixed line service revenues accounted for 76% in each of 2025 and 2024.
The following table shows information of our data service revenues for the years ended December 31, 2025 and 2024:
Data service revenues
54
1,616
1,183
Home Broadband
Home broadband data revenues amounted to Php53,375 million in 2025, an increase of Php1,616 million, or 3%, from Php51,759 million in 2024, mainly driven by the increasing demand for broadband services. Home broadband revenues accounted for 54% of fixed line data service revenues in each of 2025 and 2024.
Corporate Data and ICT
Corporate data services amounted to Php36,278 million in 2025, a decrease of Php398 million, or 1%, as compared with Php36,676 million in 2024, mainly due to lower revenues from legacy data networking services. Corporate data revenues accounted for 37% and 38% of our total data service revenues in 2025 and 2024, respectively.
ICT revenues increased by Php1,581 million, or 20%, to Php9,415 million in 2025 from Php7,834 million in 2024, mainly due to higher revenues from data center, managed IT services, data center, and data and AI solutions. The percentage contribution of this service segment to our total data service revenues accounted for 9% and 8% in 2025 and 2024, respectively.
Revenues from our voice services increased by Php1,566 million, or 5%, to Php31,226 million in 2025 from Php29,660 million in 2024, primarily due to higher revenues from wholesale international voice of PLDT Global driven by higher traffic volume. Excluding wholesale international voice revenues of Php15,533 million and Php13,224 million in 2025 and 2024, respectively, our voice services decreased by Php743 million, or 5%, to Php15,693 million in 2025 from Php16,436 million in 2024.
The percentage contribution of voice service revenues to our fixed line service revenues accounted for 24% in each of 2025 and 2024.
Miscellaneous Services
Miscellaneous service revenues are derived mostly from rentals and management fees. These service revenues decreased by Php4 million, or 6%, to Php61 million in 2025 from Php65 million in 2024.
Non-service revenues decreased by Php41 million, or 8%, to Php455 million in 2025 from Php496 million in 2024.
Expenses related to our Fixed Line business segment totaled Php95,585 million in 2025, an increase of Php228 million as compared with Php95,357 million in 2024. The increase was primarily due to higher interconnection costs, and cost of devices, accessories and contract-specific services, partly offset by lower depreciation and amortization, and general operating costs. As a percentage of our total fixed line revenues, expenses associated with our Fixed Line business segment accounted for 73% and 75% in 2025 and 2024, respectively.
The following table shows the breakdown of our total fixed line-related expenses for the years ended December 31, 2025 and 2024 and the percentage of each expense item in relation to the total:
43,867
44,850
(983
26,928
29,132
(2,204
5,239
3,641
1,598
3,318
3,415
(97
79,352
81,038
85
(1,686
16,233
14,319
1,914
General operating costs decreased by Php983 million, or 2%, from 2024 to Php43,867 million in 2025, primarily due to lower expenses related to compensation and employee benefits, professional and other contracted services, and communication, training and travel, partially offset by higher expenses related to selling and promotions, rent and repairs and maintenance.
Depreciation and amortization charges decreased by Php2,204 million, or 8%, from 2024 to Php26,928 million in 2025, mainly due to lower accelerated depreciation recognized in 2025 for the modernization of certain technology equipment, partially offset by higher amortization of subscriber contract cost to fulfill and capitalized leases.
Cost of devices, accessories and contract-specific services increased by Php1,598 million, or 44%, from 2024 to Php5,239 million in 2025, primarily due to higher cost of content and services from third-party vendors.
Asset impairment decreased by Php97 million, or 3%, from 2024 to Php3,318 million in 2025.
Interconnection costs increased by Php1,914 million, or 13%, from 2024 to Php16,233 million in 2025, primarily due to higher cost of wholesale international voice of PLDT Global driven by higher traffic volume. Excluding cost of wholesale international voice of Php15,269 million and Php12,987 million in 2025 and 2024, respectively, our interconnection costs decreased by Php368 million, or 28%, to Php964 million in 2025 from Php1,332 million in 2024.
The following table summarizes the breakdown of our total fixed line-related other income (expenses) – net for the years ended December 31, 2025 and 2024:
Gains on derivative financial instruments – net
(14
756
(770
171
230
(59
(545
(819
274
(33
Equity share in net losses of associates and joint ventures
(924
(857
(1,279
(9,411
(7,456
(1,955
7,907
13,726
(5,819
(42
Our Fixed Line business segment’s other expenses – net amounted to Php2,816 million in 2025, a change of Php9,186 million from other income – net of Php6,370 million in 2024, primarily due to the combined effects of the following: (i) lower other income – net by Php5,819 million mainly due to lower dividend income recognized from the subsidiaries of our wireless business segment; (ii) higher net financing costs by Php1,955 million mainly due to higher weighted average outstanding principal amounts, higher interest rates, and lower capitalized interest; (iii) net losses on derivative financial instruments of Php14 million in 2025 as against net gains on derivative financial instruments by Php756 million in 2024 mainly due to lower depreciation of the Philippine peso to the U.S. dollar in 2025 as compared with 2024; (iv) higher equity share in net losses of associates by Php857
million mainly from Radius Telecoms (Radius) and Cignal TV; (v) lower interest income by Php59 million; and (vi) lower net foreign exchange losses by Php274 million.
Provision for (Benefit from) Income Tax
Provision for income tax amounted to Php6,810 million in 2025, an increase of Php656 million, or 11%, from Php6,154 million in 2024, mainly due to higher taxable income.
As a result of the foregoing, our Fixed Line business segment registered a net income of Php25,599 million in 2025, a decrease of Php5,750 million, or 18%, as compared with Php31,349 million in 2024.
Revenues generated from our Other business segment amounted to nil for each of the years ended December 31, 2025 and 2024.
Expenses related to our Other business segment decreased by Php83 million to Php7 million in 2025 from Php90 million in 2024.
The following table summarizes the breakdown of other income (expenses) – net for Other business segment for the years ended December 31, 2025 and 2024:
Equity share in net gains (losses) of associates and joint ventures
507
(923
1,430
(75
79
580
Our Other business segment’s other income – net amounted to Php546 million in 2025, a change of Php1,534 million from other expenses – net of Php988 million in 2024, primarily due to equity share in net income of MIH in 2025 as against equity share in net losses in 2024.
Net Loss
As a result of the foregoing, our Other business segment registered a net income of Php568 million in 2025, a change of Php1,637 million as against net loss of Php1,069 million in 2024.
Comparison of Years Ended December 31, 2024 and 2023
We reported consolidated revenues of Php216,833 million in 2024, an increase of Php5,880 million, or 3%, as compared with Php210,953 million in 2023, primarily due to higher consolidated revenues from data, voice and SMS services, partially offset by lower consolidated non-service revenues and fixed wireless broadband service revenues.
Our consolidated service revenues of Php208,382 million in 2024, increased by Php6,550 million, or 3%, from Php201,832 million in 2023. Our consolidated non-service revenues of Php8,451 million in 2024, decreased by Php670 million, or 7%, from Php9,121 million in 2023.
55
Consolidated service revenues, net of interconnection costs of Php13,718 million, amounted to Php194,664 million in 2024, an increase of Php3,250 million, or 2%, from Php191,414 million in 2023.
The following table shows the breakdown of our consolidated revenues by business segment for the years ended December 31, 2024 and 2023:
1,333
5,756
(1,209
5,880
Consolidated expenses decreased by Php3,913 million, or 2%, to Php166,346 million in 2024 from Php170,259 million in 2023, primarily due to lower expenses related to general operating costs, depreciation and amortization, cost of devices, accessories and contract-specific services, and provisions, partially offset by higher interconnection costs and asset impairment.
The following table shows the breakdown of our consolidated expenses by business segment for the years ended December 31, 2024 and 2023:
3,826
(6,995
72
400
(816
(3,913
Consolidated other expenses – net amounted to Php9,943 million in 2024, an increase of Php3,959 million, or 66%, from Php5,984 million in 2023, primarily due to the combined effects of the following: (i) lower other income – net from our Wireless business segment mainly on account of a lower gain on sale and leaseback of telecom towers, and from our Fixed Line business segment owing mainly to lower dividend income recognized from the subsidiaries of Wireless business segment; (ii) higher net financing costs from our Fixed Line and Wireless business segments; (iii) net foreign exchange losses from our Fixed Line business segment in 2024 as compared with net foreign exchange gains in 2023; (iv) higher net gains on derivative financial instruments from our Fixed Line and Wireless business segments; and (v) lower equity share in net losses from our Fixed Line and Other business segments.
The following table shows the breakdown of our consolidated other income (expenses) – net by business segment for the years ended December 31, 2024 and 2023:
(6,673
(571
(4,326
(40
1,263
56
5,777
(3,959
(66
Consolidated net income increased by Php5,444 million, or 21%, to Php30,943 million in 2024 from Php25,499 million in 2023. The increase was mainly due to the combined effects of the following: (i) higher consolidated revenues by Php5,880 million; (ii) lower consolidated expenses by Php3,913 million; (iii) higher consolidated other expenses – net by Php3,959 million; (iv) higher provision for income tax by Php431 million; and (v) net loss from discontinued operations of Php41 million in 2023. Our consolidated basic and diluted EPS increased to Php141.80 in 2024 from Php116.77 in 2023. Our weighted average number of outstanding common shares was approximately 216.06 million for each of the years ended December 31, 2024 and 2023.
The following table shows the breakdown of our consolidated net income by business segment for the years ended December 31, 2024 and 2023:
68
(6,794
(39
5,923
1,201
(58
5,073
5,403
5,444
We generated revenues of Php105,734 million from our Wireless business segment in 2024, an increase of Php1,333 million, or 1%, from Php104,401 million in 2023.
The following table summarizes our total revenues by service from our Wireless business segment for the years ended December 31, 2024 and 2023:
2,239
(148
2,102
(769
Our wireless service revenues increased by Php2,102 million, or 2%, to Php97,779 million in 2024 as compared with Php95,677 million in 2023, primarily due to higher revenues from mobile, partially offset by lower revenues from fixed wireless broadband. As a percentage of our total wireless revenues, service revenues accounted for 92% in each of 2024 and 2023.
Wireless service revenues, net of interconnection costs, amounted to Php96,808 million in 2024, an increase of Php1,965 million, or 2%, from Php94,843 million in 2023.
Our mobile service revenues amounted to Php96,246 million in 2024, an increase of Php2,239 million, or 2%, from Php94,007 million in 2023. Mobile service revenues accounted for 98% of our wireless service revenues in each of 2024 and 2023.
The following table shows the breakdown of our mobile service revenues for the years ended December 31, 2024 and 2023:
2023(1)
75,725
3,246
11,474
(2,100
5,733
1,028
1,075
Mobile revenues from our data services, which include mobile internet, mobile broadband and other data services, increased by Php3,204 million, or 4%, to Php78,971 million in 2024 from Php75,725 million in 2023 due to higher mobile internet revenues driven mainly by the continued strength of our mobile network, and promotion of data offers such as Power All, Double Giga and Magic Data, which cater to the needs of prepaid subscribers, partially offset by lower mobile broadband data revenues.
Data services accounted for 82% and 81% of our mobile service revenues for the years ended December 31, 2024 and 2023, respectively.
The following table shows the breakdown of our mobile data service revenues for the years ended December 31, 2024 and 2023:
71,268
3,793
2,900
(645
(22
1,557
98
Mobile internet service revenues increased by Php3,793 million, or 5%, to Php75,061 million in 2024 from Php71,268 million in 2023, primarily due to our mobile data offerings, such as All Access+, Power All, Magic Data, TNT's Saya All, and Smart Postpaid's Unli 5G plans. Smart continues to drive usage and top-ups via Smart App, the Smart Online Store and its retailer network.
Mobile internet services accounted for 78% and 76% of our mobile service revenues in 2024 and 2023, respectively.
Mobile broadband revenues generated from the use of pocket WiFi, amounted to Php2,255 million in 2024, a decrease of Php645 million, or 22%, from Php2,900 million in 2023, primarily due to lower mobile broadband subscriber base.
Mobile broadband services accounted for 2% and 3% of our mobile service revenues in 2024 and 2023, respectively.
Revenues from our other data services, which include VAS and domestic leased lines, increased by Php98 million, or 6%, to Php1,655 million in 2024 from Php1,557 million in 2023.
Mobile revenues from our voice services, which include all voice traffic, decreased by Php2,100 million, or 18%, to Php9,374 million in 2024 from Php11,474 million in 2023, due to subscribers’ shift to alternative calling options, digital teleconferencing solutions, and other OTT services. To adapt to these evolving consumer behaviors, PLDT is accelerating its transition toward a mobile-data-centric ecosystem, leveraging its extensive 4G and 5G networks and investing in next-generation voice technologies.
To enhance call quality and improve customer experience, Smart has been providing its mobile users with Voice over LTE (VoLTE) and Voice over WiFi (VoWiFi) services, enabling voice calls to be transmitted over high-speed digital networks. These technologies provide superior voice clarity and better integration with mobile data service, ensuring continued relevance of voice offerings within a data-first environment.
PLDT is also optimizing its network investments to sustain growth in high-speed connectivity and digital voice solutions, ensuring long-term revenue stability despite the industry-wide decline in traditional voice services.
Mobile voice services accounted for 10% and 12% of our mobile service revenues in 2024 and 2023, respectively.
Mobile revenues from our SMS services, which include all SMS-related services, increased by Php1,028 million, or 18%, to Php6,761 million in 2024 from Php5,733 million in 2023, mainly due to the increase in application-to-person (A2P) messaging services. While traditional person-to-person (P2P) SMS volumes continue to decline due to the rise of OTT messaging, social media, and chat applications, A2P messaging remains a key growth driver. Businesses are increasingly utilizing SMS for secure authentication, customer engagement, and real-time notifications, reinforcing its role as a critical communication channel for enterprises. Mobile SMS services accounted for 7% and 6% of our mobile service revenues in 2024 and 2023, respectively.
Mobile revenues from other services increased by Php65 million, or 6%, to Php1,140 million in 2024 from Php1,075 million in 2023 mainly due to higher other subscriber-related revenues.
R.A. No. 11934 or the SIM Registration Act took effect on October 28, 2022. Under this law, all end-users are required to register their SIMs with public telecommunications entities (PTEs) as a pre-requisite to the activation thereof. On September 18, 2023, the NTC issued Memorandum Order No. ###-##-#### providing for guidelines for PTEs in the conduct of processes to verify submitted information and data by end-users of SIMs under the SIM Registration Act and its IRR.
The following table shows our mobile subscriber base as at December 31, 2024 and 2023:
1,063,609
21,530,993
228,735
34,136,887
834,874
99,072
1,162,681
In view of the SIM Registration Act, we recognize a prepaid mobile subscriber as active upon registration of the SIM card. Beginning the fourth quarter of 2023, we consider a prepaid mobile subscriber as churn if the subscriber does not reload within 180 days after the full usage or expiry of the last reload, and does not latch to the network within 180 days.
The average monthly churn rates for Smart Prepaid subscribers were 2.2% and 2.6% in 2024 and 2023, respectively, while the average monthly churn rates for TNT subscribers were 2.0% and 2.8% in 2024 and 2023, respectively.
The average monthly churn rates for Postpaid subscribers were 1.1% and 1.4% in 2024 and 2023, respectively.
Smart introduced the first prepaid eSIM in the country in July 2023 and introduced digital delivery of eSIMs in September 2023. Smart enabled physical SIM to eSIM upgrades in the second quarter of 2024 to help mitigate churn.
The following table summarizes our average monthly ARPUs for the years ended December 31, 2024 and 2023:
135
110
727
Revenues from our Fixed Wireless Broadband services amounted to Php1,481 million in 2024, a decrease of Php148 million, or 9%, from Php1,629 million in 2023.
Revenues from our other services amounted to Php52 million in 2024, an increase of Php11 million, or 27%, from Php41 million in 2023.
Our wireless non-service revenues consist of sale of mobile handsets, broadband data routers and devices. Our wireless non-service revenues decreased by Php769 million, or 9%, to Php7,955 million in 2024 from Php8,724 million in 2023, primarily due to a lower sale of postpaid mobile handsets.
Expenses associated with our Wireless business segment amounted to Php86,653 million in 2024, an increase of Php3,826 million, or 5%, from Php82,827 million in 2023. The increase was attributable to higher expenses related to depreciation and amortization, provisions, general operating costs, and interconnection costs, partially offset by lower cost of devices, accessories and contract-specific services. As a percentage of our total wireless revenues, expenses associated with our Wireless business segment accounted for 82% and 79% in 2024 and 2023, respectively.
The following table summarizes the breakdown of our total wireless-related expenses for the years ended December 31, 2024 and 2023 and the percentage of each expense item in relation to the total:
37,643
170
31,684
4,799
12,018
(1,538
648
258
81,993
3,689
834
General operating costs increased by Php170 million from 2023 to Php37,813 million in 2024, primarily due to higher expenses related to repairs and maintenance, and rent, partially offset by lower professional and other contracted services, compensation and employee benefits, selling and promotions, and communication, training and travel.
Depreciation and amortization charges increased by Php4,799 million from 2023, or 15%, to Php36,483 million in 2024, mainly on account of accelerated depreciation recognized for the modernization of certain technology equipment resulting mainly from the migration to cloud-based platform, combined with the depreciation of newly capitalized property and equipment, and the higher amortization of capitalized leases of telecom towers.
Cost of devices, accessories and contract-specific services decreased by Php1,538 million from 2023, or 13%, to Php10,480 million in 2024, primarily due to lower number of units issued for mobile handsets, and lower SIM registration and SIM printing costs.
Asset impairment increased by Php258 million from 2023, or 40%, to Php906 million in 2024, primarily due to higher provision for expected credit losses and provision for inventory obsolescence.
Interconnection costs increased by Php137 million from 2023, or 16%, to Php971 million in 2024, primarily due to higher interconnection costs on A2P transactions.
The following table summarizes the breakdown of our total wireless-related other income (expenses) – net for the years ended December 31, 2024 and 2023:
(376
1,261
335
Foreign exchange gains – net
981
(206
720
(9,034
(729
8,878
(6,977
(79
Our Wireless business segment’s other expenses – net amounted to Php5,504 million in 2024, a change of Php6,673 million as against other income – net of Php1,169 million in 2023, primarily due to the combined effects of the following: (i) lower other income – net by Php6,977 million mainly due to lower gain on sale and leaseback of telecom tower, gross of transactions, which decreased by Php6,335 million to Php1,442 million in 2024 from Php7,777 million in 2023; (ii) higher net financing costs by Php729 million mainly due to higher interest rates and lower capitalized interest; (iii) lower net foreign exchange gains by Php206 million mainly on account of revaluation of net foreign currency-denominated liabilities due to depreciation of the Philippine peso relative to the U.S. dollar in 2024 as compared to the appreciation of the Philippine peso relative to the U.S. dollar in 2023; (iv) lower interest income by Php22 million; and (v) higher net gains on derivative financial instruments by Php1,261 million mainly due to the depreciation of the Philippine peso relative to the U.S. dollar in 2024 as compared to the appreciation of the Philippine peso relative to the U.S. dollar in 2023.
Provision for income tax amounted to Php3,086 million in 2024, a decrease of Php2,372 million, or 43%, from Php5,458 million in 2023, mainly due to lower net income before tax.
As a result of the foregoing, our Wireless business segment’s net income decreased by Php6,794 million, or 39%, to Php10,491 million in 2024 from Php17,285 million in 2023.
Revenues generated from our Fixed Line business segment amounted to Php126,490 million in 2024, an increase of Php5,756 million, or 5%, from Php120,734 million in 2023.
The following table summarizes our total revenues by service from our Fixed Line business segment for the years ended December 31, 2024 and 2023:
78
2,672
2,974
5,658
Our fixed line service revenues increased by Php5,658 million, or 5%, to Php125,994 million in 2024 from Php120,336 million in 2023, primarily due to higher revenues from our voice, data and miscellaneous services.
Fixed Line service revenues, net of interconnection costs, amounted to Php111,675 million in 2024, an increase of Php2,469 million, or 2%, from Php109,206 million in 2023.
Our data services, which include Home broadband, corporate data, and ICT portfolio with data center, cloud, cybersecurity, and managed IT offerings, posted revenues of Php96,269 million in 2024, an increase of Php2,672 million, or 3%, from Php93,597 million in 2023, primarily due to higher revenues from Home broadband, corporate data and leased lines, and ICT services, inclusive of intersegment transactions. The percentage contribution of this service segment to our fixed line service revenues accounted for 76% and 78% in 2024 and 2023, respectively.
The following table shows information of our data service revenues for the years ended December 31, 2024 and 2023:
883
1,789
Home broadband data revenues amounted to Php51,759 million in 2024, an increase of Php883 million, or 2%, from Php50,876 million in 2023, mainly driven by the increasing demand for broadband services. Home broadband revenues accounted for 54% of fixed line data service revenues in each of 2024 and 2023.
Corporate data services amounted to Php36,676 million in 2024, an increase of Php1,087 million, or 3%, as compared with Php35,589 million in 2023, mainly due to the sustained demand for broadband internet and data networking services. Corporate data revenues accounted for 38% of our total data service revenues in each of 2024 and 2023.
ICT revenues increased by Php702 million, or 10%, to Php7,834 million in 2024 from Php7,132 million in 2023, mainly due to higher revenues from managed IT, data center and cloud services. The percentage contribution of this service segment to our total data service revenues accounted for 8% in each of 2024 and 2023.
Revenues from our voice services increased by Php2,974 million, or 11%, to Php29,660 million in 2024 from Php26,686 million in 2023, primarily due to higher revenues from wholesale international voice of PLDT Global driven by higher traffic volume. Excluding wholesale international voice revenues of Php13,224 million and Php9,323 million in 2024 and 2023, respectively, our voice services decreased by Php927 million, or 5%, to Php16,436 million in 2024 from Php17,363 million in 2023.
The percentage contribution of voice service revenues to our fixed line service revenues accounted for 24% and 22% in 2024 and 2023, respectively.
Miscellaneous service revenues are derived mostly from rentals and management fees. These service revenues increased by Php12 million, or 23%, to Php65 million in 2024 from Php53 million in 2023.
62
Non-service revenues increased by Php98 million, or 25%, to Php65 million in 2024 from Php53 million in 2023, primarily due higher sale of devices.
Expenses related to our Fixed Line business segment totaled Php95,357 million in 2024, a decrease of Php6,995 million, or 7%, as compared with Php102,352 million in 2023. The decrease was primarily due to lower depreciation and amortization, general operating costs and provisions, partly offset by higher interconnection costs, cost of devices, accessories and contract-specific services and asset impairment. As a percentage of our total fixed line revenues, expenses associated with our Fixed Line business segment accounted for 75% and 85% in 2024 and 2023, respectively.
The following table shows the breakdown of our total fixed line-related expenses for the years ended December 31, 2024 and 2023 and the percentage of each expense item in relation to the total:
47,434
(2,584
36,890
(7,758
3,114
527
3,784
(369
91,222
89
(10,184
11,130
3,189
General operating costs decreased by Php2,584 million, or 5%, to Php44,850 million in 2024, primarily due to lower expenses related to selling and promotions, repairs and maintenance, professional and other contracted services, and communication, training and travel. This is partly offset by higher expenses related to rent and compensation and employee benefits.
Depreciation and amortization charges decreased by Php7,758 million, or 21%, to Php29,132 million in 2024, mainly due to accelerated depreciation and amortization in 2023 of subscriber contract cost to fulfill, partially offset by accelerated depreciation recognized in 2024 for the modernization of some core and transport network equipment, and depreciation of newly capitalized property and equipment.
Cost of devices, accessories and contract-specific services increased by Php527 million, or 17%, to Php3,641 million in 2024, primarily due to higher cost of services, mainly from higher cost of content, and managed IT solutions and services.
Asset impairment decreased by Php369 million, or 10%, to Php3,415 million in 2024, primarily due to lower provision for expected credit losses, mainly on account of higher collection efficiency for Home.
Interconnection costs increased by Php3,189 million, or 29%, to Php14,319 million in 2024, primarily due to higher international interconnection costs of PLDT Global driven by higher traffic volume. Excluding cost of wholesale international voice of Php12,987 million and Php9,277 million in 2024 and 2023, respectively, our interconnection costs decreased by Php521 million, or 28%, to Php1,332 million in 2024 from Php1,853 million in 2023.
The following table summarizes the breakdown of our total fixed line-related other income (expenses) – net for the years ended December 31, 2024 and 2023:
(367
1,123
(306
324
(94
(595
528
138
(957
(693
(6,824
(632
18,020
(4,294
63
Our Fixed Line business segment’s other income – net amounted to Php6,370 million in 2024, a decrease of Php4,236 million, or 40%, from Php10,696 million in 2023, primarily due to the combined effects of the following: (i) lower other income – net by Php4,294 million mainly due to lower dividend income recognized from the subsidiaries of Wireless business segment; (ii) net foreign exchange losses of Php819 million in 2024 as against net foreign exchange gains of Php138 million in 2023 mainly due to the depreciation of the Philippine peso relative to the U.S. dollar in 2024 as compared to the appreciation of the Philippine peso relative to the U.S. dollar in 2023; (iii) higher net financing costs by Php632 million mainly due to higher interest rates and higher accretion on lease liabilities, partly offset by higher capitalized interest; (iv) lower interest income by Php94 million; (v) lower equity share in net losses of associates by Php528 million mainly due to lower equity share in net losses of Cignal TV; (vi) net gains on derivative financial instruments of Php756 million in 2025 as against net losses on derivative financial instruments of Php367 million in 2024 mainly due to the depreciation of the Philippine peso relative to the U.S. dollar in 2024 as compared to the appreciation of the Philippine peso relative to the U.S. dollar in 2023.
Provision for income tax amounted to Php6,154 million in 2024, an increase of Php2,502 million, or 69%, from Php3,652 million in 2023, mainly due to higher net income before tax.
As a result of the foregoing, our Fixed Line business segment registered a net income of Php31,349 million in 2024, an increase of Php5,923 million, or 23%, as compared with Php25,426 million in 2023.
Revenues generated from our Other business segment amounted to nil for each of the years ended December 31, 2024 and 2023.
Expenses related to our Other business segment increased by Php72 million to Php90 million in 2024 from Php18 million in 2023.
The following table summarizes the breakdown of other income (expenses) – net for Other business segment for the years ended December 31, 2024 and 2023:
114
Foreign exchange losses – net
(76
(2,211
1,288
(34
(117
Our Other business segment’s other expenses – net amounted to Php988 million in 2024, a decrease of Php1,263 million, or 56%, from Php2,251 million in 2023, primarily due to lower equity share in net losses of associates and joint ventures by Php1,288 million mainly on account of lower equity share in net losses in MIH.
As a result of the foregoing, our Other business segment registered a net loss of Php1,069 million in 2024, a decrease of Php1,201 million, or 53%, from Php2,270 million in 2023.
Key Non-IFRS Financial Measures
64
In addition to the measures presented in our consolidated financial statements, we use the following key non-IFRS financial measures to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. However, the definitions of our non-IFRS financial measures may be different from those used by other companies, and therefore, may not be comparable. Furthermore, these non-IFRS financial measures have certain limitations in that they do not include the impact of certain expenses reflected in our consolidated financial statements that are necessary to run our business. Thus, these non-IFRS financial measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with IFRS.
We compensate for these limitations by providing a reconciliation of these non-IFRS financial measures to the related IFRS financial measures under the section titled “Reconciliation of Non-IFRS Financial Measures.” We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-IFRS financial measures in conjunction with their respective related IFRS financial measures.
Adjusted EBITDA
57,589
63,253
(9,604
111,231
Adjusted EBITDA margin
Telco core income
13,025
27,877
(113
(6,864
33,925
Core income
598
34,636
55,634
61,953
(48
(9,024
108,515
10,852
34,372
(10,054
35,138
34,518
(1,084
34,232
54,369
59,102
(9,156
104,233
104,297
(64
Adjusted EBITDA margin(1)
11,750
37,590
(15,064
34,341
37,886
(2,110
32,421
32,462
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is measured as net income excluding depreciation and amortization, asset impairment on noncurrent assets, financing costs – net, interest income, equity share in net earnings (losses) of associates and joint ventures, foreign exchange gains (losses) – net, gains (losses) on derivative financial instruments – net, provision for (benefit from) income tax, other income (expense) – net, manpower rightsizing program (MRP) and non-recurring income (expenses). Adjusted EBITDA is monitored by management for each business unit separately for purposes of making decisions about resource allocation and performance assessment.
Adjusted EBITDA Margin is measured as Adjusted EBITDA divided by service revenues.
Adjusted EBITDA and Adjusted EBITDA Margin are presented because our management believes that it is widely used by investors in their analysis of the performance of PLDT and can assist them in their comparison of PLDT’s performance with those of other companies in the technology, media and telecommunications sector. Companies in the technology, media and telecommunications sector have historically reported such measures as a supplement to financial measures in accordance with IFRS Accounting Standards. Adjusted EBITDA should not be considered as alternative to net income as an indicator of our performance, nor should Adjusted EBITDA be considered as an alternative to cash flows from operating activities, as a measure of liquidity or as an alternative to any other measure determined in accordance with IFRS Accounting Standards. Unlike net income, Adjusted EBITDA does not include depreciation and amortization, or financing costs and, therefore, does not reflect current or future capital expenditures or the cost of capital.
We compensate for these limitations by using Adjusted EBITDA and Adjusted EBITDA Margin as only some of several comparative tools, together with IFRS Accounting Standards-based measurements, to assist in the evaluation of operating performance. Such IFRS Accounting Standards-based measurements include income before income tax, net income, and operating, investing and financing cash flows. We have significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in Adjusted EBITDA. Our calculation of Adjusted EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
Our consolidated Adjusted EBITDA amounted to Php111,231 million in 2025, an increase of Php2,716 million, or 3%, as compared with Php108,515 million in 2024. Our consolidated Adjusted EBITDA in 2024 represented an increase of Php4,282 million, or 4%, as compared with Php104,233 million in 2023.
Our Wireless business segment’s Adjusted EBITDA increased by Php1,955 million, or 4%, to Php57,589 million in 2025 from Php55,634 million in 2024, which in turn, represented an increase of Php1,265 million, or 2% from Php54,369 million in 2023. Adjusted EBITDA margin increased to 59% in 2025 from 57% in 2024 and 2023.
Our Fixed Line business segment’s Adjusted EBITDA increased by Php1,300 million, or 2%, to Php63,253 million in 2025 from Php61,953 million in 2024, which in turn, represented an increase of Php2,851 million, or 5%, from Php59,102 million in 2023. Adjusted EBITDA margin remained stable at 49% in 2025, 2024 and 2023.
Core Income and Telco Core Income
Core income is measured as net income attributable to equity holders of PLDT (net income less net income attributable to noncontrolling interests), excluding foreign exchange gains (losses) – net, gains (losses) on derivative financial instruments – net (excluding hedge costs), asset impairment on noncurrent assets, non-recurring gains (losses), net of tax effect of aforementioned adjustments, as applicable, and similar adjustments to equity share in net earnings (losses) of associates and joint ventures. Core income results are monitored by management for each business unit separately for purposes of making decisions about resource allocation and performance assessment.
Meanwhile, telco core income is measured as net income attributable to equity holders of PLDT (net income less net income attributable to noncontrolling interests), excluding foreign exchange gains (losses) – net, gains (losses) on derivative financial instruments – net (excluding hedge costs), asset impairment on noncurrent assets, non-recurring gains (losses), net of tax effect of aforementioned adjustments, as applicable, and similar adjustments to equity share in net earnings (losses) of associates and joint ventures, adjusted for the effect of the share in Maya Innovations Holdings, Pte. Ltd. (MIH) (formerly Voyager Innovations Holdings, Pte. Ltd.) and Kayana Solutions, Inc. (Kayana) (formerly Limitless Growth Ventures, Inc.) income (losses), asset sales, and depreciation due to change in accounting estimate. Telco core income is used by the management as a basis for determining the level of dividend payouts to shareholders and one of the bases for granting incentives to employees.
Core income and telco core income should not be considered as alternatives to income before income tax or net income determined in accordance with IFRS Accounting Standards as an indicator of our performance. Unlike net income, core income and telco core income do not include certain items, among others, foreign exchange gains and losses, gains and losses on derivative financial instruments, impairment on non-current assets and non-recurring gains and losses. We compensate for these limitations by using core income and telco core income as a few of several comparative tools, together with IFRS Accounting Standards-based measurements, to assist in the evaluation of operating performance. Such IFRS Accounting Standards-based measurements include income before income tax and net income. Our calculation of core income may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
Our consolidated telco core income amounted to Php33,925 million in 2025, a decrease of Php1,213 million, or 3%, as compared with Php35,138 million in 2024, mainly due to higher financing costs and depreciation and amortization, partially offset by higher Adjusted EBITDA and other miscellaneous income. Our consolidated telco core income in 2024 recorded an increase of Php797 million, or 2%, as compared with Php34,341 million in 2023, mainly due to higher Adjusted EBITDA and lower equity share in net losses of associates and joint ventures, partially offset by higher depreciation and amortization and financing costs.
Our consolidated core income amounted to Php34,636 million in 2025, an increase of Php404 million, or 1%, as compared with Php34,232 million in 2024, mainly on account of higher Adjusted EBITDA, equity share in net earnings of associates and joint ventures in 2025 as against equity share in net losses of associates and joint ventures in 2024, and higher other miscellaneous income, partially offset by higher depreciation and amortization and financing costs. Our consolidated core income in 2024 was an increase of Php1,811 million, or 6%, as compared with Php32,421 million in 2023, mainly on account of higher Adjusted EBITDA and lower equity share in net losses of associates and joint ventures, partially offset by higher depreciation and amortization and financing costs. Our consolidated basic and diluted core EPS increased to Php160.04 in 2025 from Php158.17 in 2024 and Php149.78 in 2023.
Our Wireless business segment’s core income increased by Php2,173 million, or 20%, to Php13,025 million in 2025 from Php10,852 million in 2024, mainly on account of higher EBITDA and other miscellaneous income, partially offset by higher depreciation and amortization, and financing costs. Our Wireless business segment’s core income in 2024 represented a decrease of Php898 million, or 8%, from Php11,750 million in 2023, mainly on account of higher depreciation and amortization, and financing costs, partially offset by higher Adjusted EBITDA and lower provision for income tax.
Our Fixed Line business segment’s core income decreased by Php6,641 million, or 19%, to Php27,877 million in 2025 from Php34,518 million in 2024, primarily due to lower other miscellaneous income and higher financing costs, partially offset by higher Adjusted EBITDA. Our Fixed Line business segment’s core income represented a decrease of Php3,368 million, or 9%,
66
from Php37,886 million in 2023, primarily due to lower other miscellaneous income and higher financing costs, partially offset by higher Adjusted EBITDA.
Our Other business segment’s core income amounted to Php598 million in 2025, a change of Php1,682 million as against core loss of Php1,084 million in 2024. Our Other business segment’s core loss amounted to Php1,084 million in 2024, a decrease of Php1,026 million, or 49%, from core loss of Php2,110 million in 2023.
67
Reconciliation of Non-IFRS Financial Measures
The following table shows the reconciliation of our consolidated net income to our consolidated Adjusted EBITDA and Adjusted EBITDA Margin for the years ended December 31, 2025, 2024 and 2023:
Consolidated net income
Add (deduct) adjustments:
(8,001
9,941
9,411
(1,184
18,168
Manpower rightsizing program (MRP)
296
1,092
1,388
Foreign exchange losses (gains) – net
545
550
Equity share in net losses (earnings) of associates and joint ventures
924
(507
428
Losses on derivative financial instruments – net
Impairment of non-current assets
(554
(171
(719
Income from prescription of liability on subscriber investment plan deposits and other non-recurring income
(501
(229
(730
Gain on sale and leaseback of telecom towers – net of transaction costs
(871
Others – net
(3,478
(7,678
6,971
(4,209
Total adjustments
48,152
37,654
(575
(2,869
82,362
Consolidated Adjusted EBITDA
Adjusted EBITDA Margin
(9,387
9,763
7,456
(1,719
15,500
MRP
69
1,688
923
990
(775
819
Income from prescription of liability on redeemable preferred shares
(71
(698
(230
(15
(916
(951
(885
(756
(1,641
(950
(13,654
11,596
(2,961
45,143
30,604
1,021
804
77,572
Net income from continuing operations
Net loss from discontinued operations
Add (deduct) adjustments to continuing operations:
(9,912
9,034
6,824
(2,103
13,755
Equity share in net earnings of associates and joint ventures
595
2,211
2,806
Additional amortization of subscriber contract cost to obtain
2,135
327
2,021
376
367
743
(720
(324
(1,016
(981
(138
(106
(1,149
(6,992
(1,102
(18,019
17,772
(1,378
37,084
33,676
2,252
5,745
78,757
Adjusted EBITDA from continuing operations
Adjusted EBITDA from discontinued operations
The following table shows the reconciliation of our consolidated net income to our consolidated core income and consolidated telco core income for the years ended December 31, 2025, 2024 and 2023:
Accelerated depreciation and amortization
5,776
6,757
Core income adjustment on equity share in net losses of associates and joint ventures
610
643
Amortization of debt discount from debt modification
113
162
Net income attributable to noncontrolling interests
(65
(127
(207
Gains on derivative financial instruments – net, excluding hedge costs
(135
(157
Net tax effect of aforementioned adjustments
(1,200
(1,776
3,588
2,278
(129
5,767
Consolidated core income
Share in Kayana losses
Share in MIH income
(716
Gain on asset sales, net of tax
(87
(711
Consolidated telco core income
2,787
2,899
5,686
124
183
Core income adjustment on equity share in net loss (income) of associates and joint ventures
Income from prescription of liability on redeemable preferred shares and other non-recurring expenses (income)
210
(363
(153
(16
(166
(248
(943
(927
(1,870
(145
(1,005
(19
(1,146
361
3,169
(226
3,289
Share in MIH losses
1,006
Gain on deconsolidation of Kayana
(146
1,052
Accelerated depreciation and amortization(1)
13,924
466
Other non-recurring expenses (income)
(174
433
259
125
177
Impairment of investments
(62
(210
(142
(1,152
Losses on derivative financial instruments – net, excluding hedge costs
310
195
505
1,799
(3,931
(2,146
(5,535
12,460
160
(163
6,922
Core income from continuing operations
Core loss from discontinued operations
2,175
(296
1,879
(1) In 2023, accelerated depreciation and amortization includes subscriber contract cost to obtain of Php2,135 million and cost to fulfill of Php11,789 million.
The following table shows the reconciliation of our consolidated basic and diluted earnings per share (EPS) attributable to common equity holders of PLDT to our consolidated basic and diluted core EPS for the years ended December 31, 2025, 2024 and 2023:
Basic
Diluted
EPS from continuing operations
132.38
141.80
116.96
EPS from discontinued operations
(0.19
Consolidated EPS attributable to common equity holders of PLDT
116.77
23.45
19.74
48.34
4.82
5.86
7.02
1.91
0.13
(4.00
Core income adjustment on equity share in net (income) losses of associates and joint ventures
2.98
(0.02
2.16
Net losses on debt modification
0.56
0.64
0.61
Impairment of investments/noncurrent assets
0.03
0.31
0.32
(0.54
(6.49
1.75
Gain on sale and leaseback of telecom towers
(3.02
(3.31
(24.59
Income from prescription of liability on redeemable preferred shares/subscriber investment plan deposits and other non-recurring expenses (income)
(2.53
(0.49
1.40
27.66
16.37
33.01
Core EPS from continuing operations
160.04
158.17
149.97
Core EPS from discontinued operations
Consolidated core EPS
149.78
B. Liquidity and Capital Resources
The following table shows our consolidated cash flows for the years ended December 31, 2025, 2024 and 2023:
Cash Flows
Net cash flows provided by operating activities
98,738
81,731
85,765
Net cash flows used in investing activities
(60,979
(65,704
(55,118
Payment for purchase of property and equipment, including capitalized interest
(62,864
(68,257
(78,435
Net cash flows used in financing activities
(35,927
(22,331
(39,418
Net increase (decrease) in cash and cash equivalents
1,855
(6,166
The following table shows our consolidated capitalization and other consolidated selected financial data as at December 31, 2025 and 2024:
Capitalization
Interest-bearing financial liabilities:
Long-term financial liabilities:
Long-term debt
278,868
258,246
Current portion of interest-bearing financial liabilities:
Long-term debt maturing within one year
16,180
23,340
Total interest-bearing financial liabilities
295,048
281,586
Total equity attributable to equity holders of PLDT
126,889
115,419
421,937
397,005
Other Selected Financial Data
Total assets
634,828
623,275
Property and equipment
327,989
318,069
Cash and cash equivalents
11,866
10,011
Short-term investments
136
Our principal sources of liquidity are our cash and cash equivalents, cash flows from operating activities and investing activities, and proceeds from long-term debt. Our consolidated cash and cash equivalents and short-term investments totaled Php11,876 million, Php10,147 million and Php16,568 million as at December 31, 2025, 2024 and 2023, respectively.
In 2025, we had (i) cash flows from operating activities amounting to Php98,738 million, (ii) proceeds from availment of long-term debt of Php36,150 million, (iii) proceeds from availment of short-term debt of Php1,322 million, (iv) proceeds from the disposal of property and equipment of Php1,220 million, mainly comprising proceeds from the sale and leaseback of telecom towers, (v) proceeds from the disposal of investment in associates and joint ventures of Php775 million, mainly comprising return of capital from investment in Vega Telecom, Inc. (VTI) of Php600 million, (vi) proceeds from the disposal of AppCard shares of Php175 million; (vii) interest received of Php686 million, and (viii) proceeds from maturity of short-term investment of Php126 million. These funds were used principally for: (1) the purchase of property and equipment, including capitalized interest, of Php62,864 million; (2) long-term debt principal and interest payments of Php23,712 million and Php13,233 million, respectively; (3) cash dividends paid of Php20,590 million; (4) settlement of obligations under lease liabilities of Php14,328 million; (5) payment of short-term debt of Php1,022 million; (6) settlement of derivative financial instruments of Php243 million; and (7) payment for acquisition of investment in associates and joint ventures of Php186 million, mainly Smart’s investment in Dream Fearlessly Technologies, Inc. (DFTI).
In 2024, we had (i) cash flows from operating activities amounting to Php81,731 million, (ii) proceeds from availment of long-term debt of Php37,000 million, (iii) proceeds from disposal of property of equipment of Php4,827 million, mainly comprising proceeds from the sale and leaseback of telecom towers, (iv) interest received of Php881 million, (v) collection of derivative financial instruments of Php704 million, and (vi) proceeds from redemption of investment in debt securities of Php200 million. These funds were used principally for: (1) the purchase of property and equipment, including capitalized interest, of Php68,257 million; (2) long-term debt principal and interest payments of Php12,059 million and Php10,740 million, respectively; (3) cash dividends paid of Php20,750 million; (4) settlement of obligations under lease liabilities of Php12,079 million; (5) payment for redemption of perpetual notes of Php4,200 million; (6) payment for acquisition of investment in associates and joint ventures of Php3,770 million, mainly PLDT's respective investments in Radius and Kayana, PCEV’s additional investment in MIH, and Smart’s investment in DFTI.
In 2023, we had (i) cash flows from operating activities amounting to Php85,765 million, (ii) proceeds from availment of long-term debt of Php38,000 million, (iii) proceeds from disposal of property of equipment of Php23,971 million, mainly comprising proceeds from the sale and leaseback of telecom towers, and (iv) interest received of Php973 million and proceeds from maturity of short-term investments of Php440 million. These funds were used principally for: (1) the purchase of property and equipment, including capitalized interest, of Php78,435 million; (2) long-term debt principal and interest payments of Php22,611 million and Php9,715 million, respectively; (3) cash dividends paid of Php23,328 million; (4) payment of short-term debt of Php10,000 million; (5) settlement of obligations under lease liabilities of Php10,707 million; (6) payment for acquisition of investment in associates and joint ventures of Php1,636 million, mainly PCEV’s additional investment in MIH’s preferred shares; (7) settlement of derivative financial instruments of Php607 million; and (8) payment for purchase of short-term investments of Php449 million.
Capital Expenditure Plans
We are one of the leading telecommunications and digital services providers in the Philippines. We are committed to reinforcing our leading position by offering a broader range and higher quality products and services.
Our consolidated capital expenditures, net of additions subject to sale and leaseback from tower companies, totaled Php60,336 million, Php78,246 million and Php85,083 million for the years ended December 31, 2025, 2024 and 2023, respectively. Our capex spending was primarily focused on Wireless LTE (4G) coverage and capacity expansion, and rollout of new sites and 5G base stations in key business areas and dense communities nationwide, and Fixed Line’s install, rollout, expansion and modernization of fiber optic transport network and backbone resiliency, and expansion of international submarine cable network. PLDT Group’s capital expenditures were financed from internally generated funds, complemented by our borrowings and proceeds from sale of assets.
Our current estimate for our consolidated capital expenditures in 2026 will be in the mid-Php50 billion range, which is expected to be spent on network maintenance and expansion and IT projects, mainly to support the exponential rise in mobile data traffic, for broadband installations, and investments to support the growth of the corporate data and ICT businesses, including data centers. Our capital spending is focused on our objective of supporting the changing demand profile of our customers, allowing the delivery of a superior customer experience, and helping corporate customers to grow their businesses.
We plan to expand our LTE network in line with our intention to expand capacity in step with the growth in customer usage, and our desire to provide coverage to substantially all of the country’s cities and municipalities. We are also heeding the government's call to expand telecommunications facilities to reach GIDAs. Furthermore, we are investing in building our 5G network to support an identified growth area in the mobile space. We intend to expand and upgrade our national and domestic transport network for cable fortification and resiliency in various locations. We continue to invest to expand capacity and improve resiliency of our international cable network which is critical in connecting the Philippines to the world. The design of our integrated network architecture optimizes the ability of PLDT to deliver diverse products and services offering to as wide a market as possible in the most cost-effective manner.
We also plan to continue upgrading our IT and service delivery platforms in order to facilitate real-time, on demand and personalized customer experience across all touch points and channels.
71
Our capital expenditure budget includes projects addressing the following objectives:
See also “- Contractual Obligations and Commercial Commitments.”
We expect to fund incremental capital expenditures from internally generated funds and debt financing.
We have adopted and implemented various operational enhancements to our policies, procedures and controls relating to our capital expenditure management processes, and we continue to review the same for any appropriate enhancements.
Financing Requirements
We believe that our available cash, including cash flows from operations, will provide sufficient liquidity to fund our projected operating, investment, capital expenditures and debt service requirements for the next 12 months and in the long-term. However, we may finance a portion of these costs from external sources if we consider it prudent to do so.
See Note 27 – Financial Assets and Liabilities – Financial Risk Management Objectives and Policies to the accompanying consolidated financial statements in Item 18. “Financial Statements” for a detailed discussion on our financing requirements.
Cash Flows from Operating Activities
Our consolidated net cash flows provided by operating activities increased by Php17,007 million, or 21%, to Php98,738 million in 2025 from Php81,731 million in 2024 primarily due to lower level of settlement of accounts payable, higher level of collection of receivables and higher operating income, partially offset by higher pension and other employee benefits, and higher level of settlement of accrued expenses and other current liabilities.
Our consolidated net cash flows provided by operating activities decreased by Php4,034 million, or 5%, to Php81,731 million in 2024 from Php85,765 million in 2023 primarily due to lower level of collection of receivables, higher level of settlement of accounts payable and accrued expenses and other current liabilities, and higher income taxes paid, partially offset by lower prepayments and higher operating income.
Cash flows provided by operating activities of our Wireless business segment decreased by Php1,581 million, or 3%, to Php56,512 million in 2025 from Php58,093 million in 2024, primarily due to higher level of settlement of accrued expenses and other current liabilities and higher pension and other employee benefits, partially offset by lower level of settlement of accounts payable and higher level of collection of receivables. Cash flows provided by operating activities of our Fixed Line business segment increased by Php7,475 million, or 16%, to Php54,072 million in 2025 from Php46,597 million in 2024 primarily due to higher collection of receivables and lower level of settlement of accrued expenses and other current liabilities, partially offset by lower operating income. Cash flows used in operating activities of our Other business segment amounted to Php614 million in 2025 as against cash flows provided by operating activities of Php3,299 million in 2024 primarily due to higher level of settlement of accounts payable.
Cash flows provided by operating activities of our Wireless business segment decreased by Php8,866 million, or 13%, to Php58,093 million in 2024 from Php66,959 million in 2023, primarily due to higher level of settlement of accounts payable, and accrued expenses and other current liabilities, and lower level of collection of receivables, partially offset by higher operating income and lower prepayments. Cash flows provided by operating activities of our Fixed Line business segment decreased by Php7,175 million, or 13%, to Php46,597 million in 2024 from Php53,772 million in 2023, primarily due to higher level of settlement of accounts payable, accrued expenses and other current liabilities, higher prepayments and lower level of collection of accounts receivables, partially offset by higher operating income. Cash flows provided by operating activities of our Other business segment amounted to Php3,299 million in 2024 as against cash flows used in operating activities of Php133 million in 2023, primarily due to higher level of collection of receivables and lower level of settlement of accounts payable.
Cash Flows Used in Investing Activities
Our consolidated net cash flows used in investing activities amounted to Php60,979 million in 2025, a decrease of Php4,725 million, or 7%, from Php65,704 million in 2024, primarily due to the combined effects of the following: (1) lower payment for purchase of property and equipment, including capitalized interest, by Php5,393 million; (2) net proceeds from investments in associates and joint ventures of Php589 million in 2025 due to return of capital in investment in VTI and proceeds from disposal of AppCard Inc. shares, net of Smart’s additional investment in DFTI, as against payments for investments in associates and joint ventures of Php3,770 million in 2024, mainly PLDT’s respective investments in Radius and Kayana, PCEV’s additional investment in MIH and Smart's investment in DFTI; (3) lower proceeds from disposal of property and equipment by Php3,607 million, mainly lower proceeds from the sale and leaseback of telecom towers; (4) lower interest received by Php195 million; and (5) lower net proceeds from redemption of investment in debt securities by Php175 million.
Our consolidated net cash flows used in investing activities amounted to Php65,704 million in 2024, an increase of Php10,586 million, or 19%, from Php55,118 million in 2023, primarily due to the combined effects of the following: (1) lower proceeds from disposal of property and equipment by Php19,144 million, mainly lower proceeds from the sale and leaseback of telecom towers; (2) higher payment for acquisition of investments in associates and joint ventures by Php2,134 million, mainly PLDT's respective investments in Radius and Kayana, PCEV's additional investment in MIH, and Smart’s investment in DFTI; (3) lower payment for purchase of property and equipment, including capitalized interest, by Php10,178 million; and (4) proceeds from redemption of investment in debt securities on Php200 million in 2024.
Our consolidated payment for purchase of property and equipment, including capitalized interest, in 2025 totaled Php62,864 million, a decrease of Php5,393 million, or 8%, as compared with Php68,257 million in 2024. Smart’s payment for purchase of property and equipment, including capitalized interest, decreased by Php4,900 million, or 15%, to Php28,482 million in 2025 from Php33,382 million in 2024. PLDT’s payment for purchase of property and equipment, including capitalized interest, decreased by Php853 million, or 3%, to Php27,236 million in 2025 from Php28,089 million in 2024. The balance represents other subsidiaries’ capital spending.
Our consolidated payment for purchase of property and equipment, including capitalized interest, in 2024 totaled Php68,257 million, a decrease of Php10,178 million, or 13%, as compared with Php78,435 million in 2023. Smart’s payment for purchase of property and equipment, including capitalized interest, decreased by Php8,701 million, or 21%, to Php33,382 million in 2024 from Php42,083 million in 2023. PLDT’s payment for purchase of property and equipment, including capitalized interest, decreased by Php4,727 million, or 14%, to Php28,089 million in 2024 from Php32,816 million in 2023. The balance represents other subsidiaries’ capital spending.
As part of our growth strategy, we may from time to time, continue to make acquisitions and investments in companies or businesses.
Cash Flows Used in Financing Activities
On a consolidated basis, cash flows used in financing activities amounted to Php35,927 million in 2025, an increase of Php13,596 million, or 61%, from Php22,331 million in 2024, primarily due to the combined effects of the following: (1) higher payment of long-term debt by Php11,653 million; (2) higher interest paid by Php2,493 million; (3) higher settlement of obligations under capital lease by Php2,249 million; (4) settlements of derivative financial instruments of Php243 million in 2025 as against collections from derivative financial instruments of Php704 million in 2024; (5) lower proceeds from availment of long-term debt by Php850 million; and (6) payment for redemption of perpetual notes of Php4,200 million in 2024.
On a consolidated basis, cash flows used in financing activities amounted to Php22,331 million in 2024, a decrease of Php17,087 million, or 43%, from Php39,418 million in 2023, primarily due to the combined effects of the following: (1) lower payment of long-term debt by Php10,552 million; (2) payment of short-term debt of Php10,000 million in 2023; (3) lower cash dividends paid by Php2,578 million; (4) collection from derivative financial instruments of Php704 million in 2024 as against settlement of Php607 million in 2023; (5) payment for redemption of perpetual notes of Php4,200 million in 2024; (6) higher settlement of obligations under lease liabilities by Php1,372 million; (7) higher interest paid by Php1,025 million; and (8) lower proceeds from availment of long-term debt by Php1,000 million.
See Note 27 – Financial Assets and Liabilities – Financial Risk Management Objectives and Policies to the accompanying consolidated financial statements in Item 18. “Financial Statements” for a detailed discussion on our treasury policies and objectives in terms of the manner in which treasury activities are controlled.
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Debt Financing
Proceeds from availment of long-term and short-term debts for the year ended December 31, 2025 amounted to Php36,150 million and Php1,322 million, respectively, mainly from PLDT, Smart, Vitro and Multisys' drawings related to refinancing of maturing debt obligations and financing of capital expenditure requirements. Payments of principal on our long-term and short-term debts amounted to Php23,712 million and Php1,022 million, respectively, while payments of interest on our total debt amounted to Php13,223 million for the year ended December 31, 2025.
Proceeds from availment of long-term debt for the year ended December 31, 2024 amounted to Php37,000 million mainly from PLDT, Smart and ePLDT’s drawings related to financing of capital expenditure requirements. Payments of principal on long-term debt amounted to Php12,059 million, while payments of interest on our total debt amounted to Php10,679 million for the year ended December 31, 2024.
Proceeds from availment of long-term debt for the year ended December 31, 2023 amounted to Php38,000 million mainly from PLDT, Smart and ePLDT’s drawings related to financing of capital expenditure requirements. Payments of principal on long-term and short-term debts amounted to Php22,611 million and Php10,000 million, respectively, while payments of interest on our total debt amounted to Php9,596 million for the year ended December 31, 2023.
Our consolidated long-term and short-term debts increased by Php13,462 million, or 5%, to Php295,048 million as at December 31, 2025 from Php281,586 million as at December 31, 2024 primarily due to drawings from our long-term facilities and the revaluation of foreign currency-denominated debt, partially offset by debt amortizations. As at December 31, 2025, PLDT’s long-term and short-term debt level increased by Php4,469 million, or 3%, to Php174,971 million from Php170,502 million as at December 31, 2024, Smart’s long-term and short-term debt level increased by Php3,654 million, or 4%, to Php107,147 million from Php103,493 million as at December 31, 2024, ePLDT's long-term debt level increased by Php5,039 million, or 66%, to Php12,630 million from Php7,591 million as at December 31, 2024, and Vitro's short-term debt of Php300 million as at December 31, 2025.
Our consolidated long-term and short-term debts increased by Php26,788 million, or 11%, to Php281,586 million as at December 31, 2024 from Php254,798 million as at December 31, 2023 primarily due to drawings from our long-term facilities and the revaluation of foreign currency-denominated debt, partially offset by debt amortizations. As at December 31, 2024, PLDT’s long-term and short-term debt level increased by Php14,630 million, or 9%, to Php170,502 million from Php155,872 million as at December 31, 2023, Smart’s long-term and short-term debt level increased by Php9,531 million, or 10%, to Php103,493 million from Php93,962 million as at December 31, 2023, and Vitro's long-term debt level increased by Php2,627 million, or 53%, to Php7,591 million from Php4,964 million as at December 31, 2023.
See Note 20 – Interest-bearing Financial Liabilities – Long-term Debt to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for a more detailed discussion of our long-term and short-term debts.
Credit Ratings
None of our existing indebtedness contains provisions under which credit rating downgrades would trigger a default, changes in applicable interest rates or other similar terms and conditions.
As at February 25, 2026, PLDT maintained its investment grade credit ratings as follows:
Rating Agency
Credit Rating
Moody’s Investors Service, or Moody’s
Baa2 with stable outlook (most recently published on February 24, 2026)
S&P Global (formerly Standard & Poor’s Ratings Services)
BBB with stable outlook (most recently published on November 23, 2025)
CRISP previously rated PLDT's retail peso bonds "AAA with stable outlook" and the credit rating agreement ended in 2024 following the full redemption of those bonds.
Contractual Obligations and Commercial Commitments
Various Trade and Other Obligations
PLDT Group has various obligations to suppliers for the acquisition of phone and network equipment, contractors for services rendered on various projects, foreign administrations and domestic carriers for the access charges, shareholders for unpaid dividends distributions, employees for benefits and other related obligations, and various business and operational related agreements. Total obligations under these various agreements amounted to approximately Php116,304 million and Php133,811 million as at December 31, 2025 and 2024, respectively. See Note 22 – Accounts Payable and Note 23 – Accrued Expenses and Other Current Liabilities to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
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For a detailed discussion of our consolidated contractual undiscounted obligations as at December 31, 2025, see Note 27 – Financial Assets and Liabilities to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Commercial Commitments
Major Network Vendors
Significant commitment in respect of major network vendors, net of advances and deliveries, amounted to about Php19,700 million and Php15,900 million as at December 31, 2025 and 2024, respectively.
Other Capital Expenditure Vendors
Commitments related to non-major capital expenditure vendors, net of advances and deliveries, amounted to Php16,900 million and Php11,200 million as at December 31, 2025 and 2024, respectively.
We have no outstanding commercial commitments, in the form of letters of credit, as at December 31, 2025 and 2024.
C. Research and development, patents and licenses, etc.
See Item 4. “Information on the Company – Business Overview – Intellectual Property Rights”.
D. Trend Information
Please refer to Item 5. “Operating and Financial Review and Prospects — A. Operating Results” for a discussion of the most recent trends in our services, sales and expenses. In addition, please refer to Item 3. “Key Information,” Item 4. “Information on the Company,” and Item 11. “Quantitative and Qualitative Disclosures About Market Risk” for a discussion of known trends, uncertainties, demands, commitments or events that we believe are reasonably likely to have a material effect on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
E. Critical Accounting Estimates
The preparation of our consolidated financial statements in conformity with IFRS Accounting Standards requires us to make judgments, estimates and assumptions that affect the reported amounts of our revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the end of each reporting period. The uncertainties inherent in these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets or liabilities affected in the future year.
Judgments and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Judgments, key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period are consistent with those applied in the most recent annual financial statements. Selected critical judgments and estimates applied in the preparation of the consolidated financial statements are discussed below:
Judgments
In the process of applying our accounting policies, management has made judgments, apart from those involving estimations which have the most significant effect on the amounts recognized in our consolidated financial statements.
Revenue Recognition
Identifying performance obligations
We identify performance obligations by considering whether the promised goods or services in the contract are distinct goods or services. A good or service is distinct when the customer can benefit from the good or service on its own or together with other resources that are readily available to the customer and our promise to transfer the good or service to the customer is separately identifiable from the other promises in the contract.
Revenues earned from multiple-deliverable arrangements offered by our fixed line and wireless businesses are split into separate identifiable performance obligations based on their relative stand-alone selling price in order to reflect the substance of the transaction. The transaction price represents the best evidence of stand-alone selling price for the services we offer since this is the observable price we charge if our services are sold separately. We account for customer contracts in accordance with IFRS 15 and have concluded that the service (telecommunication service) and non-service components (handset or equipment) may be accounted for as separate performance obligations. The handset or equipment is delivered first, followed by the telecommunication service (which is provided over the contract/lock-in period of two to three years). Revenues attributable to the separate performance obligations are based on the allocation of the transaction price relative to the stand-alone selling price.
Installation fees for voice and data services that are not custom-built for the subscribers are considered as a single performance obligation together with monthly service fees, recognized over the estimated average customer relationship period since the subscriber cannot benefit from the installation services on its own or together with other resources that are readily available to the subscriber. On the other hand, installation fees of data services that are custom-built for the subscribers are considered as a separate performance obligation and is recognized upon completion of the installation services. Activation fees for both voice and data services are also considered as a single performance obligation together with monthly service fees, recognized over the estimated average customer relationship period.
Principal versus agent consideration
We enter into contracts with our customers involving multiple deliverable arrangements. We determined that we control the goods before they are transferred to customers, and we can direct the use of the inventory. The following factors indicate that we control the goods before they are being transferred to customers:
Based on the foregoing, we are considered the principal in our contracts with other service providers except for certain VAS arrangements. We have a primary obligation to provide the services to the subscriber.
Timing of revenue recognition
We recognize revenues from contracts with customers over time or at a point in time depending on our evaluation of when the customer obtains control of the promised goods or services and based on the extent of progress towards completion of the performance obligation. For the telecommunication service which is provided over the contract period of two or more years, revenue is recognized monthly as we provide the service because control is transferred over time. For the device, which is sold at the inception of the contract, revenue is recognized at the time of delivery because control is transferred at a point in time.
Identifying methods for measuring progress of revenue recognized over time
We determine the appropriate method of measuring progress which is either using input or output methods. Input method recognizes revenue based on the entity’s efforts or inputs to the satisfaction of a performance obligation while output method recognizes revenue based on direct measurements of the value to the customer of the goods or services transferred to date.
Revenue from telecommunication services is recognized using input method wherein recognition is over time based on the customer subscription period since the customer simultaneously receives and consumes the benefits as the seller renders the services.
Significant financing component
We concluded that the handset component included in contracts with customers has a significant financing component considering the period between the time of the transfer of control over the handset and the customer’s payment of the price of the handset, which is more than one year.
In determining the interest to be applied to the amount of consideration, we concluded that the interest rate is the market interest rate adjusted with credit spread to reflect the customer credit risk that is commensurate with the rate that would be reflected in a separate financing transaction between us and our customer at contract inception.
Estimation of stand-alone selling price
We assessed that the service and non-service components represent separate performance obligations. Thus, the amount of revenues should be recognized based on the allocation of the transaction price to the different performance obligations based on their stand-alone selling prices. The stand-alone selling price is the price at which we sell the goods or services separately to a customer. However, if goods or services are not currently offered separately, we use the adjusted market or cost-plus margin method to determine the stand-alone selling price to be used in the revenue allocation.
Evaluation of business models in managing financial instruments
We determine our business model at the level that best reflects how we manage groups of financial assets to achieve our business objectives. Our business model is not assessed on an instrument-by-instrument basis, but on a higher level of aggregated portfolios and is based on observable factors such as:
The business model assessment is based on reasonably expected scenarios without taking ‘worst case’ or ‘stress case’ scenarios into account. If cash flows after initial recognition are realized in a way that is different from our original expectations, we do not change the classification of the remaining financial assets held in that business model but incorporates such information when assessing newly originated or newly purchased financial assets going forward.
We have determined that for cash and cash equivalents, short-term investments, investment in debt securities and other long-term investments, and trade and other receivables, the business model is to collect the contractual cash flows until maturity.
IFRS 9, however, emphasizes that if more than an infrequent number of sales are made out of a portfolio and those sales are more than insignificant in value, of financial assets carried at amortized cost, we should assess whether and how such sales are consistent with the objective of collecting contractual cash flows.
Definition of default and credit-impaired financial assets
We define a financial instrument as in default, which is fully aligned with the definition of credit-impaired, when it meets one or more of the following criteria:
For trade receivables and all other financial assets subject to impairment, default occurs when the receivable becomes 90 days past due, except for trade receivables from corporate subscribers, which are determined to be in default when the receivables become 120 days past due.
The counterparty meets unlikeliness to pay criteria, which indicates the counterparty is in significant financial difficulty. These are instances where:
The criteria above have been applied to all financial instruments, except FVPL, held by us and are consistent with the definition of default used for internal credit risk management purposes. The default definition has been applied consistently to the ECL models throughout our expected loss calculation.
Significant increase in credit risk
At each reporting date, we assess whether there has been a significant increase in credit risk for financial assets since initial recognition by comparing the risk of default occurring over the expected life between the reporting date and the date of initial recognition. We consider reasonable and supportable information that is relevant and available without undue cost or effort for this purpose. This includes quantitative and qualitative information and forward-looking analysis.
An exposure will migrate through the ECL stages as asset quality deteriorates. If, in a subsequent period, asset quality improves and also reverses any previously assessed significant increase in credit risk since origination, then the loss allowance measurement reverts from lifetime ECL to 12-month ECL.
Using our judgment and, where possible, relevant historical experience, we may determine that an exposure has undergone a significant increase in credit risk based on particular qualitative indicators that we consider are indicative of such and whose effect may not otherwise be fully reflected in its quantitative analysis on a timely basis.
As a backstop, we consider that a significant increase in credit risk occurs no later than when an asset is more than 30 days past due. Days past due are determined by counting the number of days since the earliest due date elapsed in respect of which full payment has not been received. Due dates are determined without considering any grace period that might be available to the counterparty.
Exposures that have not deteriorated significantly since their origination, or where the deterioration remains within our investment grade criteria, or which are less than 30 days past due, are considered to have a low credit risk. The provision for credit losses for these financial assets is based on a 12-month ECL. The low credit risk exemption has been applied on debt investments that meet the investment grade criteria of the PLDT Group.
Determining the lease term of contracts with renewal and termination options – Company as a Lessee
We apply a single recognition and measurement approach for all leases, except for short-term leases and leases of ‘low-value’ assets. See Section Leases for the accounting policy.
We determine the lease term as the non-cancellable term of the lease, together with any period covered by an option to extend the lease if it is reasonably certain to be exercised, or any period covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
We, as the lessee, have the option under some of our lease agreements to lease the assets for additional terms. We apply judgment in evaluating whether it is reasonably certain to exercise the option to renew. That is, we consider all relevant factors that create an economic incentive for us to exercise the renewal. After the commencement date, we reassess the lease term if there is a significant event or change in circumstances that is within our control and affects our ability to exercise or not to exercise the option to renew or to terminate (e.g., a change in business strategy).
We included the renewal period as part of the lease term for leases such as sites, leased circuits and poles due to the significance of these assets to our operations. These leases have a non-cancellable period (i.e., one to 30 years) and there will be a significant negative effect on our provision of services if a replacement is not readily available. Furthermore, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised.
See Note 10 – Leases to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for information on potential future payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.
Sale and Leaseback of Telecom Towers
The accounting for sale and leaseback transaction depends on whether the transfer of the asset qualifies as a sale. We applied judgment to determine whether the transfer of asset is accounted for as a sale based on the requirements for determining when a performance obligation is satisfied in IFRS 15. We also applied estimates and judgment in determining many aspects, among others, the passive telecom assets and land lease as unit of accounts, the fair value of the towers sold, the measurement of the ROU assets retained by us and determining an appropriate discount rate to calculate the present value of the minimum lease payments.
Assets classified as held-for-sale
The criteria for held-for-sale classification are regarded as met only when the sale is highly probable, and the asset is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn.
Smart and DMPI entered into sale and purchase agreements with certain tower companies in connection with the sale of telecom towers and related passive telecom infrastructure. The closing of the agreements is on a staggered basis depending on the satisfaction of closing conditions based on the number of towers transferred. Following the completion of the initial transaction with tower companies, Smart and DMPI plan to proceed with the sale of additional telecom towers and related passive infrastructure within a year. With these agreements, we believe that certain conditions were met that qualified the related assets to be reclassified as held-for-sale.
See related discussion in Note 9 – Property and Equipment and Note 10 – Leases to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Accounting for investments in MediaQuest Holdings, Inc., or MediaQuest, through Philippine Depositary Receipts, or PDRs
ePLDT made various investments in PDRs issued by MediaQuest in relation to its direct interest in Satventures, Inc., or Satventures, and indirect interest in Cignal TV, Inc., or Cignal TV.
Based on our judgment, at the PLDT Group level, ePLDT’s investments in PDRs gives ePLDT a significant influence over Satventures and Cignal TV as evidenced by provision of essential technical information and material transactions among PLDT, Smart, Satventures and Cignal TV, and thus are accounted for as investments in associates using the equity method.
See related discussion in Note 11 – Investments in Associates and Joint Ventures – Investments in Associates – Investment of ePLDT in MediaQuest PDRs to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Accounting for investment of PCEV in Maya Bank, Inc., or Maya Bank
The shareholders’ agreement of Voyager Finserve Corporation, or VFC, and Paymaya Finserve Corporation, or PFC, (collectively known as the Bank HoldCos) requires affirmative vote of at least one director nominated by both PCEV and MIH to direct the relevant activities of the Bank HoldCos. The Bank HoldCos were incorporated for the sole purpose of holding shares or equity investments in Maya Bank. Because of the contractual arrangement between the parties, the investments in the Bank HoldCos are accounted for as joint venture.
Accounting for investments in Vega Telecom Inc., or VTI, Bow Arken Holdings Company, or Bow Arken, and Brightshare Holdings, Inc., or Brightshare
PLDT acquired a 50% equity interest in each of VTI, Bow Arken and Brightshare on May 30, 2016. Based on the Memorandum of Agreement, PLDT and Globe Telecom, Inc., or Globe, each has the right to appoint half the members of the Board of Directors of each of VTI, Bow Arken and Brightshare, as well as the (i) co-Chairman of the Board; (ii) co-Chief Executive Officer and President; and (iii) co-Controller where any matter requiring their approval shall be deemed passed or approved if the consents of both co-officers holding the same position are obtained. All decisions of each Board of Directors may only be approved if at least one director nominated by each of PLDT and Globe votes in favor of it.
Based on these rights, PLDT and Globe have joint control over VTI, Bow Arken and Brightshare, which is defined in IFRS 11, Joint Arrangements, as a contractually agreed sharing of control of an arrangement and exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Consequently, PLDT and Globe classified the joint arrangement as a joint venture in accordance with IFRS 11 given that PLDT and Globe each has the right to 50% of the net assets of VTI, Bow Arken and Brightshare and their respective subsidiaries.
Accordingly, PLDT accounted for the investment in VTI, Bow Arken and Brightshare using the equity method of accounting in accordance with IAS 28. Under the equity method of accounting, the investment is initially recognized at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets. See Note 11 – Investments in Associates and Joint Ventures – Investment in Joint Ventures – Investments of PLDT in VTI, Bow Arken and Brightshare to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Material partly-owned subsidiaries
Our consolidated financial statements include additional information about subsidiaries that have non-controlling interest, or NCI, that are material to us. See Note 6 – Components of Other Comprehensive Loss to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”. We determined material partly-owned subsidiaries as those with balance of NCI greater than 5% of the total equity as at December 31, 2025 and 2024.
Material associates and joint ventures
Our consolidated financial statements include additional information about associates and joint ventures that are material to us. See Note 11 – Investments in Associates and Joint Ventures to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”. We determined material associates and joint ventures are those investees where our carrying amount of investments is greater than 5% of the total investments in associates and joint ventures as at December 31, 2025 and 2024.
Determining Taxable Profit, Tax Bases, Unused Tax Losses, Unused Tax Credits and Tax Rates
We assess whether we have any uncertain tax position and apply significant judgment in identifying uncertainties over our income tax treatments. We determined based on our assessment that it is probable that our income tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities.
Estimates and Assumptions
The key estimates and assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities recognized in our consolidated financial statements within the next financial year are discussed below. We based our estimates and assumptions on parameters available when our consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond our control. Such changes are reflected in the assumptions when they occur.
Subscriber contract costs
Subscriber contract costs are costs to obtain (i.e., commissions) and costs to fulfill (i.e., installation and CPE costs) in relation to the services we provide to our subscribers. We assessed that these subscriber contract costs are incremental in obtaining and fulfilling our performance obligations. Accordingly, we capitalized subscriber contract costs and amortized as expense over the average customer relationship period.
We apply judgment to estimate the amortization period of subscriber contract costs.
As at December 31, 2025 and 2024, the estimated useful lives of the subscriber contract costs would range from six to seven years.
Further details on subscriber contract costs are disclosed in Note 18 – Prepayments and Other Non-Financial Assets to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Leases – Estimating the incremental borrowing rate, or IBR
In calculating the present value of lease payments, we use the IBR at the lease commencement date if the interest rate implicit in the lease is not readily determinable. IBR is the rate of interest that a lessee would have to pay to borrow over a similar term, similar security, the funds necessary to obtain an asset of a similar value to the ROU asset in a similar economic environment.
We use benchmark rates from partner banks based on the tenor of our loan borrowings plus a spread adjustment based on our credit worthiness. See Note 10 – Leases to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Impairment of non-financial assets
IAS 36 requires that an impairment review be performed when certain impairment indicators are present. In the case of goodwill and intangible assets with indefinite useful life, at a minimum, such assets are subject to an impairment test annually and whenever there is an indication that such assets may be impaired. This requires an estimation of the VIU of the CGUs to which these assets are allocated. The VIU calculation requires us to make an estimate of the expected future cash flows from the CGU and to choose a suitable discount rate in order to calculate the present value of those cash flows. See Note 14 – Goodwill and Intangible Assets – Impairment Testing of Goodwill to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for the key assumptions used to determine the VIU of the relevant CGUs.
Determining the recoverable amount of property and equipment, ROU assets, investments in associates and joint ventures, goodwill and intangible assets, prepayments and other noncurrent assets, requires us to make estimates and assumptions in the determination of future cash flows expected to be generated from the continued use and ultimate disposition of such assets. Future events could cause us to conclude that property and equipment, ROU assets, investments in associates and joint
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ventures, goodwill and intangible assets, and prepayments and other noncurrent assets associated with an acquired business are impaired. Any resulting impairment loss could have a material adverse impact on our financial position and financial performance.
The preparation of estimated future cash flows involves significant estimations and assumptions of future market conditions. While we believe that our assumptions are appropriate and reasonable, significant changes in our assumptions may materially affect our assessment of recoverable values and may lead to future impairment charges.
See Note 4 – Operating Segment Information, Note 5 – Income and Expenses – Asset Impairment, and Note 9 – Property and Equipment to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
The carrying values of our property and equipment, ROU assets, investments in associates and joint ventures, goodwill and intangible assets, and prepayments and other non-financial assets are separately disclosed in Note 9 – Property and Equipment, Note 10 – Leases, Note 11 – Investments in Associates and Joint Ventures, Note 14 – Goodwill and Intangible Assets and Note 18 – Prepayments and Other Non-Financial Assets, respectively, to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Estimating useful lives of property and equipment
We estimate the useful lives of each item of our property and equipment based on the periods over which our assets are expected to be available for use. Our estimation of the useful lives of our property and equipment is also based on our collective assessment of industry practice, internal technical evaluation and experience with similar assets. The estimated useful lives of each asset are reviewed at least every year-end and updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limitations on the use of our assets. It is possible, however, that future results of operations could be materially affected by changes in our estimates brought about by changes in the factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in the estimated useful lives of our property and equipment would increase our recorded depreciation and decrease the carrying amount of our property and equipment.
In 2023, PLDT and Smart increased the EUL of Information Technology assets and general computers and peripherals, due to technological advancement allowing extended warranty and Maintenance Agreement. Smart increased the EUL of Self-Supporting Towers due to cost-effective structure which allows future expansion and upgrades of mounting antennas and is designed for durability and resistance to withstand the elements, hence extending the vendor's warranty. Had the affected assets been depreciated using the original EUL, the depreciation would have been higher by Php934 million for the year 2023.
In 2024, the PLDT Group launched further initiatives to continuously modernize its property and equipment to enhance operational efficiencies. On this basis, the Group reassessed the EUL of certain assets, including among others, certain legacy network systems replaced by Transport Network Transformation (TNT) and Core Transformation, Operations Support Systems and Optical Line and Terminal Access equipment. As a result of changes in accounting estimates, the PLDT Group recognized additional depreciation expense of Php5,686 million in the income statement for the year ended December 31, 2024.
In 2025, based on the internal technical evaluation and assessment of industry practice, PLDT reassessed the EUL of International and Domestic submarine cable systems from 15 years to 25 years, resulting in a reduction in depreciation expense amounting to Php748 million for the year ended December 31, 2025. Conversely, the EUL of certain submarine network cables decreased due to aging and performance issues, resulting in additional depreciation expense of Php237 million.
PLDT and Smart also recognized additional depreciation expense amounting to Php744 million and Php5,560 million respectively, in 2025, due to modernization of core network equipment and IT assets.
In addition, Smart recognized additional depreciation expense of Php215 million upon the expiration of its lease during the year and the consequent termination of use of and move out from the related office premises.
Overall, the total depreciation and amortization of property and equipment from continuing operations amounted to Php41,881 million, Php41,224 million and Php51,543 million for the years ended December 31, 2025, 2024 and 2023, respectively, while that from discontinued operations amounted to nil for the years ended December 31, 2025 and 2024, and Php2 million for the year ended December 31, 2023. Total carrying values of property and equipment, net of accumulated depreciation and amortization, amounted to Php327,989 million and Php318,069 million as at December 31, 2025 and 2024, respectively. See Note 4 – Operating Segment Information and Note 9 – Property and Equipment to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Investment Properties
We carry our investment properties at fair value, with changes in fair value being recognized in the consolidated income statements and in other comprehensive income for transfers from owner-occupied property to investment property. The fair
values of the investment properties have been determined based on appraisal performed by independent firms of appraisers, industry specialists in valuing these types of investment properties.
The valuation for land is based on a market approach valuation technique while the valuation for building and land improvements is based on a cost approach valuation technique using current material and labor costs for improvements based on external and independent reviewers. See Note 13 – Investment Properties to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Recognition of deferred income tax assets
We review the carrying amounts of deferred income tax assets at the end of each reporting period and reduce these to the extent that these are no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax assets to be utilized. Our assessment on the recognition of deferred income tax assets on deductible temporary differences is based on the level and timing of forecasted taxable income of the subsequent reporting years. This forecast is based on our past results and future expectations on revenues and expenses as well as future tax planning strategies. Based on this, management expects that we will generate sufficient taxable income to allow all or part of our deferred income tax assets to be utilized.
Based on the above assessment, our consolidated unrecognized deferred income tax assets amounted to Php934 million and Php803 million as at December 31, 2025 and 2024, respectively. Total consolidated provision for deferred income tax amounted to Php3,710 million, Php3,401 million and Php1,206 million for the years ended December 31, 2025, 2024 and 2023, respectively. Total consolidated recognized net deferred income tax assets amounted to Php11,582 million and Php14,643 million as at December 31, 2025 and 2024, respectively. See Note 4 – Operating Segment Information and Note 7 – Income Taxes to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Estimating allowance for ECLs
ECLs are derived from unbiased and probability-weighted estimates of expected loss, and are measured as follows:
We leverage existing risk management indicators (e.g., internal credit risk classification and restructuring triggers), credit risk rating changes and reasonable and supportable information which allow us to identify whether the credit risk of financial assets has significantly increased.
The ECL is measured on either a 12-month or lifetime basis depending on whether a significant increase in credit risk has occurred since initial recognition. We consider the probability of our counterparty to default on its obligation and the expected loss at default after considering the effects of collateral, any potential value when realized and time value of money. Based on our assessment, there is no significant increase in credit risk and the ECL for these financial assets under a general approach is measured on a 12-month basis.
The assumptions underlying the ECL calculation are monitored and reviewed on a quarterly basis.
The simplified approach does not require the tracking of changes in credit risk but instead requires the recognition of lifetime ECL. For trade receivables and contract assets, we use the simplified approach for calculating ECL. We have considered similarities in underlying credit risk characteristics and behavior in determining the groupings of various customer segments.
We used historically observed default rates and adjusted these historical credit loss experiences with forward-looking information. At every reporting date, the historical default rates are updated and changes in the forward-looking estimates are analyzed.
There have been no significant changes in the estimation techniques used for calculating ECL on trade and other receivables and contract assets.
We incorporated forward-looking information into both our assessment of whether the credit risk of an instrument has increased significantly since its initial recognition and our measurement of ECL.
To do this, management considered a range of relevant forward-looking macroeconomic assumptions and probability weights for the determination of unbiased general industry adjustments and any related specific industry adjustments that support the calculation of ECLs.
The macroeconomic factors are aligned with information used by us for other purposes such as strategic planning and budgeting.
The probability weights used in the calculation of ECLs cover a range of possible outcomes based on the current and projected economic conditions.
We have identified and documented key drivers of credit risk and credit losses of each portfolio of financial instruments and, using an analysis of historical data, has estimated relationships between macroeconomic variables and credit risk and credit losses.
Predicted relationship between the key indicators and default and loss rates on various portfolios of financial assets have been developed based on analyzing historical data over the past three to eight years. The methodologies and assumptions, including any forecasts of future economic conditions are reviewed regularly.
Due to lack of reasonable and supportable information, we have not identified any uncertain event that was assessed to be relevant to the risk of default occurring, thus we are not able to estimate the impact on ECL.
Total provision for expected credit losses for trade and other receivables from continuing operations amounted to Php3,838 million, Php3,875 million and Php4,119 million for the years ended December 31, 2025, 2024 and 2023, respectively, while that from discontinued operations amounted to nil for the years ended December 31, 2025 and 2024, and Php4 million for the year ended December 31, 2023. Trade and other receivables, net of allowance for expected credit losses, amounted to Php31,367 million and Php31,612 million as at December 31, 2025 and 2024, respectively. See Note 5 – Income and Expenses and Note 16 – Trade and Other Receivables to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Total impairment losses on contract assets amounted to Php101 million, Php181 million and Php224 million for the years ended December 31, 2025, 2024 and 2023, respectively. Contract assets, net of allowance for expected credit losses, amounted to Php1,487 million and Php1,886 million as at December 31, 2025 and 2024, respectively. See Note 5 – Income and Expenses – Contract Balances to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
A broad range of forward-looking information was considered as economic inputs such as the gross domestic product, or GDP, inflation rate, unemployment rates, export rates, The Group of Twenty, or G20 GDP and G20 inflation rates. For expected credit loss provisions modelled on a collective basis, grouping of exposures is performed on the basis of shared risk characteristics, such that risk exposures within a group are homogeneous. In performing this grouping, there must be sufficient information for the PLDT Group to be statistically acceptable. Where sufficient information is not available internally, then we have considered benchmarking internal/external supplementary data to use for modelling purposes. The characteristics and any supplementary data used to determine groupings are outlined below.
Trade receivables – Groupings for collective measurement
The following credit exposures are assessed individually:
Estimating pension benefit costs and other employee benefits
The cost of defined benefit and present value of the pension obligation are determined using the projected unit credit method. An actuarial valuation includes making various assumptions which consist, among other things, discount rates, rates of compensation increases and mortality rates. Further, our accrued benefit cost is affected by the fair value of the plan assets. Key assumptions used to estimate fair value of the unlisted equity investments included in the plan assets consist of revenue growth rate, direct costs, capital expenditures, discount rates and terminal growth rates. See Note 25 – Pension and Other Employee Benefits. Due to complexity of valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in assumptions. While we believe that our assumptions are reasonable and appropriate, significant differences in our actual experience or significant changes in our assumptions may materially affect our cost for pension and other retirement obligations. All assumptions are reviewed every year-end.
The net consolidated pension benefit costs amounted to Php1,434 million, Php1,441 million and Php1,426 million for the years ended December 31, 2025, 2024 and 2023, respectively. The prepaid benefit costs amounted to Php810 million and Php975 million as at December 31, 2025 and 2024, respectively. The accrued benefit costs amounted to Php3,810 million and Php3,548 million as at December 31, 2025 and 2024, respectively. See Note 5 – Income and Expenses – Compensation and Employee Benefits, Note 18 – Prepayments and Note 25 – Pension and Other Employee Benefits to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Long-term Incentive Plan, LTIP
The Executive Compensation Committee (ECC) of the PLDT Board of Directors approved the LTIP covering the years 2022 to 2026, on December 23, 2021. It covers two cycles and is intended to provide incentive compensation in the form of cash to key officers, executives and other eligible participants who are consistent performers, compliant with codes of conduct and contributors to our strategic and financial goals, with defined metrics based on the achievement of telco core income, customer experience and sustainability. The target metrics for sustainability are expected to capture the Company’s performance in various ESG materiality areas, including but not limited to, climate action such as initiatives to reduce energy consumption and greenhouse gas (GHG) emissions, employee and customer welfare, diversity and inclusion, cybersecurity and data privacy, and business ethics. Cycle 1 covered the performance period from 2022 to 2024 and was settled in 2025 based on the achievement of performance targets. Cycle 2, which is intended to cover the performance period from 2025 to 2026, is still subject to the ECC’s evaluation. Accordingly, the expense accrued for the LTIP for the year ended December 31, 2025 amounted to nil. The expense accrued for the years ended December 31, 2024 and 2023 amounted to Php1,136 million and Php839 million, respectively.
The accrued incentive payable amounted to nil and Php3,406 million as at December 31, 2025 and 2024, respectively. See Note 5 – Income and Expenses – Compensation and Employee Benefits and Note 25 – Pension and Other Employee Benefits – Other Long-term Employee Benefits to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Provision for asset retirement obligations
Provision for asset retirement obligations is recognized in the period in which this is incurred if a reasonable estimate can be made. This requires an estimation of the cost to restore or dismantle on a per square meter basis, depending on the location, and is based on the best estimate of the expenditure required to settle the obligation at the future restoration or dismantlement date, discounted using a pre-tax rate that reflects the current market assessment of the time value of money and, where appropriate, the risk specific to the liability. Total provision for asset retirement obligations amounted to Php1,836 million and Php1,752 million as at December 31, 2025 and 2024, respectively. See Note 21 – Deferred Credits and Other Noncurrent Liabilities to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Provision for legal contingencies and tax assessments
We are currently involved in various legal proceedings and tax assessments. Our estimates of the probable costs for the resolution of these claims have been developed in consultation with our counsel handling the defense in these matters and are based upon our analysis of potential results. Based on management’s assessment, appropriate provisions were made. We currently do not believe these proceedings could materially reduce our revenues and profitability. It is possible, however, that future financial position and performance could be materially affected by changes in our estimates or the effectiveness of our strategies relating to these proceedings and assessments. See Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Determination of fair values of financial assets and financial liabilities
When the fair value of financial assets and financial liabilities recorded in our consolidated statements of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flows model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as
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liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Other than those whose carrying amounts are reasonable approximations of fair values, total fair values of noncurrent financial assets and noncurrent financial liabilities as at December 31, 2025 amounted to Php3,322 million and Php274,220 million, respectively, while the total fair values of noncurrent financial assets and noncurrent financial liabilities as at December 31, 2024 amounted to Php3,079 million and Php247,962 million, respectively. See Note 27 – Financial Assets and Liabilities to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Amended Accounting Standards and Interpretations to Existing Standards Effective Subsequent to December 31, 2025
See Note 2 – Summary of Material Accounting Policies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for the discussion of new accounting standards that will become effective subsequent to December 31, 2025 and their anticipated impact on our consolidated financial statements for the current and future periods.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The Board of Directors is principally responsible for PLDT’s overall direction and governance. PLDT’s Articles of Incorporation provide for 13 members of the Board, who shall be elected by the stockholders. At present, three of PLDT’s 13 directors are independent directors. The Board holds office for a one-year period and until their successors are elected, and are qualified in accordance with the By-Laws.
The name, age and period of service, of each of our directors, including independent directors, of PLDT as at March 31, 2026 are as follows:
Name
Age
Period during which individual has served as such
Manuel V. Pangilinan
November 24, 1998 to present
Marilyn A. Victorio-Aquino
May 8, 2023 to present
Helen Y. Dee
June 18, 1986 to present
Robert Joseph M. de Claro(1)
February 27, 2025 to present
Ray C. Espinosa
James L. Go
November 3, 2011 to present
Hidetada Haiyashi(2)
September 16, 2025 to present
Menardo G. Jimenez, Jr.(3)
June 10, 2025 to present
Kazuyuki Kozu(4)
July 6, 2021 to September 15, 2025
Bernido H. Liu
September 28, 2015 to present
Retired Supreme Court Chief Justice Artemio V. Panganiban
April 23, 2013 to present
Alfredo S. Panlilio
June 8, 2021 to present
Kazutoshi Shimizu
August 13, 2024 to present
Bernadine T. Siy
Marife B. Zamora(5)
November 14, 2016 to June 9, 2025
The name, age, position and period of service of the executive officers of PLDT as at March 31, 2026 are as follows:
Position(s)
Period during whichindividual has served as such
Executive Officers:
Chairman of the Board
February 19, 2004 to present
President and CEO
January 1, 2024 to present
Corporate Secretary
January 25, 2022 to present
Chief Legal Counsel
December 1, 2018 to December 31, 2024
Senior Vice President
January 1, 2019 to present
Senior Legal Adviser to the Chairman
January 1, 2025 to present
Victorico P. Vargas
Leadership Transition Officer
July 1, 2021 to present
Business Transformation Office Head
January 1, 2016 to present
Menardo G. Jimenez, Jr.
Executive Vice President
September 17, 2024 to present
Chief Operating Officer
December 9, 2004 to September 16, 2024
Network Head
January 15, 2024 to September 16, 2024
Consumer Business - Home Head
July 31, 2019 to April 1, 2022
Danny Y. Yu
November 17, 2022 to present
Chief Financial Officer
May 3, 2023 to present
Chief Risk Management Officer
PLDT Group Controller
November 17, 2022 to May 3, 2023
Gina Marina P. Ordoñez
Chief People Officer
March 21, 2019 to present
May 1, 2019 to present
Jeremiah M. de la Cruz(1)
April 1, 2022 to July 1, 2025
January 15, 2024 to May 15, 2025
Consumer Business Head
April 1, 2022 to January 14, 2024
Joseph Ian G. Gendrano
August 10, 2022 to present
Enterprise Business Head
January 15, 2024 to April 1, 2025
Chief Technology Officer
January 1, 2023 to January 14, 2024
November 16, 2022 to December 31, 2022
John Gregory Y. Palanca(2)
March 21, 2024 to present
Sales and Development Head
August 15, 2023 to present
May 16, 2025 to present
First Vice President
August 15, 2023 to March 20, 2024
Patricio S. Pineda III(3)
April 2, 2025 to present
Luis S. Reňon
Senior Advisor to the Chairman
November 16, 2024 to present
May 4, 2023 to present
Internal Audit Head
July 1, 2018 to November 16, 2024
Leo I. Posadas
March 6, 2007 to present
Treasurer
May 18, 2015 to present
Louella F. Calixtro(4)
November 16, 2025 to present
Chief Procurement Officer
Joan A. de Venecia-Fabul(5)
November 5, 2020 to present
Legal and Regulatory Affairs Group Head
Patrick F. Santos
November 1, 2024 to present
Chief Information Security Officer
Cyber Security Operations Head
Melissa V. Vergel de Dios
March 5, 2013 to present
Chief Sustainability Officer
November 4, 2021 to present
Investor Relations Head
March 6, 2007 to October 31, 2024
Gil Samson D. Garcia
November 8, 2018 to present
Financial Reporting and Controllership Head
May 31, 2022 to present
The following is a brief description of the business experiences of each of our current directors, executive officers and advisors:
Mr. Manuel V. Pangilinan has been a director of PLDT since November 24, 1998. He was appointed as Chairman of the Board of Directors of PLDT in February 2004 and as President and Chief Executive Officer in December 2023 with effect January 1, 2024. He also held the position of President and Chief Executive Officer of PLDT from January 1, 2016 until June 7, 2021, and served as President and Chief Executive Officer of Smart from January 1, 2016 until August 7, 2019.
Mr. Pangilinan is the Chairman of the Governance, Nomination and Sustainability, Executive Compensation, Technology Strategy, and Data Privacy and Information Security Committees of the Board of Directors of PLDT. He also serves as Chairman and President of Metro Pacific Investments Corporation, Chairman and CEO of Meralco, and Chairman of PXP and Philex Mining Corporation, and of several subsidiaries and affiliates of PLDT or MPIC, including, among others, Smart, DMPI,
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Digitel, PCEV., ePLDT, Inc., Beacon Electric Assets Holdings Inc., Philex Petroleum Corporation, Manila North Tollways Corporation, Maynilad Water Services Corporation, Landco Pacific Corporation, Metro Pacific Hospital Holdings, Inc., Medical Doctors Incorporated (Makati Medical Center), and Colinas Verdes Corporation (Cardinal Santos Medical Center). He is also the Chairman of MediaQuest Holdings Inc., TV5 Network, Inc., and PLDT-Smart Foundation.
Mr. Pangilinan founded First Pacific, a Hongkong Stock Exchange-listed company, in 1981 and serves as its Managing Director and Chief Executive Officer. Within the First Pacific Group, he also holds the position of President Commissioner of P.T. Indofood Sukses Makmur Tbk, the largest food company in Indonesia.
Outside the First Pacific Group, Mr. Pangilinan is the Chairman of the Board of Trustees of San Beda College and the Chairman Emeritus of the Samahang Basketbol ng Pilipinas. He is also the Chairman of Philippine Business for Social Progress, the largest private sector social action organization made up of the country’s largest corporations and a Co-Chairman of the Philippine Disaster Resilience Foundation, Inc., a non-stock, non-profit foundation established to formulate and implement a reconstruction strategy to rehabilitate and rebuild areas devastated by floods and other calamities.
Mr. Pangilinan graduated cum laude from the Ateneo de Manila University, with a Bachelor of Arts Degree in Economics. He received his Master’s Degree in Business Administration from Wharton School of Finance & Commerce at the University of Pennsylvania, where he was a Procter & Gamble Fellow. He was conferred a Doctor of Humanities Degree (Honoris Causa) by the San Beda College, Xavier University, Holy Angel University and Far Eastern University.
Atty. Marilyn A. Victorio-Aquino has been a member of the Board of Directors of PLDT since May 8, 2023. Atty. Victorio-Aquino concurrently serves as a Senior Vice President, Management Committee Member, Privacy Head, Corporate Secretary, and Senior Legal Advisor to the Chairman of PLDT. She has been a director of the Philippine Stock Exchange since June 2023.
She joined First Pacific in 2012 as an Assistant Director and currently holds various positions in the Philippine subsidiaries and affiliates of First Pacific and Metro Pacific Investments Corporation (an affiliate of First Pacific), including President of First Coconut Manufacturing Inc., and director of Philex Mining Corporation (Philex) and PXP Energy Corporation (PXP). She is also a director of Lepanto Consolidated Mining Company (Lepanto). Philex, PXP, and Lepanto are PSE-listed companies. She also serves as a director of Philex Gold Philippines, Inc., Silangan Mindanao Mining Company, Inc., Maya Bank, Inc, and Maya Philippines, Inc.
Prior to joining First Pacific, Atty. Victorio-Aquino retired as a Senior Partner at SyCip Salazar Hernandez and Gatmaitan Law Offices (SyCipLaw). Atty. Victorio-Aquino graduated cum laude (class salutatorian) from the University of the Philippines with a Bachelor of Laws Degree in 1980, placed second in the Philippine Bar Examinations, and was admitted to the Philippine Bar in 1981. She obtained her Bachelor of Arts degree from the University of Santo Tomas. She is a member of the International Pacific Bar Association, Women Lawyers Circle, Federacion International de Abogadas, Philippine Bar Association, and Integrated Bar of the Philippines.
Mr. Robert Joseph M. de Claro has been a director of PLDT since February 27, 2025. He officially assumed the role of President and Chief Executive Officer of the Social Security System (SSS) on December 6, 2024. Before becoming President and Chief Executive Officer of the SSS, he served as a member of the Social Security Commission (SSC), representing the Employers sector. He also chaired the SSC Information Technology and Collection Committee and was a member of the SSC Audit Committee, SSC Risk Management and Investment Committee, and SSC Governance Committee. Additionally, Mr. de Claro represented the SSS in the Boards of the Union Bank of the Philippines, UBP Investment Management and Trust Corporation, and Ionics, Inc. He has held various leadership roles, including President and Chief Executive Officer of People4u, Inc., Operating Partner at FutureNow Business Services, Inc., President and General Manager of JMango Philippines, Inc., and General Manager, APAC for GlobalOne Solutions, Inc. and Cloud Sherpas.
Mr. de Claro holds a Bachelor of Science degree in Computer Science with a specialization in Information Technology from De La Salle University.
Ms. Helen Y. Dee has been a director of PLDT since June 18, 1986. She is the Chairperson of House of Investments, Petro Energy Resources Corporation, Rizal Commercial Banking Corporation, all of which are PSE-listed companies. She is the Chairperson, Vice Chairperson or a director of several companies engaged in banking, insurance and real property businesses. Ms. Dee received her Master’s Degree in Business Administration from De La Salle University.
Atty. Ray C. Espinosa has been a director of PLDT since November 24, 1998, and is a member of the Technology Strategy Committee and Data Privacy and Information Security Committee of the Board of Directors of PLDT. He was Senior Advisor to the President and CEO of PLDT from January 28, 2019 until June 8, 2021. He was PLDT’s Chief Corporate Services Officer from December 2016 until January 28, 2019, and previously served as President and CEO of ePLDT Inc. and its subsidiaries from July 2000 until May 2010 and as President and CEO of TV5 Network Inc. and Cignal TV Inc. from December 2009 until May 2013. He was the Deputy Chief Executive of Meralco from January 28, 2019 until May 27, 2019, and President and Chief Executive
Officer from May 28, 2019 until May 31, 2023. He was the chairman of the Philstar Group of Companies from June 11, 2014 until August 17, 2023 and BusinessWorld Publication Corporation from September 16, 2013 until August 17, 2023. In June 2013, he joined First Pacific Company Limited as Associate Director.
Atty. Espinosa is a director of Metro Pacific Investments Corporation, Meralco, and PXP, an independent director of EEI Corporation and chairman of its Risk Oversight Committee and member of its Executive Committee, and a lead independent director of Lepanto Consolidated Mining Company and chairman of its Audit Committee. He is an independent director of Concreat Holdings Philippines, Inc. and chairman of its Nominations Committee and member of its Audit Committee. He is a trustee of the PLDT-Smart Foundation Inc. and the Beneficial Trust Fund of PLDT.
He has a Master of Laws Degree from the University of Michigan School of Law and a Bachelor of Laws Degree from the Ateneo de Manila University School of Law, and is a member of the Integrated Bar of the Philippines. He was a partner at SyCip Salazar Hernandez & Gatmaitan from 1982 to 2000, a foreign associate at Covington and Burling (Washington, D.C.) from 1987 to 1988, and a law lecturer at the Ateneo de Manila University School of Law from 1983 to 1985 and 1989. He placed first in the 1982 Philippine Bar Examinations.
Mr. James L. Go has been a director of PLDT since November 3, 2011. He is a member of the Technology Strategy and Risk Committees and Advisor of the Audit Committee of the Board of Directors of PLDT. He has been the Chairman of JG Summit Holdings, Inc. and a Board Advisor of Cebu Air, Inc. since January 1, 2023, and is the Chairman and Chief Executive Officer of Oriental Petroleum and Minerals Corporation, and the Chairman Emeritus of Universal Robina Corporation, Robinsons Land Corporation, and JG Summit Olefins Corporation. He is the Vice Chairman of Robinsons Retail Holdings, Inc. and a Director of the Meralco. He is also the President and Trustee of the Gokongwei Brothers Foundation, Inc. Mr. Go obtained his Bachelor of Science Degree and Master of Science Degree in Chemical Engineering from Massachusetts Institute of Technology, USA.
Mr. Hidetada Hayashi has been a director of PLDT since September 16, 2025. He joined NTT, Inc. in April 1994 and has over 30 years of experience in the telecommunications industry. He currently serves as the Managing Director of the Philippine Branch of NTT DOCOMO, INC.
Prior to this, he served as the Director of the Business Management Division of NTT DOCOMO GLOBAL, Inc. from 2024 to 2025, Executive Director of the Corporate Planning Department of NTT DOCOMO, INC. from 2022 to 2024, Chief Operating Officer of DOCOMO Communications Laboratories Europe GmbH from 2018 to 2021 and Chief Financial Officer of DOCOMO Pacific, Inc. 2008 to 2012.
Mr. Hayashi earned a Bachelor of Arts degree in Law from Chuo University, Tokyo.
Mr. Menardo G. Jimenez, Jr. has been a director of PLDT since September 17, 2024 and is our Executive Vice President and Chief Operating Officer. He joined PLDT in December 2001 and served as the Network Head of PLDT from January 15, 2024 to September 16, 2024. Prior to that, he served in various capacities as Corporate Communications and Public Affairs Group Head, Retail Business Group Head, Fixed Line Business Transformation Office Head, Human Resources Group Head, Fixed Line Business Transformation Office Head and Consumer Home Business Group Head. He holds directorships in several subsidiaries of PLDT. Prior to joining PLDT, he had a stint at GMA Network, Inc., where he served as head of a creative services and network promotions. Mr. Jimenez received his AB Economics degree from the University of the Philippines.
Mr. Bernido H. Liu has been an independent director of PLDT since September 28, 2015 and is an independent member of the Audit, Governance, Nomination and Sustainability, Executive Compensation, Risk, and Data Privacy and Information Security Committees of the Board of Directors of PLDT. Concurrently, he is the Executive Chairman of GOLDEN ABC, Incorporated (GABC), a fashion retail company that designs and sells its own clothing, personal care and accessory lines marketed and retailed under a dynamic portfolio of well-differentiated proprietary brands, namely Penshoppe, OXGN, ForMe, Memo, Regatta, and BOCU. He is also the Group Chairman of LH Paragon Incorporated, a business holdings company which has under its management GABC and other companies in various industries, namely, Matimco Incorporated, Oakridge Realty Development Corporation, Clinica Prime, and Greentree Food Solutions, Inc.
Mr. Liu and GABC under his leadership have been recognized by different award-giving bodies. Awards include the Agora for Outstanding Achievement in Entrepreneurship from the Philippine Marketing Association, Ten Outstanding Young Men for Entrepreneurship from JCI Philippines, Global Retailer of the Year from the Philippine Retailers Association and the Department of Trade and Industry, and the ASEAN Business Awards’ Priority Integration Sector Excellence Award for Retail. He has also been conferred the Pro Ecclesia et Pontifice, the highest honor the Pope bestows upon a lay person. Mr. Liu graduated with a Bachelor of Science Degree in Architecture from the University of San Carlos and completed the Executive Education Owner/President Management Program of the Harvard Business School.
Retired Chief Justice Artemio V. Panganiban has been an independent director of PLDT since April 23, 2013 and is serving as an independent member of the Audit, Governance, Nomination and Sustainability, and Executive Compensation Committees, and Chairman of the Risk Committee, of the Board of Directors of PLDT. He was appointed as Lead Independent Director effective
March 21, 2019. He served as an independent member of the Advisory Board and an independent non-voting member of the Governance and Nomination Committee of the Board of Directors of PLDT from June 9, 2009 to May 6, 2013. Currently, he is also an independent director of Meralco, Petron Corporation, GMA Network, GMA Holdings, JG Summit Holdings, Inc., Asian Terminals, Inc. and RL Commercial REIT, Inc., and a non-executive director of Jollibee Foods Corporation, all of which are PSE-listed companies, as well as Senior Adviser of Metropolitan Bank and Trust Company, and adviser of Double Dragon Properties Corp. and Merry Mart Consumer Corp. He is an Independent Advisor of Metro Pacific Investments Corporation, a large non-listed company, and Independent Director of several large non-listed companies such as Asian Hospital, Inc., Metro Pacific Tollways Corporation, State Investment House, Inc., and State Properties Corporation. He is also the Chairman of the Board of Trustees of the Foundation for Liberty and Prosperity, and of the Board of Advisers of Metrobank Foundation, Inc., a trustee of Tan Yan Kee Foundation and Claudio Teehankee Foundation, President of the Manila Metropolitan Cathedral-Basilica Foundation and of the AIM-RVR Center, a member of the Advisory Board of World Bank (Philippines), Chairman-Emeritus of the Philippine Dispute Resolution Center, Inc., Chairman Emeritus of the Philippine National Committee of the Asean Law Association, and a column writer of the Philippine Daily Inquirer. Hon. Panganiban served the Supreme Court of the Philippines for more than 11 years, first as Associate Justice (October 10, 1995 to December 20, 2005) and later, as Chief Justice (December 21, 2005 to December 6, 2006) during which he sat concurrently as Chairperson of the Presidential Electoral Tribunal, Judicial and Bar Council and Philippine Judicial Academy.
He has received over 250 awards in recognition of his role as jurist, practicing lawyer, professor, civic leader, Catholic lay worker and business entrepreneur, including “The Renaissance Jurist of the 21st Century” given by the Supreme Court on the occasion of his retirement from the Court, and the Pro Ecclesia et Pontifice Award given by Pope Francis last September 18, 2024. Hon. Panganiban graduated cum laude from Far Eastern University with a Bachelor of Laws Degree in 1960, and was conferred a Doctor of Laws Degree (Honoris Causa) by the University of Iloilo (1997), Far Eastern University (2002), University of Cebu (2006), Angeles University (2006) and Bulacan State University (2006). He was co-founder and past president of the National Union of Students of the Philippines.
Mr. Alfredo S. Panlilio has been a Director of PLDT since June 8, 2021 and Smart since August 8, 2019. He served as President and CEO of PLDT from June 8, 2021 and of Smart from August 8, 2019, and held leadership positions in the various subsidiaries of PLDT and Smart, until his retirement as President and CEO of PLDT and Smart on December 31, 2023. Despite his retirement as President and CEO of PLDT and Smart, Mr. Panlilio has remained as a Director of PLDT and Smart, and has continued to hold various leadership positions within the PLDT Group as Chairman of Maya Bank, Inc., Director of Multisys and Multipay Corporation, and Trustee of Asian Carriers Conference Inc. Mr. Panlilio was the Senior Vice President and Head of Customer Retail Services and Corporate Communications at Meralco from September 10, 2010 to June 30, 2019. He also held several leadership positions within the Meralco Group.
Mr. Panlilio is a Trustee of the Kapampangan Development Foundation and Philpop Musicfest Foundation. With PLDT as a longtime supporter of the Philippines’ digital transformation, Mr. Panlilio is among the founding members under the Digital Infrastructure pillar of the Private Sector Advisory Council (PSAC), formed in July 2022. Mr. Panlilio sits as President of the MVP Sports Foundation, a Member of the FIBA Central Board, Second Vice President of FIBA Asia Central Board, First Vice President of the Philippine Olympic Committee and headed the FIBA Basketball World Cup 2023 local organizing committee. He is also the President of the Samahang Basketbol ng Pilipinas (SBP), the country’s governing basketball federation, and is the Chairman of the National Golf Association of the Philippines (NGAP) and Director of the Philippine Badminton Association.
Mr. Panlilio holds a Bachelor of Science Degree in Business Administration (Computer Information Systems) from San Francisco State University. He obtained his Master in Business Administration at J. L. Kellogg School of Management of Northwestern University and the Hongkong University of Science and Technology.
Mr. Kazutoshi Shimizu has been a director of PLDT since August 13, 2024. He is the Vice President of Global Strategy and Corporate Planning of NTT DOCOMO BUSINESS, Inc. (formerly NTT Communications Corporation). He has played a pivotal role in the global business expansion of NTT Group during the last decade. He also held a senior position at the Global Business Office of NTT Holdings Company from 2011 to 2022 and contributed to the growth of the NTT Group. Mr. Shimizu also served as the Vice President of NTT Com’s Smart World Business from 2022 to 2024 and as a director of NTT Holdings’ Global Business Office from 2011 to 2022.
Mr. Shimizu graduated with a Bachelor’s Degree in Mechanical Engineering from the University of Tokyo, and holds a Master’s Degree in Mechanical Engineering from the University of Tokyo, and a Master’s Degree in Business Administration from London Business School, University of London.
Ms. Bernadine T. Siy has been a director of PLDT since June 8, 2021. She is also a director of Epicurean Partners Exchange Inc. and of Fil-Pacific Apparel Corporation (FPAC), both leading players in the food service and apparel industry. She previously served as President and Chief Executive Officer of EPEI Inc. from 1994 to 2011, and President and Chief Executive Officer of
FPAC from 1987 to 1997 and again, from 2004 to 2013. She has been a trustee of the board of Ateneo de Manila University since 2014, and currently holds the position of board chair. She is currently an independent director of Cebu Air, Inc. having been appointed in March 2021. She was also appointed as an independent director of JG Summit Holdings, Inc. in June 2024. She is a trustee in the board of the Foundation for Economic Freedom, an economic policy advocacy organization and a member of the Management Association of the Philippines. She was a Consultant to the Board of Directors of the Development Bank of the Philippines from November 2012 to June 2014. She obtained her Bachelor of Arts Degree in Economics, Magna Cum Laude from Ateneo de Manila University and a Master’s Degree in Management from J.L. Kellogg Graduate School of Management of Northwestern University in Chicago, Illinois, USA.
Mr. Victorico P. Vargas is the Leadership Transition Officer of the Company. He has been an Associate Director of First Pacific since January 2016, overseeing First Pacific Group businesses operating in the Philippines and its region, with particular focus on leading the Business Transformation of PLDT. He is a director of Smart Communications Inc., Meralco, MGen Global Business Power, Maya Bank, Inc., PLDT Global Corp., PLDT Subic Telecom, Inc., PLDT Clark Telecom, Inc., Beacon Electric Asset Holdings, Inc., Beacon PowerGen Holdings, Inc., MQuest Ventures, Inc., Cignal TV, Inc., TV5 Network, Inc. and Media5 Marketing Corporation. Chairman of Hastings Holdings Inc., Philstar Global, Inc., Pilipino Star Ngayon, Inc., Pilipino Star Printing, and Philstar Daily, Inc. President and Member of the Board of Trustees of the First Pacific Leadership Academy, Trustee of the MVP Sports Foundation, PLDT-Smart Foundation, Inc. and Ideaspace Foundation and President of the PhilPop Music Fest Foundation. Mr. Vargas is a former President of the Philippine Olympic Committee and is currently a member of the Board of Trustees of the said organization. Mr. Vargas is the Chairman of the Association of Boxing Alliances in the Philippines and was a former member of the Executive Committee of the Asian Boxing Confederation. He is one of the Executive Board Members of World Boxing Council and Chairman of the Philippine Basketball Association for seasons 2017-present. He is also the Vice President of the Samahang Basketbol ng Pilipinas. Prior thereto, Mr. Vargas served as the President and Chief Executive Officer of Maynilad Water Services, Inc. He joined PLDT in 2000 as its Human Resources Group Head and through his stay at PLDT got involved in managing the PLDT Business Transformation Office, Asset Protection and Management Group, and the PLDT International Carrier Business. He has worked in senior roles at Union Carbide, Pepsi Cola, Colgate Palmolive and Citibank, NA (both in Manila and in Southeast Asia). Mr. Vargas was educated at Ateneo de Manila and University of Santo Tomas with a Bachelor of Science Degree in Psychology.
Mr. Danny Y. Yu is our Senior Vice President, Chief Financial Officer and Chief Risk Management Officer, and has served as the PLDT Group Controller from November 17, 2022 to May 3, 2023. He likewise served as Senior Vice President and Chief Financial Officer, Chief Governance Officer and Chief Risk Officer of Philex Mining Corporation from September 2013 to August 2019, Chief Finance Officer of Digitel and DMPI (Sun Cellular) from November 2011 to July 2013, Chief Financial Officer of ePLDT, Inc. from November 2010 to December 2011, Chief Financial Officer of PLDT Global Corporation from June 2004 to November 2010, Chief Financial Officer of Mabuhay Satellite Philippines Corporation & Aces Satellite Philippines Corporation from March 1999 to May 2004, and Vice President for Corporate Development of Fort Bonifacio Development Corporation from March 1997 to March 1999. He started his career at SGV & Co. where he was a senior auditor. Mr. Yu graduated Magna Cum Laude from the University of San Carlos with a Bachelor of Science in Commerce, Major in Accounting and holds a Master in Management from the Asian Institute of Management. He is also a Certified Public Accountant. In 2016, he was awarded the ING-FINEX CFO of the Year.
Ms. Gina Marina P. Ordoñez is the Senior Vice President and Chief People Officer for PLDT, Inc. and its wireless subsidiary, Smart Communications, Inc., where she drives the strategic direction and execution of human capital initiatives, workplace design, and employee experience programs. She also contributed to the development and implementation of the PLDT Group Talent Management strategy, ensuring alignment with present and future business requirements. She has been with the PLDT Group for over eight years, initially joining the Business Transformation Office in 2016 to oversee process and quality management. She transitioned to the role of Smart People Group Head before being appointed as Chief People Officer for both PLDT and Smart organizations in 2019. Ms. Ordoñez was formerly Vice President for Service Operations and Quality Management at Makati Medical Center. She also served as Head of Customer Experience for Consumer Banking at Citi where she occupied several leadership roles over a span of 16 years. During her tenure, she attained a Six Sigma Black Belt certification. She is a registered Corporate Coach and Quality Management consultant, holding membership in the International Coach Federation.
Mr. Joseph Ian G. Gendrano, Senior Vice President, has been in PLDT’s service since May 2013. He served as the Enterprise Business Head of the Company before being appointed as a Senior Vice President and Chief Operating Officer of Kayana. He is currently the President and Chief Executive Officer of Kayana. Prior to joining PLDT, he worked with Verizon Business, Cisco Systems and Goldman Sachs in the United States. He has held technical, sales, consulting and leadership roles in these organizations as well as gained industry experience in the global financial services vertical. He served as Vice President of Goldman Sachs’ Network Voice and Multimedia Division and Chief Architect for Unified Communications platforms. Mr. Gendrano obtained his Bachelor of Science degree in Electronics and Communications Engineering from De La Salle University
and Master of Science degree in Electrical Engineering, Major in Telecommunications and Networking from the University of Pennsylvania.
Mr. John Gregory Y. Palanca is our Senior Vice President and Consumer Business Head and Sales and Development Head. He also served as the First Vice President and Regional Customer Development - Luzon Head of Smart from November 2020 to July 2022. Prior to his promotion to First Vice President, Mr. Palanca served as the Vice President and Regional Customer Development - Luzon Head of Smart from December 2017 to November 2020. Before Mr. Palanca's stint with Smart, he served as the Managing Director of PLDT Japan GK from June 2016 to December 2017, General Manager of PLDT Malaysia Sdn Bhd. from January 2014 to May 2016, General Manager of PLDT HK Ltd. from May 2011 to December 2013, Country President of Motorola Communications Phils. Inc. from January 2006 to January 2011, Vice President of Nextel, Next Mobile from January 2000 to January 2006, and Principal Consultant of Islanet Information Technology from January 1998 to January 2000. Mr. Palanca earned his Bachelor of Science degree in Business Management from De La Salle University in 1987.
Mr. Patricio S. Pineda III is our Senior Vice President and Enterprise Business Head. Prior to joining the Company, Mr. Pineda served as the Chief Operating Officer of Kayana Solutions Inc. from 2024 to 2025, Strategic Advisor to Stealth Mode (Hong Kong) from 2023 to 2024, Managing Director and Global Head of Internet Industries Banking at Standard Chartered Bank (Hong Kong) from 2021 to 2023, Partner (Digital, Strategy and Transformation) at Prophet (Hong Kong) from 2017 to 2021, and Vice President for Global Client Advisors at Oracle Corporation (US) from 2011 to 2017. Mr. Pineda obtained his BS Management Engineering and AB Management Economics degrees, as a merit scholar, from the Ateneo de Manila University in 1990, and his Master’s Degree in Business Administration (with honors) from the University of Chicago Booth School of Business in 1995.
Mr. Luis S. Reñon, Senior Advisor to the Chairman, joined PLDT in July 2018. Prior thereto, he was the Emerging Markets Chief Finance Officer of Pfizer Inc. handling teams across the Philippines, Thailand, Malaysia, Indonesia, Vietnam, and Pakistan. He started his professional career in the Audit and Business Advisory Division of Ernst & Young Manila and Singapore for six years. He then moved to Novartis Asia Pacific in Singapore as Regional Auditor and Team Leader, managing APAC auditors in conducting business review and compliance test of operations in Asia Pacific and Europe. He moved back to the Philippines in 2000 where he became the Head of Finance, Administration and Operations of Novartis’ Animal Health Business Unit. He pursued a rewarding career in Wyeth Philippines and Pfizer, Inc., where he took on various roles with increasing responsibilities in Strategic Planning and Business Finance, as Pfizer’s Country CFO in 2011 during the Pfizer-Wyeth integration and as Emerging Markets CFO in 2014. Mr. Reñon is a Certified Public Accountant. He completed his Bachelor’s degree in Commerce, major in Accounting at Araullo University, and his Master’s degree in Business Administration at the Ateneo de Manila University, where he garnered the Gold Medalist Award. He attended the Management Development Program of the Asian Institute of Management in 2005 and the Financial Excellence Program of Harvard Business School in the USA.
Mr. Leo I. Posadas, Senior Vice President and Treasurer of the PLDT Group and concurrent Treasury Head of PLDT and Smart, handles the treasury planning/management and treasury operations of several companies under the PLDT Group. He is a director and Chief Financial Officer of PLDT Global Corporation, a director and Treasurer of PLDT Global Investments Holdings, a director and Vice President for Treasury of Mabuhay Investments Corporation, a director of PCEV, a director of Philstar and Businessworld, and the Treasurer of the Vega Telecom group. He is also the Treasurer of Smart, ePLDT, Digitel, DMPI, PLDT-Smart Foundation and several other subsidiaries of PLDT and Smart. Prior to joining PLDT in September 2000, he served as Treasury Manager of Total Petroleum Philippines, and as Manager for Foreign Exchange Management of San Miguel Corporation. Mr. Posadas received his Bachelor of Arts Degree in Economics and Bachelor of Science degree in Commerce Major in Management of Financial Institutions from De La Salle University.
Ms. Louella F. Calixtro, First Vice President and Chief Procurement Officer, has been in PLDT’s service since November 16, 2025. Before being appointed as First Vice President and Chief Procurement Officer of the Company, Ms. Calixtro served as Global Sourcing Strategy Director, Software, Offnet, DC Category, Liberty Blume Procurement Solutions at Liberty Global (Amsterdam, NL, London, UK, and Denver, USA) from 2024 to 2025, and Global Director, Liberty Procurement Services, IT and BPO from 2020 to 2024. She likewise held several leadership roles at VEON Ltd. (Amsterdam, NL) as Global Vendor and Contracts Director from 2017 to 2020, Director of Vendor Management Office from 2014 to 2017, and Senior Procurement Contracts and Vendor Manager from 2007 to 2016. Earlier in her career, Ms. Calixtro served as the Head of Contracts Support Services (Enterprise Sales/Customer Facing Function) at Globe Telecom, Inc. from 2004 to 2007.
Ms. Calixtro holds a Juris Doctor degree from the University of the Philippines College of Law, where she was a consistent merit scholar, and a Bachelor of Arts degree in Communications Research, graduating Cum Laude from the same institution. She is also a certified practitioner with certificates in Commercial and Vendor Contracting, Service Level Agreements, and Project Management. She also has a certificate in Capital Allocation and Business Control and Completion of Lead Forward Program for Senior Leaders.
Atty. Joan A. De Venecia-Fabul is our First Vice President and PLDT Chief Legal Counsel and Head of Legal and Regulatory Affairs Group. She was the Vice President and General Counsel of listed company Philex Mining Corporation from August 2015
to March 2019, and was concurrently its Data Protection Officer from August 2017 and Head of Human Resources from January 2019. She was the Vice President for the Public Relations and Information Services Group of the Home Development Mutual Fund from August 2013 to July 2015, and, prior to that, was Senior Associate at SyCip Salazar Hernandez & Gatmaitan, where she started her legal career.
Atty. De Venecia-Fabul is a professorial lecturer at the University of the Philippines College of Law, teaching Public International Law, as well as a regular lecturer in Mandatory Continuing Legal Education seminars. She graduated from the Ateneo de Manila University in 2001 with a Bachelor’s Degree in Legal Management. She obtained her Bachelor of Laws degree from the University of the Philippines in 2005 as class valedictorian, cum laude, and Academic Excellence Awardee, and topped the Philippine Bar exam that same year. She holds a Master of Laws in International Legal Studies from New York University under a Fulbright Scholarship and Hugo Grotius Scholarship. In 2024, she obtained alumna status from the Wharton School under its Advanced Management Program.
Mr. Patrick F. Santos is our First Vice President and Chief Information Security Officer and Cybersecurity Operations Head. Prior to joining PLDT, he held key technical leadership positions in Zuellig Pharma Asia Pacific Ltd. as Head of Network, Infrastructure, and Cybersecurity from April 2022 to August 2024 and Senior Director of Regional Information Technology from June 2016 to March 2022. He also served as a Senior Vice President and the Group Chief Information Officer of SPi Global Holdings, Inc. from January 2011 to January 2016. He obtained his Bachelor of Science Degree in Computer Science from Long Island University – C.W. Post Campus, Brookville New York U.S.A. in 1989 where he graduated with honors.
Ms. Melissa V. Vergel de Dios is the First Vice President and Chief Sustainability Officer of PLDT and Smart, leading the Group’s sustainability journey since November 2021. As head of the Corporate Sustainability Office, she drives ESG integration – embedding responsible, future-ready practices across the organization. Under her leadership, PLDT has strengthened its global ESG standing, including improved performance in major assessments and the inclusion of PLDT in the S&P Global Yearbook in 2025 and 2026.
With over four decades of cross‑functional leadership, Melissa brings expertise in strategy, operations, finance, and narrative building. She has been with PLDT since 2001, holding key roles including over 17 years as Investor Relations Head, and earlier leading the Property Management and Property and Facilities Management Centers. Before PLDT, she served as Chief Operating Officer of Wharton Credit Corp. and as Group Chief Finance Officer of Global 3 Internet Holdings from June 2000 to May 2001. She held various positions in San Miguel Group of Companies from 1984 to 2000. She holds a Bachelor of Science Degree in Marketing and Management and a Bachelor of Arts degree in Economics from Assumption College.
Mr. Gil Samson D. Garcia is our First Vice President and Financial Controllership Head. He served as Group CFO of the ePLDT Group from May 2015 to August 2023, and MVP Rewards & Loyalty Solutions, Inc. from September 2018 to August 2023. He served as Controller of PCEV from June 2022 to June 2023. He holds directorships in several subsidiaries of ePLDT. Prior to joining PLDT, he was a Senior Director until January 2007 of the Business Risk Services Group of SGV & Co. / Ernst & Young, where he gained a wide range of experiences, here and abroad, in external audit and business process review and advisory including Sarbanes Oxley 404 evaluation and consultancy, risk management, corporate governance, and business fraud investigation, and fraud prevention and detection, among others. He graduated Cum Laude from the University of Santo Tomas with a Bachelor of Science Degree in Commerce, Major in Accounting. He is a CPA and a globally Certified Internal Auditor and Certified Fraud Examiner. He completed the Management Development Program in the Asian Institute of Management School of Executive Education in cooperation with PLDT and Smart in August 2016, and the High Potential Program / Leadership Talent Assessment facilitated by Development Dimensions International in October 2020. He was certified as Executive Coach Level 3 by the Global Learning Solutions Singapore in October 2023.
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Below is a list of directorships in other private and public companies of the director named below. All directorships of our other director are included in their respective biographies in the preceding pages.
Name of Director
Names of Companies
Public
Private
House of Investments (Regular Director/Chairman)
Petro Energy Resources Corporation
(Regular Director/Chairman)
Rizal Commercial Banking Corporation
A.T. Yuchengco, Inc. (Regular Director/Chairman)
AY Foundation, Inc. (Regular Director/Chairman/Trustee)
AY Holdings, Inc. (Regular Director/Chairman)
ET Yuchengco, Inc. (Regular Director/Chairman)
GPL Holdings, Inc. (Regular Director/Chairman)
Hi-Eisai Pharmaceuticals, Inc. (Regular Director/Chairman)
Honda Cars, Kaloocan (Regular Director)
Honda Cars Philippines, Inc. (Regular Director)
Isuzu Philippines, Inc. (Regular Director)
La Funeraria Paz Sucat (Regular Director/Chairman)
Landev Corp. (Regular Director/Chairman)
Luis Miguel Foods (Regular Director)
Luisita Industrial Park Corporation (Regular Director)
Malayan Colleges Laguna, Inc. (Trustee)
Malayan Colleges of Mindanao Inc. (Regular Director/Chairman)
Malayan Educational Systems, Inc. (Regular Director/Chairman)
Malayan Insurance Co. Inc. (Regular Director/Chairman)
Malayan High School of Science, Inc. (Regular Director/Chairman)
Manila Memorial Park Cemetery, Inc.(Regular Director/Chairman)
Mayahin Holdings Corporation (Regular Director/Chairman)
MICO Equities, Inc. (Regular Director/Chairman)
Pan Malayan Express, Inc. (Regular Director/Chairman)
Pan Malayan Management and Investment
Corporation (Regular Director/Chairman)
Pan Malayan Realty Corporation (Regular Director/Chairman)
Petrowind Energy, Inc. (Regular Director/ Chairman)
Philippine Business for Education, Inc. (Regular Director/Trustee)
Philippine Integrated Advertising Agency, Inc. (Regular Director)
RCBC Land, Inc. (Regular Director)
RCBC Leasing & Finance Corp (Regular Director/Chairman)
RCBC Realty Corporation (Regular Director/Chairman)
Shayamala Corporation (Regular Director/Chairman)
Sunlife Grepa Financial, Inc. (Regular Director/Chairman)
Xamdu Motors, Inc. (Regular Director/Chairman)
YGC Corporate Services, Inc. (Regular Director/Chairman)
Y Realty, Inc. (Regular Director)
Yuchengco Center, Inc. (Regular Director/Chairman)
US-Philippine Society – Director
Family Relationships
None of the directors/independent directors and officers of the Company or persons nominated to such positions has any family relationships up to the fourth civil degree either by consanguinity or affinity, except Mr. Manuel V. Pangilinan (Chairman) and Ms. Gina Marina P. Ordoñez (Chief People Officer) who are relatives to the fourth civil degree by consanguinity.
B. Compensation
The aggregate compensation paid to our executive officers and directors named above, as a group, for 2025 amounted to approximately Php798 million.
The following table below sets forth the aggregate amount of compensation paid in 2025 and 2024 and estimated amount of compensation expected to be paid in 2026 to: (1) the President and CEO and four most highly compensated officers of PLDT, as a group, namely, Marilyn A. Victorio-Aquino, Menardo G. Jimenez, Jr., Gina Marina P. Ordoñez and Danny Y. Yu; and (2) all other executive officers, other officers and directors, as a group.
2026
Estimate
Actual
President and CEO and four most highly compensated executive officers:
Salary(1)
148
144
Bonus(2)
Other compensation(3)
226
264
269
All other executive officers, other officers and directors as a group
(excluding the President and CEO and four most highly compensated executive officers):
543
564
416
962
514
1,040
1,612
1,144
Each of the directors of the Company is entitled to a director’s fee of Php250,000 for each meeting of the Board of Directors attended. In addition, the directors who serve in the committees of the Board of Directors, namely, the Audit, Governance, Nomination and Sustainability, Executive Compensation, Technology Strategy, and Risk Committees and Data Privacy and Information Security Committee, are each entitled to a fee of Php125,000 for each committee meeting attended.
Except for the fees mentioned above, the directors are not compensated, directly or indirectly, for their services as such directors. The aggregate amount of per diems paid to the directors for their attendance in Board and Board Committee meetings is included in other compensation in the above table. The total amount of per diems paid in 2025 and 2024 were approximately Php62 million and Php85 million, respectively. The total amount of per diems estimated to be paid in 2026 is approximately Php67 million.
We and our subsidiaries have not set aside or accrued any amount to provide pension, retirement, or other similar benefits to our directors. We have accrued Php3,643 million in pension liabilities, net of pension plan assets, for employees including executive officers. See Note 25 – Pension and Other Employee Benefits to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for more information and related discussion.
Long-Term Incentive Plan
As noted above, we have established the LTIP to provide incentive compensation to key officers, executives and other eligible participants who are consistent performers and contributors to the Company’s strategic and financial goals.
See Note 3 – Management’s Use of Judgments, Estimates and Assumptions, Note 5 – Income and Expenses, Note 23 – Accrued Expenses and Other Current Liabilities and Note 25 – Pension and Other Employee Benefits to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for more information and related discussion.
Board Practices
Composition of the Board of Directors
As of the date of this Annual Report, our Board consists of 13 directors, including three independent directors who qualify as independent within the independence requirements of Rule 10A‑3(b) under the Exchange Act and the independence requirements of NYSE. Our independent directors, namely, Retired Supreme Court Chief Justice Artemio V. Panganiban, Bernido H. Liu and Bernadine T. Siy, are neither officers nor employees of PLDT or any of its subsidiaries, and are free from any business or other relationship with PLDT or any of its subsidiaries which could, or could reasonably be perceived to, materially interfere with the exercise of independent judgment in carrying out their responsibilities as independent directors.
The independence standards/criteria are provided in our By-Laws and Corporate Governance Manual pursuant to which, in general, a director may not be deemed independent if such director is, or in the past five years was, employed in an executive capacity by us or any company controlling, controlled by or under common control with us or he is, or within the past five years
had been, retained as a professional adviser by us or any of our related companies, or he is not free from any business or other relationships with us which could, or could reasonably be perceived, to materially interfere with his exercise of independent judgment in carrying out his responsibilities as a director.
On June 10, 2025, the Board reappointed Retired Supreme Court Chief Justice Panganiban as PLDT’s Lead Independent Director. The functions of the lead independent director include, among others, serving as an intermediary between the Chairman and the other directors, as needed, convening and leading meetings of the non-executive directors, and contributing to the performance evaluation of the Chairman, as may be required.
There are no agreements between PLDT Group and any of its key management personnel providing for benefits upon termination of employment, except for such benefits to which they may be entitled under PLDT Group’s retirement and incentive plans.
Terms of Office for Directors
The directors of PLDT are elected each year to serve until the next annual meeting of stockholders and until their successors are elected and qualified, except in case of death, resignation, disqualification or removal from office. The term of office of all officers is coterminous with that of the Board of Directors that elected or appointed them.
Limit on Term of Office of Independent Directors
On January 26, 2026, the Philippine SEC issued Philippine SEC Memorandum Circular No. 7, Series of 2026 (effective February 1, 2026 after publication in two newspapers of general and national circulation), which covers PSE listed companies and limits an individual's ability to serve as independent director in the same company to a maximum cumulative term of nine years, with the maximum term for incumbent independent directors generally reckoned from calendar year 2012. An independent director who has served the maximum cumulative term is perpetually barred from re-election as an independent director of the same company, subject to a transitory provision allowing incumbents who have already reached the maximum term upon effectivity to continue until the 2026 annual stockholders’ meeting (or another date approved by the SEC).
Board Committees
Our Board of Directors is authorized under the By-Laws to create committees, as it may deem necessary, to assist in the effective performance of specific functions and responsibilities which may be delegated by the Board. We have six Board committees, namely, (i) Audit Committee (AC), (ii) Governance, Nomination and Sustainability Committee (GNSC), (iii) Executive Compensation Committee (ECC), (iv) Risk Committee, (v) Technology Strategy Committee (TSC) and (vi) Data Privacy and Information Security Committee (DPISC). Each of these committees has a Board-approved written charter that provides for such committee’s composition, membership qualifications, functions and responsibilities, conduct of meetings, and reporting procedure to the Board.
Audit Committee
Our AC is composed of three members, all of whom are independent directors. The AC members are Retired Supreme Court Chief Justice Artemio V. Panganiban, Mr. Bernido H. Liu and Ms. Bernadine T. Siy, who is the chairperson of this committee. The AC is supported by three advisors, namely, Mr. Hidetada Hayashi and Mr. James L. Go, who are non-independent directors, and Ms. Corazon S. de la Paz-Bernardo, a former member of our Board. All the members of our AC are financially literate. Ms. Siy holds a master's degree in Management with majors in Finance and Accounting from the J.L. Kellogg Graduate School of Management of Northwestern University in Chicago, Illinois, USA. Ms. Corazon S. de la Paz-Bernardo has expertise in accounting and financial management. She is a former Chairman and Senior Partner of Joaquin Cunanan & Company, now Isla Lipana & Co., a member firm of PricewaterhouseCoopers (PwC).
As provided in the AC charter, the primary purpose of the AC is to assist the Board in fulfilling its oversight responsibility for:
To carry out its direct responsibility for the appointment, setting of compensation, retention and removal of the external auditor, the AC has the following duties and powers:
The AC has the authority to retain or obtain advice from special counsel or other experts or consultants in the discharge of its responsibilities without the need for Board approval.
Governance, Nomination and Sustainability Committee
Our GNSC is composed of five voting members, all of whom are members of our Board, and two non-voting members. Three of the voting members are independent directors, namely, Retired Supreme Court Chief Justice Artemio V. Panganiban, Mr. Bernido H. Liu, and Ms. Bernadine T. Siy. The two other voting members are non-executive director, Mr. Hidetada Hayashi and executive director, Mr. Manuel V. Pangilinan, who is the chairman of this committee. The two non-voting members are the Chief People Officer, Ms. Gina Marina P. Ordoňez and the Chief Sustainability Officer, Ms. Melissa V. Vergel de Dios.
The primary purpose of the GNSC is to assist the Board in the performance of the following functions:
Executive Compensation Committee
Our ECC is composed of five voting members, all of whom are members of our Board of Directors, and one non-voting member. Three of the voting members are independent directors, namely, Retired Supreme Court Chief Justice Artemio V. Panganiban, Mr. Bernido H. Liu, and Ms. Bernadine T. Siy. The two other voting members are non-executive director, Mr. Hidetada Hayashi and executive director, Mr. Manuel V. Pangilinan, who is the chairman of this committee. The non-voting member is the Chief People Officer, Ms. Gina Marina P. Ordoňez.
The primary purpose of the ECC is to assist the Board in the performance of the following functions:
Risk Committee
Our RC is composed of five voting members, all of whom are members of our Board, and one non-voting member. Three of the voting members are independent directors, namely, Mr. Bernido H. Liu, Ms. Bernadine T. Siy, and Retired Supreme Court Chief Justice Artemio V. Panganiban, who is the chairman of this committee. The two other voting members are non-executive directors, namely, Mr. Hidetada Hayashi and Mr. James L. Go. The non-voting member is the Chief Risk Management Officer, Mr. Danny Y. Yu.
The primary purpose of the RC is to assist the Board in fulfilling its governance functions relating to risk management, which include the following:
Technology Strategy Committee
Our TSC is composed of four voting members and one non-voting member. The voting members are executive director, Mr. Manuel V. Pangilinan, who is the chairman of this committee, and three non-executive directors, Atty. Ray C. Espinosa, Mr. James L. Go, and Mr. Hidetada Hayashi. The non-voting member is an executive director and the Chief Operating Officer, Mr. Menardo G. Jimenez, Jr.
The primary purpose of the TSC is to assist the Board in the performance of the following functions:
Data Privacy and Information Security Committee
Our DPISC is composed of five voting members, all of whom are members of our Board. The DPISC members are independent director, Mr. Bernido H. Liu, non-executive directors, Atty. Ray C. Espinosa and Mr. Hidetada Hayashi, and executive directors, Atty. Marilyn A. Victorio-Aquino and Mr. Manuel V. Pangilinan, who is the chairman of this committee.
The primary purpose of the DPISC is to assist the Board in the performance of its oversight function and provide strategic direction to governance functions relating to data privacy and information security, including, to:
Advisory Committee
Our Advisory Board/Committee is composed of Mr. Benny S. Santoso, Mr. Christopher H. Young, and Mr. Roberto C. Yap, S.J, as independent advisor. The Advisory Board/Committee members have no voting rights, and provide guidance and suggestions, as necessary, on matters deliberated upon during Board meetings.
D. Employees
As at December 31, 2025, we had 14,304 employees, with 10,456 and 3,848 employees in our fixed line and wireless businesses, respectively. PLDT had 9,231 employees as at December 31, 2025, of which 39% were rank and file employees, 53% were management/supervisory staff and 8% were executives.
PLDT has three employee unions, representing in the aggregate 7,533, or 53% of the employees of the PLDT Group. PLDT considers its relationship with our rank-and-file employees’ union, our supervisors’ union and our sales supervisors’ union to be good.
The following table provides a breakdown of the number of employees by business units as at the dates indicated:
PLDT Group
14,304
14,904
15,596
10,456
10,813
11,373
LEC
1,192
1,270
1,338
3,848
4,091
4,223
PLDT Only
9,231
9,513
10,004
For a detailed discussion on Department of Labor and Employment (DOLE) Compliance Order to PLDT, see Item 8. Financial Information – Legal Proceedings and Note 26 – Provisions and Contingencies – DOLE Compliance Order to PLDT to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Pension and Retirement Benefits
Defined benefit pension plans
PLDT has defined benefit pension plans, operating under the legal name “The Board of Trustees for the account of the Beneficial Trust Fund created pursuant to the Benefit Plan of PLDT Co.” and covering all of our permanent and regular employees. For the purpose of complying with Revised IAS 19, Employee Benefits, pension benefit expense has been actuarially computed based on defined benefit plan.
Defined contribution plans
Smart’s and certain of its subsidiaries’ contributions to the plan are made based on the employees’ years of tenure and range from 5% to 10% of the employee’s monthly salary. Additionally, an employee has the option to make a personal contribution to the fund, at an amount not exceeding 10% of his monthly salary. The employer then provides an additional contribution to the fund ranging from 10% to 50% of the employee’s contribution based on the employee’s years of tenure. Although the plan has a defined contribution format, Smart and certain of its subsidiaries regularly monitor their compliance with Republic Act No. 7641. As at December 31, 2025 and 2024, Smart and certain of its subsidiaries were in compliance with the requirements of Republic Act No. 7641.
See Note 2 – Summary of Material Accounting Policies – Retirement Benefits and Note 25 – Pension and Other Employee Benefits to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for a discussion of our defined benefit pension plans and defined contribution plans.
E. Share Ownership
The following table sets forth information regarding ownership of our common stock, as at March 31, 2026 by our continuing directors and executive officers. Each individual below owns less than 1% of our outstanding common shares.
Name of Owner
Shares ofCommon Stock(1)
Percentage ofClass
373,521
(1)
0.172882
27,395
0.012680
Robert Joseph M. de Claro(2)
1,401
(3)
0.000648
53,735
(4)
0.024871
44,743
0.020709
982,724
0.454847
Hidetada Hayashi(5)
0.000002
Menardo G. Jimenez, Jr.(6)
8,044
0.003723
0.000000
7,771
0.003597
7,505
0.003474
1,500
0.000694
17,950
(7)
0.008308
5,141
0.002379
897
0.000415
John Gregory Y. Palanca
Patricio S. Pineda III(8)
793
0.000367
9,705
(9)
0.004492
0.000025
Louella F. Calixtro(10)
Joan A. de Venecia-Fabul(11)
244
0.000113
4,025
0.001863
0.000001
The aggregate number of shares of common stock directly and indirectly owned by directors and executive officers listed above, as at March 31, 2026, was 1,547,159, or approximately 0.716092% of PLDT’s outstanding shares of common stock.
Information regarding our LTIP is set form in Item 6. “Directors, Senior Management and Employees – Compensation.”
F.Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
The following table sets forth information regarding ownership of shares of PLDT’s voting stock (common and voting preferred stock) as at March 31, 2026, of all shareholders known to us to beneficially own 5% or more of PLDT’s shares of voting stock, or collectively, PLDT’s Major Shareholders. All shares of PLDT’s voting stock have one vote per share. PLDT’s Major Shareholders do not have voting rights that are different from other holders of shares of PLDT’s voting stock.
Shareholder
CommonShares
Percentageof CommonShares (%)
VotingPreferredShares
Percentageof VotingPreferredShares (%)
Percentageof VotingSecurities (%)
1. First Pacific Company Limited’s affiliates
55,244,642(1)
25.57
15.1
a. Philippine Telecommunications Investment Corporation
26,034,263
12.05
7.1
b. Metro Pacific Resources, Inc.
21,556,676
9.98
5.9
2. Nippon Telegraph and Telephone Corporation’s affiliates
43,963,642(2)
20.35
12.0
a. NTT DOCOMO BUSINESS INC.
12,633,487(3)
5.85
3.4
b. NTT DOCOMO, INC.
22,796,902(4)
10.55
8.6
3. JG Summit Holdings, Inc. and its affiliates
24,342,455(5)
11.27
6.6
4. Citibank N.A.
23,626,693(6)
10.94
6.4
5. The Hongkong and Shanghai Banking Corporation Limited - Clients Acct
16,553,419(7)
7.88
4.5
6. BTF Holdings, Inc.(8)
150,000,000
As at March 31, 2026, approximately 65.68% of the outstanding voting stock (comprising common capital stock and voting preferred capital stock) and 88.87% of the outstanding capital stock (comprising common capital stock, voting preferred capital stock and non-voting preferred capital stock) of PLDT were owned by Philippine persons. In addition, as at March 31, 2026, there were a total of approximately 16,983 million ADSs outstanding, substantially all of which PLDT believes were held in the United States by 197 holders.
As at March 31, 2026, the First Pacific and its Philippine affiliates (together, the “FP Parties”), NTT Communications and NTT DOCOMO and the JG Summit Group, collectively, beneficially own 57.18% in PLDT’s outstanding common stock (representing 33.75% of our overall voting stock). Additionally, all of PLDT’s shares of voting preferred stock, which represent 40.98% of PLDT’s total outstanding shares of voting stock as at March 31, 2026, are owned by a single stockholder, BTF Holdings, Inc. (BTFHI). As a result of their respective shareholdings, the FP Parties, NTT Communications, NTT DOCOMO, JG Summit Group and/or BTFHI are able to influence our actions and corporate governance, including (i) elections of our directors; and (ii) approval of major corporate actions, which require the vote of holders of common and voting preferred stocks.
Additionally, the FP Parties, NTT Communications, NTT DOCOMO and PLDT entered into a Cooperation Agreement, dated January 31, 2006, pursuant to which, among other things, certain rights of NTT Communications under the Stock Purchase and Strategic Investment Agreement dated September 28, 1999, or the Strategic Agreement, and the Shareholders Agreement dated March 24, 2000, or the Shareholders Agreement, were extended to NTT DOCOMO. As a result of the Cooperation Agreement, NTT Communications and NTT DOCOMO, in coordination with each other, have contractual rights relating to a number of major decisions and transactions that PLDT could make or enter into.
Specifically, PLDT may not take any of the following actions described without the approval of NTT DOCOMO and NTT Communications, acting in coordination with each other (however, NTT DOCOMO and NTT Communications may not withhold their consent to such actions in circumstances where PLDT proposes to invest in a business that competes with Nippon Telegraph and Telephone Corporation and its subsidiaries and where the Board of Directors has among other things, approved the transaction):
PLDT also may not issue common stock or stock that is convertible into common stock except where NTT Communications and NTT DOCOMO have first been offered the opportunity to purchase their pro rata portion of PLDT’s shares of common stock.
PLDT is also aware that each of NTT Communications and NTT DOCOMO has agreed (pursuant to the Shareholders Agreement in the case of NTT Communications and pursuant to the Cooperation Agreement in the case of NTT DOCOMO) to use its best efforts to procure that PLDT not take the following actions without the consent of First Pacific and certain of its affiliates, as well as other parties bound by the provisions of the Shareholders Agreement:
As PLDT is not a party to the Shareholders Agreement, these contractual rights held by NTT Communications, NTT DOCOMO, First Pacific and certain of First Pacific’s affiliates are not directly enforceable against PLDT.
Pursuant to amendments effected by the Cooperation Agreement to the Stock Purchase and Strategic Investment Agreement and the Shareholders Agreement, upon NTT Communications and NTT DOCOMO and their respective subsidiaries owning in the aggregate 20% or more of PLDT’s shares of common stock and for as long as they continue to own in the aggregate at least 17.5% of PLDT’s shares of common stock then outstanding, NTT DOCOMO has additional rights under the Stock Purchase and Strategic Investment Agreement and Shareholders Agreement, including that:
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company.
B. Related Party Transactions
PLDT, in the ordinary course of business, engages in transactions with some of its stockholders, its subsidiaries and affiliates, and directors and officers and their close family members.
PLDT has in place a Material Related Party Transactions (MRPT) Policy in accordance with the Company’s CG Manual and in compliance with Philippine SEC Memorandum Circular No.10, Series of 2019 or the Rules on Material Related Party Transactions for Publicly Listed Companies. The Company’s MRPT Policy covers transactions of PLDT and the other members of the PLDT Group that meet or exceed the materiality threshold of ten percent (10%) of PLDT’s total consolidated assets. It defines the processes, controls and safeguards for the proper handling, including review, approval and disclosure, of related party transactions (RPT) in accordance with applicable laws and regulations. Each material RPT shall be subject to prior review by the Audit Committee, composed of independent directors, to determine whether the same meets the following standards: (a) it is on arm’s length terms, and (b) it is in the best interest of the Company and its shareholders, considering relevant factors and circumstances. A copy of the MRPT Policy is posted on the PLDT website:
https://cms.pldt.com/drupal/sites/default/files/corporategovernancedocs/2022-01/material-related-party-transactions-policy.pdf. This website does not form part of this annual report on Form 20-F.
Related party transactions involving an amount below the specified materiality threshold shall be covered by our Guidelines on the Proper Handling of Related Party Transactions.
For a detailed discussion of our material related party transactions, see Note 24 – Related Party Transactions to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
Except for the transactions discussed in Note 24 – Related Party Transactions to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”, there were no other material related party transactions during the last three financial years, nor are there any material transactions currently proposed between PLDT and any: (i) director, officer, direct or indirect owner of 10% or more of the outstanding shares in PLDT; (ii) close family member of such director, officer or owner; (iii) associates of PLDT; (iv) enterprises controlling, controlled by or under common control with PLDT; or (v) enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any director, officer or owner of 10% or more of the outstanding shares in PLDT or any close family member of such director, key officer or owner, or collectively, the Related Parties.
C. Interests of Experts and Counsel
ITEM 8. FINANCIAL INFORMATION
A. Consolidated Financial Statements and Other Financial Information
See Item 18. “Financial Statements.”
Legal Proceedings
Except as disclosed in the following paragraphs, neither PLDT nor any of its subsidiaries is a party to, and none of their respective properties is subject to, any pending legal proceedings that PLDT considers to be potentially material to its and its subsidiaries’ business.
DITO, PCC and NTC Complaints
The NTC proceedings between Smart and DITO over interconnection capacity and bypass traffic have been largely overtaken by subsequent events. In 2024, Smart informed the NTC and PCC that it had provided DITO with additional interconnection capacity and that both parties had executed a Memorandum of Agreement on Bypass Activities, under which DITO acknowledged its ISR liabilities for 2021 to August 2023.
During 2023–2024, Smart representatives appeared before the PCC-CEO in relation to an ongoing administrative investigation concerning alleged violations of the Philippine Competition Act. Smart submitted required documents and attended clarificatory hearings in June, July, and November 2023, and filed several Manifestations in 2024 confirming its agreement with DITO and subsequent compliance actions.
On March 18, 2025, Smart received another Subpoena Duces Tecum from the PCC-CEO, directing it to submit documents and information on or before April 11, 2025 pertaining to its operations as a PTE and its relationship with other PTEs for the period of March 2021 to December 2024. On April 11, 2025, Smart requested for an additional thirty (30) days to comply with the Subpoena. Thereafter, on May 13, 2025, Smart filed its Compliance to the PCC-CEO’s Subpoena.
On May 30, 2025, Smart received a resolution from the PCC-CEO requiring it to clarify documents to be further submitted in relation to the March 18, 2025 Subpoena, and scheduling a videoconference on June 11, 2025. Smart, through its representatives then attended the June 11, 2025 clarificatory hearing via videoconference, and simultaneously filed its partial compliance with the Subpoena and a prayer that it be given a period of fifteen (15) days from June 11, 2025 or until June 26, 2025, to submit other information and documents required in the Subpoena. Accordingly, Smart filed its Compliance on June 25, 2025. Thereafter, the PCC-CEO issued a Resolution dated June 25, 2025, directing Smart to submit further documents in relation to the issues on or before July 7, 2025. In compliance therewith, Smart filed its Manifestation on July 7, 2025.
As at the date of this report, the PCC-CEO’s investigation remains pending resolution.
See Note 26 – Provisions and Contingencies – DITO, PCC and NTC Complaints to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion.
DOLE Compliance Order Issued Against PLDT
In a series of orders, including a compliance order issued by the DOLE in 2018, PLDT was ordered to regularize 7,344 workers from 38 of PLDT’s third party service contractors. PLDT questioned these regularization orders before the CA. The CA partially ruled in favor of PLDT by holding that the following services can be validly outsourced: (i) janitorial, messengerial, clerical; (ii) IT support and application development; (iii) back office support and BPOs; and (iv) sales, and other professional services. This ruling considerably reduced by at least half, the number of workers of service contractors required to be regularized. PLDT filed a petition for review with the Supreme Court because the CA ordered the regularization of individuals performing installation, repair, and maintenance functions on the basis that they are usually necessary and desirable to the usual course of PLDT’s business.
The Supreme Court resolved the consolidated Petitions in a Decision promulgated on February 14, 2024. The Decision affirmed the Court of Appeals in setting aside the Secretary of Labor’s orders for PLDT to regularize the 7,344 workers of its contractors, except those workers performing “installation, repair and maintenance” services, whose regularization is subject to a remand of proceedings before the Regional Director of the DOLE. The remand will require the Regional Director of DOLE to determine the appropriateness of regularization of employees of contractors engaged in installation, repair, and maintenance, by undertaking the following: (a) to review and properly determine the effects of the regularization of the workers performing installation, repair, and maintenance services; (b) to review, compute, and properly determine, the monetary award on the labor standards violation, to which PLDT, and the concerned contractors are solidarily liable; and (c) to conduct further appropriate proceedings, consistent with this Decision. Motions for Reconsideration may be filed by the parties, subject to their receipt of the Supreme Court decision by official service.
PLDT filed a Motion for Partial Reconsideration on April 4, 2024, and received MKP’s separate motion on April 16, 2024.
The Supreme Court, First Division, in its Resolution dated November 5, 2025, which was received by counsel on February 24, 2026, resolved to deny with finality the motions for partial reconsideration filed by PLDT and MKP and held that no further pleadings, motions, letters, or other communications will be entertained. Accordingly, the Decision of the Supreme Court to remand the case stands.
See Note 26 – Provisions and Contingencies – DOLE Compliance Order to PLDT to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion.
Petition against the PCC
In July 2016, PLDT filed before the CA a petition for certiorari and prohibition (with urgent application for a temporary restraining order and/or writ of preliminary injunction) against the PCC. The Petition sought to enjoin the PCC from proceeding with the review of the acquisition by PLDT and Globe of equity interest, including outstanding advances and assumed liabilities, in the telecommunications business of SMC, and performing any act which challenges or assails the “deemed approved” status of the said transactions. In August 2016, the CA issued a writ of preliminary injunction enjoining the PCC to cease and desist from conducting further proceedings for the pre-acquisition review and/or investigation of the SMC Transactions. In April 2017, the PCC filed before the Supreme Court a petition to annul the writ of preliminary injunction issued by the CA. The petition remains pending with the Supreme Court.
See Note 11 – Investments in Associates and Joint Ventures – In the Matter of the Petition against the PCC to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion.
Attys. Baquiran and Tecson vs. NTC, et al.
In October 2018, a petition for mandamus was filed against the NTC, the PCC, Liberty Telecoms Holdings, Inc. (also known as Tori Spectrum Telecom, Inc.), Bell Telecommunication, Inc., Globe, PLDT and Smart. This involves the 700 MHz frequency, among others, that was originally assigned to Liberty and which eventually became subject of a co-use agreement between Globe, PLDT and Smart. The petition remains pending with the Supreme Court.
See Note 26 – Provisions and Contingencies – Attys. Baquiran and Tecson vs. NTC, et al. to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion.
As at December 31, 2025, PLDT has no contested LGU assessments for franchise taxes based on gross receipts received or collected for services within its respective territorial jurisdiction.
104
Smart, SBI and DMPI currently face various local business and franchise tax assessments by different local government units, while Digitel is discussing with various local government units as to the settlement of its local taxes.
See Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion.
Dividend Distribution Policy
We offer a dividend payout rate of 60% of our core earnings per share as regular dividends. In declaring dividends, we take into consideration the interest of our shareholders, as well as our working capital, capital expenditures and debt servicing requirements. The retention of earnings may be necessary to meet the funding requirements of our business expansion and development programs. Depending on business funding requirements and investment opportunities, we may consider the option of returning additional cash to our shareholders in the form of special dividends of up to the balance of our core earnings or to undertake share buybacks.
We were able to pay out approximately 100% of our core earnings for seven consecutive years from 2007 to 2013, approximately 90% of our core earnings for 2014, 75% of our core earnings for 2015, 60% of our core earnings from 2016 to 2018, and 60% of our telco core income from 2019 to 2025. In addition, we paid special dividends of 28% of our telco core earnings in 2022, bringing the total payout ratio to 88% for that year. The accumulated equity in the net earnings of our subsidiaries, which forms part of our retained earnings, is not available for distribution unless realized in the form of dividends from such subsidiaries.
Dividends are generally paid in Philippine pesos. In the case of shareholders residing outside the Philippines, PLDT’s transfer agent in Manila, Philippines, as the dividend-disbursing agent, converts the Philippine peso dividends into U.S. dollars at the prevailing exchange rate and remits the dollar dividends abroad, net of any applicable withholding tax and fees, in the case of the ADS.
Our subsidiaries pay dividends subject to the requirements of applicable laws and regulations and availability of unrestricted retained earnings, without any restriction imposed by the terms of contractual agreements. Notwithstanding the foregoing, the subsidiaries of PLDT may, at any time, declare and pay such dividends depending upon the results of operations and future projects and plans, the respective subsidiary’s earnings, cash flow, financial condition, capital investment requirements and other factors.
Consolidated cash dividend payments paid to shareholders amounted to Php20,590 million, Php20,750 million, and Php23,328 million as at December 31, 2025, 2024 and 2023, respectively.
The following table shows the dividends declared to common shareholders from the earnings for the years ended December 31, 2021, 2022, 2023, 2024 and 2025:
Date
Earnings
Approved
Record
Payable
Per share
TotalDeclared
(in Php)
2021
August 5, 2021
August 19, 2021
September 3, 2021
9,075
March 3, 2022
March 17, 2022
April 4, 2022
18,150
2022
August 4, 2022
August 18, 2022
September 5, 2022
10,155
6,049
March 23, 2023
April 11, 2023
April 24, 2023
9,722
3,025
134
28,951
August 3, 2023
August 17, 2023
September 4, 2023
10,587
March 7, 2024
March 21, 2024
April 5, 2024
9,939
20,526
August 13, 2024
August 27, 2024
September 11, 2024
10,803
February 27, 2025
March 13, 2025
April 3, 2025
20,958
August 12, 2025
August 28, 2025
September 10, 2025
10,370
February 26, 2026
March 26, 2026
April 15, 2026
20,309
The following table shows the dividends declared to common and preferred shareholders for the years ended December 31, 2025, 2024 and 2023:
Approved(1)
Total Declared
(amounts in million Php, except per share amount)
Common Stock
Regular Dividend
Preferred
Series IV Cumulative Non-convertible Redeemable Preferred Stock(1)
January 28, 2025
February 11, 2025
March 15, 2025
May 15, 2025
May 22, 2025
June 15, 2025
August 26, 2025
September 15, 2025
November 11, 2025
November 25, 2025
December 15, 2025
Voting Preferred Stock
March 20, 2025
April 15, 2025
June 10, 2025
June 24, 2025
July 15, 2025
October 15, 2025
December 2, 2025
December 16, 2025
January 15, 2026
Charged to Retained Earnings
20,584
9,938
January 30, 2024
February 14, 2024
March 15, 2024
May 9, 2024
May 24, 2024
June 15, 2024
August 28, 2024
September 15, 2024
November 12, 2024
November 28, 2024
December 15, 2024
April 15, 2024
June 11, 2024
June 28, 2024
July 15, 2024
September 16, 2024
October 15, 2024
December 3, 2024
December 17, 2024
January 15, 2025
20,800
Common
Special Dividend
January 31, 2023
February 27, 2023
March 15, 2023
May 4, 2023
May 19, 2023
June 15, 2023
August 19, 2023
September 15, 2023
March 2, 2023
March 17, 2023
April 15, 2023
June 13, 2023
June 28, 2023
July 15, 2023
August 29, 2023
September 13, 2023
October 15, 2023
23,378
106
The following table shows a summary of dividends paid per share of PLDT's common stock stated in both Philippine peso and U.S. dollars:
In PhilippinePeso
In U.S.Dollars
82.00
1.66
Regular Dividend – April 6, 2021
40.00
0.82
Regular Dividend – September 3, 2021
42.00
0.84
117.00
2.14
Regular Dividend – April 4, 2022
Regular Dividend – September 5, 2022
47.00
0.83
Special Dividend – September 5, 2022
28.00
0.49
108.00
1.94
Regular Dividend – April 24, 2023
45.00
0.81
Regular Dividend – September 4, 2023
49.00
0.88
Special Dividend – April 24, 2023
14.00
0.25
96.00
1.70
Regular Dividend – April 5, 2024
46.00
Regular Dividend – September 11, 2024
50.00
0.89
95.00
Regular Dividend – April 3, 2025
Regular Dividend – September 10, 2025
48.00
Dividends on PLDT’s common stock were declared and paid in Philippine pesos. For the convenience of the reader, the Philippine peso dividends have been converted into U.S. dollars based on exchange rates quoted through the BAP for 2021 to 2025 dividend payments. See Note 19 – Equity to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further information on our dividend payments.
Our dividends declared after December 31, 2025 are detailed as follows:
Class
Per Share
(in million Php, except per share amount)
April 16, 2026
January 27, 2026
February 10, 2026
March 15, 2026
9,951
See Note 19 – Equity to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for tables that show dividends declared in 2025.
B. Significant Changes
There have been no significant changes in our financial position since December 31, 2025.
ITEM 9. THE OFFER AND LISTING
A. Offer and Listing Details
Common Capital Stock and ADSs
The shares of common stock of PLDT are listed and traded on the PSE under the symbol of “TEL”. On October 19, 1994, an American Depositary Receipt (ADR) facility was established, pursuant to which Citibank, N.A., as the depositary, issued ADRs evidencing ADSs with each ADS representing one PLDT common share with a par value of Php5.00 per share. Effective February 10, 2003, PLDT appointed JP Morgan Chase Bank as successor depositary of PLDT’s ADR facility. The ADSs are listed on the NYSE and are traded on the NYSE under the symbol of “PHI”.
The public ownership level of PLDT common shares listed on the PSE as at March 31, 2026 is 42.08%.
As at March 31, 2026, 9,771 stockholders were Philippine persons and held approximately 65.68% of PLDT’s common capital stock. In addition, as at March 31, 2026, there were a total of approximately 16,983 million ADSs outstanding, substantially all of which PLDT believes were held in the United States by 197 holders.
B. Plan of Distribution
C. Markets
See Item 9. “The Offer and Listing – Offer and Listing Details”.
D. Selling Shareholders
E. Dilution
F. Expenses of the Issue
ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
B. Memorandum and Articles of Association
Amended Articles of Incorporation and By-Laws
A copy of each of the Articles of Incorporation and By-Laws, each as amended, is furnished under Item 19. “Exhibits”. Under our Articles of Incorporation and By-Laws, we have full capacity to carry on or undertake any business or activity, do any act, or enter into any transaction consistent with our primary and secondary purposes as set forth in our Articles of Incorporation, and for the purposes of the foregoing, full rights, powers, and privileges.
Summaries of certain provisions of PLDT’s Articles of Incorporation and By-Laws and amendments thereto and applicable Philippine laws as previously disclosed in Item 10 of our annual reports on Form 20-F for the calendar years ended December 31, 2010 and December 31, 2014 filed on March 30, 2011 and March 26, 2015, respectively, are herein incorporated by reference.
On March 25, 2021, the Board of Directors approved the amendments to the By-laws of PLDT to conform with the provision of Republic Act No. 11232, and on September 9, 2022, the Philippine SEC approved the same amendment.
On April 8, 2020 and June 9, 2020, the Board of Directors and stockholders, respectively, approved the amendment of the Second Article of the Articles of Incorporation of PLDT, or the Amendment, (a) to reflect the current focus of PLDT’s business, which is the provision of telecommunications services through trending and constantly evolving technologies and innovative products and services, and (b) to allow sufficient flexibility for the PLDT business units to design their operations and expand their products and services by constantly transforming PLDT from being the country’s leading telecommunications company to a dynamic and customer-centric multi-media organization. On November 24, 2020, the amendment to the Articles of Incorporation was approved by the Philippine SEC.
On April 12, 2016 and June 14, 2016, the Board of Directors and stockholders of PLDT, respectively, approved amendments to our Articles of Incorporation to reflect the change in the name of the Company from Philippine Long Distance Telephone Company to PLDT Inc. and an expansion of the purposes of the Company. On August 30, 2016, the Board of Directors also approved amendments to our By-Laws to reflect the change in the name of the Company.
C. Material Contracts
Other than the contracts described in Item 7. “Major Shareholders and Related Party Transactions,” we have not entered into any material contract that is not in the ordinary course of business within the two years preceding the date of this annual report.
D. Exchange Controls
In Circular No. 1389 dated November 10, 1993, as amended by Circular No. 224 dated January 26, 2000, of the BSP, foreign investments in the shares of stock of Philippine companies listed in the PSE may be registered either with the BSP or with an investor’s designated custodian bank. The foreign investments in listed shares of stock, which are duly registered with the BSP or with a custodian bank duly designated by the foreign investor, are entitled to full and immediate capital repatriation and dividend and interest remittance privileges. Without the need to obtain prior BSP approval, commercial banks are authorized to sell and to remit the equivalent foreign exchange (at the exchange rate prevailing at the time of actual remittance) representing sales and divestment proceeds or dividends of a duly registered foreign equity investment upon presentation of a BSP Registration Document, or BSRD, together with other supporting documents. The BSRD is issued by the BSP or the custodian bank upon registration of the foreign investment and serves as the authority to repatriate such divestment and sales proceeds or remittance of cash dividends. Effective April 3, 2000, only pre-numbered BSRD forms, printed on BSP security paper may be used and issued as proof of registration of foreign investments in accordance with existing BSP rules. The remitting commercial bank must submit to the BSP a statement of remittance together with the supporting documents within two banking days from date of actual remittance. Foreign investments not duly registered with the BSP or with the investor’s designated custodian bank are not entitled to repatriation and remittance privileges through the banking system except capital repatriation or dividend remittance of direct foreign equity investments made prior to March 15, 1973 when BSP registration was not yet required. The BSP should be notified of the transfer of sale of foreign investments in equity or securities already registered with the BSP, in order that the registration of the foreign investment may be transferred in the name of the transferee or purchaser.
Cash dividends on PLDT’s stock are paid in Philippine peso. PLDT’s Transfer Agent for its common stock, BDO Unibank, Inc., which also acts as dividend paying agent, converts and remits in U.S. dollars, at the prevailing exchange rate, cash dividends due to all common shareholders residing outside the Philippines. Under the above-mentioned regulations, PLDT has been able to remit the cash dividends due to shareholders residing outside the Philippines. As at December 31, 2025, approximately 88.89% of PLDT’s outstanding shares of common and preferred stock were held by Philippine persons. For certain restrictions on the declaration and payment of dividends by PLDT, see Note 19 –Equity and Note 20 – Interest-bearing Financial Liabilities to the accompanying audited consolidated financial statements in Item 18. “Financial Statements”.
E. Taxation
The following summary of Philippines and U.S. federal income tax considerations of an investment in the ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this Annual Report, all of which are subject to change. This summary does not deal with all possible tax considerations relating to an investment in our securities, such as the tax considerations under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Philippines and the U.S.
Philippine Taxation
Taxes on Exchange of ADRs for Common Stock
Philippine capital gains or stock transaction taxes and documentary stamp taxes may be payable upon the transfer of shares of common stock to a holder of ADRs or to a holder of Global Depository Receipts. See “–– Capital Gains Tax and Stock Transaction Tax” and “–– Documentary Stamp Taxes.”
Taxation of Dividends
Under the Philippine Tax Code, dividends paid by a Philippine corporation to citizens of the Philippines and resident aliens in the Philippines are subject to a final withholding tax of 10% while those paid to non-resident aliens engaged in trade or business within the Philippines are subject to a final withholding tax of 20%. Dividends paid to non-resident aliens not engaged in trade or business within the Philippines are subject to a final withholding tax of 25%. Dividends paid by a Philippine corporation to other Philippine corporations or to resident non-Philippine corporations are not subject to tax. Dividends paid by Philippine corporations to non-resident non-Philippine corporations not engaged in a trade or business in the Philippines shall be subject to a final withholding tax of 15% (tax sparing), subject to the condition that the country in which the non-resident non-Philippine corporation is domiciled either: (i) allows a credit against the tax due from the non-resident non-Philippine corporation for taxes deemed to have been paid in the Philippines equivalent to 10% (which represents the difference between the regular income tax on non-resident non-Philippine corporations of 25% effective January 1, 2021 and the 15% tax on dividends) (this condition is not satisfied in the case of corporations domiciled in the United States) or (ii) imposes no income taxes on dividends received by such non-resident non-Philippine corporations from Philippine corporations (this condition is not satisfied in the case of corporations domiciled in the United States).
Under rulings issued by Philippine tax authorities, Hong Kong is viewed as falling within the condition (ii) mentioned above and, thus, companies that are organized in Hong Kong that are not engaged in trade or business in the Philippines may be entitled to the benefit of the reduced dividend rate. Such rulings, however, were based upon the laws of Hong Kong as in effect at the time such rulings were issued, and any subsequent changes in the relevant laws of Hong Kong may affect the validity of such rulings. PLDT reserves the right to change the rate at which it makes payments of withholding tax whenever it deems it appropriate under applicable law.
Under BIR Revenue Memorandum Order (RMO) No. 46-2020 (RMO No. 46-2020), the Philippine corporation paying the dividends may remit outright the dividends to the non-resident non-Philippine corporation, applying thereon the applicable reduced dividend rate without the need for a confirmatory ruling from the BIR. However, such Philippine corporation must first determine whether the country of domicile of the non-resident non-Philippine corporation grants a “deemed paid” tax credit equivalent to the 10% waived by the Philippines or exempts from tax the dividends received. Within ninety (90) days from remittance of the dividends or from the determination by the foreign tax authority of the deemed paid tax credit/non-imposition of tax because of the exemption, whichever is later, the non-resident non-Philippine corporation must file with the BIR a request for confirmation of the reduced dividend rate. If neither of the foregoing conditions are met, the dividends paid to the non-resident non-Philippine corporation shall be subject to the regular income tax (in the form of final withholding tax) at the rate of 25% effective January 1, 2021.
If the holder of common stock is a non-resident foreign partnership, which is treated as a corporation for Philippine tax purposes, dividends on the common stock should be subject to a final withholding tax of 25% effective January 1, 2021. Cede & Co., the partnership nominee of Depository Trust Company, should qualify as a non-resident foreign partnership that would be treated as a corporation for Philippine tax purposes.
In certain circumstances where the holder has common stock, a tax treaty rate may be applicable with respect to the Philippine withholding tax. For instance, holders under such circumstances and as to which the Philippines-United States Tax Treaty would be applicable would be eligible for a treaty rate of 25% (or 20% in certain instances). The 20% treaty rate is generally not applicable in the case of non-resident non-Philippine corporations domiciled in the United States which own less than 10% of the voting stock of PLDT.
The BIR has prescribed certain procedures, through administrative issuances, for availment of tax treaty relief. On March 31, 2021, the BIR issued RMO No. 14-2021, which updates the procedures and requirements for the availment of preferential tax treaty rates covering all incomes, including dividends, interests and royalties derived by non-resident taxpayers from Philippine sources. On June 15, 2021, the BIR also issued Revenue Memorandum Circular (RMC) No. 77-2021 (RMC 77-2021) which clarified certain provisions of RMO No. 14-2021.
RMO No. 14-2021, as clarified by RMC 77-2021, provides that if a non-resident intending to avail of treaty benefits submits to the income payor a Tax Residency Certificate (TRC) duly issued by the tax authority of the foreign country in which the income recipient is a resident and the appropriate BIR Form No. 0901 (Application Form for Treaty Purposes) prior to the payment of income, the income payor may apply the provisions of the applicable treaty, provided that all the conditions for the availment thereof, other than residency, have been satisfied. Otherwise, the regular rates imposed under the Philippine Tax Code should be applied.
When an item of income is subjected to taxation in accordance with the provisions of the relevant treaty, the withholding agent (or a duly authorized representative) shall file with the International Tax Affairs Division of the BIR a request for confirmation that the tax treatment of such income is proper.
On the other hand, when the regular rates are applied by the withholding agent, the non-resident intending to avail of treaty benefits may file a Tax Treaty Relief Application (TTRA) with complete documentary requirements and a claim for refund at any time after the payment of the withholding tax.
Once the entitlement to treaty benefits is confirmed, the BIR will issue a Certificate of Entitlement to Treaty Benefit (COE). RMC No. 20-2022 provides for two kinds of COEs, one for non-recurring transactions and another for recurring transactions. The COE for recurring transactions covers dividends payments. Such COE will apply to, and cover, future or subsequent income payments to the same non-resident recipient and dispenses with the requirement to file a TTRA or request for confirmation each time a dividend payment is made, provided that the requirements stated in the COE continue to be satisfied. Thus, if the COE mentions tax residency as a requisite for continuous enjoyment of treaty benefit, the income payor must require the nonresident to submit a TRC for the relevant year before making any payment.
However, if the BIR determines that the withholding tax rate applied is lower than the rate that should have been applied, or that the non-resident taxpayer is not entitled to treaty benefits, it will issue a BIR Ruling denying the request for confirmation or TTRA.
RMO No. 14-2021, as clarified by RMC 77-2021, does not cover non-resident non-Philippine corporations invoking the tax sparing provision (or the reduced tax rate on intercorporate dividends paid to non-resident non-Philippine corporations). This is instead addressed by RMO No. 46-2020 which specifically covers the procedures for non-resident non-Philippine corporations to avail of the tax sparing provision. The said RMO provides that non-resident non-Philippine corporations may opt to avail of the tax sparing provision, irrespective of the existence of a tax treaty. However, the rule on the continuing validity of COEs for recurring transactions as provided in RMC No. 20-2022 (and which applies specifically to TTRAs) was also expressly made applicable to tax sparing applications and the issuance by the BIR of Certificates of Entitlement to the Reduced Dividend Rate.
Capital Gains Tax and Stock Transaction Tax
The Philippine Tax Code, as amended by the Capital Markets Efficiency Promotion Act (CMEPA), also known as Republic Act No. 12214, provides that gain from the sale of shares of stock in a Philippine corporation shall be treated as derived entirely from sources within the Philippines, regardless of where the shares are sold. Subject to applicable tax treaty rates, the rate of tax imposed on individuals, Philippine corporations, and foreign corporations on such gain, where the share is not sold or disposed of through the PSE, is a final tax (i.e., capital gains tax) of 15% of the net capital gains realized during the taxable year from the sale, exchange or other disposition of shares of stock. On March 15, 2018, the BIR issued Revenue Regulations No. 11-2018, which requires buyers of shares of stock (i.e., individuals, Philippine corporations and resident foreign corporations) to withhold from sellers the capital gains tax due on the sale of shares of stock in a Philippine corporation. Further, Philippine tax laws prohibit a sale or transfer of shares of stock from being recorded in the Stock and Transfer Books of the corporation unless the Philippine Commissioner of Internal Revenue certifies that the tax due on the sale or transfer has been paid or certain other conditions are met or, with respect to a non-resident alien or non-Philippine corporation, a bond conditioned upon the future payment of any income tax that may be due on the gains derived from such transfer has been filed by the transferor with the Philippine Commissioner of Internal Revenue.
The sale of shares which are listed in and sold through the PSE are subject to the stock transaction tax imposed at the rate of 1/10 of 1% of the gross selling price or gross value in money of the shares of stock. This tax is required to be collected and paid to the BIR by the selling stockbroker on behalf of his client. In a letter from the BIR dated December 28, 2010 and addressed to the SEC, the BIR sets out the policy that, for tax purposes: (i) listed companies should continually maintain, if not surpass, their initial public ownership requirement (the minimum public ownership, or MPO) in order to continually enjoy the preferential tax rate of 1/10 of 1% (formerly, 6/10 of 1%) of the gross selling price or gross value in money arising from the disposal by the stockholders of their listed shares through the PSE; and (ii) failure of listed companies to do so exposes the stockholders selling their shares to the 15% capital gains tax as these companies are no longer compliant with their “public ownership” status and will, thus, not be considered publicly-listed companies for taxation purposes. On November 7, 2012, the BIR issued Revenue Regulations No. 16-2012 prescribing the tax treatment of sales, barters, exchanges or other dispositions of shares of stock of publicly-listed companies that do not meet the MPO. The salient provisions of such BIR issuance are as follows: (i) publicly-listed companies which are not compliant with the MPO level were allowed up to December 31, 2012 to comply; (ii) from and after January 1, 2013, the sale, barter, transfer or assignment of shares of stock of publicly-listed companies which is not compliant with the MPO shall be subject to the capital gains tax; and (iii) listed companies are required to submit to the BIR certain reportorial requirements to enable the BIR to monitor compliance with the MPO requirement. As of the date of this report, PLDT is required to have an MPO of 10% of its issued and outstanding shares, exclusive of any treasury shares.
Sales of shares other than through a Philippine stock exchange will be subject to Philippine capital gains tax in the manner described above.
Under the Philippines-United States Tax Treaty, gains derived by a United States resident from the sale of shares of stock of a Philippine corporation will not be subject to capital gains tax (i.e., where the share is not disposed of through the PSE), unless the shares are those of a corporation of which over 50% of the assets (in terms of value) consist of real property interests located in the Philippines. PLDT does not believe that it currently is such a corporation. Holders are required, however, to establish to the Philippine taxing authorities their eligibility for such treaty exemption. Philippine tax authorities have prescribed, through administrative issuances, procedures for availment of tax treaty relief.
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Documentary Stamp Taxes
The Philippines imposes a documentary stamp tax upon transfers of shares of stock issued by a Philippine corporation at a rate of Php1.50 on each Php200, or fractional part thereof, of the par value of the shares. The documentary stamp tax is collectible wherever the document is made, signed, issued, accepted or transferred, when the obligation or right arises from Philippine sources or the property is situated in the Philippines. The sale, barter, transfer or exchange of shares of stock of a Philippine Corporation which is listed and traded through the facilities of the PSE is exempt from the documentary stamp tax. However, Revenue Regulations No. 16-2012 provides that transfers of shares of stock of publicly-listed companies which are not compliant with the MPO requirement shall be subject to documentary stamp tax.
Estate and Donor’s Taxes
Shares of stock issued by a corporation organized or constituted in accordance with Philippine law are deemed to have a Philippine situs and their transfer by way of succession or donation is subject to Philippine estate and gift taxes. The transfer of shares of stock by a deceased individual to his heirs by way of succession, whether such an individual was a citizen of the Philippines or an alien, regardless of residence, will be subject to Philippine estate tax at 6% of the net estate.
Individual shareholders, whether or not citizens or residents of the Philippines, who transfer the Equity Securities by way of gift or donation will be liable for Philippine donor’s tax on such transfers at the rate of 6% of the total gifts in excess of Php250,000 made during the calendar year. Estate and gift taxes will not be collected in respect of intangible personal property such as the Equity Securities:
Shares of stock of a deceased shareholder or shares that have been donated may not be transferred on the books of the corporation without a certificate from the Philippine Commissioner of Internal Revenue that the applicable estate or donor’s taxes have been paid. In the case of ADRs, however, there is no corresponding requirement, unless a transfer of the ADRs would also entail a change in the registration of the underlying shares.
United States Federal Income Taxation
The following summary describes certain material U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) of an investment in the ADSs or common stock. This summary applies only to U.S. Holders that hold the ADSs or common stock as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “U.S. Tax Code”) and that have the U.S. dollar as their functional currency.
This discussion is based on the tax laws of the United States, including the U.S. Tax Code, as in effect on the date hereof and on U.S. Treasury regulations as in effect or, in some cases, as proposed, on the date hereof, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change or differing interpretations, which change or differing interpretation could apply retroactively and could affect the tax consequences described below. This summary does not address any estate or gift tax consequences, any alternative minimum tax consequences, the Medicare tax on net investment income or any state, local or non-U.S. tax consequences.
This summary also does not address the tax consequences that may be relevant to persons in special tax situations such as banks, certain financial institutions, insurance companies, regulated investment companies, real estate investment trusts, individual retirement accounts and other tax-deferred accounts, broker-dealers, traders that elect to mark to market, U.S. expatriates, tax-exempt entities, persons that own the ADSs or common stock as part of a “straddle,” “hedge,” “conversion transaction” or integrated transaction; persons that actually or constructively own 10% or more of the PLDT’s share capital (by vote or value), persons that are resident or ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States, or pass-through entities or arrangements, or persons holding ADSs or common stock through pass-through entities or arrangements.
THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSIDERATIONS SET OUT BELOW IS FOR GENERAL INFORMATION ONLY. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE, LOCAL, NON-U.S. AND OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE ADSS AND COMMON STOCK.
As used herein, the term “U.S. Holder” means a beneficial owner of the ADSs or common stock that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust that is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
If an entity or other arrangement treated as a partnership for U.S. federal income tax purposes holds ADSs or common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Partnerships considering an investment in ADSs or common stock and partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences of owning and disposing of ADSs and common stock.
The tax treatment of your ADSs or common stock will depend in part on whether or not we are classified as a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes. Except as discussed below under “Passive Foreign Investment Company Rules”, this discussion assumes that we are not classified as a PFIC for United States federal income tax purposes.
Exchange of ADSs for Common Stock
In general, assuming that each obligation of the Deposit Agreement and any related agreement will be performed according to its terms, for U.S. federal income tax purposes, if you hold ADRs evidencing ADSs, you will be treated as the owner of the shares of common stock represented by those ADRs. Exchanges of shares of common stock for ADRs, and ADRs for shares of common stock, generally will not be subject to U.S. federal income tax.
Taxation of Distributions
The gross amount of any distribution we pay out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), other than certain pro-rata distributions of our common stock, will be treated as a dividend that is subject to United States federal income taxation. If you are a non-corporate U.S. Holder, dividends paid to you with respect to the ADSs or common stock may be qualified dividend income that is taxable to you at the preferential rates applicable to long-term capital gains, provided that you hold the common stock or ADSs for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and certain other requirements are met.
You must include any Philippine tax withheld from the dividend payment in this gross amount even though you do not in fact receive it. The dividend is taxable to you when you, in the case of common stock, or the Depositary, in the case of ADSs, receive the dividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations. The amount of the dividend distribution that you must include in your income will be the U.S. dollar value of the Philippine peso payments made, determined at the spot Philippine peso/U.S. dollar rate on the date the dividend distribution is includible in your income. Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a non-taxable return of capital to the extent of your basis in the ADSs or common stock and thereafter as capital gain. However, we do not expect to calculate earnings and profits in accordance with U.S. federal income tax principles. Accordingly, you should expect to generally treat distributions we make as dividends.
Subject to certain limitations, the Philippine tax withheld in accordance with the Philippines-United States Tax Treaty and paid over to the Philippines may be creditable or deductible against your United States federal income tax liability. Special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the preferential rates applicable to long-term capital gains. Dividends will be income from sources outside the United States and will generally be “passive” income for purposes of computing the foreign tax credit allowable to you. The rules relating to the determination of the U.S. foreign tax credit are complex, and final U.S. Treasury Regulations (the Final FTC Regulations) have imposed additional requirements that must be met for a foreign tax to be creditable (in particular, with respect to U.S. Holders not entitled to, or not electing to apply, treaty benefits), and we do not intend to determine whether such requirements will be met. However, recent U.S. Internal Revenue Service guidance (the Notices) allows, subject to certain conditions, taxpayers to defer the application of many aspects of the Final FTC Regulations until the date when a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). U.S. Holders should consult their tax advisors regarding the availability of a foreign tax credit in their particular circumstances and the possibility of claiming an itemized deduction (in lieu of the foreign tax credit) for any foreign taxes paid or withheld.
Taxation of Disposition of the ADSs or Common Stock
Upon a sale or other taxable disposition of ADSs or common stock, a U.S. Holder will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in such ADSs or common stock, in each case as determined in U.S. dollars. Any such gain or loss will generally be treated as long-term capital gain or loss if the U.S. Holder’s holding period in the ADSs or common stock exceeds one year. Non-corporate U.S. Holders (including individuals) generally will be subject to U.S. federal income tax on long-term capital gain at preferential rates. The deductibility of capital losses is subject to significant limitations.
If the consideration received upon the sale or other disposition of ADSs or common stock is paid in foreign currency, the amount realized will be the U.S. dollar value of the payment received, translated at the spot rate of exchange on the date of taxable disposition. The ADSs are listed on the New York Stock Exchange and our common stock is listed on the Philippine Stock Exchange. If the ADSs or common stock are treated as traded on an established securities market for U.S. federal income tax purposes and the relevant U.S. Holder is either a cash basis taxpayer or an accrual basis taxpayer who has made a special election (which must be applied consistently from year to year and cannot be changed without the consent of the U.S. Internal Revenue Service), such holder will determine the U.S. dollar value of the amount realized in foreign currency by translating the amount received at the spot rate of exchange on the settlement date of the sale. An accrual basis taxpayer that does not make the special election will recognize exchange gain or loss to the extent attributable to the difference between the exchange rates on the sale date and the settlement date, and such exchange gain or loss generally will constitute U.S.-source ordinary income or loss.
In general, a U.S. Holder’s adjusted tax basis in its ADSs or common stock will be equal to the cost of such ADSs or common stock to the U.S. Holder. If a U.S. Holder used foreign currency to purchase ADSs or common stock, the cost of the ADS or common stock will be the U.S. dollar value of the foreign currency purchase price on the date of purchase, translated at the spot rate of exchange on that date. If the ADS or common stock is treated as traded on an established securities market for U.S. federal income tax purposes and the relevant U.S. Holder is either a cash basis taxpayer or an accrual basis taxpayer who has made the special election described above, the U.S. Holder will determine the U.S. dollar value of the cost of such ADS or common stock by translating the amount paid at the spot rate of exchange on the settlement date of the purchase.
Gain or loss, if any, recognized by a U.S. Holder on the sale or other disposition of ADSs or common stock generally will be treated as U.S. source gain or loss for U.S. foreign tax credit limitation purposes. As a result, the use of U.S. foreign tax credits relating to Philippine capital gains tax may be limited. Moreover, U.S. Holders entitled to an exemption from Philippine taxes on disposition gains pursuant to the Philippines-United States Tax Treaty will not be able to credit Philippine taxes imposed on disposition gains. In addition, subject to the Notices (as described above), any Philippine capital gains tax imposed on the sale or other taxable disposition of ADSs or common stock may not be treated as a creditable tax for the U.S. Holder. Non-U.S. taxes on disposition gains that are not creditable may possibly reduce the amount realized on the disposition of ADSs or common stock or alternatively may be deductible subject to limitations. In addition, U.S. Holders may not be eligible to credit against their U.S. federal income tax liability amounts paid in respect of the Philippine stock transaction tax. The applicability of these rules is very complex and U.S. Holders should consult their tax advisors regarding the foreign tax credit and other U.S. federal income tax consequences if Philippine taxes are imposed on a disposition of ADSs or common stock in their particular circumstances, including their ability, if any, to credit any such Philippine tax against their U.S. federal income tax liability or to claim a deduction for any such Philippine tax.
Passive Foreign Investment Company Rules
We would be classified as a PFIC for any taxable year if either: (a) at least 75% of our gross income is “passive income” for purposes of the PFIC rules or (b) at least 50% of the value of our assets (determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income. For this purpose, we will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we, directly or indirectly, 25% or more (by value) of the stock.
We believe that we were not a PFIC for our taxable year ending December 31, 2025, and we do not expect to become a PFIC in the current taxable year or in the foreseeable future. However, this conclusion is a factual determination that is made annually and thus may be subject to change. If we were to be treated as a PFIC, gain realized on the sale or other disposition of your ADSs or common stock would in general not be treated as capital gain. Instead, unless you elect to be taxed annually on a mark-to-market basis with respect to your ADSs or common stock, you would be treated as if you had realized such gain and certain "excess distributions" ratably over your holding period for the ADSs or common stock. The amounts allocated to the taxable year of the sale or other disposition (or the taxable year of receipt, in the case of an excess distribution) and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed. With certain exceptions, your ADSs or common stock will be treated as stock in a PFIC if we were a PFIC at any time during your holding period in your ADSs or common stock. Dividends that you receive from us will not be eligible for the special tax rates applicable to qualified dividend income if we are a PFIC (or are treated as a PFIC with respect to you) either in the taxable year of the distribution or the preceding taxable year.
If we were a PFIC, a U.S. Holder would also be subject to annual information reporting requirements. U.S. Holders should consult their tax advisors about the potential application of the PFIC rules to an investment in ADSs or common stock.
Information Reporting and Backup Withholding
Dividend payments with respect to ADSs and common stock and proceeds from the sale, exchange or redemption of ADSs or common stock may be subject to information reporting to the United States Internal Revenue Service and U.S. backup withholding. A U.S. Holder may be eligible for an exemption from backup withholding if the U.S. Holder furnishes a correct taxpayer identification number and makes any other required certification or is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status may be required to provide such certification on United States Internal Revenue Service Form W-9. U.S. Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability, and such U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing an appropriate claim for refund with the United States Internal Revenue Service and furnishing any required information.
Information With Respect to Foreign Financial Assets
Certain U.S. Holders who are individuals (and certain entities) that hold an interest in “specified foreign financial assets” (which may include the ADSs and common stock) are required to report information relating to such assets, subject to certain exceptions (including an exception for ADSs or common stock held in accounts maintained by certain financial institutions). U.S. Holders should consult their tax advisors regarding the effect, if any, of this requirement on their ownership and disposition of the ADSs and common stock and the significant penalties for non-compliance.
F. Dividends and Paying Agents
G. Statement by Experts
H. Documents on Display
We are subject to certain of the informational requirements of the Exchange Act. Since we are a “foreign private issuer,” we are exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the “short-swing” profit recovery provision contained in Section 16 of the Exchange Act with respect to their purchase and sale of our ordinary shares. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies whose securities are registered under the Exchange Act. However, we are required to file with the SEC an Annual Report on Form 20‑F containing financial statements audited by an independent accounting firm, and our officers and directors are required to report to the SEC on their beneficial ownership of our securities and changes thereto pursuant to Section 16 of the Exchange Act starting on March 18, 2026. The SEC also maintains a website at www.sec.gov that contains reports and other information that we file with or furnish electronically to the SEC.
Copies of these materials may be obtained by mail from the public reference section of the Commission, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. These reports and other information may also be inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005, on which the ADSs representing our common stock are listed. Our website address is www.pldt.com, where certain of our filings with the Commission are available online. Our website and the information contained therein or connected thereto will not be deemed to be incorporated into this Annual Report and you should not rely on any such information in making your decision whether to purchase our common stock or ADSs.
I. Subsidiary Information
J. Annual Report to Security Holdings
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The main risks arising from our financial instruments are liquidity risk, foreign currency exchange risk, interest rate risk and credit risk. The importance of managing those risks has significantly increased in light of the considerable change and volatility in both the Philippine and international financial markets. Our Board of Directors reviews and approves policies for managing each of these risks. We also monitor the market price risk arising from all financial instruments.
See Note 27 – Financial Assets and Liabilities – Financial Risk Management Objectives and Policies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for a detailed discussion.
Impact of Inflation and Changing Prices
Inflation can be a significant factor in the Philippine economy and we are continually seeking ways to minimize its impact. The average inflation rate in the Philippines for the years ended December 31, 2025, 2024 and 2023 were 1.7%, 3.2% and 6.0% respectively. The risks to the inflation outlook are continuing constraints in the supply of key food items, the adverse impact of climate change on food and electricity prices, and the effects of potential increases in transport fares and minimum wages.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities
B. Warrants and Rights
C. Other Securities
D. American Depositary Shares
Fees and Charges for Holders of American Depositary Receipts
JP Morgan Chase Bank, N.A., or the depositary, as depositary of our ADS collects fees from each person to whom ADS are issued, specifically US$5.00 for each 100 ADS (or portion thereof) issued, delivered, reduced, cancelled or surrendered.
The depositary also collects the following fees from holders of ADRs or intermediaries acting in their behalf:
Fees and Other Payments Made by the Depositary to Us
The depositary has agreed to reimburse certain reasonable expenses of PLDT related to PLDT’s ADR program and incurred by PLDT in connection with the ADR program. The amounts reimbursable by the depositary are not necessarily related to the fees collected by the depositary from ADR holders. The total amount that the depositary has agreed to reimburse for the year ended December 31, 2025 was US$498,666.89.
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
ITEM 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, carried out an evaluation on the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as at December 31, 2025. Based on this evaluation, our CEO and principal financial officer concluded that our disclosure controls and procedures were effective as at December 31, 2025.
Management’s Annual Report on Internal Control Over Financial Reporting
The Management of the PLDT Group is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the U.S. Securities Exchange Act of 1934, as amended.
Our internal control over financial reporting is designed and implemented under the supervision of our principal executive officers and principal finance officers, in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the PLDT Group; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS Accounting Standards, and that receipts and expenditures of the PLDT Group are being made only in accordance with authorizations of our management and board of directors; and (iii) provide reasonable assurance regarding prevention or timely detection of any unauthorized acquisition, use or disposition of the PLDT Group’s assets that could have a material effect on the financial statements.
Management assessed the effectiveness of the PLDT Group’s internal control over financial reporting as at December 31, 2025, based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013.
We reviewed the results of management’s assessment with the Audit Committee of the Board of Directors.
Based on this assessment, management has determined that the internal control over financial reporting of the PLDT Group was effective as at December 31, 2025.
Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance with respect to financial statements preparation and presentation, and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Attestation Report of Registered Public Accounting Firm
SyCip Gorres Velayo & Co. (a member firm of the Ernst & Young Global Limited), an independent registered public accounting firm, has audited our consolidated financial statements included in this Annual Report and has issued an attestation report on our internal control over financial reporting as at December 31, 2025. This attestation report is dated April 27, 2026 and is set forth in Item 18 “Financial Statements” of the Annual Report on Form 20-F for the year ended December 31, 2025.
Changes in Internal Control Over Financial Reporting
There was no change to our internal control over financial reporting that occurred during the year ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16A. Audit Committee Financial Expert
Our Board has determined that all the members of our AC are financially literate. Although none of the members of the AC is an audit committee financial expert as defined in Item 16A of Form 20-F, our Board believes that the AC members along with its advisors, possess sufficient financial knowledge and experience. Hence, our Board has not separately appointed an AC member who qualifies as an AC financial expert.
Ms. Bernadine T. Siy is the chairman of the AC and holds a master's degree in Management with majors in Finance and Accounting from the J.L. Kellogg Graduate School of Management of Northwestern University in Chicago, Illinois, USA. Our Board has also appointed Ms. Corazon S. de la Paz-Bernardo, a former member of our Board of Directors, as AC advisor to render advice on complex financial reporting or accounting issues that may be raised in our AC’s evaluation of our financial statements and other related matters. Formerly the Chairman and Senior Partner of Joaquin Cunanan & Co., now Isla Lipana & Co., a member firm of PricewaterhouseCoopers, Ms. de la Paz-Bernardo is a certified public accountant and possesses in-depth knowledge of accounting principles (including IFRS Accounting Standards), internal controls and procedures for financial reporting and AC functions, as well as extensive experience in overseeing or actively supervising the preparation, audit, analysis or evaluation of financial statements and in addressing complex and general financial reporting, accounting and audit issues.
ITEM 16B. Code of Business Conduct and Ethics
PLDT has adopted a Code of Business Conduct and Ethics (Code of Ethics) which applies to its directors, officers, including its principal executive officer, principal financial officer and principal accounting officer or controller, and employees. On September 17, 2024, the Board reviewed and approved the updated Code of Ethics that is aligned with applicable international best practices on corporate governance and sustainability.
We did not grant any waivers to the Code of Conduct during the year ended December 31, 2025.
A copy of the PLDT’s Code of Ethics is posted on our website: https://cms.pldt.com/drupal/sites/default/files/corporategovernancedocs/2024-09/pldt-code-of-business-conduct-and-ethics_0.pdf , under the Corporate Governance section. This website does not form part of this annual report on Form 20-F. The Company has undertaken to provide a copy, without charge, to any person requesting for a copy of the Company’s Code of Ethics from our Chief Governance Officer, Atty. Ma. Magdalene A. Tan, who can be reached at e-mail address matan@pldt.com.ph or telephone number +632-88888-246.
ITEM 16C. Principal Accountant Fees and Services
The following table summarizes the fees paid or accrued for services rendered by SGV & Co., our independent auditors for the years ended December 31, 2025 and 2024:
Audit Fees
Audit-Related Fees
Tax Fees
All other fees
Total Audit and Non-audit Fees
Audit Fees. Aggregate fees for the audit of our annual financial statements and services that are normally provided by the principal accountants, in connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes fees with respect to our Sarbanes-Oxley 404 assessment in 2025 and 2024.
Audit-Related Fees. Aggregate fees for assurance and related services rendered by our principal accountants related to the audit of our annual financial statements and our Sustainability Report that are not reported under “audit fees”.
Tax Fees. Aggregate fees for tax compliance, tax advice and tax planning.
All Other Fees. Aggregate fees for all other advisory services provided by our principal accountants, including non-audit engagement fees with respect to our certain projects.
The fees presented above are net of out-of-pocket expenses incidental to our independent auditors’ work, amount of which do not exceed 5% of the agreed-upon engagement fees. The fees and out-of-pocket expenses are exclusive of a 12% VAT.
Our AC pre-approved all audit and non-audit services as these are proposed or endorsed before these services are performed by our principal accountants.
Audit Committee’s Pre-approval Policies and Procedures
ITEM 16D. EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
No Company common stock was repurchased in 2025, 2024 and 2023.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
ITEM 16G. CORPORATE GOVERNANCE
PLDT is a Philippine company with its shares of common stock listed on the Philippine Stock Exchange (PSE) and American Depositary Shares (ADS) listed on the New York Stock Exchange (NYSE). As a foreign private issuer, PLDT is permitted under the NYSE listing standards to follow Philippine corporate governance practices on most corporate governance matters, and, accordingly, PLDT complies with the requirements of the Philippine Securities Regulation Code and the Revised Corporation Code of the Philippines,1 and, as appropriate, the recommended practices under Philippine SEC Code of Corporate Governance for Publicly Listed Companies (CG Code for PLCs) in respect of corporate governance matters as well as with the NYSE listing standards applicable to foreign private issuers. The CG Code for PLCs, which was issued by the Philippine SEC and took effect on January 1, 2017, contains Code provisions with recommended corporate governance practices. In accordance with its “comply or explain” approach, the CG Code for PLCs requires publicly listed companies to state in their respective annual corporate governance reports, due on or before May 30 of the following year, whether they comply with the Code provisions or, in case of non-compliance, explain the reason for such non-compliance. PLDT’s Integrated Annual Corporate Governance Report 2024 is posted on our website at: https://cms.pldt.com/drupal/sites/default/files/cgdisclosures/CGFD_PLDT%20INC._SEC%20PSE%20Form%20I-ACGR_30May2025.pdf
PLDT’s corporate governance practices are generally consistent with the NYSE listing standards, except that PLDT’s corporate governance practices differ from U.S. companies under the NYSE listing standards in the significant ways summarized below.
An example where the NYSE listing standards impose more stringent standards than PLDT’s corporate governance practices include the “auditor affiliation” test. In contrast to the NYSE listing standards, under PLDT’s By-Laws and Board Committee charters, present or previous affiliation or employment of a director’s immediate family member with the external auditor does not preclude a determination that such director is independent.
An example where PLDT’s corporate governance practices impose more stringent standards than NYSE listing standards is the “material relationship with the listed company” test. PLDT’s Manual on Corporate Governance (PLDT’s CG Manual) provides that a director who owns more than 2% of the shares of stock of PLDT, or whose relative is a substantial shareholder of PLDT, any of its related companies or any of its substantial shareholders cannot be considered as independent.
PLDT’s disclosure containing a summary of differences on corporate governance practices based on requirements of Philippine law on one hand, and U.S. law on the other, is found in this link: https://cms.pldt.com/drupal/sites/default/files/cgdisclosures/nyse-section-303a-11-disclosure-2025_0.pdf
[1] Section 22 of the Revised Corporation Code of the Philippines defines “a corporation vested with public interest” as:
“a) Corporations covered by Section 17.2 of Republic Act No. 8799, otherwise known as “The Securities Regulation Code,” namely those whose securities are registered with the Commission, corporations listed with an exchange or with assets of at least Fifty million pesos (Php50,000,000.00) and having two hundred (200) or more holders of shares, each holding at least one hundred (100) shares of a class of its equity shares;
b) Banks and quasi-banks, NSSLAs, pawnshops, corporations engaged in money service business, pre-need, trust and insurance companies, and other financial intermediaries; and
c) Other corporations engaged in business vested with public interest similar to the above, as may be determined by the Commission, after taking into account relevant factors which are germane to the objective and purpose of requiring the election of an independent director, such as the extent of minority ownership, type of financial products or securities issued or offered to investors, public interest involved in the nature of business operations, and other analogous factors.”
[2] Sections 2 and 3 of the Philippine SEC MC No.7, Series of 2026 on the Term Limit of Independent Directors
Section 2 Term Limit. An independent director (1D) shall be elected for a term of one (1) year and shall serve for a maximum cumulative term of nine (9) years in the same company. Unless otherwise provided herein, an ID elected as such before the effectivity of this Circular, shall be subject to the same 9-year maximum term reckoned from calendar year 2012.
2.1 Computation of Nine-Year Term Limit
2.1.1 ln case of continuous or consecutive service of an ID as such, the nine-year maximum term limit shall fall on (i) the date of the Annual Stockholders' Meeting (ASM) per the by-laws of the company, or (ii) on any other ASM date priorly approved by the Commission.
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2.1.2 In case of intermittent service of an ID as such, the cumulative tenure shall not exceed nine (9) years. For this purpose, on the ID's ninth year term as such, the maximum term limit shall fall on (i) the date of the ASM, per the by-laws of the company, or (ii) any other ASM date priorly approved by the Commission.
2.1.3. In case an ID is elected as non-independent director or officer of the company within the nine-year term limit, he can be elected again as an ID of the same company only after observing a cooling off period of two (2) years from the date he ceases being a non-independent director or officer, provided that the cumulative service as ID has not yet reached the nine (9) year maximum limit.
2.1.4. Any fraction of a year exceeding six (6) months shall be considered one (1) full year, regardless of the manner or reason by which the position of ID was relinquished or vacated.
Section 3. Effects of Term Limit. An ID who has served the maximum cumulative term under Section 2 of this Circular shall be barred perpetually from re‑election as an ID of the same company, without prejudice to serving as a non‑independent director or officer of the same company without any cooling‑off period.
ITEM 16H. MINE SAFETY DISCLOSURE
Item 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Item 16J. INSIDER TRADING POLICIES
The Company has adopted a policy enjoining directors and officers, executives, and employees of the Company, as well as its subsidiaries and affiliates, from buying or selling PLDT shares while in possession of unpublished price-sensitive information. A copy of the Company's policy on blackout periods and trading restrictions is attached herewith as “Exhibit 11.1.” Additionally, the Company imposes administrative penalties for (a) failure to promptly or accurately report PLDT share transactions; and (b) trading of PLDT shares during restricted periods. These policies aim to facilitate compliance with insider trading laws, regulations, rules, and the listing standards that apply to the Company. A copy of the Company’s policy on the imposition of administrative penalties is attached herewith as “Exhibit 11.2.”
Item 16K. CYBER SECURITY
For purposes of this section:
Cyber security incident means an unauthorized occurrence, or a series of related unauthorized occurrences, on or conducted through a registrant’s information systems that jeopardizes the confidentiality, integrity, or availability of PLDT’s information systems or any information residing therein.
Cyber security threat means any potential unauthorized occurrence on or conducted through PLDT’s information systems that may result in adverse effects on the confidentiality, integrity, or availability of PLDT’s information systems or any information residing therein.
Information systems means electronic information resources, owned or used by PLDT, including physical or virtual infrastructure controlled by such information resources, or components thereof, organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of PLDT’s information to maintain or support PLDT’s operations.
Cybersecurity Risk Management and Strategy
Our cybersecurity risk management program (Program) includes:
In addition, all technologies, systems, platforms and network elements go through a security assessment by CSOG and must be approved by CSOG before they are implemented in order to ensure that all network elements meet our cyber security standards.
As part of our continuing efforts to improve security measures and fortify the network environment, PLDT Group has retained external cyber security experts to assist us in deploying the latest technology and adopting global best practices to detect and prevent cyber security attacks.
The Program is constantly reviewed for compliance with ISO 27001. While CSOG uses the Balanced Scorecard Framework (Balanced Scorecard) as a tool for measuring performance and effectiveness of security controls, as well as for alignment of CSOG objectives with the goals of the PLDT Group, it has adopted the National Institute of Standards and Technology (NIST) as a framework. The Balanced Scorecard is a strategic planning and management method designed to align business activities with the vision and strategy of the organization to improve internal and external communications, and monitor CSOG’s performance against the strategic goals of the entire organization, including financial stability, customer satisfaction, efficient internal processes, and continuous improvement and innovation in cyber security capabilities. On the other hand, the adoption of the NIST Framework enhances our ability to identify, protect, detect, respond and recover from cyber threats. By identifying the risks, the organization is able to understand and manage the cyber security risks to systems, assets, data and capabilities and, at the same time, implement safeguards to ensure the delivery of critical infrastructure services. Detection is achieved by developing and implementing activities to identify the occurrence of a cyber security event.
The Program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes with the enterprise risk management program, which are also applied to other legal, compliance, strategic, operational, and financial risk areas. This integration serves to align PLDT’s cyber security initiatives with the overall strategic objectives of the organization.
Process for Assessing, Identifying, and Managing Material Risks from Cyber Security Threats Pursuant to the Program
Assessment
CSOG, through its Risk Management Team, performs functional security risk assessments for projects (e.g., solutions, products, services, and their components) and enterprise (e.g., in response to incidents, intelligence threat information, and/or as part of
planned scope and schedule) in accordance with the Risk Management Standards. Information security risk assessments are performed on all new technologies, systems, platforms, and network elements that:
In other words, all technologies, systems, platforms and network elements go through a security assessment by CSOG and must be approved by CSOG before they are implemented, whether it is merely proof-of-concept, for demonstration, or for production. Information security risk assessments on existing systems should be initiated and performed by CSOG based on emerging threats and risk.
Identification
Risks are identified based on the probable loss of confidentiality, integrity, and availability of information within the scope of our ISMS. Risks are categorized based on their impact on the following: (1) customer’s rights; (2) reputation; (3) technology; (4) finance; (5) people; and (6) governance. Once identified, risks are categorized as either high or low to arrive at the risk rating/score.
Results of risk assessment are documented in our Risk Register, which shall be the basis of the risk treatment.
Risks identified as part of information security risk assessment shall be treated according to the Company’s security requirements (risk appetite), taking into account business circumstances and level of threat. Treatment of information security risk shall primarily be via risk mitigation. In cases where the risk is difficult to mitigate and requires long-term efforts, we may (i) document acceptance of the risk by an appropriate senior management, (ii) cancel, postpone or modify the implementation of a project or initiative that gives rise to the risk or (iii) share the risk with external parties, such as joint venture partners, cloud service providers and other third-party service providers.
Management/Strategy
CSOG uses the Balanced Scorecard methodology/framework to ensure that cyber security efforts are not just technically proficient, but also contribute to the overall strategic objectives of the organization, including financial stability, customer satisfaction, efficient internal processes, and continuous improvement and innovation in cyber security capabilities. The Balanced Scorecard is reviewed annually or as necessary to keep up with the latest threats, technological advancements, and regulatory requirements. In the end of 2024, CSOG started reviewing its strategy and roadmap based on the approved budget and its identified projects and initiatives.
See Section (b) above for more details.
Engagement of Third-Parties
The Company engages third-party service providers, such as, but not limited to assessors, consultants, and auditors, in connection with the processes described above. The Company has established its External Party Security Standards to ensure the confidentiality, integrity, and availability of information transmitted between PLDT Group and third parties are maintained, that hardware and software acquired from third parties do not compromise PLDT Group’s confidential and restricted information, and that security requirements are satisfied and maintained when the running of a particular environment or service is entrusted to a third party.
When entering into contracts, third parties must agree to PLDT Group’s security requirements as embodied in PLDT Group’s Cyber Security Clauses and CS Requirements set forth in the External Party Security Standards. All contracts are reviewed by CSOG before they are executed and subjected to a risk assessment on the third party, including assessing their security posture and compliance with security requirements, before launching the project or implementing the solution. Through this process, CSOG seeks to ensure that we have the appropriate controls in place for any systems, solutions or platforms that are to be integrated with our internal network or system, or will involve the processing of personal data.
Cybersecurity Incidents
In the second quarter of 2023, pursuant to Philippine laws, the Company notified the relevant regulatory authorities that it experienced cybersecurity attacks on its network and systems and, with the help of leading cybersecurity experts here and abroad, the Company was able to contain the effects of such cybersecurity attacks on network and systems performance. Upon detection of the incidents, the Company immediately activated relevant security protocols, and worked around the clock to protect its network and systems. Therefore, such cybersecurity attacks did not have any material financial, legal, reputational or regulatory repercussions for the Company. We did not experience any cyber security incidents in 2025 and 2024 that resulted in any financial loss, reputational damage, or regulatory fines.
We continue to analyze and enhance our network and systems to introduce further security measures, and fortify our network environment. Further, we have retained external cyber security experts to ensure that we deploy the latest technology, and adopt global best practices to detect and prevent cyber security attacks.
Cyber Security Governance
Our Board considers cyber security risk as part of its risk oversight function and has delegated the responsibility for overseeing cyber security and other information technology risks to the Board’s Data Privacy and Information Security Committee (the Committee). This Committee gives strategic direction to governance functions relating to data privacy and information security matters and oversees management’s implementation of our Program.
The Committee receives quarterly reports from management on (a) our data privacy and information security risk profile, with a focus on known or emerging major risk exposures; (b) the level of compliance with regulatory requirements and internal policies and standards on data protection and information security; and (c) any significant gaps in our data protection and information security capabilities and the status of any initiatives to address those gaps. In addition, management updates the Committee, as necessary, regarding any material cyber security incidents, as well as any incidents with lesser impact potential, and the steps or proposed steps taken by management to monitor and manage data privacy and information security risks, including adequacy of resources; training of the workforce; administrative, physical, and technical safeguards; and an incident management framework.
On the other hand, the Committee reports to the full Board on its activities including those related to cyber security. Further, the Committee reports and secures the full Board’s approval, at least annually, on the risk appetite and risk tolerance of our Company and the risk management objectives and strategies on data privacy and information security. The Committee also ensures that management, through its Chief Information Security Officer (CISO), reports to the full Board the level of our compliance with regulatory requirements and internal policies and standards on data protection and information security. Each year, the Committee also ensures that the CISO creates and implements continuing annual training programs for Directors to inform them of developments in the business and regulatory environments, including emerging risks relevant to data protection and information security.
Our CSOG, led by the CISO, is responsible for assessing and managing any material risks from cyber security threats. CSOG has primary responsibility for implementing and monitoring our Program and supervises both our internal cyber security personnel and our external cyber security consultants. The CISO, through the different pillars of CSOG (e.g., Governance, Innovation, Risk Management, Compliance, Internal Cyber Security Operations, and Special Operations Group), supervises efforts to prevent, detect, mitigate, and remediate cyber security risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants; and alerts and reports produced by security tools deployed in the IT environment.
CSOG oversees and implements organizational initiatives aimed at creating a sustainable culture of cyber security, including, but not limited to, internal and external training programs for staff, technological upgrades in cyber security, and knowledge management practices in cyber security. Collectively, CSOG is equipped with the relevant experience and technical knowledge to perform its responsibilities in relation to cyber security.
The CISO provides quarterly reports to the Committee on potential and existing cyber security risks identified by CSOG, remedial actions undertaken, and measures implemented to enhance PLDT Group’s cyber security posture. The Committee then reports such cyber security matters to the full Board. The CISO also directly provides the Board with quarterly reports on the implementation of the Group’s security measures.
ITEM 17. FINANCIAL STATEMENTS
ITEM 18. FINANCIAL STATEMENTS
The audited consolidated financial statements as required under Item 18 are attached hereto beginning on page F‑1 of this Annual Report.
Index to Financial Statements
Page
PLDT INC. ANNUAL FINANCIAL STATEMENTS
Reports of Independent Public Accounting Firm (PCAOB ID 01755)
F-1
Consolidated Statements of Financial Position as at December 31, 2025 and 2024
F-5
Consolidated Income Statements for the Years Ended December 31, 2025, 2024 and 2023
F-7
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023
F-8
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2025, 2024 and 2023
F-9
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023
F-10
Notes to Consolidated Financial Statements
F-12
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of PLDT Inc.
Opinion on Internal Control over Financial Reporting
We have audited PLDT Inc. and subsidiaries’ (collectively referred to as “PLDT Group”) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO criteria”). In our opinion, the PLDT Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the PLDT Group as of December 31, 2025 and 2024, the related consolidated income statements, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated April 27, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The PLDT Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the PLDT Group’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the PLDT Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ SyCip Gorres Velayo & Co.
April 27, 2026
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of PLDT Inc. and subsidiaries (collectively referred to as “PLDT Group”) as of December 31, 2025 and 2024, the related consolidated income statements, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the PLDT Group at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the PLDT Group’s internal control over financial reporting as of December 31, 2025, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 27, 2026 expressed an unqualified opinion thereon.
These financial statements are the responsibility of the PLDT Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the PLDT Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Revenue recognition
Description of the Matter
For the year ended December 31, 2025, the Group recognized revenues amounting to Php218,388 million as disclosed in Notes 3, 4 and 5 to the consolidated financial statements. The Group derives revenues from wireless and fixed line telecommunications services, which includes bundled offers such as telecommunications services and handsets provided to a large number of subscribers.
Auditing the information technology (IT) systems used to capture accurate and complete information to recognize substantial amounts of the wireless and fixed line service revenues was especially challenging due to the significant volume of data and transactions processed through various systems and the heavy reliance on automated processes and controls over the capture, measurement and recording of transactions.
F-2
How We Addressed the Matter in Our Audit
We obtained an understanding of the PLDT Group’s revenue recognition process, involving our IT professionals to assist us in evaluating the design and testing of the effectiveness of controls around the capture, measurement and recording of wireless and fixed line revenues. For example, we evaluated the design and tested the operating effectiveness of controls around access rights, system migration, program changes, IT operations and IT dependent transaction-level controls to establish that changes to the system were appropriately authorized, tested and implemented including those over: set-up of customer accounts, pricing, segregation of duties and the linkage to usage that drives revenue recognition.
To test revenue recognition, among other procedures, we compared the customer billing data to the details in the billing systems for wireless and fixed line postpaid revenues on a sample basis. We also tested the recognition of revenue based on actual usage and inspected the reconciliation of the ending balance of unearned income for prepaid revenues between the subledger and the general ledger.
At December 31, 2025, the Group’s property and equipment was Php327,989 million. As explained in Notes 3 and 9 to the consolidated financial statements, the Group reviews its estimates of useful lives annually or as and when needed if expectations differ from previous estimates due to changes in expectation of physical wear and tear, technical or commercial obsolescence and legal or other limitations on the continuing use of the assets.
Auditing the Group's estimated useful lives of property and equipment was complex and required significant judgment because the determination of the estimated useful lives considers a number of factors and assumptions including the collective assessment of industry practice, internal technical evaluation and experience with similar assets.
We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Group’s process of estimating the useful lives of property and equipment. For example, we tested controls over management’s assessment which includes consideration for industry data and practice, market outlook and other relevant data. To test whether the estimated useful life of property and equipment used by management was reasonable, our audit procedures included, among others, obtaining an understanding of the Group’s technology roadmap plan and strategy related to asset replacement and assessing the reasonableness by considering external sources such as telecommunication technology growth, changes in market demand and current economic and market outlooks. We assessed whether there were any potential sources of contrary information by performing benchmarking analysis on the estimated useful lives of property and equipment against other public companies within the telecommunication industry.
We have served as the PLDT Group’s auditor since 2002.
F-3
PLDT INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2025 AND 2024
AND FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023
F-4
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in million pesos)
December 31,2025
December 31,2024
January 1,2024
ASSETS
Noncurrent Assets
Property and equipment (Note 9)
287,103
Right-of-use assets (Note 10)
48,777
39,111
32,717
Investments in associates and joint ventures (Note 11)
52,425
52,764
50,308
Financial assets at fair value through profit or loss (Note 27)
1,030
1,101
578
Debt instruments at amortized cost – net of current portion (Note 12)
350
395
Investment properties (Note 13)
7,789
3,000
1,315
Goodwill and intangible assets (Note 14)
64,421
64,464
64,335
Deferred income tax assets – net (Note 7)
11,582
14,643
18,172
Derivative financial assets – net of current portion (Note 27)
617
385
Prepayments and other nonfinancial assets – net of current portion (Note 18)
46,486
61,929
80,365
Contract assets – net of current portion (Note 5)
333
485
531
Other financial assets – net of current portion (Note 27)
3,616
3,126
3,481
Total Noncurrent Assets
565,415
559,447
539,396
Current Assets
Cash and cash equivalents (Notes 15 and 27)
16,177
Short-term investments (Note 27)
391
Trade and other receivables (Note 16)
31,367
31,612
26,086
Inventories and supplies (Note 17)
1,843
3,306
3,340
Current portion of contract assets (Note 5)
1,154
1,387
Current portion of derivative financial assets (Note 27)
203
Current portion of debt instruments at amortized cost (Notes 12 and 27)
200
Current portion of prepayments and other nonfinancial assets (Note 18)
16,191
9,975
13,215
Current portion of other financial assets (Note 27)
339
831
320
62,993
57,327
61,116
Assets classified as held-for-sale (Notes 9 and 10)
6,420
6,501
9,007
Total Current Assets
69,413
63,828
70,123
TOTAL ASSETS
609,519
EQUITY AND LIABILITIES
Equity
Non-voting serial preferred stock (Note 19)
360
Voting preferred stock (Note 19)
150
Common stock (Note 19)
1,093
Treasury stock (Note 19)
(6,505
Capital in excess of par value
130,204
130,312
Retained earnings
37,320
29,242
18,973
Other comprehensive loss (Note 6)
(35,733
(39,233
(39,165
Total Equity Attributable to Equity Holders of PLDT
105,218
Noncontrolling interests
1,194
1,316
5,168
TOTAL EQUITY
128,083
116,735
110,386
See accompanying Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)
Noncurrent Liabilities
Interest-bearing financial liabilities – net of current portion (Note 20)
243,152
Lease liabilities – net of current portion (Note 10)
55,276
46,703
41,625
Deferred income tax liabilities – net (Note 7)
165
Customers’ deposits (Note 27)
1,262
2,046
2,238
Pension and other employee benefits (Note 25)
3,810
3,548
5,661
Deferred credits and other noncurrent liabilities (Note 21)
8,311
7,475
9,607
Derivative financial liabilities – net of current portion (Note 27)
Total Noncurrent Liabilities
347,602
318,078
302,460
Current Liabilities
Accounts payable (Note 22)
56,379
66,722
81,014
Accrued expenses and other current liabilities (Note 23)
72,952
85,488
88,750
Current portion of interest-bearing financial liabilities (Note 20)
11,646
Current portion of lease liabilities (Note 10)
8,897
7,335
5,921
Dividends payable (Note 19)
2,087
2,005
1,912
Current portion of derivative financial liabilities (Note 27)
Income tax payable
946
1,860
4,630
157,518
186,847
194,894
Liabilities associated with assets classified as held-for-sale (Note 10)
1,625
1,615
1,779
Total Current Liabilities
159,143
188,462
196,673
TOTAL LIABILITIES
506,745
506,540
499,133
TOTAL EQUITY AND LIABILITIES
F-6
CONSOLIDATED INCOME STATEMENTS
For the Years Ended December 31, 2025, 2024 and 2023
(in million pesos, except earnings per common share amounts which are in pesos)
REVENUES FROM CONTRACTS WITH CUSTOMERS
Service revenues (Notes 4 and 5)
Non-service revenues (Notes 4 and 5)
EXPENSES
General operating costs (Note 5)
Depreciation and amortization (Notes 9, 10, 14 and 18)
Cost of devices, accessories and contract-specific services (Note 5)
Asset impairment (Note 5)
Interconnection costs (Note 5)
OTHER EXPENSES — NET (Note 5)
12,658
9,943
5,984
INCOME BEFORE INCOME TAX FROM CONTINUING OPERATIONS
PROVISION FOR INCOME TAX (Note 7)
NET INCOME FROM CONTINUING OPERATIONS (Note 4)
NET LOSS FROM DISCONTINUED OPERATIONS (Notes 2 and 4)
NET INCOME (Note 4)
ATTRIBUTABLE TO:
Equity holders of PLDT (Note 8)
28,662
30,695
25,289
207
248
Earnings Per Share Attributable to Common Equity Holders of PLDT (Note 8)
Earnings Per Share from Continuing Operations Attributable to Common Equity Holders of PLDT (Note 8)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS) – NET OF TAX (Note 6)
Foreign currency translation differences of subsidiaries
(93
(154
Net transactions on cash flow hedges:
167
239
Net fair value gains on cash flow hedges (Note 27)
223
319
267
Income tax related to fair value adjustments charged directly to equity
(56
(80
Net other comprehensive gain to be reclassified to profit or loss in subsequent years
146
Revaluation increment on investment properties:
4,087
1,196
Revaluation increment in investment properties transferred from property and equipment (Note 13)
3,594
1,631
Income tax related to revaluation adjustments charged directly to equity
493
(435
Share in the other comprehensive income (loss) of associates and joint ventures accounted for using the equity method
Remeasurements of post-employment benefit obligations:
(626
(1,462
(5,469
Remeasurement losses on post-employment benefit obligations
(838
(1,978
(7,277
Income tax related to remeasurement adjustments
212
516
1,808
Net other comprehensive income (loss) not to be reclassified to profit or loss in subsequent years
3,460
(274
(5,466
Total other comprehensive income (loss) – net of tax
3,492
(128
(5,420
TOTAL COMPREHENSIVE INCOME
32,361
30,815
20,079
Equity holders of PLDT
32,162
30,627
19,884
199
188
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
PreferredStock
Treasury Stock
Capital in Excess of Par Value
Retained Earnings
Other Comprehensive Income (Loss)
NoncontrollingInterests
TotalEquity
Balances as at January 1, 2025
510
Cash dividends (Note 19)
(20,584
(20,659
Total comprehensive income (loss) - net:
3,500
Net income
Other comprehensive income (loss) (Note 6)
Acquisition and dilution of noncontrolling interests
Deconsolidation of a subsidiary
(108
(89
(197
Balances as at December 31, 2025
Balances as at January 1, 2024
(20,800
(20,850
(68
(60
235
Perpetual notes settlement (Note 19)
(4,200
Distribution charges on perpetual notes (Note 19)
Transaction costs from settlement of perpetual notes (Note 19)
374
Balances as at December 31, 2024
Balances as at January 1, 2023
17,077
(33,760
108,727
5,234
113,961
(23,393
(25
(23,418
(5,405
(236
Balances as at December 31, 2023
CONSOLIDATED STATEMENTS OF CASH FLOWS
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Income before income tax and noncontrolling interest from continuing operations
Loss before income tax and noncontrolling interest from discontinued operations (Note 2)
Income before income tax
34,669
Adjustments for:
58,683
Interest on loans and other related items – net (Note 5)
13,197
11,031
9,990
Accretion on lease liabilities (Notes 5 and 10)
4,579
3,935
3,268
4,436
Pension benefit costs (Notes 5 and 25)
1,434
1,441
1,426
Foreign exchange losses (gains) – net (Notes 5 and 27)
(1,153
Equity share in net losses of associates and joint ventures (Notes 5 and 11)
Accretion on financial liabilities (Notes 5 and 20)
372
409
Losses (Gains) on derivative financial instruments – net (Notes 5 and 27)
Incentive plan (Notes 5 and 25)
1,136
839
Impairment of investments (Note 11)
Income from prescription of preferred shares redemption liability (Note 19)
Gains on disposal of property and equipment (Note 5)
(85
(468
Interest income (Note 5)
(1,017
Gain on sale and leaseback of telecom towers (Notes 5 and 9)
(887
(1,442
(7,777
(781
(864
Operating income before changes in assets and liabilities
119,282
115,098
106,758
Decrease (increase) in:
Prepayments
5,731
21,034
10,264
Inventories and supplies
1,742
597
Contract assets
265
(139
Trade and other receivables
(2,052
(9,137
952
Other financial and non-financial assets
279
(1,824
156
Increase (decrease) in:
Customers deposits
(784
(194
Pension and other employee benefits
(3,355
(5,174
Accounts payable
(7,754
(27,765
(21,285
Accrued expenses and other current liabilities
(9,921
(8,716
(4,414
Other noncurrent liabilities
(20
(57
Net cash flows generated from operations
101,394
85,013
87,823
Income taxes paid
(2,656
(3,282
(2,058
Net cash flows from operating activities
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Proceeds from:
Disposal of property and equipment (Note 9)
1,220
4,827
23,971
Return of capital on an investment in joint venture (Note 11)
600
Disposal of investments in associates and joint ventures
175
Maturity of short-term investments
440
Redemption of investment in debt securities (Note 12)
Interest received
686
881
973
Payments for:
Purchase of short-term investments
(37
(449
Purchase of financial assets at fair value through profit or loss
Acquisition of investments in associates and joint ventures (Note 11)
(186
(3,770
(1,636
Acquisition of intangibles
(217
Interest capitalized to property and equipment (Notes 5 and 9)
(2,724
(2,589
(2,169
Purchase of property and equipment (Note 9)
(60,140
(65,668
(76,266
Decrease (Increase) in other financial and non-financial assets
(544
626
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Availments of long-term debt (Notes 20 and 28)
36,150
37,000
38,000
Availments of short-term debt (Notes 20 and 28)
1,322
Collections of derivative financial instruments – net (Notes 27 and 28)
704
Return of preferred shares redemption fund (Note 19)
Redemption of perpetual notes (Note 19)
Settlements of derivative financial instruments – net (Notes 27 and 28)
(243
(607
Debt issuance costs (Notes 20 and 28)
(271
(219
(214
Short-term debt (Notes 20 and 28)
(1,022
(10,000
Interest – net of capitalized portion (Notes 5 and 28)
(13,233
(10,740
(9,715
Obligations under lease liabilities (Notes 10 and 28)
(14,328
(12,079
(10,707
Cash dividends (Notes 19 and 28)
(20,590
(20,750
(23,328
Long-term debt (Notes 20 and 28)
(23,712
(12,059
(22,611
NET EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
(263
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR (Note 15)
25,211
CASH AND CASH EQUIVALENTS AT END OF THE YEAR (Note 15)
F-11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PLDT Inc., which we refer to as PLDT or the Parent Company, was incorporated under the old Corporation Law of the Philippines (Act 1459, as amended) on November 28, 1928, following the merger of four telephone companies under common U.S. ownership. PLDT holds a perpetual corporate term under Section 11 of the Revised Corporation Code of the Philippines (Republic Act No. 11232), which grants existing corporations to have a perpetual existence, unless a majority vote of its stockholders elects to retain a specified corporate term.
In 1967, effective control of PLDT was transferred from General Telephone and Electronics Corporation, a major shareholder then since PLDT’s incorporation, to a group of Filipino investors. In 1981, as part of the Philippine government’s policy to integrate the country’s telecommunications industry, PLDT acquired substantially all of the assets and liabilities of the Republic Telephone Company, then the second largest telephone provider in the Philippines.
In 1998, certain subsidiaries of First Pacific Company Limited, or First Pacific, and its Philippine affiliates (collectively the First Pacific Group and its Philippine affiliates), acquired a significant interest in PLDT. On March 24, 2000, NTT DOCOMO Business, Inc., or NTT DOCOMO Business (formerly NTT Communications Corporation), through its wholly-owned subsidiary NTT Communications Capital (UK) Ltd., became PLDT’s strategic partner with approximately a 15% economic and voting interest in PLDT’s common stock. Concurrent with NTT DOCOMO Business’ investment, PLDT acquired 100% of Smart Communications, Inc., or Smart.
On March 14, 2006, NTT DOCOMO, Inc., or NTT DOCOMO, acquired approximately 7% of PLDT’s then outstanding common shares from NTT DOCOMO Business, which retained ownership of about 7% of PLDT’s common shares. Since then, NTT DOCOMO has made additional purchases of PLDT shares, bringing the combined beneficial ownership of NTT DOCOMO and NTT DOCOMO Business (both part of Nippon Telegraph and Telephone Corporation) to approximately 20.35% of PLDT’s outstanding common stock as at December 31, 2025.
On February 28, 2007, Metro Pacific Asset Holdings, Inc., a Philippine affiliate of First Pacific, completed an acquisition of an approximately 46% interest in Philippine Telecommunications Investment Corporation, or PTIC, a shareholder of PLDT. This investment in PTIC represented an attributable interest of approximately 6% of PLDT’s outstanding common shares at the time and raised the First Pacific Group’s and its Philippine affiliates’ beneficial ownership to approximately 28% of PLDT’s outstanding common stock as of that date. Since then, the First Pacific Group’s beneficial ownership interest in PLDT has decreased by approximately 2%, mainly due to the holders of Exchangeable Notes issued in 2005 by a subsidiary of First Pacific, which were fully exchanged into PLDT shares. The First Pacific Group and its Philippine affiliates held beneficial ownership of approximately 25.57% of PLDT’s outstanding common stock as at December 31, 2025.
On October 26, 2011, PLDT completed the acquisition of a controlling interest in Digital Telecommunications Phils., Inc., or Digitel, from JG Summit Holdings, Inc., or JGSHI, and its affiliates, or collectively, the JG Summit Group. As consideration for the assets acquired, PLDT issued approximately 27.7 million common shares. In November 2011, JGSHI sold 5.81 million and 4.56 million PLDT shares to a Philippine affiliate of First Pacific and NTT DOCOMO, respectively, under separate option agreements. As at December 31, 2025, the JG Summit Group beneficially owned approximately 11.27% of PLDT’s outstanding common stock.
On October 16, 2012, BTF Holdings, Inc., or BTFHI, a wholly-owned company of the Board of Trustees for the Account of the Beneficial Trust Fund, or PLDT Beneficial Trust Fund, created pursuant to PLDT’s Benefit Plan, subscribed to 150 million newly issued shares of Voting Preferred Stock of PLDT, or Voting Preferred Shares, at a subscription price of Php1.00 per share for a total subscription price of Php150 million. This subscription was made pursuant to a subscription agreement between BTFHI and PLDT dated October 15, 2012. Consequently, the issuance of these Voting Preferred Shares reduced the voting power of the NTT Group (comprising of NTT DOCOMO and NTT DOCOMO Business), the First Pacific Group and its Philippine affiliates, and JG Summit Group to 12.01%, 15.09% and 6.65%, respectively, which still holds as at December 31, 2025. See Note 19 – Equity – Preferred Stock – Voting Preferred Stock.
The common shares of PLDT are listed and traded on the Philippine Stock Exchange, Inc., or PSE. On October 19, 1994, an American Depositary Receipt, or ADR, facility was established, under which Citibank N.A., as the depositary, issued American Depositary Shares, or ADSs, with each ADS representing one PLDT common share with a par value of Php5.00 per share. Effective February 10, 2003, PLDT appointed JP Morgan Chase Bank as the successor depositary for its ADR facility. The ADSs are listed on the New York Stock Exchange, or NYSE, in the United States and are traded on the NYSE under the symbol “PHI”. As at December 31, 2025, there were approximately 17 million ADSs outstanding.
PLDT and our Philippine-based fixed line and wireless subsidiaries operate under the jurisdiction of the Philippine National Telecommunications Commission, or NTC. The NTC’s jurisdiction includes, among other responsibilities, the approval of major services offered and certain rates charged to customers.
We are one of the leading telecommunications and digital services providers in the Philippines, serving the fixed line, wireless and broadband markets. Through our three principal business segments, Wireless, Fixed Line and Others, we offer a wide range of telecommunications and digital services across our extensive fiber optic backbone and wireless and fixed line networks. Our principal activities are discussed in Note 4 – Operating Segment Information.
Our registered office address is Ramon Cojuangco Building, Makati Avenue, Makati City, Philippines. Information on our structure is provided in Note 2 – Summary of Material Accounting Policies – Basis of Consolidation. Information on other related party relationships of the PLDT Group is provided in Note 24 – Related Party Transactions.
Our consolidated financial statements as at December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023 were approved and authorized for issuance by the Board of Directors on February 26, 2026, as reviewed by the Audit Committee on February 23, 2026.
Enactment of Republic Act No. 12234 (Konektadong Pinoy Act)
The Konektadong Pinoy Act (KP Act) took effect on September 14, 2025. The Implementing Rules and Regulations (IRR) took effect on December 16, 2025. The KP Act introduces an open-access regime in the data transmission sector, including removal of the legislative franchise requirement for data transmission services, mandatory infrastructure sharing for services included in the regulators’ Access List, and a revised spectrum management framework providing for periodic review, potential recall, and reassignment of spectrum by the NTC and the Department of Information and Communications Technology (DICT).
These regulatory changes may increase competitive intensity, requiring the PLDT Group to provide access to certain infrastructure and services on fair and non-discriminatory terms, and subject spectrum holdings to periodic review under the new Spectrum Management Policy Framework. The implementation of performance standards, pricing transparency requirements, and other regulatory measures may also affect operating flexibility and margins.
This legislation marks a significant shift in the Philippine connectivity regulatory landscape aimed at accelerating digital connectivity and fostering a more competitive market environment. We continue to monitor further regulatory guidelines from the NTC and the DICT. Management does not expect any immediate material impairment of its existing assets, though it continues to evaluate the potential long-term impact of these regulatory developments on the competitive position and overall financial performance of the Company.
F-13
Basis of Preparation
Our consolidated financial statements have been prepared in accordance with International Financial Reporting Standards Accounting Standards, or IFRS Accounting Standards, as issued by the International Accounting Standards Board, or IASB.
Our consolidated financial statements have been prepared under the historical cost basis, except for financial instruments at fair value through profit or loss, or FVPL, investment properties and pension that are measured at fair values.
Our consolidated financial statements are presented in Philippine Peso, PLDT’s functional currency, and all values are rounded to the nearest million, except when otherwise indicated.
Our consolidated financial statements provide comparative information in respect of the previous period.
Revisions of Prior Period Financial Statements
The Group revised the prior period financial statements, as disclosed below, primarily to revise the recycling of “Net fair value losses on cash flow hedges” to “Other income (expense) – Gains (losses) on derivative financial instruments – net.” In accordance with the United States Securities and Exchange Commission (U.S. SEC) Staff Accounting Bulletin (SAB) No. 99, “Materiality,” and U.S. SEC SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the impact was immaterial to our previously filed financial statements on an annual basis and has no impact to the Group’s cash flows or key operating metrics, including EBITDA, EBIT, Telco Core income and Core income. The Group has revised the comparative annual periods of fiscal year 2024 and 2023 consolidated financial statements and related notes included herein.
Our hedge accounting processes were designed with the involvement of a hedge accounting specialist and have been subject to regular review as part of the Group’s financial reporting and audit processes.
The Group implemented hedge accounting in accordance with IFRS 9, supported by consultation with technical experts. Upon a subsequent detailed review of hedge effectiveness, the amounts previously recycled to profit or loss have exceeded the amount of fair value losses on cash flow hedges in other comprehensive loss.
Similarly, the matter does not affect the dividend payout to shareholders and management incentives, which are also computed based on our telco core income. The matter is technical in nature and does not trigger, nor is it subject to, any clawback or recovery provisions.
Consolidated balance sheet/Consolidated statement of changes in equity
December 31, 2024
December 31, 2023
January 1, 2023
As reported
Reclassification
As revised
33,901
(4,659
22,020
(3,047
18,799
(1,722
Other comprehensive loss
(43,892
4,659
(42,212
3,047
(35,482
1,722
Consolidated income statements
Adjustment
Other expenses – net
7,794
2,149
4,217
1,767
Income before income tax from continuing operations
42,693
(2,149
36,477
(1,767
10,138
(537
9,612
(442
Net income from continuing operations/Net income
32,555
(1,612
26,865
(1,325
Net income attributable to equity holders of PLDT
32,307
26,614
Earnings per share attributable to common equity holders of PLDT (Basic/Diluted)
149.26
(7.46
122.91
(6.14
Earnings per share from continuing operations attributable to common equity holders of PLDT (Basic/Diluted)
123.10
F-14
Consolidated statements of comprehensive income
(131
(1,547
1,786
(1,256
1,456
Net fair value losses on cash flow hedges
(2,063
2,382
(1,674
1,941
(596
418
(485
Net other comprehensive loss to be reclassified to profit or loss in subsequent years
(1,466
1,325
(1,740
(6,745
The matter has no impact to the consolidated statement of cash flows as the adjustments will offset among related accounts within the net cash flows from operating activities.
F-15
Basis of Consolidation
Our consolidated financial statements include the financial statements of PLDT and the following subsidiaries (collectively, the “PLDT Group”) as at December 31, 2025 and 2024:
Place of
Percentage of Ownership
Name of Subsidiary
Incorporation
Principal Business Activity
Direct
Indirect
Smart:
Philippines
Cellular mobile services
100.0
Smart Broadband, Inc., or SBI, and Subsidiary
Internet broadband distribution services
Primeworld Digital Systems, Inc., or PDSI
I-Contacts Corporation(a)
Operations support servicing business
Far East Capital Limited, or FECL(a)
Cayman Islands
Cost effective offshore financing and risk management activities for Smart
PH Communications Holdings Corporation(a)
Investment company
Connectivity Unlimited Resource Enterprise, Inc.(a)
Francom Holdings, Inc.(a)
Chikka Holdings Limited, or Chikka, and Subsidiaries, or Chikka Group(a)
British Virgin Islands
Content provider, mobile applications development and services
Wifun, Inc.(a)
Software developer and selling of WiFi access equipment
PLDT Global, Inc.
Cross-border digital platforms and other allied services
ACeS Philippines Cellular Satellite Corporation, or ACeS Philippines(a)
Satellite information and messaging services
88.5
11.5
Digitel Mobile Philippines, Inc., or DMPI, (a wholly-owned subsidiary of Digitel)
99.6
PLDT Clark Telecom, Inc., or ClarkTel
Telecommunications services
PLDT Subic Telecom, Inc., or SubicTel(a)
PLDT Global Corporation, or PLDT Global, and Subsidiaries
PLDT-Philcom, Inc., or Philcom, and Subsidiaries, or Philcom Group(a)
Talas Data Intelligence, Inc.(a)
Business infrastructure and solutions; intelligent data processing and implementation services and data analytics insight generation
Multisys Technologies Corporation, or Multisys(b)
Software development and IT solutions services
50.7
45.7
F-16
ePLDT, Inc., or ePLDT:
Information and communications infrastructure for internet-based services, e-commerce, customer relationship management and IT related services
IP Converge Data Services, Inc., or IPCDSI, and Subsidiary, or IPCDSI Group
Curo Teknika, Inc., or Curo(a)
Managed IT outsourcing
ABM Global Solutions, Inc., or AGS, and Subsidiaries, or AGS Group(a)
Internet-based purchasing, IT consulting and professional services
ePDS, Inc., or ePDS(a)
Bills printing and other related value-added services, or VAS
netGames, Inc.(a)
Gaming support services
57.5
MVP Rewards Loyalty Solutions, Inc., or MRSI(a)
Full-services customer rewards and loyalty programs
VITRO, Inc., or Vitro
ePLDT Capital Investment Pte. Ltd. or ePLDT Capital
Singapore
Investment holding and acquisition of companies
Digitel
Digitel Information Technology Services, Inc.(a)
Internet services
PLDT-Maratel, Inc., or Maratel(a)
98.0
Bonifacio Communications Corporation, or BCC
Telecommunications, infrastructure and related VAS
75.0
Pilipinas Global Network Limited, or PGNL, and Subsidiaries
International distributor of Filipino channels and content
64.6
PLDT Global Investments Holdings, Inc., or PGIH
PLDT Digital Investments Pte. Ltd., or PLDT Digital, and Subsidiaries
PLDT Communications and Energy Ventures, Inc., or PCEV
99.9
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The financial statements of our subsidiaries are prepared for the same reporting period as PLDT. We prepare our consolidated financial statements using uniform accounting policies for like transactions and other events with similar circumstances.
Additional Investment in Maya Innovations Holdings Pte. Ltd. (MIH)
On April 5, 2024, PCEV paid the subsequent consideration of US$15.3 million or Php857 million for 6.7 million MIH Class C2 convertible preferred shares and received warrants for 2.7 million shares valued at Php152 million, resulting in an increase of PCEV's ownership in MIH from 36.97% to 37.66%.
See Note 11 – Investment in Associates and Joint Venture – Investment in Associates.
Investment in Multisys
On January 5, 2024, PGIH entered into a Share Purchase Agreement for the sale of 227 common shares of Multisys, representing a 4.99% interest, for a total consideration of Php270 million. The transaction was completed and fully paid on January 12, 2024. Following this sale, PGIH retained ownership of 2,080 common shares representing 45.73% equity interest in Multisys. Pursuant to the Restated Shareholders’ and related Amendment Agreement signed on January 30, 2024 and March 1, 2024, respectively, PGIH remains entitled to nominate three out of the five directors in Multisys, who manage and control the operations of Multisys. Consequently, the results of operation and financial position of Multisys continue to be consolidated with the PLDT Group.
On April 2, 2025, PGIH entered into a Share Purchase Agreement for the purchase of 228 common shares of Multisys, representing a 5.01% interest, for a total consideration of Php257.5 million. The transaction was completed on April 5, 2025. Following this acquisition, PGIH owns 2,308 common shares representing 50.74% equity interest in Multisys. On April 16, 2025 and December 16, 2025, PGIH partially paid Php150 million and Php94.6 million, respectively, out of the total consideration. The balance of Php12.9 million remains outstanding as at December 31, 2025.
Investment in Kayana Solutions Inc., or Kayana (formerly Limitless Growth Ventures, Inc.)
In March 2024, PLDT invested in Kayana, to serve as a digital entity designed to harness the data assets of the MVP Group of Companies and provide a platform for a Group-wide digitalization initiatives. This collaboration marks the first step in a collective effort aimed at creating new growth opportunities and value within the MVP Group of Companies.
Kayana will leverage a technology platform capable of enabling the MVP Group of Companies to scale operations and achieve seamless integration of services and capabilities. Additionally, payments and rewards systems are expected to play a pivotal role in enhancing the overall user experience.
As at September 27, 2024, PLDT has invested a total of Php840 million in Kayana representing 60% equity interest.
On September 30, 2024, Kayana entered into share subscription agreements with its shareholders, wherein PLDT subscribed to additional common shares equivalent to Php46.5 million and the remaining shareholders subscribed to additional shares equivalent to Php523.5 million. As a result, PLDT’s equity ownership in Kayana was reduced to 45%, leading PLDT to account for its remaining interest as an investment in associate.
On September 1, 2025, Kayana entered into another share subscription agreement with its shareholders, wherein PLDT subscribed to additional common shares equivalent to Php594 million. PLDT’s equity ownership in Kayana remained at 45%. as at December 31, 2025, the subscription remains unpaid.
The following summarizes the subscription agreements entered into by PLDT with Kayana:
Number of Shares Acquired
(in millions)
March 24, 2024
754.5
September 27, 2024
85.5
September 30, 2024
46.5
September 1, 2025
594.0
1,480.5
As at December 31, 2025 and 2024, the carrying value of PLDT’s investment in Kayana amounted to Php1,355 million and Php853 million, respectively. See Note 11 – Investment in Associates and Joint Venture – Investment in Associates.
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Reduction of Capital in PLDT Capital Pte Ltd., or PLDT Capital
On May 6, 2024, the Directors of PLDT Capital approved the reduction of its issued and paid-up share capital from Php891 million, comprising 26,773,606 ordinary shares, to Php1 million, comprising 30,058 fully paid ordinary shares. The Accounting and Corporate Regulatory Authority of Singapore approved the capital reduction of PLDT Capital on July 12, 2024.
Discontinued Operations
In 2023, ePLDT completed the winding down of operations of certain subsidiaries. As a result, the operations of these discontinued ePLDT subsidiaries were classified as discontinued operations in the consolidated income statements.
The results of the operations of the discontinued ePLDT subsidiaries, net of intercompany transactions, for the year ended December 31, 2023 is as follows:
Expenses:
168
Cost of contract-specific services
192
Net operating loss
Other income (expenses):
Financing costs
Loss before and after tax from discontinued operations
Loss per share (Note 8):
Basic/Diluted
The net cash flows generated by (used in) the discontinued ePLDT subsidiaries, net of intercompany transactions, for the year ended December 31, 2023 are as follows:
Operating activities
(120
Investing activities
Financing activities
Net effect of foreign exchange rate changes on cash and cash equivalents
Net cash outflows
New Standards, Interpretations and Amendments
The accounting policies adopted are consistent with those of the previous financial year, except for the adoption of new amendment effective in 2025. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
Unless otherwise indicated, adoption of this new amendment did not have a material impact on the consolidated financial statements of the PLDT Group:
Summary of Material Accounting Policies
The following is the summary of material accounting policies we applied in preparing our consolidated financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
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Business Combinations and Goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value, and the amount of any noncontrolling interest in the acquiree. For each business combination, we elect whether to measure the components of the noncontrolling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in general operating costs.
When we acquire a business, we assess the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss. The fair value of previously held equity interest is then included in the amount of total consideration transferred.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a financial instrument within the scope of IFRS 9 is measured at fair value with the changes in fair value recognized in profit or loss. In accordance with IFRS 9, the contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognized in profit or loss.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for noncontrolling interests and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, we reassess whether we correctly identified all of the assets acquired and all of the liabilities assumed and review the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain on a bargain purchase is recognized in profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, we report in our consolidated financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, which is no longer than one year from the acquisition date, the provisional amounts recognized at acquisition date are retrospectively adjusted to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. During the measurement period, we also recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of our cash-generating units, or CGUs, that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill acquired in a business combination has yet to be allocated to identifiable CGUs because the initial accounting is incomplete, such provisional goodwill is not tested for impairment unless indicators of impairment exist and we can reliably allocate the carrying amount of goodwill to a CGU or group of CGUs that are expected to benefit from the synergies of the business combination.
Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the disposed operation and the portion of the CGU retained.
Investments in Associates
Investments in associates are accounted for using the equity method of accounting and are initially recognized at cost. The cost of the investments includes directly attributable transaction costs. The details of our investments in associates are disclosed in Note 11 – Investments in Associates and Joint Ventures – Investments in Associates.
Where there has been a change recognized directly in the equity of the associate, we recognize our share in such change and disclose this, when applicable, in our consolidated statements of comprehensive income and consolidated statements of
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changes in equity. Unrealized gains and losses resulting from our transactions with and among our associates are eliminated to the extent of our interests in those associates.
Our share in the profits or losses of our associates is included under “Other Expenses - Net” in our consolidated income statements. This is the profit or loss attributable to equity holders of the associate and net of the noncontrolling interest in the subsidiaries of the associate.
Joint Arrangements
When necessary, adjustments are made to bring the accounting policies of the joint venture in line with our policies. The details of our investments in joint ventures are disclosed in Note 11 – Investments in Associates and Joint Ventures – Investments in Joint Ventures.
Adjustments are made in our consolidated financial statements to eliminate our share of unrealized gains and losses on transactions between us and our joint venture. Our investment in the joint venture is carried at equity method until the date on which we cease to have joint control over the joint venture.
Upon loss of joint control over the joint venture, we measure and recognize our retained investment at fair value. Any difference between the carrying amount of the former joint venture upon loss of joint control and the fair value of the remaining investment and proceeds from disposal is recognized in profit or loss. When the remaining investment constitutes significant influence, it is accounted for as an investment in an associate with no remeasurement.
Foreign Currency Transactions and Translations
Our consolidated financial statements are presented in Philippine Peso, which is also the Parent Company’s functional currency. The Philippine Peso is the currency of the primary economic environment in which we operate. This is also the currency that mainly influences the revenue from and cost of rendering products and services. Each entity in our Group determines its own functional currency and items included in the separate financial statements of each entity are measured using that functional currency.
The functional and presentation currency of the entities under the PLDT Group (except for the subsidiaries discussed below) is the Philippine Peso.
Transactions in foreign currencies are initially recorded by entities under our Group at the respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rate of exchange prevailing at the end of the reporting period. All differences arising on settlement or translation of monetary items are recognized in our consolidated income statements except for foreign exchange differences that qualify as capitalizable borrowing costs for qualifying assets. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The gain or loss arising from transactions of non-monetary items measured at fair value is treated in line with the recognition of this gain or loss on the change in fair value of the items (i.e., translation differences on items whose fair value gain or loss is recognized in other comprehensive income or profit or loss are also recognized in other comprehensive income or profit or loss, respectively).
The functional currency of PLDT Global and certain of its subsidiaries, and PGNL and certain of its subsidiaries is the U.S. Dollar. As at the reporting date, the assets and liabilities of these subsidiaries are translated into Philippine Peso at the rate of exchange prevailing at the end of the reporting period, and income and expenses of these subsidiaries are translated monthly using the weighted average exchange rate for the month. The exchange differences arising on translation are recognized as a separate component of other comprehensive income as cumulative translation adjustments. Upon disposal of these subsidiaries, the amount of deferred cumulative translation adjustments recognized in other comprehensive income relating to subsidiaries is recognized in our consolidated income statements.
Foreign exchange gains or losses of the Parent Company and our Philippine-based subsidiaries are treated as taxable income or deductible expenses in the period such exchange gains or losses are realized.
Assets Classified as Held-for-Sale
We classify assets as held-for-sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Assets classified as held-for-sale are measured at the lower of their carrying amount and fair
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value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.
The criteria for held-for-sale classification are regarded as met only when the sale is highly probable, and the asset is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale is expected to be completed within one year from the date of the classification.
Property and equipment and intangible assets are not depreciated or amortized once classified as held-for-sale.
Assets and liabilities classified as held-for-sale are presented separately as current items in the consolidated statements of financial position.
Additional disclosures are provided in Note 9 – Property and Equipment – Sale and Leaseback of Telecom Towers and Note 10 – Leases. All other notes to the financial statements include amounts for continuing operations, unless indicated otherwise.
Financial Instruments – Initial recognition and subsequent measurement
Classification of financial assets
Financial assets are classified in their entirety based on the contractual cash flows characteristics of the financial assets and our business model for managing the financial assets. We classify our financial assets into the following measurement categories:
Contractual cash flows characteristics
In order for us to identify the measurement of our debt financial assets, a solely payments of principal and interest, or SPPI, test needs to be initially performed in order to determine whether the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Once a debt financial asset passed the SPPI test, business model assessment, which identifies our objective of holding the financial assets – hold to collect or hold to collect and sell, will be performed. If both of the conditions are met, the financial asset shall be measured either at FVOCI, if the business model is to hold to collect and sell, or amortized cost, if the business model is to hold to collect. Otherwise, it shall be measured at FVPL.
In making the assessment, we determine whether the contractual cash flows are consistent with a basic lending arrangement, i.e., interest includes consideration only for the time value of money, credit risk and other basic lending risks and costs associated with holding the financial asset for a particular period of time. In addition, interest can include a profit margin that is consistent with a basic lending arrangement. The assessment as to whether the cash flows meet the SPPI test is made in the currency in which the financial asset is denominated. Any other contractual terms that introduce exposure to risks or volatility in the contractual cash flows that is unrelated to a basic lending arrangement, such as exposure to changes in equity prices or commodity prices, do not give rise to contractual cash flows that are solely payments of principal and interest on the principal amount outstanding.
F-22
Business model
Our business model is determined at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. Our business model does not depend on management’s intentions for an individual instrument.
Our business model refers to how we manage our financial assets in order to generate cash flows. Our business model determines whether cash flows will result from collecting contractual cash flows, collecting contractual cash flows and selling financial assets or neither.
Financial assets at amortized cost
These financial assets are initially recognized at fair value plus directly attributable transaction costs and subsequently measured at amortized cost using the effective interest rate, or EIR, method, less any impairment in value. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the EIR. The amortization is included in ‘Other expenses – net’ in our consolidated income statements and is calculated by applying the EIR to the gross carrying amount of the financial asset, except for (i) purchased or originated credit-impaired financial assets and (ii) financial assets that have subsequently become credit-impaired, where, in both cases, the EIR is applied to the amortized cost of the financial asset. Losses arising from impairment are recognized in ‘Asset impairment’ in our consolidated income statements.
Our financial assets at amortized cost include debt instruments at amortized cost, cash and cash equivalents, short-term investments, trade and other receivables, and other financial assets as at December 31, 2025 and 2024. See Note 12 – Debt Instruments at Amortized Cost, Note 15 – Cash and Cash Equivalents, Note 16 – Trade and Other Receivables and Note 27 – Financial Assets and Liabilities.
Financial assets at FVPL
Financial assets at FVPL are measured at fair value. Included in this classification are derivative financial assets, equity investments held for trading and debt instruments with contractual terms that do not represent solely payments of principal and interest. Financial assets held at FVPL are initially recognized at fair value, with transaction costs recognized in our consolidated income statements as incurred. Subsequently, they are measured at fair value and any gains or losses are recognized in our consolidated income statements.
Additionally, even if the asset meets the amortized cost or the FVOCI criteria, we may choose at initial recognition to designate the financial asset at FVPL if doing so eliminates or significantly reduces a measurement or recognition inconsistency (an accounting mismatch) that would otherwise arise from measuring financial assets on a different basis.
Trading gains or losses are calculated based on the results arising from trading activities of the PLDT Group, including all gains and losses from changes in fair value for financial assets and financial liabilities at FVPL, and the gains or losses from disposal of financial investments.
Our financial assets at FVPL include derivative financial assets and equity investments as at December 31, 2025 and 2024. See Note 27 – Financial Assets and Liabilities.
Classification of financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Financial liabilities are subsequently measured at amortized cost, except for the following:
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A financial liability may be designated at FVPL if it eliminates or significantly reduces a measurement or recognition inconsistency (an accounting mismatch) or:
Where a financial liability is designated at FVPL, changes in fair value attributable to our own credit quality which is calculated by determining the changes in credit spreads above observable market interest rates are recognized in other comprehensive income, unless this treatment would create or enlarge an accounting mismatch, in which case they are recognized in profit or loss.
Our financial liabilities at FVPL include derivative financial liabilities and liability from redemption of preferred stock as at December 31, 2025 and 2024. See Note 19 – Equity – Redemption of Preferred Stock, Note 23 – Accrued Expenses and Other Current Liabilities and Note 27 – Financial Assets and Liabilities.
Our financial liabilities at amortized costs include interest-bearing financial liabilities, lease liabilities, customers’ deposits, dividends payable, certain accounts payable, certain accrued expenses and other current liabilities and certain deferred credits and other noncurrent liabilities, (except for statutory payables) as at December 31, 2025 and 2024. See Note 10 – Leases, Note 20 – Interest-bearing Financial Liabilities, Note 21 – Deferred Credits and Other Noncurrent Liabilities, Note 22 – Accounts Payable, Note 23 – Accrued Expenses and Other Current Liabilities and Note 27 – Financial Assets and Liabilities.
Reclassifications of financial instruments
We reclassify our financial assets when, and only when, there is a change in the business model for managing the financial assets. Reclassifications shall be applied prospectively, and any previously recognized gains, losses or interest shall not be restated.
We do not reclassify our financial assets when:
We do not reclassify our financial liabilities.
Offsetting of Financial Instruments
Financial assets and liabilities are offset, and the net amount is reported in the consolidated statements of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts; and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. We assess that it has a currently enforceable right of offset if the right is not contingent on a future event and is legally enforceable in the normal course of business, event of default, and event of insolvency or bankruptcy of the Group and all of the counterparties.
Impairment of Financial Assets
We recognize expected credit losses, or ECL for debt instruments that are measured at amortized cost and FVOCI.
No ECL is recognized on financial assets at FVPL.
ECLs are measured in a way that reflects the following:
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Financial assets migrate through the following three stages based on the change in credit quality since initial recognition:
Stage 1: 12-month ECL – not credit impaired
For credit exposures where there have not been significant increases in credit risk since initial recognition and that are not credit-impaired upon origination, the portion of lifetime ECLs representing the ECLs that result from all possible default events within the 12-months after the reporting date are recognized.
Stage 2: Lifetime ECL – not credit-impaired
For credit exposures where there have been significant increases in credit risk since initial recognition on an individual or collective basis but are not credit-impaired, lifetime ECLs representing the ECLs that result from all possible default events over the expected life of the financial asset are recognized.
Stage 3: Lifetime ECL – credit-impaired
Financial assets are credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of those financial assets have occurred. For these credit exposures, lifetime ECLs are recognized and interest revenue is calculated by applying the credit-adjusted EIR to the amortized cost of the financial asset.
Loss Allowances
Loss allowances are recognized based on 12-month ECL for debt instruments that are assessed to have low credit risk at the reporting date. A financial asset is considered to have low credit risk if:
We consider a debt instrument to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade’, or when the exposure is less than 30 days past due.
The loss allowances recognized in the period is impacted by a variety of factors, as described below:
F-25
Write-off Policy
We write-off a financial asset measured at amortized cost, in whole or in part, when the asset is considered uncollectible, and we have exhausted all practical recovery efforts and concluded that we have no reasonable expectations of recovering the financial asset in its entirety or a portion thereof. We write-off an account when all of the following conditions are met:
Simplified Approach
The simplified approach, where changes in credit risk are not tracked and loss allowances are measured at amounts equal to lifetime ECL, is applied to ‘Trade and other receivables’ and ‘Contract assets’. We have established a provision matrix for billed trade receivables and a vintage analysis for contract assets and unbilled trade receivables that is based on historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Derecognition of Financial Assets and Liabilities
Financial assets
A financial asset (or where applicable as part of a financial asset or part of a group of similar financial assets) is primarily derecognized when: (1) the right to receive cash flows from the asset has expired; or (2) we have transferred the right to receive cash flows from the asset or have assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either: (a) we have transferred substantially all the risks and rewards of the asset; or (b) we have neither transferred nor retained substantially all the risks and rewards of the asset, but have transferred control of the asset.
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or has expired.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in consolidated income statements.
The financial liability is also derecognized when equity instruments are issued to extinguish all or part of the financial liability. The equity instruments issued are recognized at fair value if it can be reliably measured, otherwise, it is recognized at the fair value of the financial liability extinguished. Any difference between the fair value of the equity instruments issued and the carrying value of the financial liability extinguished is recognized in consolidated income statements.
Derivative Financial Instruments and Hedge Accounting
Initial recognition and subsequent measurement
We use derivative financial instruments, such as foreign currency options and forward currency contracts to hedge its risk associated with foreign currency fluctuations. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
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The fair value of foreign currency options and forward currency contracts is determined using applicable valuation techniques. See Note 27 – Financial Assets and Liabilities.
Any gains or losses arising from changes in fair value on derivatives during the period that do not qualify for hedge accounting are taken directly to the “Other income (expense) – Gains (losses) on derivative financial instruments – net” in our consolidated income statements.
Cash flow hedges which meet the criteria for hedge accounting are accounted for as follows:
The effective portion of the gain or loss on the hedging instrument is recognized in other comprehensive income, while any ineffective portion is recognized immediately in our consolidated income statements. See Note 27 – Financial Assets and Liabilities for more details.
Amounts taken to other comprehensive income are transferred to our consolidated income statements when the hedged transaction affects our consolidated income statements, such as when the hedged financial income or financial expense is recognized or when a forecast transaction occurs. Where the hedged item is the cost of a non-financial asset or non-financial liability, the amounts taken to other comprehensive income are transferred to the initial carrying amount of the non-financial asset or liability.
If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognized in other comprehensive income are transferred to our consolidated income statements. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognized in other comprehensive income remain in other comprehensive income until the forecast transaction or firm commitment occurs.
We use a long-term foreign currency options agreement to hedge our foreign exchange exposure on certain outstanding loan balances. See Note 27 – Financial Assets and Liabilities.
Property and Equipment
Property and equipment, except for land, is stated at cost less accumulated depreciation and any accumulated impairment losses. Land is stated at cost less any impairment in value. The initial cost of property and equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the property and equipment to its working condition and location for its intended use. Such cost includes the cost of replacing component parts of the property and equipment when the cost is incurred, if the recognition criteria are met. When significant parts of property and equipment are required to be replaced at intervals, we recognize such parts as individual assets with specific useful lives and depreciate them accordingly. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the property and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs are recognized as expenses as incurred. The present value of the expected cost for the decommissioning of the asset after use is included in the cost of the asset if the recognition criteria for a provision are met.
Depreciation commences once the property and equipment are available for their intended use and are calculated on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives used in depreciating our property and equipment are disclosed in Note 9 – Property and Equipment.
The residual values, the estimated useful lives, and methods of depreciation are reviewed at least at each financial year-end and adjusted prospectively, if appropriate.
An item of property and equipment and any significant part initially recognized are derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in our consolidated income statements when the asset is derecognized.
Property under construction is stated at cost less any impairment in value. This includes the cost of construction, property and equipment not ready for intended use, capitalizable borrowing costs and other direct costs associated with construction. Property under construction is not depreciated until such time that the relevant assets are completed and available for its intended use.
Property under construction is transferred to the related property and equipment when the construction or installation and related activities necessary to prepare the property and equipment for their intended use have been completed, and the property and equipment are ready for operational use.
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Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Asset Retirement Obligations
We are legally required under various lease agreements to dismantle the installation on leased sites and restore such sites to their original condition at the end of the contract lease term. We recognize the liability measured at the present value of the estimated costs of these obligations and capitalize such costs as part of the balance of the related item of property and equipment and right-of-use asset. The amount of asset retirement obligations is accreted and such accretion is recognized as interest expense. See Note 10 – Leases and Note 21 – Deferred Credits and Other Noncurrent Liabilities.
Intangible Assets
Intangible assets acquired separately are measured at cost on initial recognition. The cost of intangible assets acquired from business combinations is initially recognized at fair value on the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. The useful lives of intangible assets are assessed at the individual asset level as either finite or indefinite.
Intangible assets with finite lives are amortized over the economic useful life using the straight-line method and assessed for impairment whenever there is an indication that the intangible assets may be impaired. At the minimum, the amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in our consolidated income statements.
Intangible assets with indefinite useful lives are not amortized but are tested for impairment annually either individually or at the CGU level. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether the indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis.
The estimated useful lives used in amortizing our intangible assets are disclosed in Note 14 – Goodwill and Intangible Assets.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in our consolidated income statements when the asset is derecognized.
Internally generated intangibles are not capitalized, and the related expenditures are charged against operations in the period in which the expenditures are incurred.
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the period in which they arise, including the corresponding tax effect. Fair values are determined based on an annual valuation performed by accredited external independent valuers applying a valuation model.
Investment properties are derecognized either when they have been disposed of (i.e., at the date the recipient obtains control) or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition. In determining the amount of consideration from the derecognition of investment property, we consider the effects of variable consideration, existence of a significant financing component, non-cash consideration, and consideration payable to the buyer (if any).
Transfers are made to, or from, investment property when, and only when there is a change in use.
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For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use.
If owner-occupied property becomes an investment property, we account for such property in accordance with IAS 16, Property and Equipment. The difference between the carrying amount of the property in accordance with IAS 16 and its fair value is treated the same way as revaluation in accordance with IAS 16. Any resulting decrease in the carrying amount of the property is recognized in profit or loss. However, to the extent that an amount is included in revaluation surplus for that property, the decrease in recognized in other comprehensive income and reduces the revaluation surplus within equity. Any resulting increase in the carrying amount is recognized in profit or loss to the extent that the increase reverses a previous impairment loss for that property. The amount recognized in profit or loss does not exceed the amount needed to restore the carrying amount to the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized. Any remaining part of the increase in carrying amount is recognized in other comprehensive income and increases the revaluation surplus within equity. On subsequent disposal of the investment property, the revaluation surplus included in equity may be transferred to retained earnings. The transfer from revaluation surplus to retained earnings is not made through profit or loss.
Inventories and Supplies
Inventories and supplies, which include cellular and landline phone units, materials, spare parts, terminal units and accessories, are valued at the lower of cost and net realizable value.
Costs incurred in bringing inventories and supplies to its present location and condition are accounted for using the weighted average cost method. Net realizable value is determined by either estimating the selling price in the ordinary course of business, less the estimated cost to sell or determining the prevailing replacement costs.
Impairment of Non-Financial Assets
We assess at each reporting period whether there is an indication that an asset may be impaired. If any indication exists, or when the annual impairment testing for an asset is required, we make an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use, or VIU. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent from those of other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing the VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining the fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses are recognized in our consolidated income statements.
For assets, excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, we make an estimate of the recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. If this is the case, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation and amortization, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in our consolidated income statements. After such reversal, the depreciation and amortization charges are adjusted in future years to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining economic useful life.
The following assets have specific characteristics for impairment testing:
Property and equipment, right-of-use, or ROU, assets, and intangible assets with finite useful lives
For property and equipment and ROU assets, we assess impairment on the basis of impairment indicators such as evidence of internal obsolescence or physical damage. For intangible assets with finite useful lives, we assess for impairment whenever there is an indication that the intangible assets may be impaired. See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Impairment of non-financial assets, Note 9 – Property and Equipment, Note 10 – Leases and Note 14 – Goodwill and Intangible Assets for further disclosures relating to impairment of non-financial assets.
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Investments in associates and joint ventures
We determine at the end of each reporting period whether there is any objective evidence that our investments in associates and joint ventures are impaired. If this is the case, the amount of impairment is calculated as the difference between the recoverable amount of the investments in associates and joint ventures, and its carrying amount. The amount of impairment loss is recognized in our consolidated income statements. See Note 11 – Investments in Associates and Joint Ventures for further disclosures relating to impairment of non-financial assets.
Goodwill
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU, or group of CGUs, to which the goodwill relates. When the recoverable amount of the CGU, or group of CGUs, is less than the carrying amount of the CGU, or group of CGUs, to which goodwill has been allocated, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.
See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Impairment of non-financial assets and Note 14 – Goodwill and Intangible Assets for further disclosures relating to impairment of non-financial assets.
Intangible asset with indefinite useful life
Intangible asset with indefinite useful life is not amortized but is tested for impairment annually either individually or at the CGU level, as appropriate. We calculate the amount of impairment as being the difference between the recoverable amount of the intangible asset or the CGU, and its carrying amount and recognize the amount of impairment in our consolidated income statements. Impairment losses relating to intangible assets can be reversed in future periods.
Fair Value Measurement
We measure financial instruments such as derivatives, financial assets at FVPL, assets classified as held-for-sale and -financial assets such as investment properties and pension plan assets, at fair value at each reporting date. The fair values of investment properties are disclosed in Note 13 – Investment Properties. The fair values of the pension plan assets are disclosed in Note 25 – Pension and Other Employee Benefits. The fair values of financial instruments measured at amortized cost are disclosed in Note 27 – Financial Assets and Liabilities.
Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: (i) in the principal market for the asset or liability; or (ii) in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to us.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
We use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in our consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: (i) Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities; (ii) Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and (iii) Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
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For assets and liabilities that are recognized in our consolidated financial statements on a recurring basis, we determine whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
We determine the policies and procedures for both recurring fair value measurement, such as investment properties and unquoted FVPL financial assets, and for non-recurring measurement, such as assets held for distribution in discontinued operation.
External valuers are involved for valuation of significant assets, such as investment properties. Involvement of external valuers is decided upon annually. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. At each reporting date, we analyze the movements in the values of assets and liabilities which are required to be remeasured or reassessed as per our accounting policies. For this analysis, we verify the major inputs applied in the latest valuation by agreeing the information in the valuation computation with the contracts and other relevant documents.
We, in conjunction with our external valuers, also compare the changes in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable. This includes a discussion of the major assumptions used in the valuations. For the purpose of fair value disclosures, we have determined the classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Our revenues are principally derived from providing the following telecommunications services: cellular voice, SMS and data services in the wireless business; and local exchange, international and national long distance, data and other network, and information and communications services in the fixed line business.
Services may be rendered separately or bundled with goods or other services. The specific recognition criteria are as follows:
Postpaid service arrangements include fixed monthly charges (including excess of consumable fixed monthly service fees) generated from cellular voice, short messaging services, or SMS, and data services through the postpaid plans of Smart from local exchange services primarily through landline and related services, and from fixed line and other network services primarily through broadband and leased line services, which we recognize on a straight-line basis over the customer’s subscription period. Services provided to postpaid subscribers are billed throughout the month according to the billing cycles of subscribers. Services availed by subscribers in addition to these fixed fee arrangements are charged separately at their stand-alone selling prices and recognized as the additional service is provided or as availed by the subscribers.
Prepaid service revenues arise from the proceeds from over-the-air reloading channels and prepaid cards are initially recognized as contract liability and realized upon actual usage of the airtime value for voice, SMS, mobile data and other VAS, prepaid unlimited and bucket-priced SMS and call subscriptions, net of bonus credits from load packages purchased, such as free additional call minutes, SMS, data allocation or airtime load, or upon expiration, whichever comes earlier.
We also consider recognizing revenue from the expected expiry of airtime load in proportion to the pattern of rights exercised by the customer if we expect to be entitled to that expired amount. If we do not expect to be entitled to an expired amount based on historical experience with the customers, then we recognize the expected expired amount as revenue when the likelihood of the prepaid customer exercising its remaining rights becomes remote.
Interconnection fees and charges arising from the actual usage of airtime value or subscriptions are recorded as incurred.
Revenue from international and national long-distance calls carried via our network is generally based on rates which vary with distance. Revenue from both wireless and fixed line long distance calls are recognized as the service is provided. In general, non-refundable upfront fees, such as activation fees, that do not relate to the transfer of a promised good or service, are deferred and recognized as revenue throughout the estimated average customer relationship period, and the related incremental costs incurred are similarly deferred and recognized as expense over the same period, if such costs generate or enhance resources of the entity and are expected to be recovered.
Activation fees for both voice and data services are also considered as a single performance obligation together with monthly service fees, recognized over the estimated average customer relationship period.
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In revenue arrangements, which involve bundled sales of mobile devices and accessories (non-service component) and telecommunication services (service component), the total transaction price is allocated based on the relative stand-alone selling prices of each distinct performance obligation. Stand-alone selling price is the price at which we sell the good or service separately to a customer. However, if goods or services are not currently offered separately, we use the adjusted market or cost-plus margin method to determine the stand-alone selling price to be used in the transaction price allocation. We adjust the transaction price for the effects of the time value of money if the timing of the payment and delivery of goods or services do not coincide, effects of which are considered as containing a significant financing component.
Activation services and installation services for voice and data services that are not a distinct performance obligation are considered together with monthly voice and data services as a single performance obligation, recognized over the estimated average customer relationship period since the subscriber cannot benefit from the installation services on its own or together with other resources that are readily available to the subscriber. The related incremental costs are recognized in the same manner in our consolidated income statements, if such costs are expected to be recovered. On the other hand, custom-built installation services provided to data services subscribers are considered a distinct separate performance obligation and is recognized when services are rendered.
Revenues from the sale of non-service component are recognized at the point in time when the goods are delivered while revenues from telecommunication services component are recognized on a straight-line basis over the contract period when the services are provided to subscribers.
Significant Financing Component
The non-service component included in contracts with customers have significant financing components considering the period between the time of the transfer of control over the mobile device and the customer’s payment of the price of the mobile device, which is more than one year.
The transaction price for such contracts is determined by discounting the amount of promised consideration using the appropriate discount rate. We concluded that there is a significant financing component for those contracts where the customer elects to pay in arrears considering the length of time between the transfer of mobile device to the customer and the customer’s payment, as well as the prevailing interest rates in the market adjusted with customer credit spread.
Customer Loyalty Program
Through our customer loyalty program called Giga Points, points are earned through subscription of promo, purchase of load, and payment of bill for postpaid subscribers. Points are also earned through other activities such as daily login in the Smart App. These points can be used to redeem items such as giga promos, bill rebates, content subscription, discounts, exclusive tickets, and more.
Our contract with customers for revenue-related activity includes a promise to provide future telco services or rights to third-party services in the form of earning points. We consider these revenue-related earnings as performance obligation and the transaction price is allocated to each performance obligation. For earnings on non-revenue activity, we recognize a financial liability upon redemption of the points from third party partners.
We also offer PLDT Home Rewards. This customer loyalty program is available exclusively to active PLDT Home customers except for Home Biz and Corporate accounts which are not currently eligible for enrollment. Under this program, PLDT Home customers are granted points to incentivize customer-related activities. Points are earned thru enrollment, payment on time, upgrade, availment of VAS add-on etc.
Interconnection revenues for call termination, call transit and network usages are recognized in the period in which the traffic occurs. Revenues related to local, long distance, network-to-network, roaming and international call connection services are recognized when the call is placed, or connection is provided, and the equivalent amounts charged to us by other carriers are recorded under interconnection costs in our consolidated income statements. Inbound revenue and outbound charges are based on agreed transit and termination rates with other foreign and local carriers.
Variable consideration
We assessed that a variable consideration exists in certain interconnection agreements where there is a monthly aggregation period and the rates applied for the total monthly traffic will depend on the total traffic for the month. We
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also consider whether contracts with carriers contain volume commitment or tiering arrangements whereby the rate being charged will change upon meeting certain volume of traffic. We estimate the amount of variable consideration to which we are entitled and included in the transaction price some or all of the amount of variable consideration estimated arising from these agreements, unless the impact is not material.
Revenues from VAS include streaming and downloading of games, music, video contents, loan services, messaging services, applications and other digital services which are only arranged for by us on behalf of third-party content providers. The amount of revenue recognized is net of content provider’s share in revenue. Revenue is recognized at a point in time upon service availment. We act as an agent for certain VAS arrangements.
Revenue from server hosting, co-location services and customer support services are recognized over the period that the services are performed.
Subscriber Contract Costs
Costs to obtain a contract with customers, such as commission, and costs to fulfill the contract, such as installation and Customer Premises Equipment (CPE) costs, are capitalized if we expect to recover those costs. These subscriber contract costs are stated at cost net of accumulated amortization and impairment losses. Subscriber contract costs are amortized on a systematic basis consistent with the pattern of transfer of goods and services to which the assets relates.
The amortization of costs to obtain and costs to fulfill are presented as part of general operating costs, and depreciation and amortization, respectively, in the consolidated income statements.
Impairment losses are recognized to the extent that the carrying amount of the subscriber contract costs exceed the net of (i) remaining amount of consideration that we expect to receive in exchange for the goods or services to which the asset relates, less (ii) any costs that relate directly to providing those goods or services that have not yet been recognized as expenses.
The disclosures of significant accounting judgments, estimates and assumptions relating to revenues from contracts with customers are provided in Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Identifying performance obligations.
Cost of Devices, Accessories and Contract-Specific Services
Cost of devices and accessories
This refers to the cost of devices such as mobile handsets, phone units, and broadband and data modems sold to subscribers.
This refers to the costs from third-party vendors that are directly identifiable and distinct to specific customer contracts where we are the principal, such as content, license, and maintenance/warranty costs. Costs not identifiable and distinct to specific customer contracts such as compensation and benefits, and equipment depreciation are excluded.
Retirement Benefits
PLDT and certain of its subsidiaries are covered under Republic Act No. 7641 otherwise known as “The Philippine Retirement Law”.
PLDT has separate and distinct retirement plans for itself and some of its Philippine-based operating subsidiaries, administered by the respective Funds’ Trustees, covering permanent employees. Retirement costs are separately determined using the projected unit credit method. This method reflects services rendered by employees to the date of valuation and incorporates assumptions concerning employees’ projected salaries.
Retirement costs consist of the following:
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Service cost (which includes current service costs, past service costs and gains or losses on curtailments and non-routine settlements) is recognized as part of “General operating costs – Compensation and employee benefits” account in our consolidated income statements. These amounts are calculated periodically by an independent qualified actuary.
Net interest on the net defined benefit asset or obligation is the change during the period in the net defined benefit asset or obligation that arises from the passage of time which is determined by applying the discount rate based on the government bonds to the net defined benefit asset or obligation. Remeasurements, comprising actuarial gains and losses, return on plan assets (excluding net interest on defined benefit obligation) and any change in the effect of the asset ceiling are recognized immediately in other comprehensive income in the period in which they occur. Remeasurements are not classified to profit or loss in subsequent periods. Net defined benefit asset is recognized as part of “Prepayments, and other nonfinancial assets - net of current portion” and net defined benefit obligation is recognized as part of “Pension and other employee benefits” in our consolidated statements of financial position.
The net defined benefit asset or obligation comprises the present value of the defined benefit obligation (using a discount rate based on government bonds, as explained in Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Estimating pension benefit costs and other employee benefits), net of the fair value of plan assets out of which the obligations are to be settled directly. Plan assets are assets held by a long-term employee benefit fund or qualifying insurance policies and are not available to our creditors nor can they be paid directly to us. Fair value is based on market price information and in the case of quoted securities, the published bid price and in the case of unquoted securities, the discounted cash flow using the income approach. The value of any defined benefit asset recognized is restricted to the asset ceiling which is the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan. See Note 25 – Pension and Other Employee Benefits – Defined Benefit Pension Plans for more details.
Smart and certain subsidiaries maintain a defined contribution plan that covers all regular full-time employees under which it pays fixed contributions based on the employees’ monthly salaries and provide for qualified employees to receive a defined benefit minimum guarantee. The defined benefit minimum guarantee is equivalent to a certain percentage of the monthly salary payable to an employee at normal retirement age with the required credited years of service based on the provisions of Republic Act No. 7641.
Accordingly, Smart and certain subsidiaries account for its obligation under the higher of the defined benefit obligation related to the minimum guarantee and the obligation arising from the defined contribution plan.
For the defined benefit minimum guarantee plan, the liability is determined based on the present value of the excess of the projected defined benefit obligation over the projected defined contribution obligation at the end of the reporting period. The defined benefit obligation is calculated annually by a qualified independent actuary using the projected unit credit method. Smart and certain subsidiaries determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense (income) and other expenses (income) related to the defined benefit plan are recognized in our consolidated income statements.
Remeasurements, comprising actuarial gains and losses, return on plan assets (excluding amounts included in net interest), and any change in the effect of the asset ceiling, are recognized immediately in other comprehensive income in the period in which they occur.
The defined contribution liability, on the other hand, is measured at the fair value of the defined contribution assets upon which the defined contribution benefits depend, with an adjustment for margin on asset returns, if any, where this is reflected in the defined contribution benefits.
When the benefits of the plan are changed or when the plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in our profit or loss. Gains or losses on the settlement of the defined benefit plan are recognized when the settlement occurs. See Note 25 – Pension and Other Employee Benefits – Defined Contribution Plans for more details.
Employee benefit costs include current service cost, past service cost, and net interest on the net defined benefit obligation, which are recognized in profit or loss. Remeasurements of the net defined benefit obligation, including actuarial gains and losses, are recognized immediately in other comprehensive income.
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The long-term employee benefit liability comprises the present value of the defined benefit obligation (using a discount rate based on government bonds) at the end of the reporting period and is determined using the projected unit credit method. See Note 25 – Pension and Other Employee Benefits – Other Long-term Employee Benefits for more details.
Leases
We assess at contract inception whether the contract is, or contains, a lease that is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for a consideration.
As a Lessee. We apply a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. We recognize lease liabilities to make lease payments and ROU assets representing the right to use the underlying assets.
We recognize ROU assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). ROU assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of ROU assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless it is reasonably certain that we obtain ownership of the leased asset at the end of the lease term, the recognized ROU assets are depreciated on a straight-line basis over the shorter of its estimated useful life, or EUL, and the lease term. ROU assets are subject to impairment. Refer to the accounting policies in impairment of non-financial assets section.
At the commencement date of the lease, we recognize lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option if reasonably certain to be exercised and payments of penalties for terminating a lease, if the lease term reflects exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, we use the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
As a Lessor. Leases in which we do not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income is accounted for on a straight-line basis over the lease term and is included in revenue in our consolidated income statements due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term as rental income.
Sale and Leaseback. If we transfer an asset to another entity (the buyer-lessor) and lease that asset back from the buyer-lessor, we account for the transfer contract and the lease by applying the requirements of IFRS 16. We first apply the requirements for determining when a performance obligation is satisfied in IFRS 15 to determine whether the transfer of an asset is accounted for as a sale of that asset.
For transfer of an asset that satisfies the requirements of IFRS 15 to be accounted for as a sale of the asset, we measure the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained by us. Accordingly, we recognize only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor.
If the transfer of an asset does not satisfy the requirements of IFRS 15 to be accounted for as a sale of the asset, we continue to recognize the transferred asset and recognize a financial liability equal to the transfer proceeds. We account for the financial liability applying IFRS 9.
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Income Taxes
Current income tax
Current income tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted as at the end of the reporting period where we operate and generate taxable income.
Current income tax relating to items recognized directly in equity is recognized in equity and not in our consolidated income statements. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred income tax
Deferred income tax is provided using the balance sheet liability method on all temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the end of reporting period.
Deferred tax liabilities are recognized for all taxable temporary differences, except (a) where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting income nor taxable income or loss; and (b) in respect of taxable temporary differences associated with investments in subsidiaries, associates and interest in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax, however, is not recognized when (a) it arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting income nor taxable income or loss; and (b) in respect of deductible temporary differences associated with investments in subsidiaries, associates and interest in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable income will be available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable income will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized, or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end of each reporting period.
Contingencies
Contingent liabilities are not recognized in our consolidated financial statements. Unless the possibility of an outflow of resources embodying economic benefits is probable and measurable, they are disclosed in the notes to our consolidated financial statements. On the other hand, contingent assets are not recognized in our consolidated financial statements but are disclosed in the notes to our consolidated financial statements when an inflow of economic benefits is probable.
Segment Information
PLDT and its subsidiaries are organized into three business segments. Such business segments are the bases upon which we report our primary segment information. Financial information on business segments is presented in Note 4 – Operating Segment Information.
Events After the End of the Reporting Period
Post reporting period events up to the date of approval of the Board of Directors that provide additional information about our financial position at the end of the reporting period (adjusting events) are reflected in our consolidated financial statements. Post reporting period events that are classified as non-adjusting events are disclosed in the notes to our consolidated financial statements when material.
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Preferred and common stocks are measured at par value for all shares issued. Incremental costs incurred directly attributable to the issuance of new shares are shown in equity as a deduction from proceeds, net of tax. Proceeds and/or fair value of considerations received in excess of par value are recognized as capital in excess of par value in our consolidated statements of changes in equity and consolidated statements of financial position.
Treasury stocks are our own equity instruments which are reacquired and recognized at cost and presented as reduction in equity. No gain or loss is recognized in our consolidated income statements on the purchase, sale, reissuance or cancellation of our own equity instruments. Any difference between the carrying amount and the consideration upon reissuance or cancellation of shares is recognized as capital in excess of par value in our consolidated statements of changes in equity and consolidated statements of financial position.
Change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity transaction and any difference between the amount by which the NCI is adjusted and the fair value of the consideration paid or received is recognized directly in equity attributable to the owners of the parent in the consolidated statement of changes in equity.
Retained earnings represent our net accumulated earnings less cumulative dividends declared.
Other comprehensive income comprises of income and expenses, including reclassification adjustments, that are not recognized in our consolidated income statements as required or permitted by IFRS Accounting Standards.
Standards Issued But Not Yet Effective
Pronouncements issued but not yet effective are listed below. The PLDT Group intends to adopt the following pronouncements when they become effective. Unless otherwise indicated, adoption of these pronouncements is not expected to have a material impact on the PLDT Group’s consolidated financial statements.
Effective beginning on or after January 1, 2026
Effective beginning on or after January 1, 2027
The standard replaces IAS 1, Presentation of Financial Statements, introducing new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new.
The standard requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and it also includes new requirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financial statements and the notes.
In addition, narrow-scope amendments have been made to IAS 7, Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from ‘profit or loss’ to ‘operating profit or loss’ and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards.
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PLDT Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements. The initial expected material impacts on PLDT Group’s financial statements are, as follows:
Deferred effectivity
The preparation of our consolidated financial statements in conformity with IFRS Accounting Standards requires us to make judgments, estimates and assumptions that affect the reported amounts of our revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the end of each reporting period. The uncertainties inherent in these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets or liabilities affected in the future years.
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See Note 10 – Leases for information on potential future payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.
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See related discussion in Note 9 – Property and Equipment and Note 10 – Leases.
See related discussion in Note 11 – Investments in Associates and Joint Ventures – Investments in Associates – Investment of ePLDT in MediaQuest PDRs.
Based on these rights, PLDT and Globe have joint control over VTI, Bow Arken and Brightshare, which is defined in IFRS 11, Joint Arrangements, as a contractually agreed sharing of control of an arrangement and exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Consequently, PLDT and Globe classified the joint arrangement as a joint venture in accordance with IFRS 11 given that PLDT and Globe each have the right to 50% of the net assets of VTI, Bow Arken and Brightshare and their respective subsidiaries.
Accordingly, PLDT accounted for the investment in VTI, Bow Arken and Brightshare using the equity method of accounting in accordance with IAS 28. Under the equity method of accounting, the investment is initially recognized at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets. See Note 11 – Investments in Associates and Joint Ventures – Investment in Joint Ventures – Investments of PLDT in VTI, Bow Arken and Brightshare.
Our consolidated financial statements include additional information about subsidiaries that have non-controlling interest, or NCI, that are material to us. See Note 6 – Components of Other Comprehensive Loss. We determined material partly-owned subsidiaries as those with balance of NCI greater than 5% of the total equity as at December 31, 2025 and 2024.
Our consolidated financial statements include additional information about associates and joint ventures that are material to us. See Note 11 – Investments in Associates and Joint Ventures. We determined material associates and joint ventures are those investees where our carrying amount of investments is greater than 5% of the total investments in associates and joint ventures as at December 31, 2025 and 2024.
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Further details on subscriber contract costs are disclosed in Note 18 – Prepayments and Other Non-Financial Assets.
We use benchmark rates from partner banks based on the tenor of our loan borrowings plus a spread adjustment based on our credit worthiness. See Note 10 – Leases and Note 21 – Deferred Credits and Other Noncurrent Liabilities.
IAS 36 requires that an impairment review be performed when certain impairment indicators are present. In the case of goodwill and intangible assets with indefinite useful life, at a minimum, such assets are subject to an impairment test annually and whenever there is an indication that such assets may be impaired. This requires an estimation of the VIU of the CGUs to which these assets are allocated. The VIU calculation requires us to make an estimate of the expected future cash flows from the CGU and to choose a suitable discount rate in order to calculate the present value of those cash flows. See Note 14 – Goodwill and Intangible Assets – Impairment Testing of Goodwill for the key assumptions used to determine the VIU of the relevant CGUs.
Determining the recoverable amount of property and equipment, ROU assets, investments in associates and joint ventures, goodwill and intangible assets, prepayments and other noncurrent assets, requires us to make estimates and assumptions in the determination of future cash flows expected to be generated from the continued use and ultimate disposition of such assets. Future events could cause us to conclude that property and equipment, ROU assets, investments in associates and joint ventures, goodwill and intangible assets, and prepayments and other noncurrent assets associated with an acquired business are impaired. Any resulting impairment loss could have a material adverse impact on our financial position and financial performance.
See Note 4 – Operating Segment Information, Note 5 – Income and Expenses – Asset Impairment, and Note 9 – Property and Equipment.
The carrying values of our property and equipment, ROU assets, investments in associates and joint ventures, goodwill and intangible assets, and prepayments and other non-financial assets are separately disclosed in Note 9 – Property and Equipment, Note 10 – Leases, Note 11 – Investments in Associates and Joint Ventures, Note 14 – Goodwill and Intangible Assets and Note 18 – Prepayments and Other Non-Financial Assets, respectively.
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Overall, the total depreciation and amortization of property and equipment from continuing operations amounted to Php41,881 million, Php41,224 million and Php51,543 million for the years ended December 31, 2025, 2024 and 2023, respectively, while that from discontinued operations amounted to nil for the years ended December 31, 2025 and 2024, and Php2 million for the year ended December 31, 2023. Total carrying values of property and equipment, net of accumulated depreciation and amortization, amounted to Php327,989 million and Php318,069 million as at December 31, 2025 and 2024, respectively. See Note 4 – Operating Segment Information and Note 9 – Property and Equipment.
We carry our investment properties at fair value, with changes in fair value being recognized in the consolidated income statements and in other comprehensive income for transfers from owner-occupied property to investment property. The fair values of the investment properties have been determined based on appraisal performed by independent firms of appraisers, industry specialists in valuing these types of investment properties.
The valuation for land is based on a market approach valuation technique while the valuation for building and land improvements is based on a cost approach valuation technique using current material and labor costs for improvements based on external and independent reviewers. See Note 13 – Investment Properties.
We review the carrying amounts of deferred income tax assets at the end of each reporting period and reduce these to the extent that these are no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax assets to be utilized. Our assessment on the recognition of deferred income tax assets on deductible temporary differences is based on the level and timing of forecasted taxable income of the subsequent reporting years. This forecast is based on our past results and future expectations on revenues and expenses as well as future tax planning strategies. Based on
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this, management expects that we will generate sufficient taxable income to allow all or part of our deferred income tax assets to be utilized.
Based on the above assessment, our consolidated unrecognized deferred income tax assets amounted to Php934 million and Php803 million as at December 31, 2025 and 2024, respectively. Total consolidated provision for deferred income tax amounted to Php3,710 million, Php3,401 million and Php1,206 million for the years ended December 31, 2025, 2024 and 2023, respectively. Total consolidated recognized net deferred income tax assets amounted to Php11,582 million and Php14,643 million as at December 31, 2025 and 2024, respectively. See Note 4 – Operating Segment Information and Note 7 – Income Taxes.
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Total provision for expected credit losses for trade and other receivables from continuing operations amounted to Php3,838 million, Php3,875 million and Php4,119 million for the years ended December 31, 2025, 2024 and 2023, respectively, while that from discontinued operations amounted to nil for the years ended December 31, 2025 and 2024, and Php4 million for the year ended December 31, 2023. Trade and other receivables, net of allowance for expected credit losses, amounted to Php31,367 million and Php31,612 million as at December 31, 2025 and 2024, respectively. See Note 5 – Income and Expenses and Note 16 – Trade and Other Receivables.
Total impairment losses on contract assets amounted to Php101 million, Php181 million and Php224 million for the years ended December 31, 2025, 2024 and 2023, respectively. Contract assets, net of allowance for expected credit losses, amounted to Php1,487 million and Php1,886 million as at December 31, 2025 and 2024, respectively. See Note 5 – Income and Expenses – Contract Balances.
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The net consolidated pension benefit costs amounted to Php1,434 million, Php1,441 million and Php1,426 million for the years ended December 31, 2025, 2024 and 2023, respectively. The prepaid benefit costs amounted to Php810 million and Php975 million as at December 31, 2025 and 2024, respectively. The accrued benefit costs amounted to Php3,810 million and Php3,548 million as at December 31, 2025 and 2024, respectively. See Note 5 – Income and Expenses – Compensation and Employee Benefits, Note 18 – Prepayments and Note 25 – Pension and Other Employee Benefits.
The accrued incentive payable amounted to nil and Php3,406 million as at December 31, 2025 and 2024, respectively. See Note 5 – Income and Expenses – Compensation and Employee Benefits and Note 25 – Pension and Other Employee Benefits – Other Long-term Employee Benefits.
Provision for asset retirement obligations is recognized in the period in which this is incurred if a reasonable estimate can be made. This requires an estimation of the cost to restore or dismantle on a per square meter basis, depending on the location, and is based on the best estimate of the expenditure required to settle the obligation at the future restoration or dismantlement date, discounted using a pre-tax rate that reflects the current market assessment of the time value of money and, where appropriate, the risk specific to the liability. Total provision for asset retirement obligations amounted to Php1,836 million and Php1,752 million as at December 31, 2025 and 2024, respectively. See Note 21 – Deferred Credits and Other Noncurrent Liabilities.
We are currently involved in various legal proceedings and tax assessments. Our estimates of the probable costs for the resolution of these claims have been developed in consultation with our counsel handling the defense in these matters and are based upon our analysis of potential results. Based on management’s assessment, appropriate provisions were made. We currently do not believe these proceedings could materially reduce our revenues and profitability. It is possible, however, that future financial position and performance could be materially affected by changes in our estimates or the effectiveness of our strategies relating to these proceedings and assessments. See Note 26 – Provisions and Contingencies.
When the fair value of financial assets and financial liabilities recorded in our consolidated statements of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flows model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Other than those whose carrying amounts are reasonable approximations of fair values, total fair values of noncurrent financial assets and noncurrent financial liabilities as at December 31, 2025 amounted to Php3,322 million and Php274,220 million, respectively, while the total fair values of noncurrent financial assets and noncurrent financial liabilities as at December 31, 2024 amounted to Php3,079 million and Php247,962 million, respectively. See Note 27 – Financial Assets and Liabilities.
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Operating segments are components of the PLDT Group that engage in business activities from which they may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of PLDT Group). The operating results of these operating segments are regularly reviewed by the Executive Committee to make decisions about how resources are to be allocated to each of the segments and to assess their performances, and for which discrete financial information is available.
For management purposes, we are organized into business units based on our products and services. We have three reportable operating segments as follows:
See Note 2 – Summary of Material Accounting Policies for further discussion.
Segment revenues, segment expenses and segment results include transfers between business segments. These transfers are eliminated in full upon consolidation.
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The amounts of segment assets and liabilities and segment profit or loss are based on measurement principles that are similar to those used in measuring the assets and liabilities and profit or loss in our consolidated financial statements, which is in accordance with IFRS Accounting Standards. The segment revenues, net income, and other segment information of our reportable operating segments for the years ended December 31, 2025, 2024 and 2023, and as at December 31, 2025 and 2024 are as follows:
December 31, 2025
External customers
102,616
115,772
Service revenues
Non-service revenues
5,747
700
15,038
699
Total revenues
Equity share in net income (losses) of associates and joint ventures
(428
Net income / Segment profit
Assets
Operating assets
305,477
297,575
24,919
(57,150
570,821
280
43,234
8,911
Deferred income tax assets – net
5,684
5,235
572
311,441
346,044
33,921
(56,578
Liabilities
Operating liabilities
254,793
282,827
1,020
(31,970
506,670
Deferred income tax liabilities
Total liabilities
254,809
282,884
1,022
Other segment information
Capital expenditures, including capitalized interest (Note 9)(1)(2)
29,203
31,133
60,336
(1) Net of additions subject to sale and leaseback from tower companies.
(2) Includes capitalization of subscriber contract cost to fulfill.
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104,944
111,889
790
14,601
916
(990
Net income (loss) / Segment profit (loss)
326,672
291,635
19,879
(82,318
555,868
44,758
7,898
6,537
8,014
333,317
344,407
27,839
(82,288
280,160
287,993
1,182
(62,855
506,480
280,175
288,036
(62,853
40,767
37,294
185
78,246
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(in million pesos, except for EBITDA margin)
103,718
107,235
397
683
13,499
13,498
(35
1,016
(2,806
Discontinued operations (Notes 2 and 8)
36,797
48,286
85,083
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The following table presents our revenues from external customers by category of products and services for the years ended December 31, 2025, 2024 and 2023:
Wireless revenues
Service revenues:
Fixed wireless broadband
Non-service revenues ─
Total wireless revenues
Fixed line revenues
Voice and miscellaneous
30,033
28,165
25,213
Sale of phone units, devices and others
Total fixed line revenues
Disclosure of the geographical distribution of our revenues from external customers and the geographical location of our total assets are not provided since majority of our consolidated revenues are derived from our operations within the Philippines.
There is no revenue transaction with a single external customer that accounted for 10% or more of our consolidated revenues from external customers for the years ended December 31, 2025, 2024 and 2023.
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Revenues from Contracts with Customers
Disaggregation of Revenue
We derived our revenue from the transfer of goods and services over time and at a point in time in the following major product lines. This is consistent with the revenue information that is disclosed for each reportable segment under IFRS 8, Operating Segments. See Note 4 – Operating Segment Information.
Set out is the disaggregation of PLDT Group’s revenues from contracts with customers for the years ended December 31, 2025, 2024 and 2023:
Revenue Streams
Inter-segmentTransactions
Type of goods or services
Service revenue
Non-service revenue
Total revenues from contracts with customers
Transferred over time
Transferred at a point time
Type of good or service
Remaining performance obligations are associated with our wireless and fixed line subscription contracts. As at December 31, 2025, excluding the performance obligations for contracts with original expected duration of less than one year, the aggregate amount of the transaction price allocated to remaining performance obligations was Php44,702 million, of which we expect to recognize approximately 52% in 2026 and 48% in 2027 and onwards. As at December 31, 2024, excluding the performance obligations for contracts with original expected duration of less than one year, the aggregate amount of the transaction price allocated to remaining performance obligations was Php45,868 million, of which we expect to recognize approximately 51% in 2025 and 49% in 2026 and onwards.
Contract Balances
Contract balances as at December 31, 2025 and 2024 consists of the following:
50,264
48,808
1,529
1,953
Contract liabilities and unearned revenues (Notes 21 and 23)
14,329
16,067
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Set out below is the movement in the allowance for expected credit losses of contracts assets as at December 31, 2025 and 2024.
Balances at beginning of the year
Reversals and reclassification
Balances at end of the year
Changes in the contract liabilities and unearned revenues accounts for the years ended December 31, 2025 and 2024 are as follows:
18,895
Deferred during the year
110,987
123,975
Recognized as revenue during the year
(112,725
(126,803
The contract liabilities and unearned revenues accounts as at December 31, 2025 and 2024 are as follows:
Unearned revenues from prepaid contracts
5,556
6,543
Leased facilities
4,444
Advance monthly service fees
2,198
2,098
Short-term advances for installation services
2,773
Long-term advances from equipment
Total contract liabilities and unearned revenues
Contract liabilities:
Noncurrent (Note 21)
194
256
Current (Note 23)
312
Unearned revenues:
4,690
5,369
9,133
10,425
General operating costs for the years ended December 31, 2025, 2024 and 2023 consist of the following:
Repairs and maintenance
30,849
30,653
30,186
Compensation and employee benefits
22,767
24,479
24,644
Professional and other contracted services
7,521
7,878
9,077
Taxes and licenses
5,328
5,156
5,215
Selling and promotions (Note 18)
4,914
5,427
8,037
Rent
1,413
1,398
1,372
Insurance and security services
1,402
1,408
1,344
Communication, training and travel
1,134
1,165
1,229
Other expenses
461
504
551
Total general operating costs
Compensation and Employee Benefits
Compensation and employee benefits for the years ended December 31, 2025, 2024 and 2023 consist of the following:
Salaries and other employee benefits
19,945
20,214
20,358
Pension benefit costs (Note 25)
Manpower Rightsizing Program (MRP)
Incentive plan (Note 25)
Total compensation and employee benefits
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Over the past several years, we have been implementing the MRP in line with our continuing efforts to realize manpower and cost efficiencies as a result of technological and organizational changes process improvements, and shifting market conditions that reshape the future of our businesses. The MRP is being implemented in compliance with the Labor Code of the Philippines and all other relevant labor laws and regulations in the Philippines.
Cost of devices, accessories and contract-specific services for the years ended December 31, 2025, 2024 and 2023 consist of the following:
7,447
10,046
10,948
5,337
3,965
4,144
Total cost of devices, accessories and contract-specific services
Asset impairment for the years ended December 31, 2025, 2024 and 2023 consist of the following:
3,838
3,875
4,119
181
224
196
Total asset impairment
Interconnection Costs
Interconnection costs include wholesale international voice cost amounting to Php14,887 million, Php12,535 million and Php9,258 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Other Expenses – Net
Other expenses – net for the years ended December 31, 2025, 2024 and 2023 consist of the following:
Gains on sale and leaseback of telecom towers – gross of expenses (Note 9)
887
1,442
7,777
Gains on fair value of investment properties
352
Gains on disposal of property and equipment
468
Gains (losses) on derivative financial instruments – net (Note 27)
1,641
(743
Equity share in net losses of associates and joint ventures (Note 11)
Foreign exchange gains (losses) – net (Note 27)
(550
(36
1,149
(18,168
(15,500
(13,755
4,492
2,476
651
Total other expenses – net
(1)Includes reversal of excess LTIP accrual and income from prescription of liability arising from Subscriber Investment Plan (SIP).
Interest Income
Interest income for the years ended December 31, 2025, 2024 and 2023 consist of the following:
Interest income arising from revenue contracts with customers
480
574
467
Interest income on cash and cash equivalents (Note 15)
176
469
Interest income on financial instruments at amortized cost
Interest income on financial instruments at FVPL
Interest income – others
Total interest income
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Financing Costs – Net
Financing costs – net for the years ended December 31, 2025, 2024 and 2023 consist of the following:
Interest on loans and other related items
15,921
13,620
12,159
Accretion on lease liabilities (Note 10)
3,266
Accretion on financial liabilities
Financing charges
Capitalized interest (Note 9)
Total financing costs – net
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6. Components of Other Comprehensive Loss
Changes in other comprehensive loss under equity of our consolidated statements of financial position for the years ended December 31, 2025, 2024 and 2023 are as follows:
Foreign currencytranslationdifferences ofsubsidiaries
Net loss onfinancialinvestments at FVPL– net of tax
Nettransactionson cash flowhedges– net of tax
Revaluationincrement oninvestmentproperties– net of tax
Remeasurements of post-employment benefit obligations-net of tax
Share in theothercomprehensive income (loss) of associates andjoint venturesaccounted forusing the equity method
Fair value changes of financial instrument at FVOCI
Total othercomprehensiveincome (loss)attributableto equityholdersof PLDT
Share ofnoncontrollinginterests
Total othercomprehensiveincome (loss) – net of tax
(47
(1,175
1,740
(39,722
(39,283
Other comprehensive income (loss)
(1,008
5,827
(40,348
(30
(35,791
(1,414
544
(38,260
(39,155
133
(1,549
(32,856
(33,735
(1,349
(38,325
Adjustments
Revaluation increment on investment properties pertains to the difference between the carrying value and fair value of property and equipment transferred to investment property at the time of change in classification.
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Corporate Income Tax
The major components of consolidated net deferred income tax assets (liabilities) recognized in our consolidated statements of financial position as at December 31, 2025 and 2024 are as follows:
Net deferred income tax assets
Net deferred income tax liabilities
Net balances at the end of the year
11,507
14,583
The components of our consolidated net deferred income tax assets (liabilities) as at December 31, 2025 and 2024 are as follows:
Net deferred income tax assets:
Accumulated provision for expected credit losses
3,990
3,618
Lease liability over ROU assets under IFRS 16(1)
3,185
3,240
Unearned revenues
2,781
3,914
Depreciation due to shortened estimated useful life of assets
2,550
2,480
1,680
2,607
Unrealized foreign exchange losses
1,605
1,404
Unamortized past service pension costs
1,439
1,908
Accumulated write-down of inventories to net realizable values
284
371
NOLCO
266
Excess MCIT over RCIT
Taxes and duties capitalized
(176
(167
Derivative financial instruments
(203
Customer list and trademark
(456
(361
Capitalized charges and others
(5,591
(4,447
Total deferred income tax assets – net
Net deferred income tax liabilities:
Investment property
388
Unrealized foreign exchange gains
(173
(126
Total deferred income tax liabilities - net
(1) As at December 31, 2025 and 2024, the deferred tax asset on lease liability amounted to Php15,731 million and Php13,234 million, respectively while the deferred tax liability on right of use asset amounted to Php12,546 million and Php9,994 million, respectively.
Changes in our consolidated net deferred income tax assets (liabilities) as at December 31, 2025 and 2024 are as follows:
Net balances at beginning of the year
18,007
Movement charged directly to other comprehensive income (loss)
663
Provision for deferred income tax
(3,710
(3,401
Net balances at end of the year
The analysis of our consolidated net deferred income tax assets as at December 31, 2025 and 2024 are as follows:
Deferred income tax assets:
Deferred income tax assets to be recovered after 12 months
8,090
11,449
Deferred income tax assets to be recovered within 12 months
3,194
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The analysis of our consolidated net deferred income tax liabilities as at December 31, 2025 and 2024 are as follows:
Deferred income tax liabilities:
Deferred income tax liabilities to be settled after 12 months
Deferred income tax liabilities to be settled within 12 months
(46
Provision for income tax for the years ended December 31, 2025, 2024 and 2023 consists of:
Current
5,111
6,200
7,964
Deferred (Note 3)
3,710
3,401
1,206
The impact of the application of MCIT amounting to Php9 million, Php53 thousand and Php103 million for the years ended December 31, 2025, 2024 and 2023, respectively, were considered in the provisions for current and deferred income taxes.
The reconciliation between the provision for income tax at the applicable statutory tax rate and the actual provision for corporate income tax for the years ended December 31, 2025, 2024 and 2023 are as follows:
Provision for income tax at the applicable statutory tax rate
9,422
10,136
8,667
Tax effects of:
Nondeductible expenses
220
326
701
NOLCO/MCIT expiration
Loss (income) not subject to income tax
Income subject to final tax
(172
(251
Net movement in unrecognized deferred income tax assets and other adjustments
338
Special deductible items and income subject to lower tax rate
Difference between Optional Standard Deduction (OSD) and itemized deductions
(356
(303
Actual provision for income tax
The breakdown of our consolidated deductible temporary differences, carryforward benefits of unused tax credits from excess of MCIT over RCIT, and NOLCO (excluding those not recognized due to the adoption of the OSD method) for which no deferred income tax assets were recognized and the equivalent amount of unrecognized deferred income tax assets as at December 31, 2025 and 2024 are as follows:
2,001
1,266
718
1,208
Provisions
621
365
Lease liability over ROU assets under IFRS 16
169
Unrealized foreign exchange (gains) losses
3,719
3,205
Unrecognized deferred income tax assets
934
803
In 2024, DMPI, IP Converge and Vitro availed the OSD method in computing their taxable income. This assessment is based on projected taxable profits at a level where it is favorable to use OSD method. These companies are also expected to avail of the OSD method in the foreseeable future. Thus, certain deferred income tax assets of DMPI, IP Converge and Vitro amounting to Php82 million and Php237 million as at December 31, 2025 and 2024, respectively, were not recognized.
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Our consolidated deferred income tax assets have been recorded to the extent that such consolidated deferred income tax assets are expected to be utilized against sufficient future taxable profit. Deferred income tax assets shown in the preceding table were not recognized as we believe that future taxable profit will not be sufficient to realize these deductible temporary differences and carryforward benefits of unused tax credits from excess of MCIT over RCIT, and NOLCO in the future.
The breakdown of our consolidated excess MCIT and NOLCO as at December 31, 2025 are as follows:
Date Incurred
Expiry Date
MCIT
December 31, 2021(1)
December 31, 2026
December 30, 2023
628
December 31, 2027
December 31, 2028
825
Consolidated tax benefits
206
Consolidated unrecognized deferred income tax assets
(183
Consolidated recognized deferred income tax assets
(1)Under R.A. 11494.
The excess MCIT totaling Php32 million as at December 31, 2025 can be deducted against future RCIT liability. The excess MCIT that was deducted against RCIT amounted to Php9 million, nil and Php103 million for the years endedDecember 31, 2025, 2024 and 2023, respectively.
NOLCO totaling Php825 million as at December 31, 2025 can be claimed as deduction against future taxable income. The NOLCO claimed as deduction against taxable income amounted to Php1,344 million, Php459 million and Php129 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Republic Act No. 11494 Bayanihan to Recover as One Act, or Bayanihan II
Republic Act No. 11494, otherwise known as the Bayanihan to Recover as One Act, or Bayanihan II, was signed by former President Rodrigo Duterte on September 11, 2020. It contains the government’s second wave of relief measures to address the health and economic crises that stemmed from the COVID-19 outbreak.
As part of mitigating the costs and losses stemming from the disruption of economic activities, Bayanihan II extended the carry-over of the NOLCO incurred in 2021 as deductions from gross income for the next five consecutive taxable years immediately following the year of the loss. Hence, NOLCO incurred in 2021 amounting to Php41 million, which ordinarily can be carried over until December 31, 2025, has been extended until December 31, 2026.
Registration with Clark Special Economic Zone
ClarkTel’s franchise expired on July 1, 2024. Prior to the expiration, ClarkTel’s Board of Directors applied for a national franchise. The franchise application has been filed and for evaluation of Congress as of report date. Considering the timeline for the national franchise grant, ClarkTel also applied for VAS license with the NTC to ensure continued services to subscribers. The license was approved on November 20, 2024 with a validity period of up to November 19, 2029.
ClarkTel is registered with Clark Special Economic Zone, or Economic Zones, under Republic Act No. 7227 otherwise known as the Bases Conversion and Development Act of 1992. As a registrant, ClarkTel is entitled to all the rights, privileges and benefits established thereunder including tax and duty-free importation of capital equipment and a special income tax rate of 5% of gross income, as defined in Republic Act No. 7227. These incentives are in effect until May 11, 2027 by virtue of a License to Operate issued by Clark Development Corporation.
Our consolidated income derived from non-registered activities within the Economic Zones is subject to the RCIT rate at the end of the reporting period.
BEPS 2.0 Pillar Two Impact Assessment
The Organization for Economic Co-operation and Development (OECD) has issued the Global Anti-Base Erosion (GLoBE) Model Rules (Pillar Two), which establish a 15% minimum effective tax rate on a jurisdictional basis. The rules apply to Multinational Enterprise (MNE) Groups with consolidated annual revenues of at least Euro 750 million in at least two (2) of the four (4) fiscal years immediately preceding the tested fiscal year. The Group is within the scope of the Pillar Two Model Rules. For the period ended December 31, 2025, the Group has applied the IASB amendment to IAS 12, Income Taxes, which provides a mandatory temporary exception from recognizing or disclosing deferred taxes related to Pillar Two.
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The Pillar Two legislation has been enacted by some of the jurisdictions in which the Group operates effective for financial year beginning on or after January 1, 2025. The Group has performed assessment of its potential exposure based on the 2025 financial information for the constituent entities in the Group. There are a limited number of jurisdictions where the Pillar Two effective tax rate is close to 15%. The Group does not expect a material exposure to Pillar Two income taxes in those jurisdictions.
The Group continues to follow Pillar Two legislative developments, as further countries enact the Pillar Two model rules, to evaluate the potential future impact on its consolidated results of operations, financial position and cash flows.
8. Earnings Per Common Share
The following table presents information necessary to calculate the EPS for the years ended December 31, 2025, 2024 and 2023:
Net income attributable to equity holders of PLDT from:
25,330
Consolidated net income attributable to common shares
Dividends on preferred shares (Note 19)
Consolidated net income attributable to common equity holders of PLDT
28,603
30,636
25,230
(in thousands, except per share amounts which are in pesos)
Outstanding common shares at beginning of year
216,056
Weighted average number of common shares
EPS attributable to common equity holders of PLDT
Basic EPS amounts are calculated by dividing our consolidated net income for the period attributable to common equity holders of PLDT (consolidated net income adjusted for dividends on all series of preferred shares), by the weighted average number of common shares issued and outstanding during the year.
Diluted EPS amounts are calculated in the same manner assuming that, at the beginning of the year or at the time of issuance during the year, all outstanding options are exercised, convertible preferred shares are converted to common shares, and appropriate adjustments to our consolidated net income are effected for the related income and expenses on preferred shares. Outstanding stock options will have a dilutive effect only when the average market price of the underlying common share during the year exceeds the exercise price of the stock option.
Convertible preferred shares are deemed dilutive when required dividends declared on each series of convertible preferred shares divided by the number of equivalent common shares, assuming such convertible preferred shares are converted to common shares, decreases the basic EPS. As such, the diluted EPS is calculated by dividing our consolidated net income attributable to common shareholders (consolidated net income, adding back any dividends and/or other charges recognized for the year related to the dilutive convertible preferred shares classified as liability, less dividends on non-dilutive preferred shares) by the weighted average number of common shares excluding the weighted average number of common shares held as treasury shares, and including the common shares equivalent arising from the conversion of the dilutive convertible preferred shares.
Where the effect of the assumed conversion of the preferred shares and the exercise of all outstanding options has an anti-dilutive effect, basic and diluted EPS are stated at the same amount.
F-61
Changes in property and equipment account for the years ended December 31, 2025 and 2024 are as follows:
Cableandwirefacilities
Central equipment
Networkfacilities
Building and lease improvement
Vehicles,furniture and othernetworkequipment
Land and land improvements
ITsystemsandplatforms
Securityplatforms
Property underconstruction
Net book value at beginning of the year
101,265
257
116,506
7,304
1,971
4,474
17,210
864
68,218
Additions (Note 4)
882
723
273
51,935
54,277
Disposals/retirements
(82
11,158
23,581
7,141
448
(614
6,977
(51,345
(2,396
Translation differences charged directly to cumulative translation adjustments
Depreciation and amortization (Note 3)
(10,483
(24,626
(759
(725
(4,850
(282
(41,881
Net book value at end of the year
102,817
154
116,181
13,780
1,993
3,806
19,610
840
68,808
As at December 31, 2025
Cost
327,658
513
384,033
35,183
35,463
4,301
66,115
2,189
924,263
Accumulated depreciation, impairment and amortization
(224,841
(359
(267,852
(21,403
(33,470
(495
(46,505
(596,274
Net book value
81,227
384
101,941
7,979
3,654
4,122
18,794
1,162
67,840
69,730
70,912
(234
(384
31,435
33,692
542
(809
456
5,561
202
(69,167
(185
Impairment losses recognized during the year
(11,484
(19,178
(1,247
(1,063
(104
(7,742
(304
(41,224
As at December 31, 2024
316,803
532
362,387
27,884
36,467
4,960
56,418
1,930
875,599
(215,538
(275
(245,881
(20,580
(34,496
(486
(39,208
(1,066
(557,530
F-62
Interest capitalized to property and equipment that qualified as borrowing costs amounted to Php2,724 million, Php2,589 million and Php2,169 million for the years ended December 31, 2025, 2024 and 2023, respectively. See Note 5 – Income and Expenses – Financing Costs – Net. The average interest capitalization rate used was approximately 5% each for the years ended December 31, 2025 and 2024 and 4% for the year ended December 31, 2023.
Our net foreign exchange differences, which qualified as borrowing costs, amounted to Php308 million, Php686 million and Php195 million for the years ended December 31, 2025, 2024 and 2023, respectively.
As at December 31, 2025, the estimated useful lives of our property and equipment are as follows:
Cable and wire facilities(1)
5 – 25 years
Central equipment(2)
10 years
Network facilities
3 – 20 years
Buildings
25 – 50 years
Vehicles, furniture and other network equipment
3 – 15 years
Land improvements
IT systems and platforms(3)
Security platforms
3 – 5 years
Leasehold improvements
3 – 10 years or the term of the lease, whichever is shorter
(1)As at December 31, 2024, the estimated useful life ranged from 5-15 years.
(2)As at December 31, 2024, the estimated useful life ranged from 3-15 years.
(3)As at December 31, 2024, the estimated useful life ranged from 3-5 years.
See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Estimating useful lives of property and equipment.
On various dates in 2022 and 2023, Smart and DMPI signed Sale and Purchase Agreements with Edotco Towers, Inc., Edgepoint Towers, Inc., Unity Digital Infrastructure and Frontier Tower Associates Philippines, Inc., or collectively the TowerCos, in connection with the sale of 7,569 telecom towers and related passive telecommunication infrastructure for Php98,309 million.
Concurrent with the execution of the Sale and Purchase Agreements, Smart also entered into Master Service Agreements, or MSAs, with the TowerCos wherein Smart agreed to lease back the towers sold in the transaction for a period of 10 years. In addition to space, the TowerCos are responsible for providing operations and maintenance services, as well as power to the sites. The sale and leaseback with the TowerCos is complemented by a commitment to place service orders for a total of 1,220 Build-To-Suit, or BTS, sites within the next two to four years. Thus, total committed BTS sites with the TowerCos is 2,270 sites. The closing of the agreements is on a staggered basis depending on the satisfaction of closing conditions based on the number of towers transferred.
The following summarizes the completed sale of Smart and DMPI telecom towers as at December 31, 2025:
Closing Date
Number of Tower Assets Sold
Cash Consideration
Gain on Sale and Leaseback
4,665
60,492
25,234
1,705
22,465
7,467
356
4,362
1,471
1,068
859
6,815
88,387
35,031
(1) Gross of related transaction costs.
The remaining telecom towers with net book value of Php4,162 million and Php4,547 million as at December 31, 2025 and 2024, respectively, subject to sale and purchase agreement within one year, were reclassified from “Property and equipment” to “Assets classified as held-for-sale” under current assets in our consolidated statement of financial position.
F-63
Group as a Lessee
We have lease contracts for various items of sites, buildings, leased circuits and poles used in our operations. We considered in the lease term the non-cancellable period of the lease together with the periods covered by an option to extend and option to terminate the lease.
Our consolidated estimated useful lives of ROU assets as at December 31, 2025 are as follows:
Sites
1 – 30 years
International leased circuits(1)
2 – 19 years
Poles(2)
2 – 12 years
Domestic leased circuits
2 – 10 years
Office buildings
1 – 25 years
Co-located sites(3)
4 – 7 years
F-64
Our consolidated roll forward analysis of ROU assets as at December 31, 2025 and 2024 are as follows:
InternationalLeasedCircuits
Poles
DomesticLeasedCircuits
OfficeBuildings
Co-locatedSites
Costs:
44,047
5,055
5,336
2,637
1,301
58,437
Additions (Note 28)
16,227
2,535
1,079
596
20,808
Asset retirement obligation
Modifications
164
Terminations
(2,504
(1,964
(411
(318
(326
(5,526
Reclassification to ROU assets classified as held-for-sale
(255
57,596
5,722
6,168
2,919
1,364
73,827
Accumulated depreciation and amortization:
(11,608
(3,110
(1,739
(1,810
(1,010
(49
(19,326
1,321
1,307
405
231
305
3,587
Depreciation (Note 3)
(6,419
(907
(1,196
(420
(328
(9,281
(55
(16,755
(2,710
(2,530
(1,999
(1,014
(25,050
Net book value at the end of the year
40,841
3,012
3,638
920
38,461
4,305
3,364
49,328
8,683
1,546
4,273
763
334
15,607
571
576
(1,180
173
(579
(2,350
(1,062
(2,474
(262
(209
(6,357
(7,599
(3,298
(3,156
(1,632
(16,611
2,474
262
4,317
(4,763
(828
(365
(295
(7,315
285
32,439
1,945
3,597
827
291
F-65
The following amounts are recognized in our consolidated income statements for the years ended December 31, 2025, 2024 and 2023:
Depreciation expense of ROU assets from continuing operations
9,281
7,315
6,898
Depreciation expense of ROU assets from discontinued operations
Interest expense on lease liabilities from continuing operations
Interest expense on lease liabilities discontinued operations
Variable lease payments (included in general operating costs) from continuing operations
895
829
656
Variable lease payments (included in general operating costs) from discontinued operations
Expenses relating to short-term leases (included in general operating costs)
569
714
Expenses relating to leases of low-value assets (included in general operating costs)
Total amount recognized in consolidated income statements
15,273
12,648
11,555
Our consolidated roll forward analysis of lease liabilities as at December 31, 2025 and 2024 are as follows:
54,038
47,546
Accretion on lease liabilities (Note 5)
Reclassification to lease liabilities classified as held-for-sale
Lease modifications
287
(121
Termination
(1,216
(863
Settlement of obligations
Balances at end of the year (Notes 3 and 28)
64,173
Less: Current portion of lease liabilities (Note 27)
Noncurrent portion of lease liabilities (Note 27)
We had total cash outflows for leases of Php14,328 million, Php12,079 million and Php10,707 million for the years ended December 31, 2025, 2024 and 2023, respectively. We had non-cash additions to ROU assets of Php20,808 million and Php15,607 million and lease liabilities of Php20,800 million and Php15,607 million both as at December 31, 2025 and 2024, respectively. The future cash outflows relating to leases that have not yet commenced are disclosed in Note 28 – Notes to the Statements of Cash Flows.
We have entered into several lease contracts that include automatic extension and termination options. These options are negotiated by us to provide flexibility in managing the leased-asset portfolio and aligning with our business needs. However, in some of these lease contracts, we did not impute the renewal period in our assessment of the lease terms of these contracts since said renewal period is not yet reasonably estimable at the time of transition or commencement date of the lease. See Note 3 – Managements Use of Accounting Judgments, Estimates and Assumptions – Determining the lease term of contracts with renewal and termination options – Company as a Lessee.
As disclosed in Note 9 – Property and Equipment, on the sale and leaseback of telecom towers, Smart and DMPI signed Sale and Purchase Agreements with the TowerCos in connection with the sale of 7,569 telecom towers and related passive telecom infrastructure, with the concurrent execution of MSAs with the TowerCos where Smart has agreed to lease back the towers sold in the transaction for a period of 10 years.
In 2022, 2023, 2024 and 2025, the MSAs covering the leaseback arrangements of 4,665, 1,705, 356 and 89 telecom towers, respectively, became effective. As a result, we recognized cumulative lease liability of Php40,824 million and cumulative ROU assets of Php24,759 million as at December 31, 2025.
The ROU assets relating to leasehold land with net book value of Php2,258 million and Php1,954 million, and the related lease liabilities amounting to Php1,625 million and Php1,615 million, were respectively reclassified as “Assets classified as held-for-sale” under current assets and “Liabilities associated with assets classified as held-for-sale” under current liabilities in our consolidated statement of financial position as at December 31, 2025 and 2024, respectively.
F-66
Common Tower Pilot, or CTP, Program
The CTP Program, established by Smart in January 2020, in partnership with several TowerCos duly accredited by the DICT aims to accelerate new site rollouts and reduce upfront the capital expenditures spending.
Under the MSAs, TowerCos will handle site acquisition and permitting, site development works, construction and permanent electrification of the towers. Effective 30 days after the sites are Ready For Telecommunication Installation, or RFTI, Smart will be liable to settle a monthly fixed fee covering rental and maintenance costs for a contract term of 15 years. The monthly fee will be subject to agreed escalation rates with TowerCos. As anchor tenant, Smart will also be entitled to colocation discounts when additional tenants come on board.
Upon launching of the program, the original CTP commitment covered 200 sites. As at December 31, 2025, Smart has issued service orders, or SOs, corresponding to 434 sites. As at December 31, 2025 and 2024, 433 and 422 sites are ready for service, respectively. All are classified as RFTI.
Group as a Lessor
We have entered into operating leases on our investment property portfolio consisting of certain office buildings and business offices. See Note 13 – Investment Properties. These leases have a term of five years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The lessee is also required to provide a residual guarantee on the properties. Rental income recognized amounted to Php62 million, Php59 million and Php57 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Future minimum rentals receivable under non-cancellable operating leases expected within one year both amounted to Php62 million, and after one year but not more than five years amounted to nil and Php62 million as at December 31, 2025 and 2024, respectively.
F-67
As at December 31, 2025 and 2024, this account consists of:
Carrying value of investments in associates:
MediaQuest PDRs
8,706
9,186
MIH
7,411
6,731
Individually immaterial associates
3,034
3,064
19,151
18,981
Carrying value of investments in joint ventures:
VTI, Bow Arken and Brightshare
32,990
33,675
Individually immaterial joint ventures
33,274
33,783
Total carrying value of investments in associates and joint ventures
Changes in the cost of investments for the years ended December 31, 2025 and 2024 are as follows:
68,010
64,658
Additions
779
3,485
Disposals
Return of capital
(600
Translation and other adjustments
(133
68,092
Changes in the accumulated impairment losses for the years ended December 31, 2025 and 2024 are as follows:
2,763
2,875
(112
Changes in the accumulated equity share in net earnings (losses) of associates and joint ventures as at December 31, 2025 and 2024 are as follows:
(12,483
(11,475
Equity share in net earnings (losses) of associates and joint ventures:
681
(935
(480
(74
Individually immaterial associates and joint ventures
(12,904
Investment of ePLDT in MediaQuest PDRs
ePLDT made various investments in PDRs issued by Mediaquest in relation to its direct interest in Satventures and indirect interest in Cignal TV through Satventures. These investments in PDRs provided ePLDT with a 64% economic interest in Cignal TV.
Cignal TV is a wholly-owned subsidiary of Satventures, which is a wholly-owned subsidiary of MediaQuest, an entity incorporated in the Philippines. It operates a direct-to-home, or DTH, Pay-TV business under the brand name “Cignal TV”, which is the largest DTH Pay-TV operator in the Philippines.
F-68
The PLDT Group’s financial investment in PDRs of MediaQuest is part of the PLDT Group’s overall strategy of broadening its distribution platforms and increasing the PLDT Group’s ability to deliver multimedia content to its customers across the PLDT Group’s broadband and mobile networks.
ePLDT’s aggregate value of investment in MediaQuest PDRs amounted to Php8,706 million and Php9,186 million as at December 31, 2025 and 2024, respectively. See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Accounting for investment in MediaQuest through PDRs.
The table below presents the summarized financial information of Satventures/Cignal TV as at December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023:
Statements of Financial Position:
Noncurrent assets
22,546
22,710
Current assets
6,596
8,578
Noncurrent liabilities
1,350
2,146
Current liabilities
13,188
13,787
14,604
15,355
Carrying amount of interest in Satventures/Cignal TV
Additional Information:
588
Current financial liabilities(1)
2,736
Noncurrent financial liabilities(1)
965
1,210
(1) Excluding trade, other payables and provisions.
Income Statements:
7,219
8,440
8,637
1,459
1,405
1,304
Interest expense
396
347
281
Benefit from income tax
(334
Net loss / Total comprehensive loss
(750
(115
(929
Equity share in net losses of Satventures/Cignal TV
The carrying amount of Satventures’ investment as at December 31, 2025 and 2024 are as follows.
Satventures’/Cignal TV's equity
Deposit for future stock subscription
(1,000
Satventures’/Cignal TV’s net equity
13,604
14,355
Satventures’/Cignal TV’s noncontrolling interest
Investment of PCEV in MIH
The following summarizes the subscription agreements entered into by PCEV with MIH:
Agreement
Number of Shares
Total Consideration
PCEV's Equity Interest
March 14, 2018
Acquisition of Ordinary Shares
53.4
465
100.00
Subscription of Ordinary Shares
95.9
December 31, 2020
Conversion of notes to Class A2 preference shares
7.9
43.97
March 12, 2021
Exercise of warrants to subscribe to Class A2 preference shares
6.7
447
41.87
June 11, 2021
Subscription to Class B convertible preferred shares
15.6
1,218
38.45
April 7, 2022
Subscription to Class C convertible preferred shares
27.2
3,252
36.82
December 13, 2023
Subscription to Class C2 convertible preferred shares
12.3
1,563
36.97
857
37.66
F-69
Additional Investment in MIH
On April 5, 2024, PCEV paid a consideration of US$15.3 million or Php857 million for 6.7 million MIH Class C2 convertible preferred shares and received warrants for 2.7 million shares valued at Php152 million, resulting in an increase of PCEV’s ownership in MIH from 36.97% to 37.66%.
PCEV’s percentage equity interest in MIH stood at 37.66% as at December 31, 2025 and 2024.
The summarized financial information of MIH as at December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023 is shown below:
9,798
7,241
30,261
29,815
1,523
798
29,499
29,461
9,037
6,797
Carrying amount of interest in MIH
7,375
8,565
29,194
29,274
(1)Excluding statutory payables and accrued taxes.
17,577
14,089
8,553
537
392
348
129
489
Net gain (loss)/Total comprehensive gain (loss)
1,807
(2,501
(6,153
Equity share in net income (loss) of MIH (1)
(2,273
(1)2025 and 2024 amounts include impact of 2024 and 2023 audit adjusting entries, respectively.
The carrying value of PCEV’s investment in MIH as at December 31, 2025 and 2024 are as follows.
MIH Equity(1)
6,623
4,711
PCEV's noncontrolling interests
Share in net assets of MIH
2,494
1,774
Goodwill arising from acquisition
4,917
4,957
(1)Net of Php2,413 million and Php2,086 million Employee Share Stock Option in 2025 and 2024, respectively.
Investments in Joint Ventures
Investments of PLDT in VTI, Bow Arken and Brightshare
The Company’s acquisition of a 50% equity interest in the telecommunications business of San Miguel Corporation, or SMC, through the VTI, Bow Arken and Brightshare Transactions (collectively, the SMC Transactions), was approved by the Board on May 30, 2016. Globe acquired the remaining 50%. PLDT and Globe executed separate Share Purchase Agreements to acquire the equity, outstanding advances, and assumed liabilities of these entities.
The total consideration of Php52.8 billion was paid in three tranches: 50% on May 30, 2016, 25% on December 1, 2016, and 25% on May 30, 2017. Under the agreements, PLDT and Globe, through VTI, Bow Arken, and Brightshare, also assumed liabilities amounting to Php17.2 billion from May 30, 2016 subject to a price adjustment mechanism. Following confirmatory due diligence, both parties paid the previous owners a net adjustment of Php2.6 billion on May 29, 2017.
As part of the SMC Transactions, PLDT and Globe also acquired certain outstanding advances from the previous owners, the largest of which amounted to Php11,359 million, comprising Php11,038 million from VTI and its subsidiaries, Php238 million from Bow Arken, and Php83 million from Brightshare.
F-70
PLDT and Globe each subscribed to preferred shares of VTI as follows: (a) February 28,2017: 2.8 million preferred shares at Php4,000 per share (Php11,040 million per party), paid by applying assigned advances; (b) February 28, 2017: 800 thousand additional preferred shares at Php4,000 per share (Php3,200 million per party), with Php148 million paid in cash and the balance settled by year-end 2017; and (c) December 15, 2017: 600 thousand preferred shares at Php5,000 per share (Php3,000 million per party), partly paid in cash and the balance settled through conversion of advances.
All subscription payments were fully paid as at December 31, 2017. The amount of the advances outstanding of PLDT, to cover for the assumed liabilities and working capital requirements of the acquired companies, amounted to nil and Php69 million as at December 31, 2025 and 2024, respectively.
The table below presents the summarized financial information of VTI, Bow Arken and Brightshare as at December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023:
77,344
77,849
4,486
5,231
9,448
9,475
2,651
2,395
69,731
71,209
Carrying amount of assets in VTI, Bow Arken and Brightshare
2,006
3,010
Current financial liabilities (1)
4,904
4,708
4,344
1,920
1,973
1,685
186
(169
Equity share in net income of VTI, Bow Arken and Brightshare
The carrying value of PLDT’s investment in VTI, Bow Arken and Brightshare as at December 31, 2025 and 2024 are as follows:
VTI, Bow Arken and Brightshare equity
PLDT's share
Share in net assets of VTI, Bow Arken and Brightshare
34,866
35,605
Share in adjustment based on liability and ETPI net cash balance
442
Reimbursements
(393
Share in SMC's advances in VTI, Bow Arken and Brightshare
(840
Non-controlling interests
(1,118
(1,127
Carrying amount of interest in VTI, Bow Arken and Brightshare
Notice of Transaction filed with the PCC
Prior to the closing of the transaction on May 30, 2016, PLDT, Globe, and SMC each submitted separate notices to the Philippine Competition Commission (PCC) covering the VTI, Bow Arken, and Brightshare transactions, respectively, pursuant to the Philippine Competition Act (PCA) and PCC Circular Nos. 16-001 and 16-002 (the “Circulars”). Under the Circulars, such transactions are deemed approved upon the PCC’s receipt of complete and compliant notices.
On June 6 and 7, 2016, the PCC informed the parties that: (a) with respect to the VTI transaction, the notice was deficient in form and substance and therefore not deemed approved, as key terms were allegedly missing and certain agreements potentially prohibited; and (b) with respect to the Bow Arken and Brightshare transactions, compulsory notification under the Circulars was inapplicable, and in any case, the notices were also deemed deficient.
In its response dated June 10, 2016, PLDT maintained that its notice was complete, sufficient, and compliant, and that the VTI transaction was therefore deemed approved under Section 23 of the PCA and not subject to retroactive review. PLDT
F-71
further stated that the parties had taken measures to prevent any substantial lessening of competition, including the relinquishment and co-use of certain frequencies among Smart, BellTel, and Globe. For transparency, PLDT and the other parties voluntarily furnished the PCC with copies of the Sale and Purchase Agreements.
Despite this response, the PCC, in a letter dated June 17, 2016, required the parties to submit additional documents relating to the co-use arrangements and other definitive agreements, and disregarded the transaction’s deemed-approved status under the Circulars, indicating its intent to conduct a full review or investigation of the transaction.
In the Matter of the Petition against the PCC
PLDT’s Petition for Certiorari and Prohibition before the Court of Appeals (CA) against the Philippine Competition Commission (PCC), which challenged the PCC’s review of PLDT’s and Globe’s acquisition of SMC’s telecommunications business (the “SMC Transactions”), was decided by the CA in October 2017 in favor of PLDT and Globe. The CA permanently enjoined the PCC from conducting any pre-acquisition review or investigation, set aside the PCC’s letters directing such review, and declared the SMC Transactions “deemed approved” under the Philippine Competition Act and the PCC’s transitory rules. The CA, however, clarified that the PCC retained authority to conduct post-acquisition reviews to address any anti-competitive conduct.
The PCC elevated the case to the Supreme Court via a Petition for Review on Certiorari, which was consolidated with an earlier PCC petition to annul the CA’s writ of preliminary injunction. The Supreme Court proceedings have since involved multiple submissions and motions by the parties, and the consolidated petitions remain pending resolution.
The Supreme Court has not yet issued a final decision on the consolidated cases. The most recent action was the Court’s February 8, 2021 Resolution, noting the Consolidated Reply filed by petitioners in a related docket (G.R. No. 242352). No further order or resolution has been promulgated since. As of the date of this report, the matter remains pending before the Supreme Court.
Return of Capital from VTI
On September 2, 2025, the Board of Directors of VTI authorized to partially redeem a portion of its issued and outstanding redeemable preferred shares issued to PLDT and Globe consisting of an aggregate of 265,420 preferred shares (132,710 shares per party) at a redemption price of Php4 thousand per share or an aggregate redemption price of Php1,062 million (Php531 million per party). Additionally, the Board of Directors of VTI agreed to return the deposits for future stock subscription in the amount of Php138 million (Php69 million per party) as it no longer desires to convert the said deposits into equity.
As at December 31, 2025 and 2024, following are the carrying values of individually immaterial associates and joint ventures:
Individually immaterial associates:
Radius
1,679
2,123
Kayana
1,355
853
Appcard
Individually immaterial joint ventures:
DFTI
238
Telecommunications Connectivity, Inc.
PFC/VFC
Total individually immaterial associates and joint ventures
3,172
F-72
The summarized financial information of individually immaterial associates and joint ventures as at December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023 is shown below:
Associates
Joint Ventures
8,259
9,342
4,848
3,331
2,393
863
1,279
2,960
2,346
5,052
3,607
678
1,222
5,675
6,849
1,383
Carrying amount of interest in individually immaterial associates and joint ventures
1,517
1,011
Current financial liabilities
1,586
1,614
Noncurrent financial liabilities
674
2,798
3,694
927
2,225
1,122
302
Other comprehensive income
(1,828
(542
(457
530
(84
Equity share in net losses of individually immaterial associates and joint ventures
(536
Retail Treasury Bonds
340
Fixed Rate Treasury Notes, or FXTN
Less: Current portion of debt instrument at amortized cost (Note 27)
Noncurrent portion of debt instrument at amortized cost (Note 27)
On March 9, 2021, Smart purchased at par a three-year Retail Treasury Bond Tranche 25 with face value of Php100 million which matured on March 9, 2024. The bond had a gross coupon rate of 2.375% payable on a quarterly basis. Interest income, recognized on this investment amounted to nil, Php475 thousand and Php1.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.
On December 2, 2021, PLDT and Smart purchased at par a 5.5-year Retail Treasury Bond Tranche 26 with face value of Php300 million maturing on June 2, 2027. The bond has a gross coupon rate of 4.6250% payable on a quarterly basis. Interest income, recognized on this investment amounted to Php11.1 million each for the years ended December 31, 2025, 2024 and 2023. The carrying value of this investment each amounted to Php300 million as at December 31, 2025 and 2024.
On March 4, 2022, PLDT and Smart purchased at par a five-year Retail Treasury Bond Tranche 27 with face value of Php40 million maturing on March 4, 2027. The bond has a gross coupon rate of 4.8750% payable on a quarterly basis. Interest income, recognized on this investment amounted to Php1.6 million each for the years ended December 31, 2025, 2024 and 2023. The carrying value of this investment each amounted to Php40 million as at December 31, 2025 and 2024.
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FXTN
On June 3, 2022, Smart purchased at a discount a three-year FXTN 03-27 with face value of Php25 million which matured on April 7, 2025. The bond has a gross coupon rate of 4.25% payable on a semi-annual basis. Interest income recognized on this investment amounted to Php425 thousand for the year ended December 31, 2025 and Php850 thousand each for the years ended December 31, 2024 and 2023. The carrying value of this investment amounted to nil and Php25 million as at December 31, 2025 and 2024, respectively.
On June 16, 2022, Smart purchased at a premium a seven-year FXTN 07-67 with face value of Php10 million maturing on May 19, 2029. The bond has a gross coupon rate of 6.5% payable on a semi-annual basis. Interest income recognized on this investment amounted to Php520 thousand each for the years ended December 31, 2025, 2024 and 2023. The carrying value of this investment each amounted to Php10 million as at December 31, 2025 and 2024.
On July 7, 2022, PLDT and Smart purchased at a premium a four-year FXTN 07-62 with face value of Php20 million subsequently matured on February 14, 2026. The bond has a gross coupon rate of 6.25% payable on a semi-annual basis. Interest income recognized on this investment amounted to Php1.0 million each for the years ended December 31, 2025, 2024 and 2023. The carrying value of this investment each amounted to Php20 million as at December 31, 2025 and 2024.
ASENSO Bonds
On February 16, 2026, PLDT and Smart subsequently purchased at par a 1.5-year Landbank ASENSO Bonds Series B with face value of Php50 million each maturing on August 16, 2027. The bond has a gross coupon rate of 5.1714% payable on a quarterly basis.
Changes in investment properties account for the years ended December 31, 2025 and 2024 are as follows:
Land
LandImprovements
Building
2,882
Net gains (losses) from fair value adjustments charged to other comprehensive income
3,386
(90
298
Transfers from property and equipment
464
219
851
Net gains (losses) from fair value adjustments charged to profit or loss
346
Disposals during the year
7,070
630
1,184
Net gains from fair value adjustments charged to other comprehensive income
2,093
Transfers to property and equipment - net
(398
(417
Net gains from fair value adjustments charged to profit or loss
Investment properties, which consist of land, land improvements and building, are stated at fair values, which have been determined based on appraisal performed by independent firms of appraisers, industry specialists in valuing these types of investment properties.
The valuation for land was based on a market approach valuation technique using price per square meter. The valuation for building and land improvements was based on a cost approach valuation technique using current material and labor costs for improvements based on external and independent reviewers.
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We have determined that the highest and best use of some of the idle or vacant land properties at the measurement date would be to convert the properties for residential or commercial development. The properties are not being used for strategic reasons.
We have no restrictions on the realizability of our investment properties and no contractual obligations to either purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
Repairs and maintenance expenses related to investment properties that do not generate rental income amounted to Php119 million, Php122 million and Php129 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Rental income relating to investment properties that are being leased and included as part of other miscellaneous income amounted to Php62 million, Php59 million and Php57 million for the years ended December 31, 2025, 2024 and 2023, respectively. See Note 10 – Leases.
The above investment properties were categorized under Level 2 and Level 3 of the fair value hierarchy. There were no transfers in and out of Level 2 and Level 3 of the fair value hierarchy.
Significant increases or decreases in price per square meter for land, current material and labor costs of improvements would result in a significantly higher or lower fair value measurement.
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Changes in goodwill and intangible assets account for the years ended December 31, 2025 and 2024 are as follows:
IntangibleAssets with
Intangible Assets with Finite Life
TotalIntangibleAssets with
Total Goodwilland
IndefiniteLife
Trademark
Franchise
CustomerList
Spectrum
FiniteLife
IntangibleAssets
4,565
3,017
4,703
1,205
1,689
15,314
15,534
63,595
79,129
Additions during the year
217
229
4,570
4,707
1,906
15,528
15,748
79,343
Accumulated amortization and impairment:
2,451
654
14,665
Amortization during the year
270
2,638
4,697
1,035
14,268
14,922
379
871
1,260
1,480
62,941
Estimated useful lives (in years)
5-10
Remaining useful lives (in years)
3-10
4,561
14,942
15,162
366
2,265
899
13,768
14,422
240
566
737
1,303
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The consolidated goodwill and intangible assets of our reportable segments as at December 31, 2025 and 2024 are as follows:
Customer list
Total intangible assets
957
56,571
Total goodwill and intangible assets
56,950
7,471
57,137
7,327
The consolidated future amortization of intangible assets as at December 31, 2025 are as follows:
Year
2027
294
2028
2029
2030
2031 and onwards
357
Impairment Testing of Goodwill
The organizational structure of PLDT and its subsidiaries is designed to monitor financial operations based on fixed line and wireless segmentation. Management provides guidelines and decisions on resource allocation, such as continuing or disposing of assets and operations by evaluating the performance of each segment through review and analysis of available financial information on the fixed line and wireless segments. As at December 31, 2025, the PLDT Group’s goodwill comprised of goodwill resulting from PGIH’s acquisition of Multisys in 2022, ePLDT’s acquisition of IPCDSI in 2012, PLDT’s acquisition of Digitel in 2011, ePLDT’s acquisition of ePDS in 2011, Smart’s acquisition of PDSI and Chikka in 2009, SBI’s acquisition of Airborne Access Corporation in 2008, and Smart’s acquisition of SBI in 2004.
Although revenue streams may be segregated among the companies within the PLDT Group, cash inflows are not considered coming from independent groups of assets on a per Company basis due largely to the significant portion of shared and commonly used network/platform that generates related revenue. On the other hand, PLDT has the largest fixed line network in the Philippines. PLDT’s transport facilities are installed nationwide to cover both domestic and international IP backbone to route and transmit IP traffic generated by the customers. In the same manner, PLDT has the most Internet Gateway facilities which are composed of high-capacity IP routers and switches that serve as the main gateway of the Philippines to the Internet connecting to the World Wide Web. With PLDT’s network coverage, other fixed line subsidiaries share the same facilities to leverage from a Group perspective.
Because of the significant common use of network facilities among fixed line and wireless companies within the Group, management deems that the Wireless and Fixed Line units are the lowest CGUs to which goodwill is to be allocated and tested for impairment given that the Fixed Line and Wireless operations generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
The recoverable amount of the Wireless and Fixed Line CGUs have been determined using the value- in-use approach calculated using cash flow projections based on the financial budgets approved by the Board of Directors. The post-tax discount rates applied to cash flow projections are 9.32% for the Wireless and Fixed Line CGUs. Cash flows beyond the projection period of three years are determined using a 2% growth rate for the Wireless and Fixed Line CGUs, which is the same as the long-term average growth rate for the telecommunications industry. Other key assumptions used in the cash flow projections include revenue growth rate and capital expenditures.
Based on the assessment of the VIU of the Wireless and Fixed Line CGUs, the recoverable amount of the Wireless and Fixed Line CGUs exceeded their carrying amounts. Hence, no impairment was recognized in relation to goodwill as at December 31, 2025 and 2024.
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Cash on hand and in banks (Note 27)
10,497
8,547
Temporary cash investments (Note 27)
1,369
1,464
Cash in banks earn interest at prevailing bank deposit rates. Temporary cash investments are made for varying periods of up to three months depending on our immediate cash requirements and earn interest at the prevailing temporary cash investment rates. Due to the short-term nature of such transactions, the carrying value approximates the fair value of our temporary cash investments. See Note 27 – Financial Assets and Liabilities.
Interest income earned from cash in banks and temporary cash investments amounted to Php176 million, Php267 million and Php469 million for the years ended December 31, 2025, 2024 and 2023, respectively. See Note 5 – Income and Expenses.
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16. Trade and Other Receivables
As at December 31, 2025 and 2024, this account consists of receivables from:
Corporate subscribers (Note 27)
21,373
20,936
Retail subscribers (Note 27)
19,369
17,516
Foreign administrations (Note 27)
1,254
Domestic carriers (Note 27)
208
Dealers, agents and others (Note 27)
7,699
8,846
Less: Allowance for expected credit losses
18,897
17,196
Trade and other receivables are noninterest-bearing and generally have settlement terms of 30 to 180 days.
Receivables from foreign administrations and domestic carriers represent receivables based on interconnection agreements with other telecommunications carriers. The aforementioned amounts of receivable are shown net of related payables to the same telecommunications carriers where a legal right of offset exists and settlement is facilitated on a net basis.
Receivables from dealers, agents and others consist mainly of receivables from credit card companies, dealers and distributors having collection arrangements with the PLDT Group, dividend receivables and advances to affiliates.
For terms and conditions relating to related party receivables, see Note 24 – Related Party Transactions.
See Note 27 – Financial Assets and Liabilities on credit risk of trade receivables to understand how we manage and measure credit quality of trade receivables that are neither past due nor impaired.
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The following table explains the changes in the allowance for expected credit losses as at December 31, 2025 and 2024:
Retail Subscribers
Corporate Subscribers
ForeignAdministrations
Domestic Carriers
Dealers, Agentsand Others
Stage 2
Stage 3
Lifetime ECL
9,290
2,400
3,513
606
734
3,596
13,600
2,926
764
141
3,697
Translation adjustments
Write-offs
(1,760
(446
(2,206
Reclassifications and reversals
547
(464
10,529
2,873
3,816
3,767
15,130
1,448
8,250
2,126
3,820
608
838
4,190
17,215
(484
3,537
322
472
(143
4,018
(2,975
(3,892
(388
436
(69
(472
The significant changes in the balances of trade and other receivables and contract assets are disclosed in Note 5 – Income and Expenses, while the information about the credit exposures are disclosed in Note 27 – Financial Assets and Liabilities.
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Cost:
Commercial
1,048
2,100
Network
1,716
2,436
245
3,009
4,815
Allowance for inventory obsolescence and write-down:
308
837
1,358
1,166
1,509
Net realizable value:
740
1,967
879
1,078
261
Changes in the allowance for inventory obsolescence and write-down for the years ended December 31, 2025 and 2024 are as follows:
Provisions (Note 5)
Cost of devices and accessories consumed, previously provided
Disposals and other adjustments
(63
Reversals
(290
(38
The cost of inventories and supplies recognized as expense for the years ended December 31, 2025, 2024 and 2023 are as follows:
7,287
9,904
11,912
407
Provision for inventory obsolescence
7,576
10,507
12,735
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26,906
28,817
Advances to suppliers and contractors
23,825
29,486
Prepaid taxes
5,228
6,968
Prepaid fees and licenses
1,947
2,084
Prepaid benefit costs (Note 25)
810
975
Prepaid repairs and maintenance
541
862
Prepaid rent
Prepaid insurance
145
Other prepayments
1,822
Other non-financial assets
1,029
62,677
71,904
Less current portion of prepayments and other nonfinancial assets
Noncurrent portion of prepayments and other nonfinancial assets
Subscriber contract costs consist of the cost to obtain and cost to fulfill a contract with subscribers. Cost to obtain amounted to Php4,533 million and Php4,448 million as at December 31, 2025 and 2024, respectively. Amortization of cost to obtain presented under selling and promotions amounted to Php1,427 million, Php1,204 million and Php3,147 million for the years ended December 31, 2025, 2024 and 2023, respectively. Costs to fulfill amounted to Php22,373 million and Php24,369 million as at December 31, 2025 and 2024, respectively. Amortization of cost to fulfill, which is presented under depreciation and amortization in the Income Statement, amounted to Php8,055 million, Php7,449 million and Php11,789 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Advances to suppliers and contractors are non-interest bearing and are to be applied to contractors’ subsequent progress billings for projects.
Prepaid taxes include creditable withholding taxes and input VAT.
Prepaid fees and licenses include advance payments for NTC license fees and unexpired portion of fees paid to the NTC.
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PLDT’s number of shares of subscribed and outstanding capital stock as at December 31, 2025 and 2024 are as follows:
Authorized
Non-Voting Serial Preferred Stock
234
Subscribed
Non-Voting Serial Preferred Stock(1)
300
Outstanding
216
(1)300 million shares of Series IV Cumulative Non-Convertible Redeemable Preferred Stock subscribed for Php3 billion, of which Php360 million has been paid and with subscription payable amounting to Php2,640 million as at December 31, 2025 and 2024.
There were no changes in Parent Company's capital account for the years ended December 31, 2025 and 2024.
Preferred Stock
Pursuant to the PLDT Subscriber Investment Plan, the Board of Directors designated 50,000 shares of Non-Voting Serial Preferred Stock as Series JJ 10% Cumulative Convertible Preferred Stock on November 5, 2013 to be issued from January 1, 2013 to December 31, 2015, and 20,000 shares as Series KK on January 26, 2016, to be issued from January 1, 2016 to December 31, 2020 on (collectively, “SIP Shares”). On June 8, 2015, PLDT issued 870 shares of Series JJ. SIP shares earn cumulative dividends at an annual rate of 10% and may be converted into Common Stock of PLDT, at a price 10% below the average market price over 30 trading days, subject to a minimum of par value. The Board of Directors may, at its sole discretion, adjust the conversion price in the event of a reclassification, change in outstanding Common Stock, consolidation, or merger. PLDT, at its discretion, may redeem Series JJ and KK SIP Shares five years after issuance at par value plus any accrued dividends.
The Series IV Cumulative Non-Convertible Redeemable Preferred Stock earns cumulative dividends at an annual rate of 13.5% based on the paid-up subscription price. It is redeemable at the option of PLDT at any time one year after subscription and at the actual amount paid for such stock, plus accrued dividends. This stock is non-voting, except as specifically provided by law, and is preferred in liquidation.
All preferred stocks limit the ability of PLDT to pay cash dividends unless all dividends on such preferred stock for all past dividend payment periods have been paid, or declared, set apart and provision has been made for the currently payable dividends.
PLDT’s Non-Voting Serial Preferred Stock has a par value of Php10 per share.
On June 5, 2012, the Philippine SEC approved the amendments to the Seventh Article of PLDT’s Articles of Incorporation consisting of the sub-classification of its authorized Preferred Capital Stock into: 150 million shares of Voting Preferred Stock with a par value of Php1.00 each, and 807.5 million shares of Non-Voting Serial Preferred Stock with a par value of Php10.00 each, and other conforming amendments, or the Amendments. The shares of Voting Preferred Stock may be issued, owned, or transferred only to or by: (a) a citizen of the Philippines or a domestic partnership or association wholly-owned by citizens of the Philippines; (b) a corporation organized under the laws of the Philippines of which at least 60% of the capital stock entitled to vote is owned and held by citizens of the Philippines and at least 60% of the board of directors of such corporation are citizens of the Philippines; and (c) a trustee of funds for pension or other employee retirement or separation benefits, where the trustee qualifies under paragraphs (a) and (b) above and at least 60% of the funds accrue to the benefit of citizens of the Philippines, or Qualified Owners. The holders of Voting Preferred Stock will have voting rights at
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any meeting of the stockholders of PLDT for the election of directors and for all other purposes, with one vote in respect of each share of Voting Preferred Stock. The Amendments were approved by the Board of Directors and stockholders of PLDT on July 5, 2011 and March 22, 2012, respectively.
On October 12, 2012, the Board of Directors, pursuant to the authority granted to it in the Seventh Article of PLDT’s Articles of Incorporation, determined the following specific rights, terms and features of the Voting Preferred Stock: (a) entitled to receive cash dividends at the rate of 6.5% per annum, payable before any dividends are paid to the holders of Common Stock; (b) in the event of dissolution or liquidation or winding up of PLDT, holders will be entitled to be paid in full, or pro-rata insofar as the assets of PLDT will permit, the par value of such shares of Voting Preferred Stock and any accrued or unpaid dividends thereon before any distribution shall be made to the holders of shares of Common Stock; (c) redeemable at the option of PLDT; (d) not convertible to Common Stock or to any shares of stock of PLDT of any class; (e) voting rights at any meeting of the stockholders of PLDT for the election of directors and all other matters to be voted upon by the stockholders in any such meetings, with one vote in respect of each Voting Preferred Share; and (f) holders will have no pre-emptive right to subscribe for or purchase any shares of stock of any class, securities or warrants issued, sold or disposed by PLDT.
On October 16, 2012, BTFHI subscribed to 150 million newly issued shares of Voting Preferred Stock of PLDT, at a subscription price of Php1.00 per share for a total subscription price of Php150 million pursuant to a subscription agreement between BTFHI and PLDT dated October 15, 2012. As a result of the issuance of Voting Preferred Shares, the voting power of the NTT Group (comprising of NTT DOCOMO and NTT DOCOMO Business), First Pacific Group and its Philippine affiliates, and JG Summit Group was reduced to 12.01%, 15.09% and 6.65%, respectively, which still holds as at December 31, 2025. See Note 1 – Corporate Information.
PLDT’s Voting Serial Preferred Stock has a par value of Php1 per share.
Redemption of Preferred Stock
The Board of Directors approved the redemption, or the Redemption, of all outstanding shares of the following 10% Cumulative Convertible Preferred Stock as follows:
Date of Board Approval
Series
Amount set aside for Redemption Price
Amount set aside for Unclaimed Dividends
Date of Redemption
Redemption Period
September 23, 2011
A-FF
Php4,029 million
Php4,143 million
January 19, 2012
January 19, 2012 toJanuary 19, 2022
May 8, 2012
GG
Php236 thousand
Php74 thousand
August 30, 2012
August 30, 2012 toAugust 30, 2022
January 29, 2013
HH(issued in 2007)
Php24 thousand
Php6 thousand
May 16, 2013
May 16, 2013 toMay 16, 2023
January 28, 2014
HH(issued in 2008)
Php2 thousand
Php1 thousand
May 16, 2014
May 16, 2014 toMay 16, 2024
January 26, 2016
II
Php4 thousand
__
May 11, 2016
May 11, 2016 toMay 11, 2026
January 28, 2020
JJ
May 12, 2020
May 12, 2020 toMay 12, 2030
PLDT set aside amounts required to fund the redemption price and unclaimed dividends for the Series A to JJ Shares, or the Redemption Trust Fund, in a trust account, or the Trust Account, in the name of RCBC, as Trustee. Pursuant to the terms of the Trust Account, the Trustee will continue to hold the Redemption Trust Fund or any balance thereof, in trust, for the benefit of holders of Series A to JJ Shares, for a period of ten years from the date of redemption. After the said date, any and all remaining balance in the Trust Account shall be returned to PLDT and revert to its general funds. Any interest on the Redemption Trust Fund shall accrue for the benefit of, and be paid from time to time, to PLDT.
On January 20, 2022, RCBC returned to PLDT the remaining unclaimed balance of the Trust Account for the Series A to FF, amounting to Php7,839 million. Due to the prescription of PLDT’s obligations to pay the trust amounts for Series A to FF, income from prescription of preferred shares redemption liability of Php7,839 million was recognized in 2022.
PLDT has withdrawn nil, Php13 thousand and Php354 thousand from the Trust Account representing total payments on redemption for the years ended December 31, 2025, 2024 and 2023, respectively. There were no outstanding balance of the Trust Account as at December 31, 2025 and 2024. On June 14, 2013, PLDT amended its Articles of Incorporation to decrease the authorized capital stock for its Non-Voting Serial Preferred Stock from 807.5 million shares to 388 million shares. See related disclosures below under Non-controlling interests - Perpetual Notes and Note 27 – Financial Assets and Liabilities.
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Common Stock/Treasury Stock
The Board of Directors approved a share buyback program of up to five million shares of PLDT’s common stock, representing approximately 3% of PLDT’s then total outstanding shares of common stock in 2008. Under the share buyback program, PLDT reacquired shares on an opportunistic basis, directly from the open market through the trading facilities of the PSE and NYSE.
As at November 2010, we had acquired a total of approximately 2.72 million shares of PLDT’s common stock at a weighted average price of Php2,388 per share for a total consideration of Php6,505 million in accordance with the share buyback program. There were no further buyback transactions subsequent to November 2010.
PLDT’s Common Stock, has a par value of Php5 per share, with shares issued and outstanding amounting to Php1,093 million as at December 31, 2025 and 2024.
Dividends Declared
Our dividends declared for the years ended December 31, 2025, 2024 and 2023 are detailed as follows:
(in million pesos, except per share amounts)
Cumulative Non-Convertible Redeemable Preferred Stock
Series IV (1)
`
20,525
Charged to retained earnings
(1)Dividends were declared based on the total amount subscribed.
20,741
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November 7, 2023
November 22,2023
December 15,2023
December 5, 2023
December 22, 2023
January 15, 2024
23,334
23,393
April 2, 2026
9,953
Noncontrolling Interests – Perpetual Notes
Smart issued Php2,610 million and Php1,590 million perpetual notes on March 3, 2017 and March 6, 2017, respectively, under two Notes Facility Agreements dated March 1, 2017 and March 2, 2017, respectively. Proceeds from the issuance of these notes were used to finance capital expenditures. The notes have no fixed redemption dates. The transaction costs amounting to Php34 million were accounted for as a deduction from the perpetual notes. The notes are subordinated to and rank junior to all senior loans of Smart. In accordance with IAS 32, Financial Instruments: Presentation, the notes are classified as part of Smart’s equity and recorded as noncontrolling interests in PLDT’s consolidated financial statements.
Smart paid distributions amounting to Php59 million and Php236 million as at December 31, 2024 and 2023, respectively. On March 3, 2024 and March 6, 2024, Smart fully redeemed its Perpetual Notes amounting to Php2,610 million and Php1,590 million, respectively.
Retained Earnings Available for Dividend Declaration
As at December 31, 2025, Parent Company’s unappropriated retained earnings available for dividends amounted to Php24,655 million.
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As at December 31, 2025 and 2024, this account consists of the following:
Long-term portion of interest-bearing financial liabilities ─
Long-term debt (Notes 27 and 28)
Long-term debt maturing within one year (Notes 27 and 28)
15,880
Short-term debt (Notes 27 and 28)
Unamortized debt discount, representing debt premium, debt issuance costs and any difference between the fair value of consideration given or received at initial recognition, included in our financial liabilities amounted to Php1,891 million and Php1,989 million as at December 31, 2025 and 2024, respectively.
The following table describes all changes to unamortized debt discount for the years ended December 31, 2025 and 2024:
Unamortized debt discount at beginning of the year
1,989
2,129
271
Revaluations
Accretion included as part of financing costs – net
(372
(368
Unamortized debt discount at end of the year
1,891
The scheduled maturities of our consolidated outstanding long-term and short-term debt at nominal values as at December 31, 2025 are as follows:
U.S. Dollar Debt
Php Debt
U.S. Dollar
Php
823
15,736
16,559
27,056
27,879
1,646
20,027
21,673
26,662
24,192
25,015
35,274
143,877
179,151
Total long-term debt (Note 27)
39,389
257,550
296,939
Long-term Debt
As at December 31, 2025 and 2024, long-term debt consists of:
Description
Interest Rates
U.S.Dollar
U.S. Dollar Debts:
Fixed Rate Notes
2.5000% to 3.4500% in 2025 and 2024
591
34,779
34,177
Term Loans:
SOFR + 1.31161 % in 2025 and SOFR + 1.31161 % to 1.47826% in 2024
4,100
4,838
661
38,879
675
39,015
Philippine Peso Debts:
Unsecured Term Loans
4.0000% to 5.3500%; PHP BVAL + 0.4000% to 1.1250% (floor rate 4.5000% to 4.6250%) in 2025 and 4.000% to 5.3500%; PHP BVAL + 0.5000% to 1.0000% (floor rate 4.5000% to 4.6250%) in 2024
255,869
242,571
Total long-term debt (Notes 27 and 28)
294,748
Less portion maturing within one year (Note 27)
Noncurrent portion of long-term debt (Note 27)
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Outstanding Amounts
Repurchase Amount
Loan Amount
Issuance Date
Trustee
Terms
Dates
Paid infull on
Fixed Rate Notes(1)
US$300M
June 23, 2020
The Bank of New York Mellon, London Branch
Non-amortizing, payable in full upon maturity on January 23, 2031
297
(2)
17,468
17,155
Non-amortizing, payable in full upon maturity on June 23, 2050
17,311
17,022
(1)The purpose of this loan is to refinance the existing loan obligations, prepay outstanding loans and partially finance capital expenditures.
(2)Amounts are net of unamortized debt discount/premium and/or debt issuance cost.
Drawn Amount
Cancelled Undrawn Amount
Date of LoanAgreement
Lender(s)
Dates Drawn
U.S. Dollar Debts
Other Term Loans(1)
US$25M
2017
NTT TC Leasing
Non-amortizing, payable upon maturity on March 27, 2024
March 27, 2024
US$140M
March 4, 2020
PNB
Quarterly amortization rates equivalent to: (a) 2.5% of the total amount drawn payable on the first interest payment date up to the 28th interest payment date; (b) 5% of the total amount drawn payable on the 29th interest payment date up to the 32nd interest payment date; and (3) 2.5% of the total amount drawn payable on the 37th interest payment date up to maturity on December 13, 2030
December 14, 2020
140
(1)The purpose of this loan is to finance capital expenditures and/or to refinance existing loan obligations which were utilized for network expansion and improvement programs.
Date of
Payments
Issuance/
Paying Agent
Drawdown
Fixed Rate Retail Bonds(1)
Php15,000M
January 22, 2014
Philippine DepositaryTrust Corp.
Php12.4B – non-amortizing, payable in full upon maturity on February 6, 2021; Php2.6B – non-amortizing payable in full on February 6, 2024
February 6, 2014
12,4002,600
February 8, 2021February 6, 2024
F-88
Drawn
Date of Loan
Term Loans
Unsecured Term Loans(1)
Php9,500M
Various dates in 2014 and 2019
Union Bank of the Philippines
With annual amortization up to 10 years
9,500
7,689
7,811
Php70,500M
Various dates in 2015 to 2024
Bank of the Philippine Islands
With annual amortization up to 6, 10 and 11 years
Various dates in 2015 to 2025
70,500
56,443
54,738
Php55,500M
Metropolitan Bank and Trust Company(3)
With annual amortization up to 10 and 11 years
Various date in 2015 to 2025
54,000
42,635
38,618
Php18,500M
Various dates in 2019 and 2023
China Banking Corporation
18,500
14,919
15,770
Php14,000M
Various dates in 2016 and 2017
Security Bank
With semi-annual amortization up to 10 years
Various dates in 2017
14,000
10,372
10,566
Php39,970M
Various dates in 2016 to 2025
Banco de Oro
With annual amortization up to 7 and 10 years
Various dates in 2016, 2020, 2021, 2024 and 2025
39,820
38,560
29,564
Php8,500M
Various dates in 2016, 2017 and 2019
Philippine National Bank
With annual amortization up to 7, 8 and 10 years
Various dates in 2017, 2018 and 2019
8,500
6,491
7,920
Php41,500M
Various dates in 2016 to 2023
Landbank of the Philippines
Various dates in 2017 to 2023
41,500
39,131
39,475
Various dates in 2019 to 2021
Development Bank of the Philippines
With annual amortization up to 8, 9 and 10 years
Various dates in 2019 to 2022
13,397
13,513
Php2,000M
April 11, 2019
Bank of China (Hong Kong) Limited, Manila Branch
With annual amortization up to 7 years
September 6, 2019
2,000
1,878
Various dates in 2020, 2021 and 2023
With annual amortization up to 8, 10 and 11 years
15,000
14,324
14,443
Php2,500M
March 30, 2020
MUFG Bank, Ltd.
With semi-annual amortization up to 6 years
April 2, 2020
2,500
949
972
Php3,800M
Various dates in 2023 and 2024
Bank of Commerce
With annual amortization up to 9 and 10 years
3,800
3,733
3,769
Php3,000M
Various dates in 2024
Hongkong and Shanghai Banking Corporation(3)
With annual amortization up to 5 years
2,838
2,986
Php2,530M
Various dates in 2024 and 2025
Philippine Veterans Bank
2,530
2,510
(1)The purpose of this loan is to finance capital expenditure and/or to refinance existing loan obligations which were utilized for network expansion and improvement programs.
(3)Includes Green Loan and Social Loan.
F-89
Green Loan and Social Loan Facilities
On March 6 and May 6, 2024, PLDT secured Php1,000 million and Php4,000 million Green Loan Facilities from HSBC Philippines and Metropolitan Bank & Trust Company, respectively, to partially fund the Company’s ongoing nationwide modernization and expansion of its fiber network. The upgrade of the network to fiber and the resultant energy-efficient operations support the PLDT Group decarbonization roadmap, which aims to reduce its Scope 1 and Scope 2 greenhouse gas emissions by 40% by 2030, from a 2019 baseline.
On October 21, 2024, PLDT secured a Php2,000 million Social Loan Facility from HSBC Philippines to partially fund the Company’s network fiber expansion to reach the country's fourth to sixth class municipalities. This initiative aligns with the government’s focus on enhancing connectivity in Geographically Isolated and Disadvantaged Areas (GIDAs).
On November 4, 2025, Smart secured a Php2,000 million Green Loan Facility from Metropolitan Bank & Trust Company, to partially fund the expansion of its 5G network. Compared to previous technologies, 5G networks are more energy efficient per gigabyte of data and more reliable in delivering better speeds to end-users. 5G also enables shifting to low-energy mode and optimizes energy consumption based on actual network activity, facilitating reduction of greenhouse gas (GHG) emissions.
Short-term Debt
On January 3, 2025, PLDT and Smart availed of unsecured short-term debt amounting to Php787 million and Php235 million, respectively, with an interest rate of 6.43%, which were fully paid on March 21, 2025.
In July and August 2025, Multisys availed of unsecured short-term debt amounting to Php50 million each, with an interest rate of 6.40%.
In October 2025, Multisys availed of unsecured short-term debt amounting to Php200 million, with an average interest rate of 6.0391%.
As at December 31, 2025, outstanding short-term debt amounted to Php300 million.
Subsequent Drawdown
No subsequent drawdowns were made after December 31, 2025.
F-90
Compliance with Debt Covenants
PLDT’s debt instruments contain restrictive covenants, including covenants that require us to comply with specified financial ratios tests, such as total debt to EBITDA and interest cover ratio, at relevant measurement dates, principally at the end of each quarterly period.
PLDT’s debt instruments also contain a number of other negative covenants that, subject to certain exceptions and qualifications, restrict PLDT’s ability to take certain actions without lenders’ approval, including: (a) making or permitting any material change in the character of its business; (b) selling, leasing, transferring or disposing of all or substantially all of its assets or any significant portion thereof other than in the ordinary course of business; (c) creating any lien or security interest; (d) permitting set-off against amounts owed to PLDT; (e) merging or consolidating with any other company; and (f) making or permitting any preference or priority in respect of any other relevant indebtedness of PLDT.
PLDT’s debt instruments also contain customary and other default provisions that permit the lender to accelerate amounts due or terminate their commitments to extend additional funds under the debt instruments.
Smart’s debt instruments contain certain restrictive covenants that require Smart to comply with specified financial ratios and other financial tests at semi-annual measurement dates. Smart’s loan agreements include compliance with financial tests such as Smart’s consolidated debt to consolidated EBITDA and interest coverage ratio. The agreements also contain customary and other default provisions that permit the lender to accelerate amounts due under the loans or terminate their commitments to extend additional funds under the loans.
Vitro’s debt instruments contain certain restrictive covenants that require Vitro to comply with specified financial ratios and other financial tests at quarterly measurement dates. Vitro’s loan agreement includes compliance with financial tests such as total debt to equity and interest coverage ratio. The agreement also contains customary and other default provisions that permit the lender to accelerate amounts due under the loans or terminate their commitment to extend additional funds under the loans. Vitro’s debt instruments also contain a number of other negative covenants that, subject to certain exceptions and qualifications, restrict Vitro’s ability to take certain actions without lenders’ approval.
The principal factors that could negatively affect our ability to comply with these financial ratio covenants and other financial tests are poor operating performance of PLDT and its subsidiaries, depreciation of the Philippine Peso relative to the U.S. Dollar, impairment or similar charges in respect of investments or other long-lived assets that may be recognized by PLDT and its subsidiaries, and increases in our interest expense. Interest expense may increase as a result of various factors including issuance of new debt, the refinancing of lower cost indebtedness by higher cost indebtedness, depreciation of the Philippine Peso relative to the U.S. Dollar, the lowering of PLDT’s credit ratings or the credit ratings of the Philippines, increase in reference interest rates, and general market conditions. Of our total consolidated debts (net of consolidated debt discount), approximately 13% and 14% were denominated in U.S. Dollars as at December 31, 2025 and 2024, respectively. Considering our consolidated outstanding derivatives, the unhedged portion of the PLDT’s net debt amounts was approximately 10% (or 9%, net of our consolidated U.S. Dollar cash balances allocated for debt) as at December 31, 2025 and 6% (or 5%, net of our consolidated U.S. Dollar cash balances allocated for debt) as at December 31, 2024. Therefore, the financial ratio and other tests are expected to be negatively affected by any weakening of the Philippine Peso relative to the U.S. Dollar. See Note 27 – Financial Assets and Liabilities – Foreign Currency Exchange Risk.
The loan agreements with banks (foreign and local alike) and other financial institutions provide for certain restrictions and requirements with respect to, among others, maintenance of percentage of ownership of specific shareholders, incurrence of additional long-term indebtedness or guarantees and creation of property encumbrances.
As at December 31, 2025 and 2024, we were in compliance with all of our debt covenants. See Note 27 – Financial Assets and Liabilities – Derivative Financial Instruments.
F-91
Contract liabilities and unearned revenues - non-current
4,884
5,625
1,836
1,752
Accrual of capital expenditures (1)
1,526
(1)Represents expenditure related to the acquisition of Property and Equipment which are not due to be settled within one year.
The following table summarizes the changes to provision for asset retirement obligations for the years ended December 31, 2025 and 2024:
Provision for asset retirement obligations at beginning of the year
1,164
Capitalized to ROU assets during the year
Accretion expenses
Settlement of obligations and others
Reclassification to liabilities associated with assets classified as held-for-sale
Change in assumptions
(51
Revaluation due to change in IBR
515
Provision for asset retirement obligations at end of the year
F-92
Suppliers and contractors (Note 27)
49,896
58,524
Taxes (Note 26)
3,559
5,473
Carriers and others (Note 27)
2,674
2,579
Related parties
250
Certain suppliers entered into Trade Financing Arrangements (TFAs) to sell their receivables. The Purchaser will have exclusive ownership of the purchased receivables and all of its rights, title and interest. As of December 31, 2025 and 2024, the carrying amounts of liabilities entered into TFAs amounted to Php15,741 million and Php14,106 million, respectively. The same amounts were also received by the suppliers as at December 31, 2025 and 2024, respectively. These are presented as part of Accounts Payable – Suppliers and contractors.
Below are the range of payment terms:
Liabilities that are part of the arrangement
210-359 days after invoice due date
210-300 days after invoice due date
Comparable trade payables that are not part of an arrangement
30-300 days after invoice due date
Non-cash changes
There were no material business combinations or foreign exchange differences in either period. There were no non-cash transfers from trade payables to finance payables as at December 31, 2025 and 2024.
For terms and conditions pertaining to the payables to related parties, see Note 24 – Related Party Transactions.
For detailed discussion on the PLDT Group’s liquidity risk management processes, see Note 27 – Financial Assets and Liabilities – Liquidity Risk.
F-93
Accrued utilities and related expenses (Notes 24 and 27)
50,462
57,276
Contract liabilities and unearned revenues - current portion
9,445
10,442
Accrued employee benefits and other provisions (Note 27)
4,970
9,246
Accrued interests and other related costs (Note 28)
2,454
2,426
Accrued taxes and related expenses (Note 26)
2,349
3,907
3,272
2,191
Accrued utilities and related expenses pertain to costs incurred for electricity and water consumption, repairs and maintenance, selling and promotions, professional and other contracted services, rent, insurance and security services and other operational related expenses pending receipt of billings and statements of account from suppliers. These liabilities are noninterest-bearing and are normally settled within a year.
Contract liabilities and unearned revenues represent advance payments for leased lines, installation fees, monthly service fees and unused and/or unexpired portions of prepaid loads.
Accrued employee benefits and other provisions pertain to accrued salaries, wages and bonuses, and other employee benefits that are normally settled within a year.
Accrued taxes and related expenses pertain to licenses, permits and other related business taxes, which are normally settled within a year.
Accrued interests and other related costs include interest expense on loans, which are normally settled within a year.
Other accrued expenses and other current liabilities are normally settled within a year. They pertain to other costs incurred for operation-related expenses pending receipt of invoice and statement of accounts from suppliers and are noninterest-bearing. They also include accruals related to acquisition of Property and Equipment which are due to be settled within a year.
F-94
24. Related Party Transactions
Parties are considered to be related if one party has the ability, directly and indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or with interlocking directorship. Related parties may be individuals or corporate entities. Transactions with related parties are on an arm’s length basis, similar to transactions with third parties.
Settlement of outstanding balances of related party transactions at year-end are expected to be settled with cash.
The following table provides a summary of outstanding balances as at December 31, 2025 and 2024, and transactions for the years ended December 31, 2025, 2024 and 2023 that have been entered into with related parties:
Company Name
Particulars
Conditions
Statement of Financial
Income Statement
Position Classification
Classification
Transactions with major stockholders, directors and officers:
Manila Electric Company, or Meralco
Electricity services to PLDT and certain subsidiaries’ offices within Meralco's franchise area
Immediately upon receipt of invoice
Unsecured
Accounts payable and accrued expenses and other current liabilities
590
552
3,152
3,039
2,928
Pole attachment contracts, wherein Meralco leases its pole spaces to accommodate PLDT and Smart’s cable network facilities
Upon depreciation or expiration of lease
ROU assets
1,974
2,600
1,309
603
2025 – due after December 31, 2026; 2024 – due after December 31, 2025
Lease liabilities - net of current portion
1,552
2025 – due after December 31, 2025; 2024 – due after December 31, 2024
Current portion of lease liabilities
645
565
Meralco Industrial Engineering Services Corporation, or MIESCOR
Customer line installation, repair, rehabilitation and maintenance activities
30 days upon receipt of invoice
213
F-95
PLDT signed a US$25 million term loan facility agreement on March 22, 2016
Non-amortizing, payable upon maturity on March 30, 2023
Interest-bearing financial liabilities
PLDT signed a US$25 million term loan facility agreement on January 31, 2017
NTT World Engineering Marine Corporation
On February 1, 2008, PLDT entered into a service agreement, wherein NTT World Engineering Marine Corporation provides offshore submarine cable repair and other allied services for the maintenance of PLDT’s domestic fiber optic network submerged plant.
1st month of each quarter; noninterest-bearing
NTT DOCOMO Business
On March 24, 2000, PLDT entered into an advisory service agreement (as amended on March 31, 2003, March 31, 2005 and June 16, 2006), under which NTT DOCOMO Business provides PLDT with technical, marketing and other consulting services for various business areas of PLDT starting April 1, 2000.
30 days upon receipt of invoice; noninterest-bearing
NTT Worldwide Telecommunications Corporation
On March 24, 2000, PLDT entered into an agreement under which PLDT markets, and manages data and other services under NTT DOCOMO Business’ “Arcstar” brand to its corporate customers in the Philippines. PLDT also entered into a Trade Name and Trademark Agreement with NTT DOCOMO Business under which PLDT has been given the right to use the trade name “Arcstar” and its related trademark, logo and symbols, solely for the purpose of PLDT’s marketing, promotional and sales activities for the Arcstar services within the Philippines.
Selling and promotions
NTT DOCOMO
On June 5, 2006, in accordance with the Cooperation Agreement dated January 31, 2006, an Advisory Services Agreement was entered into by NTT DOCOMO and PLDT. Pursuant to the Advisory Services Agreement, NTT DOCOMO will provide the services of certain key personnel in connection with certain aspects of the business of PLDT and Smart. Also, this agreement governs the terms and conditions of the appointments of such key personnel and the corresponding fees related thereto.
F-96
JGSHI and Subsidiaries
PLDT and certain of its subsidiaries have existing agreements with Universal Robina Corporation and Robinsons Land Corporation for office and business office rental.
1st month of each quarter; 30 days upon receipt of invoice; noninterest-bearing
246
PLDT Group's other transactions with JGSHI and subsidiaries mainly consist of electricity charges for collocated offices and business offices.
Malayan Insurance Co., Inc., or Malayan
PLDT and certain of its subsidiaries have insurance policies with Malayan covering directors, officers, liability to employees and material damage for buildings, building improvements, equipment and motor vehicles. The premiums are directly paid to Malayan.
Gotuaco del Rosario and Associates, or Gotuaco
Gotuaco acts as the broker for certain insurance companies to cover certain insurable properties of the PLDT Group. Insurance premiums are remitted to Gotuaco and the broker’s fees are settled between Gotuaco and the insurance companies.
142
First Pacific Investment Management Limited, or FPIML
On March 1, 2018, Smart entered into an Advisory Services Agreement with FPIML effective for a period of one-year subject to a 12-month automatic renewal unless either party notifies the other party of its intent not to renew the agreement. FPIML provides advisory and related services in connection with the operation of Smart’s business of providing mobile communications services, high-speed internet connectivity, and access to digital services and content. Since April 2021, Smart pays a monthly service fee amounted to $220 thousand per month.
163
149
F-97
Other related parties:
Various
PLDT and certain of its subsidiaries provide telephone, data communication and other services to various related parties including affiliates and directorship affiliations.
8,459
7,948
2,656
2,589
PLDT and certain of its subsidiaries avail of lease and other services from various related parties including affiliates and directorship affiliations.
Lease liabilities - net of current portion (Note 10)
738
4,355
7,618
4,433
243
ROU assets (Note 10)
907
30 days upon receipt of billing; noninterest-bearing
1,485
Immediately upon receipt of billing
744
F-98
Compensation of Key Officers
The compensation of key officers of the PLDT Group by benefit type for the years ended December 31, 2025, 2024 and 2023 are as follows:
Short-term employee benefits
318
582
Post-employment benefits
Other long-term employee benefits (Note 25)
254
Total compensation of PLDT key officers
677
The amounts disclosed in the table above are the amounts recognized as expenses during the period related to key management personnel.
Effective January 2014, each of the directors, including the members of the advisory board of PLDT, is entitled to a director’s fee in the amount of Php250 thousand for each board meeting attended. Each of the members or advisors of the audit, governance, nomination and sustainability, executive compensation, technology strategy, and risk and data privacy and information security committees is entitled to a fee in the amount of Php125 thousand for each committee meeting attended.
Total fees paid for board meetings and board committee meetings amounted to Php62 million, Php85 million and Php88 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Except for the fees mentioned above, the directors are not compensated, directly or indirectly, for their services as directors.
There are no agreements between PLDT and any of its key management personnel providing benefits upon termination of employment, except for such benefits to which they may be entitled under PLDT’s retirement and incentive plans.
F-99
Pension
Defined Benefit Pension Plans
PLDT has defined benefit pension plans, operating under the legal name “The Board of Trustees for the account of the Beneficial Trust Fund created pursuant to the Benefit Plan of PLDT Company” and covering all of our permanent and regular employees. For the purpose of complying with Revised IAS 19, Employee Benefits, pension benefit expense has been actuarially computed based on defined benefit plan.
PLDT and certain of its subsidiaries’ actuarial valuation is performed every year-end. There is no significant change in the fair value of plan assets for the year ended December 31, 2025. Based on the latest actuarial valuation, the actual present value of accrued (prepaid) benefit costs as at December 31, 2025 and 2024, and net periodic benefit costs and average assumptions used in developing the valuation as at and for the years ended December 31, 2025, 2024 and 2023 are as follows:
Changes in the present value of defined benefit obligations:
Present value of defined benefit obligations at beginning of the year
17,376
17,964
15,883
Service costs
1,042
Interest costs on benefit obligation
1,059
1,043
1,065
Actuarial losses on obligations – experience
437
Actuarial gains on obligations – economic assumptions
(122
(496
2,303
Actual benefits paid/settlements
(2,744
(2,848
Curtailment and others
130
Present value of defined benefit obligations at end of the year
17,786
Changes in fair value of plan assets:
Fair value of plan assets at beginning of the period
13,985
14,522
16,291
Actual contributions
1,533
3,201
4,507
Interest income on plan assets
984
1,019
1,138
(1,599
(2,820
(2,510
Return on plan assets (excluding amount included in net interest)
(760
(1,937
(4,904
Fair value of plan assets at end of the year
14,143
Unfunded status – net
(3,643
(3,391
(3,442
Accrued benefit costs
3,541
Prepaid benefit costs
157
Components of net periodic benefit costs:
Interest costs - net
(73
272
Net periodic benefit costs
1,240
1,215
Actual net gain on plan assets amounted to Php224 million, Php918 million and Php3,766 million for the years ended December 31, 2025, 2024 and 2023.
Based on the latest actuarial valuation, our expected contribution to the defined benefit plan in 2026 will amount to
Php4,665 million.
The following table sets forth the expected future settlements by the Plan of maturing defined benefit obligation as at December 31, 2025:
711
644
1,331
12,069
The average duration of the defined benefit obligation at the end of the reporting period is 12.70 years.
F-100
The weighted average assumptions used to determine pension benefits for the years ended December 31, 2025, 2024 and 2023 are as follows:
(in percentage)
Rate of increase in compensation
5.7
Discount rate
6.5
6.2
6.0
The sensitivity analysis below has been determined based on reasonably possible changes of each significant assumption on the defined benefit obligation as at December 31, 2025 and 2024, assuming if all other assumptions were held constant:
Effect
15,525
15,251
(19,744
(19,348
Future salary increases
19,730
19,334
(15,501
(15,229
PLDT’s Retirement Plan
The Board of Trustees, which manages the beneficial trust fund, is composed of: (i) a member of the Board of Directors of PLDT, who is not a beneficiary of the Plan; (ii) a member of the Board of Directors or a senior officer of PLDT, who is a beneficiary of the Plan; (iii) a senior member of the executive staff of PLDT; and (iv) two persons who are not executives nor employees of PLDT.
Benefits are payable in the event of termination of employment due to: (i) compulsory, optional, or deferred retirement; (ii) death while in active service; (iii) physical disability; (iv) voluntary resignation; or (v) involuntary separation from service. For a plan member with less than 15 years of credited services, retirement benefit is equal to 100% of final compensation for every year of service. For those with at least 15 years of service, retirement benefit is equal to 125% of final compensation for every year of service, with such percentage to be increased by an additional 5% for each completed year of service in excess of 15 years, but not to exceed a maximum of 200%. In the case of voluntary resignation after attainment of age 40 and completion of at least 15 years of credited service, benefit is equal to a percentage of his vested retirement benefit, in accordance with percentages prescribed in the retirement plan.
The Board of Trustees of the beneficial trust fund uses an investment approach with the objective of maximizing the long-term expected return of plan assets.
The majority of the Plan’s investment portfolio consists of listed and unlisted equity securities while the remaining portion consists of passive investments like temporary cash investments and fixed income investments.
The plan assets are primarily exposed to financial risks such as liquidity risk and price risk.
Liquidity risk pertains to the plan’s ability to meet its obligation to the employees upon retirement. To effectively manage liquidity risk, the Board of Trustees invests at least the equivalent amount of actuarially computed expected compulsory retirement benefit payments for the year to liquid/semi-liquid assets such as government securities, savings and time deposits with commercial banks.
Price risk pertains mainly to fluctuations in market prices of equity securities listed in the PSE. In order to effectively manage price risk, the Board of Trustees continuously assesses these risks by closely monitoring the market value of the securities and implementing prudent investment strategies.
F-101
The following table sets forth the fair values, which are equal to the carrying values, of PLDT’s plan assets recognized as at December 31, 2025 and 2024:
Noncurrent Financial Assets
Investments in:
Unquoted equity investments
10,502
10,774
Shares of stock
2,288
1,983
Corporate bonds
317
303
Mutual funds
306
252
Government securities
Total noncurrent financial assets
13,417
13,316
Current Financial Assets
459
Receivables
Total current financial assets
559
512
Total PLDT’s Plan Assets
13,976
13,828
Subsidiaries Plan Assets
Total Plan Assets of Defined Benefit Pension Plans
Investment in shares of stocks is valued using the latest bid price at the reporting date. Investments in corporate bonds, mutual funds and government securities are valued using the quoted market prices at reporting date.
Unquoted Equity Investments
(Percentage of Ownership)
MediaQuest
6,970
Tahanan Mutual Building and Loan Association, Inc., or TMBLA, (net of subscriptions payable of Php32 million)
773
722
BTFHI
2,759
2,748
Investments in MediaQuest
MediaQuest was registered with the Philippine SEC on June 29, 1999 primarily to purchase, subscribe for or otherwise acquire and own, hold, use, manage, sell, assign, transfer, mortgage, pledge, exchange, or otherwise dispose of real and personal property or every kind and description, and to pay thereof in whole or in part, in cash or by exchanging, stocks, bonds and other evidences of indebtedness or securities of this any other corporation. Its investments include common shares of stocks of various communication, broadcasting and media entities.
Investments in MediaQuest are carried at fair value. The VIU calculations were derived from cash flow projections over a period of five years based on the 2026 financial budgets approved by MediaQuest’s Board of Directors and calculated terminal value. Other key assumptions used in the cash flow projections include revenue growth rate, direct costs and capital expenditures. The post-tax discount rates applied to cash flow projections range from 11.15% to 11.36%. Cash flows beyond the five-year period are determined using 0.00% to 4.89% growth rates.
The Board of Trustees of PLDT Beneficial Trust Fund and the MediaQuest Board of Directors, on various dates in 2012 and 2013, approved the issuances of MediaQuest of PDRs comprising of underlying shares of stocks of 40% of Cignal TV (Cignal TV PDRs), 40% of Satventures (Satventures PDRs) and 70% of Hastings (Hastings PDRs). Satventures is a wholly-owned subsidiary of MediaQuest and the parent company of Cignal TV. Hastings, on the other hand, is also a wholly-owned subsidiary of MediaQuest, which holds all the print-related investments of MediaQuest, including equity interests in The Philippine Star and BusinessWorld.
ePLDT’s Board of Directors approved on various dates in 2012 to 2015, the investment in the PDRs of MediaQuest as follows:
ePLDT's economic interest
Satventures PDRs
40% of Satventures
3,600
Cignal TV PDRs
40% of Cignal TV
6,000
Hastings PDRs
70% of Hastings
3,250
F-102
In February 2018, ePLDT entered into a Deed of Assignment with the Board of Trustees of the PLDT Beneficial Trust Fund transferring the Hastings PDRs for Php1,664 million. This provided PLDT Beneficial Trust with 100% economic interest in Hastings.
As at December 31, 2025 and 2024, the PLDT Beneficial Trust Fund’s economic interests in Cignal TV (through Satventures) and Hastings were at 36% and 100%, respectively.
Investment in TMBLA
TMBLA was incorporated for the primary purpose of accumulating the savings of its stockholders and lending funds to them for housing programs. The beneficial trust fund’s total investment into TMBLA amounted to Php119 million consisting of initial direct subscription in shares of stocks of TMBLA in the amount of Php20 million (net of unpaid subscription amounting to Php32 million) and subsequently via a Deed of Pledge amounting to Php99 million. The cumulative change in the fair market values of this investment amounted to Php654 million and Php603 million as at December 31, 2025 and 2024, respectively.
Investment in BTFHI
BTFHI was incorporated for the primary purpose of acquiring voting preferred shares in PLDT and while the owner, holder or possessor thereof, to exercise all the rights, powers, and privileges of ownership or any other interest therein.
BTFHI subscribed to a total of 150 million shares of Voting Preferred Stock of PLDT at a subscription price of Php1.00 per share for a total subscription price of Php150 million on October 26, 2012.
On April 30, 2024, the Board of Trustees of PLDT Beneficial Trust Fund subscribed and paid an additional subscription into BTFHI amounting to Php2,480 million.
Total cash dividend income amounted to Php10 million for each of the years ended December 31, 2025, 2024 and 2023. Dividend receivables amounted to Php2 million each as at December 31, 2025 and 2024.
Shares of Stocks
Common shares
PSE
506
Preferred shares
Dividends earned on PLDT common shares amounted to Php3 million each for the years ended December 31, 2025, 2024 and 2023.
Preferred shares represent 300 million unlisted preferred shares of PLDT at Php10 par value, net of subscription payable of Php2,640 million as at December 31, 2025 and 2024. These shares, which bear a dividend of 13.5% per annum based on the paid-up subscription price, are cumulative, non-convertible and redeemable at par value at the option of PLDT. Dividends earned on this investment amounted to Php49 million each for the years ended December 31, 2025, 2024 and 2023.
Corporate Bonds
Investment in corporate bonds includes debt securities of First Pacific and International Container Terminal Services, Inc. amounting to Php140 million and Php74 million, respectively. Other various long-term peso and dollar denominated bonds with maturities ranging from March 2026 to July 2035 and fixed interest rates from 3.36% to 7.53% per annum amounted to Php103 million.
Mutual Funds
Investment in mutual funds amounting to Php306 million includes UITF, bond and equity funds, which aims to out-perform benchmarks in various indices as part of its investment strategy.
F-103
Government Securities
Investments in government securities include Retail Treasury Bonds and FXTN bearing interest rates ranging from 3.9% to 4.8% per annum. These securities are fully guaranteed by the government of the Republic of the Philippines.
The allocation of the fair value of the assets for the PLDT pension plan as at December 31, 2025 and 2024 are as follows:
Investments in listed and unlisted equity securities
Temporary cash investments
Debt and fixed income securities
Receivables and other assets
Defined Contribution Plans
Smart’s and certain subsidiaries’ contributions to the plan are made based on the employees’ years of tenure and range from 5% to 10% of the employee’s monthly salary. Additionally, an employee has the option to make a personal contribution to the fund, at an amount not exceeding 10% of his monthly salary. The employer then provides an additional contribution to the fund ranging from 10% to 50% of the employee’s contribution based on the employee’s years of tenure. Although the plan has a defined contribution format, Smart and certain of its subsidiaries regularly monitor their compliance with Republic Act No. 7641. As at December 31, 2025 and 2024, Smart and certain subsidiaries were in compliance with the requirements of Republic Act No. 7641.
Smart’s and certain subsidiaries’ actuarial valuation is performed every year-end. There is no significant change in the fair value of plan assets from December 31, 2024 to December 31, 2025. Based on the latest actuarial valuation, the actual present value of prepaid benefit costs, net periodic benefit costs and average assumptions used in developing the valuation as at and for the years ended December 31, 2025, 2024 and 2023 are as follows:
Changes in the present value of defined contribution obligations:
Present value of defined contribution obligations at beginning of the period
3,235
2,800
2,777
Contribution costs
Interest costs on contribution obligation
174
(98
(380
(344
275
Present value of defined contribution obligations at end of the period
3,602
4,053
260
Actual contribution paid/settlements
Fair value of plan assets at end of the period
4,245
Funded status – net
818
Prepaid contribution costs
Components of net periodic contribution costs:
Net periodic contribution costs
211
Actual net income on plan assets amounted to Php302 million, Php318 million and Php257 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Based on the latest actuarial valuation, Smart and certain subsidiaries expect to contribute the amount of approximately Php309 million to the plan in 2026.
The following table sets forth the expected future settlements by the Plan of maturing defined contribution obligation as at December 31, 2025:
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337
2,524
The average duration of the defined contribution obligation at the end of the reporting period is 10 years.
(Unaudited)
(Audited)
5.0
6.3
7.3
The sensitivity analysis below has been determined based on reasonably possible changes of each significant assumption on the defined contribution obligation as at December 31, 2025 and 2024, assuming if all other assumptions were held constant:
3,499
3,406
(3,508
(3,417
Smart’s Retirement Plan
The fund is being managed and invested by BPI Asset Management and Trust Corporation, as Trustee, pursuant to an amended trust agreement dated February 21, 2012.
The plan’s investment portfolio seeks to achieve regular income, long-term capital growth and consistent performance over its own portfolio benchmark. In order to attain this objective, the Trustee’s mandate is to invest in a diversified portfolio of bonds and equities, both domestic and international. The portfolio mix is kept at 68% and 32% for fixed income securities and equity securities, respectively.
The following table sets forth the fair values, which are equal to the carrying values, of Smart’s plan assets recognized as at December 31, 2025 and 2024:
Domestic fixed income
2,479
2,655
International equities
854
Philippine foreign currency bonds
892
753
Domestic equities
813
International fixed income
295
5,532
5,295
311
Total plan assets
5,843
5,579
Less: Employee’s share, forfeitures and mandatory reserve account
Total Plan Assets of Defined Contribution Plans
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Domestic Fixed Income
Investments in domestic fixed income include Philippine Peso denominated bonds, such as government securities and corporate debt securities, with fixed interest rates from 3.36% to 10.25% per annum.
International Equities
Investments in international equities include iShares Core MSCI World UCITS ETF USD, Invesco QQQ Trust Series, Wellington Strategic European Equity Fund, and Odyssey Asia Pacific High Dividend Equity Feeder Fund.
Philippine Foreign Currency Bonds
Investments in Philippine foreign currency bonds include U.S. Dollar denominated fixed income instruments issued by the Philippine government and local corporations with fixed interest rates from 2.38% to 9.5% per annum.
Domestic Equities
Investments in domestic equities include direct equity investments in common shares listed in the PSE. These investments earn on stock price appreciation and dividend payments. This includes investment in PLDT shares with fair value of Php72 million and Php38 million as at December 31, 2025 and 2024, respectively.
International Fixed Income
Investments in international fixed income include iShares International Treasury Bond ETF, iShares J.P. Morgan EM Local Currency Bond ETF, iShares US Treasury Bond ETF, and PIMCO Global Investors Series – Income Fund.
Cash and Cash Equivalents
This pertains to the fund’s excess liquidity in Philippine Peso and U.S. Dollars including investments in time deposits, money market funds and other deposit products of banks with duration or tenor less than a year.
The asset allocation of the Plan is set and reviewed from time to time by the Plan Trustees taking into account the membership profile, the liquidity requirements of the Plan and risk appetite of the Plan sponsor. This considers the expected benefit cash flows to be matched with asset durations.
Liquidity risk pertains to the Plan’s ability to meet its obligation to the employees upon retirement. To effectively manage liquidity risk, the Plan Trustees invest a portion of the fund in readily tradeable and liquid investments which can be sold at any given time to fund liquidity requirements.
Price risk pertains mainly to fluctuations in market prices of equity securities listed in the PSE. In order to effectively manage price risk, the Plan Trustees continuously assess these risks by closely monitoring the market value of the securities and implementing prudent investment strategies.
The allocation of the fair value of Smart and certain subsidiaries' pension plan assets as at December 31, 2025 and 2024 are as follows:
Investments in debt and fixed income securities and others
Other Long-term Employee Benefits
LTIP
The ECC approved on December 23, 2021 the LTIP covering the years 2022 to 2026, covering two cycles, based on the achievement of telco core income targets, with additional performance metrics on Customer Experience and Sustainability to impact the LTIP payout. Cycle 1 covered the performance period from 2022 to 2024 and was settled in 2025 based on the
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achievement of performance targets. Cycle 2 covers the performance period from 2025 and 2026 and is subject to the ECC’s further evaluation and approval of the final terms.
This long-term employee benefit liability was recognized and measured using the projected unit credit method and was amortized on a straight-line basis over the vesting period.
The expense accrued for the LTIP amounted to nil, Php1,136 million and Php839 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The accrued incentive payable amounted to nil and Php3,406 million as at December 31, 2025 and 2024, respectively. See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Estimating Pension Benefit Costs and Other Employee Benefits and Note 5 – Income and Expenses – Compensation and Employee Benefits.
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PLDT’s Local Business and Franchise Tax Assessments
Smart’s Local Business and Franchise Tax Assessments
Province of Cagayan
The Province of Cagayan, or the Province, issued a tax assessment against Smart in 2016 for alleged local franchise tax covering the years 2011 to 2015. Smart appealed the assessment to the Regional Trial Court, or RTC, on the ground that Smart cannot be held liable for local franchise tax mainly because it has no sales office within the Province pursuant to Section 137 of the Local Government Code (Republic Act No. 7160). The RTC rendered its Decision on November 29, 2021 dismissing the appeal of Smart for lack of jurisdiction without prejudice. Subsequently, a motion for reconsideration was filed by the Province. On April 25, 2023, the RTC ruled in favor of the Province and denied Smart’s subsequent Motion for Reconsideration. On May 24, 2023, Smart filed its Petition for Review before the Court of Tax Appeals. On June 27, 2023, the Second Division of the CTA, in a resolution, ordered the Province to file their Comment to the Petition for Review filed by Smart. The same was complied with. On December 14, 2023, Smart filed its Memorandum requesting for favorable decision by stating all legal and factual bases. On March 12, 2025, Smart received a Decision from the CTA Second Division. The CTA Second Division ruled in favor of Smart. As of this writing, the Company is waiting for finality of judgement or the filing of motion for reconsideration from the Province of Cagayan.
City of Makati
The City of Makati sent letters to Smart and SBI for alleged franchise tax liability, which Smart and SBI refuted through respective protest letters and judicial actions on the ground that Makati City is imposing tax on revenues outside its jurisdiction. After several court proceedings, on March 2, 2023, the City of Makati, Smart and SBI, mutually agreed to execute respective Compromise Agreements to abbreviate the long and protracted court cases. On March 17, 2023, the court approved the Compromise Agreement. Pursuant thereto, on March 28, 2023 and June 30, 2023, external counsels informed Smart and SBI, respectively, that the Courts approved Compromise Agreements, which eventually ended the cases. On
April 27, 2023, the City of Makati issued the Business Permits of Smart and SBI. For 2024 and 2025, all Business Permits were issued by the City of Makati to Smart and SBI.
Digitel’s Local Government Unit, or LGU, Assessments
Digitel is discussing with various LGUs, as to the settlement of its local taxes.
DMPI vs. City of Trece Martires
DMPI petitioned in 2010 to declare void the City of Trece Martires' ordinance of imposing tower fee of Php150 thousand for each cell site every year. Application for the issuance of a preliminary injunction by DMPI is pending resolution as of the date of this report.
ACeS Philippines’ Withholding Tax Assessments
ACeS Philippines had a case filed with the Supreme Court (ACeS Philippines Satellite Corporation vs. Commissioner of Internal Revenue Supreme Court G.R. No. 226680) for alleged 2006 deficiency withholding tax. On July 23, 2014, the CTA Second Division affirmed the assessment of the Commissioner of Internal Revenue for deficiency basic withholding tax, surcharge plus deficiency interest, and delinquency interest amounting to Php87 million. On November 18, 2014, ACeS Philippines filed a Petition for Review with the CTA En Banc. On August 16, 2016, the CTA En Banc also affirmed the assessment with finality. On October 19, 2016, ACeS Philippines filed a petition before the Supreme Court assailing the decision of the CTA. On February 23, 2017 and March 15, 2017, respectively, the Company paid a compromise settlement amounting to Php27 million and filed a formal request for compromise of tax liabilities before the Bureau of Internal Revenue, or BIR, while the case is pending before the Supreme Court.
ACeS Philippines entered into an amicable settlement with the BIR on February 19, 2021 pursuant to the provisions of the Civil Code of the Philippines and paid an additional compromise settlement amounting to Php20 million. The Commissioner of Internal Revenue signed the judicial compromise agreement on April 18, 2021. The corresponding Certificate of Availment (Compromise Settlement) was issued by the BIR. The parties filed with the Supreme Court on July 21, 2022 a Joint Motion for Judgment based on Judicial Compromise Agreement. On January 31, 2023, ACeS Philippines received the
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Decision of the Supreme Court dated August 30, 2022 affirming the decision of the CTA En Banc. On February 15, 2023, ACeS Philippines filed its Motion for Reconsideration praying to consider the Joint Motion for Judgment based on Judicial Compromise Agreement filed on July 21, 2022. In a Notice dated February 21, 2023, the Supreme Court required the BIR to comment on the Motion for Reconsideration (on the Decision dated August 30, 2022). The BIR filed its Comment dated March 13, 2023 submitting that the Judicial Compromise Agreement executed by and between the parties be considered and judgment be rendered based thereon.
In a Notice received on June 29, 2023, the Supreme Court issued a Resolution dated April 25, 2023 resolving to deny ACeS Philippines’ Motion for Reconsideration with finality. The corresponding Entry of Judgment was received on September 20, 2023. While the Supreme Court Decision and Resolution did not mention the Judicial Compromise Agreement, the BIR – National Evaluation Board previously approved ACeS Philippines’ application and payment for compromise settlement and issued the Certificate of Availment.
Arbitration with Eastern Telecommunications Philippines, Inc., or ETPI
PLDT and Eastern Telecommunications Philippines, Inc. (ETPI) have been involved in disputes since 1990 concerning interconnection and traffic exchange arrangements. The issues include, among others, ETPI’s alleged uncompensated bypass of PLDT’s systems, unpaid access charges, and non-payment of applicable rates for Off-Net and On-Net traffic from 1998 to 2003. ETPI, in turn, claims traffic shortfalls, under-reporting of revenues, and lost revenues arising from the blocking of incoming traffic and circuit migration during the same period.
Although the parties executed Compromise Agreements in 1990 and 1999, these did not fully resolve their differences. To avoid protracted litigation and preserve their business relationship, PLDT and ETPI entered into an Arbitration Settlement Agreement on April 16, 2008, submitting their respective Statements of Claims and Answers. Each party asserted claims of approximately Php2.8 billion to Php2.9 billion, and the arbitration proceedings were subsequently suspended by mutual agreement.
In connection with PLDT’s and Globe’s acquisition of San Miguel Corporation’s telecommunications business, the parties further agreed to cause the dismissal with prejudice of Eastern Telecommunications Philippines, Inc. v. Philippine Long Distance Telephone Company (Civil Case No. 17694) and all related or incidental proceedings, including the voluntary arbitration. As of the date of this report, there have been no changes in the status of the arbitration proceedings.
Department of Labor and Employment, or DOLE, Compliance Order, or Order, to PLDT
In a series of orders including a Compliance Order issued by the DOLE Regional Office on July 3, 2017, partly affirmed by the DOLE Secretary in resolutions dated January 10 and April 24, 2018, the DOLE directed PLDT to regularize 7,344 workers from 38 third-party service contractors. PLDT questioned these “regularization orders” before the CA, which, in a Decision dated July 31, 2018, granted PLDT’s prayer for injunction and set aside the DOLE orders insofar as they declared labor-only contracting in several functions, including janitorial, clerical, IT, back-office, call center sales, and professional services. The CA remanded to the DOLE only the determination of workers performing installation, repair, and maintenance, (IRM) functions and the computation of Php51.8 million in monetary awards.
The CA held that the DOLE Secretary’s regularization order was tainted with grave abuse of discretion for failure to meet the substantial-evidence standard and for misapplying the legal tests of “control over means and methods” versus “control over results.” PLDT thereafter filed a Motion for Partial Reconsideration on August 20, 2018, arguing that the remand exceeded the DOLE’s visitorial powers, as the fact-finding required could not be performed in the normal course of a labor inspection. PLDT also maintained that not all IRM work is necessarily regular, as some may be project-based or seasonal in nature, and proposed that the NLRC, with broader fact-finding authority, should determine such issues. The DOLE and the PLDT rank-and-file union MKP likewise sought reconsideration.
In a Resolution dated February 14, 2019, the CA denied all motions for reconsideration and affirmed its earlier decision. PLDT elevated the case to the Supreme Court through a Petition for Review filed on April 5, 2019, questioning only the CA’s remand order on IRM functions. The petitions of the DOLE and MKP were later consolidated with PLDT’s petition, and PLDT filed its Comment and Reply between February and December 2020.
On March 20, 2024, PLDT received the Supreme Court Decision dated February 14, 2024, which dismissed all petitions and affirmed the CA’s July 31, 2018 Decision. The Supreme Court upheld the modification of the DOLE Secretary’s resolutions and set aside the regularization orders for all contractor workers except those performing IRM services, who may be declared regular employees of PLDT subject to further proceedings. The Court remanded the case to the DOLE–NCR Regional Office to (a) determine the effects of regularization of IRM workers; (b) review and compute monetary awards for labor-standards violations, for which PLDT and the concerned contractors are solidarily liable; and (c) conduct further proceedings consistent with the Decision.
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The Supreme Court, First Division, in its Resolution dated November 05, 2025, which was received by counsel on February 24, 2026, resolved to deny with finality the motions for partial reconsideration filed by PLDT and MKP and held that no further pleadings, motions, letters, or other communications will be entertained. Accordingly, the Decision of the Supreme Court to remand the case stands.
This Petition for Mandamus filed before the Supreme Court against the NTC, PCC, Liberty, BellTel, Globe, PLDT, and Smart concerns the 700 MHz frequency band and related frequencies originally assigned to Liberty and subsequently covered by the Co-Use Agreement among Globe, PLDT, and Smart. The petition questions the constitutionality and validity of the NTC’s assignments of the Subject Frequencies, the transfer from Liberty to BellTel, and the Co-Use Agreement itself, and also seeks to compel the NTC and PCC to revoke the Co-Use Agreement and conduct a full review of the Vega Telecom acquisition.
PLDT and Smart filed their Comment on January 17, 2019, arguing that the requisites for judicial review and mandamus were not met, that congressional approval was not required for Liberty’s assignment of the Subject Frequencies to BellTel, and that the Co-Use Agreement was valid and duly approved by the NTC. BellTel and Globe likewise filed their respective comments, which the Supreme Court noted in a Resolution dated March 19, 2019.
In a Resolution dated June 18, 2019, the Supreme Court ordered the consolidation of this case with G.R. No. 230798 (PCC v. CA [Twelfth Division] and PLDT; Globe, intervenor) and G.R. No. 234969 (PCC v. PLDT and Globe), assigning the consolidated cases to the division handling the lowest-numbered docket.
On September 17, 2024, PLDT received a Notice of Resolution dated August 6, 2024, directing the parties to move in the premises within ten (10) days from notice. PLDT, Liberty, and Globe thereafter filed their respective compliances.
As of the date of this report, the consolidated cases remain pending before the Supreme Court.
During 2023–2024, Smart representatives appeared before the PCC Competition Enforcement Office (PCC-CEO) in relation to an ongoing administrative investigation concerning alleged violations of the Philippine Competition Act. Smart submitted required documents and attended clarificatory hearings in June, July, and November 2023, and filed several Manifestations in 2024 confirming its agreement with DITO and subsequent compliance actions.
On May 30, 2025, Smart received a resolution from the PCC-CEO requiring it to clarify documents to be further submitted in relation to the March 18, 2025 Subpoena, and scheduling a videoconference on June 11, 2025. Smart, through its representatives then attended the June 11, 2025 clarificatory hearing via videoconference, and simultaneously filed its partial compliance with the Subpoena and a prayer that it be given a period of fifteen (15) days from June 11, 2025 or until June 26, 2025, to submit other information and documents required in the Subpoena. Accordingly, Smart filed its Compliance on June 25, 2025. Thereafter, the PCC-CEO issued a Resolution dated June 25, 2025, directing Smart to submit further documents in relation to the issues on or before July 07, 2025. In compliance therewith, Smart filed its Manifestation on July 07, 2025.
As of the date of this report, the PCC-CEO’s investigation remains pending resolution.
Other disclosures required by IAS 37, Provisions, Contingent Liabilities and Contingent Assets, were not provided as it may prejudice our position in on-going claims, litigations and assessments. See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Provision for legal contingencies and tax assessments.
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We have various financial assets such as trade and non-trade receivables, cash and short-term deposits. Our principal financial liabilities, other than derivatives, comprise of bank loans, lease liabilities, trade and non-trade payables. The main purpose of these financial liabilities is to finance our operations. We also enter into derivative transactions, primarily forward foreign exchange contracts and options to manage the currency arising from our operations and sources of financing. Our accounting policies in relation to derivatives are set out in Note 2 – Summary of Material Accounting Policies – Financial Instruments.
The following table sets forth our consolidated financial assets and financial liabilities as at December 31, 2025 and 2024:
Financial instrumentsat amortizedcost
Financialinstrumentsat FVPL
Derivatives used for hedging
Totalfinancialinstruments
Assets as at December 31, 2025
Noncurrent:
Financial assets at fair value through profit or loss
Debt instruments at amortized cost – net of current portion
Derivative financial assets – net of current portion
Other financial assets – net of current portion
Current:
Current portion of derivative financial assets
Current portion of debt instruments at amortized cost
Current portion of other financial assets
47,568
1,233
49,418
Liabilities as at December 31, 2025
Interest-bearing financial liabilities – net of current portion
Lease liabilities – net of current portion
Customers' deposits
Deferred credits and other noncurrent liabilities
52,755
60,807
60,809
Current portion of interest-bearing financial liabilities
Dividends payable
Current portion of derivative financial liabilities
Liabilities associated with assets classified as held-for-sale
479,340
479,419
Net assets (liabilities)
(431,772
1,231
540
(430,001
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Assets as at December 31, 2024
46,111
1,131
47,627
Liabilities as at December 31, 2024
61,204
70,795
70,797
473,379
473,478
(427,268
1,109
(425,851
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The following table sets forth our consolidated offsetting of financial assets and liabilities recognized as at December 31, 2025 and 2024:
Gross amounts of recognizedfinancial assetsand liabilities
Gross amounts ofrecognized financialassets and liabilitiesset-off in theconsolidated statements offinancial position
Net amountpresented in theconsolidatedstatements of financial position
December 21, 2025
Foreign administrations
4,071
2,540
1,531
Domestic carriers
4,471
2,732
1,739
Current Financial Liabilities
Suppliers and contractors
50,024
Carriers and others
4,835
2,610
54,859
2,353
52,506
2,536
1,359
1,177
2,892
1,433
58,613
8,359
5,825
2,534
66,972
5,914
61,058
There are no financial instruments subject to an enforceable master netting arrangement as at December 31, 2025 and 2024.
The following table sets forth our consolidated carrying values and estimated fair values of our financial assets and liabilities recognized as at December 31, 2025 and 2024 other than those whose carrying amounts are reasonable approximations of fair values. This includes financial assets and financial liabilities measured using Level 3 inputs, which are not based on observable market data:
Carrying Value
Fair Value
Debt instruments at amortized cost
349
363
2,973
2,716
3,966
3,496
3,322
3,079
Noncurrent Financial Liabilities
Long-term debt – net of current portion
272,011
246,572
1,311
281,713
260,382
274,220
247,962
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Below is the list of our consolidated financial assets and liabilities carried at fair value that are classified using a fair value hierarchy as required for our complete sets of consolidated financial statements as at December 31, 2025 and 2024. This classification provides a reasonable basis to illustrate the nature and extent of risks associated with those financial statements.
Level 1(1)
Level 2(2)
Level 3(3)
1,027
1,098
1,230
1,128
As at December 31, 2025 and 2024, there were no transfers into and out of Level 3 and between Level 1 and Level 2 fair value measurements.
The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate such value:
Long-term financial assets and liabilities:
Fair value is based on the following:
Type
Fair Value Assumptions
Fair Value Hierarchy
Noncurrent portion of advances and other noncurrent assets
Estimated fair value is based on the discounted values of future cash flows using the applicable zero-coupon rates plus counterparties’ credit spread.
Level 3
Fixed rate loans: U.S. Dollar notes
Quoted market price.
Level 1
Investment in debt securities
Fair values were determined using quoted prices. For non-quoted securities, fair values were determined using discounted cash flow based on market observable rates.
Level 1Level 2
Other loans in all other currencies
Estimated fair value is based on the discounted value of future cash flows using the applicable Commercial Interest Reference Rate and BVAL rates for similar types of loans plus PLDT’s credit spread.
Variable rate loans
The carrying value approximates fair value because of recent and regular repricing based on marketconditions.
Level 2
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Derivative Financial Instruments
Forward foreign exchange contracts and foreign currency options: The fair values were computed as the present value of estimated future cash flows using market U.S. Dollar and Philippine Peso interest rates as at valuation date.
The valuation techniques considered various inputs including the credit quality of counterparties.
Due to the short-term nature of the transactions, the fair value of cash and cash equivalents, short-term investments, trade and other receivables, accounts payable, accrued expenses and other current liabilities and dividends payable approximate their carrying values as at the end of the reporting period.
Our derivative financial instruments are accounted for as either cash flow hedges or transactions not designated as hedges. Cash flow hedges refer to those transactions that hedge our exposure to variability in cash flows attributable to a particular risk associated with a recognized financial asset or liability and exposures arising from forecast transactions. Changes in the fair value of these instruments representing effective hedges are recognized directly in other comprehensive income until the hedged item is recognized in our consolidated income statements. For transactions that are not designated as hedges, any gains or losses arising from the changes in fair value are recognized directly to income for the period.
As at December 31, 2025 and 2024, we have taken into account the counterparties’ credit risks (for derivative assets) and our own non-performance risk (for derivative liabilities) and have included a credit or debit valuation adjustment, as appropriate, by assessing the maximum credit exposure and taking into account market-based inputs which considers the risk of default occurring and corresponding losses once the default event occurs. The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships and other financial instruments recognized at fair value.
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The table below sets out the information about our consolidated derivative financial instruments as at December 31, 2025 and 2024:
OriginalNotionalAmount
Trade Date
Underlying Transaction in U.S. Dollar
TerminationDate
WeightedAverageHedge Cost/(Premium)
Weighted AverageForeignExchangeRate
Notional Amount
NetMark-to-market Gains(Losses)in Php
Transactions not designated as hedges:
Forward foreign exchange contracts
US$1,191
U.S. Dollar Liabilities
Php56.93
US$—
US$303
Various dates inOctober to December 2024
Various dates inJanuary to July 2025
Php58.45
US$14
U.S. Dollar Revenues
Various dates inJuly to December 2025
Php58.65
US$766
Various dates inJanuary to December 2025
Various dates inMarch 2025 to May 2026
Php57.75
US$38
Various dates inJune to December 2025
Various dates in December 2025 to December 2026
Php58.37
US$77
Various dates inJanuary 2026
Various dates in March to August 2026
Php59.01
US$2
Various dates in December 2026
Php60.13
US$22
Various dates inDecember 2025
U.S. Dollar Cash
January 2026
Php58.70
Foreign exchange options(a)
US$16
Various dates in March to September 2024
Various dates in September to December 2024
Php56.40
Php56.84
Php57.76
US$10
Various dates in Septemberto December 2024
Various dates in April 2025
Php57.00
Php57.59
Php58.32
Various dates in Januaryto December 2025
Various dates in April 2025 to April 2026
Php56.71
Php56.99
Php58.74
US$11
Various dates in Januaryto February 2026
Various dates in April to December 2026
Php58.00
Php59.56
US$1,063
Various dates in June 2023 to December 2024
Php56.66
US$204
Various dates in January to June 2025
Php58.18
204
US$5
Various dates inOctober to November 2024
Various dates inJuly to November 2025
Php58.48
US$550
Various dates in January to December 2025
Various dates inJanuary 2025 to March 2026
Php57.83
US$23
Various dates in December 2025 to November 2026
Php58.22
US$72
Various dates in January 2026
Various dates in March to July 2026
Php59.36
US$1
Php59.88
Foreign exchange options(b)
US$45
Php55.60Php56.00Php57.00
US$8
Various dates inJanuary to April 2025
Php57.01Php57.41Php58.63
US$58
Various dates inApril 2025 to May 2026
Php57.71Php58.03Php59.55
US$20
Various dates in January to February 2026
Various dates in May to September 2026
Php58.07Php58.30Php59.65
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Transactions designated as hedges:
Long-term foreign currency options(c)
US$225
Various dates in July 2020 and February to March 2021
300M Notes 2031
January 23, 2031
1.20%
Php49.58Php55.27
US$222
US$109
Various dates in July 2020 and July 2025
1.21%
Php49.67Php55.35
US$108
377
Long-term foreign currency options(d)
February to April 2021
US$140 PNB Loan
December 13, 2030
1.63%
Php48.00Php53.34
US$55
US$66
If the Philippine Peso to U.S. dollar spot exchange rate on fixing date settles between Php57.59 to Php58.32, PLDT will purchase the U.S. Dollar for Php57.59. However, if on maturity, the exchange rate settles above Php58.32, PLDT will purchase the U.S. Dollar for Php57.59 plus the excess above Php58.32, and if the exchange rate is lower than Php57.59, PLDT will purchase the U.S. Dollar at the prevailing Philippine peso to U.S. Dollar spot exchange rate, subject to a floor of Php57.00.
If the Philippine Peso to U.S. dollar spot exchange rate on fixing date settles between Php56.99 to Php58.74, PLDT will purchase the U.S. Dollar for Php56.99. However, if on maturity, the exchange rate settles above Php58.74, PLDT will purchase the U.S. Dollar for Php56.99 plus the excess above Php58.74, and if the exchange rate is lower than Php56.99, PLDT will purchase the U.S. Dollar at the prevailing Philippine peso to U.S. Dollar spot exchange rate, subject to a floor of Php56.71.
If the Philippine Peso to U.S. Dollar spot exchange rate on fixing date settles between Php57.41 to Php58.63, Smart will purchase the U.S. Dollar for Php57.41. However, if on maturity, the exchange rate settles above Php57.41, Smart will purchase the U.S. Dollar for Php57.41 plus the excess above Php58.63, and if the exchange rate is lower than Php57.41, Smart will purchase the U.S. Dollar at the prevailing Philippine Peso to U.S. Dollar spot exchange rate, subject to a floor of Php57.01.
If the Philippine Peso to U.S. Dollar spot exchange rate on fixing date settles between Php58.03 to Php59.55, Smart will purchase the U.S. Dollar for Php58.03. However, if on maturity, the exchange rate settles above Php59.55, Smart will purchase the U.S. Dollar for Php58.03 plus the excess above Php59.55, and if the exchange rate is lower than Php58.03, Smart will purchase the U.S. Dollar at the prevailing Philippine Peso to U.S. Dollar spot exchange rate, subject to a floor of Php57.71.
If the Philippine peso to U.S. dollar spot exchange rate on fixing date is between Php49.58 and Php55.27, PLDT will purchase the U.S. dollar at Php49.58. However, if on fixing date, the exchange rate is beyond Php55.27, PLDT will purchase the U.S. dollar at the prevailing Philippine peso to U.S. dollar spot exchange rate minus a subsidy of Php5.69,
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and if the exchange rate is lower than Php49.58, PLDT will purchase the U.S. dollar at the prevailing Philippine peso to U.S. dollar spot exchange rate.
If the Philippine peso to U.S. dollar spot exchange rate on fixing date is between Php49.67 and Php55.35, PLDT will purchase the U.S. dollar at Php49.67. However, if on fixing date, the exchange rate is beyond Php55.35, PLDT will purchase the U.S. dollar at the prevailing Philippine peso to U.S. dollar spot exchange rate minus a subsidy of Php5.68, and if the exchange rate is lower than Php49.67, PLDT will purchase the U.S. dollar at Php49.67.
The mark-to-market gains amounting to Php452 million and Php239 million were recognized in our consolidated statement of other comprehensive income as at December 31, 2025 and 2024, respectively. Hedge cost accrual on the long-term foreign currency option agreements amounting to Php75 million each were recognized as at December 31, 2025 and 2024. The intrinsic value of the long-term foreign currency options recognized as other comprehensive income is transferred to profit or loss when the hedged loan is revalued for changes in the foreign exchange rate. The hedge cost portion of the movements in the fair value amounting to Php129 million, Php119 million and Php39 million were recognized in our consolidated income statements for the years ended December 31, 2025, 2024 and 2023, respectively. The effective portion of the movements in the fair value amounting to Php164 million and Php209 million were recognized in our consolidated statement of other comprehensive income for the years ended December 31, 2025 and 2024, respectively.
Our derivative financial instruments as at December 31, 2025 and 2024 are presented in the statements of financial position as follows:
Asset:
Liabilities:
Current liabilities (Note 28)
(77
Movements of our consolidated mark-to-market gains (losses) for the years ended December 31, 2025 and 2024 are summarized as follows:
Net mark-to-market gains (losses) at beginning of the period
(937
Gains on derivative financial instruments
1,870
Settlements, accretion and others
(934
Net fair value gains on cash flow hedges charged to other comprehensive income
Net mark-to-market gains at end of the period
Our consolidated analysis of gains on derivative financial instruments for the years ended December 31, 2025, 2024 and 2023 are as follows:
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Gains (losses) on derivative financial instruments
(505
Hedge costs
(198
(238
Gains (losses) on derivative financial instruments – net (Note 5)
Financial Risk Management Objectives and Policies
The main risks arising from our financial instruments are liquidity risk, foreign currency exchange risk, interest rate risk and credit risk. The importance of managing those risks has significantly increased in light of the considerable change and volatility in both the Philippine and international financial markets. Our Board of Directors reviews and approves policies for managing each of these risks, which are summarized below. We also monitor the market price risk arising from all financial instruments.
Liquidity Risk
Our exposure to liquidity risk refers to the risk that our financial requirements, working capital requirements and planned capital expenditures may not be met.
We manage our liquidity profile to be able to finance our operations and capital expenditures, service our maturing debts and meet our other financial obligations. To cover our financing requirements, we use internally generated funds and proceeds from debt and equity issues and sales of certain assets.
As part of our liquidity risk management program, we regularly evaluate our projected and actual cash flows, including our loan maturity profiles, and continuously assess conditions in the financial markets for opportunities to pursue fund-raising initiatives. These may include bank loans, export credit agency-guaranteed facilities, and issuances in the debt and equity markets.
Any excess funds are primarily invested in short-term and principal-protected bank products that provide flexibility of withdrawing the funds anytime. We also allocate a portion of our cash in longer tenor investments such as fixed income securities issued or guaranteed by the Republic of the Philippines, and Philippine banks and corporates and managed funds. We regularly evaluate available financial products and monitor market conditions for opportunities to enhance yields at acceptable risk levels. Our funding arrangements are designed to keep an appropriate balance between equity and debt and to provide financing flexibility while enhancing our businesses.
Our cash position remains sufficient to support our planned capital expenditure requirements and service our debt and financing obligations; however, we may be required to finance a portion of our future capital expenditures from external financing sources. We have cash and cash equivalents, and short-term investments amounting to Php11,866 million and Php10 million, respectively, as at December 31, 2025, which we can use to meet our short-term liquidity needs. See Note 15 – Cash and Cash Equivalents. As part of our liquidity management, we assess dividend declarations in light of operating cash flows, funding needs, and financial priorities.
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The following table summarizes the maturity profile of our financial assets based on our consolidated undiscounted claims outstanding as at December 31, 2025 and 2024:
Less than 1 year
1-3 years
3-5 years
More than 5 years
Financial instruments at amortized cost:
56,238
52,002
4,005
Other financial assets
4,225
3,665
218
Retail subscribers
Corporate subscribers
Dealers, agents and others
Financial instruments at FVPL:
57,268
1,258
55,039
51,264
3,608
4,236
3,248
56,140
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The following table summarizes the maturity profile of our financial liabilities based on our consolidated contractual undiscounted obligations outstanding as at December 31, 2025 and 2024:
Payments Due by Period
Debt:
396,013
12,663
95,634
73,945
213,771
Principal (1)
12,240
53,872
51,676
Interest
99,074
423
41,762
22,269
34,620
Lease obligations
84,616
18,199
23,239
18,452
24,726
Various trade and other obligations:
116,304
113,183
2,026
1,077
49,980
Utilities and related expenses
50,114
50,113
Employee benefits and other provisions
Customer deposits
Dividends
5,281
3,507
Total contractual obligations
596,933
144,045
120,899
92,415
239,574
385,962
20,335
89,028
69,915
206,684
283,575
47,479
47,561
168,925
102,387
725
41,549
22,354
37,759
77,244
16,560
19,410
16,178
25,096
133,811
131,580
362
1,845
58,568
57,029
56,934
Customers’ deposits
2,383
2,337
597,017
168,475
108,800
86,117
233,625
Debt
See Note 20 – Interest-bearing Financial Liabilities – Long-term Debt for a detailed discussion of our debt.
Our consolidated future minimum lease commitments payable with non-cancellable leases as at December 31, 2025 and 2024 are as follows:
Within one year
After one year but not more than five years
41,691
35,588
More than five years
PLDT Group has various obligations to suppliers for the acquisition of network equipment, contractors for services rendered on various projects, foreign administrations and domestic carriers for the access charges, shareholders for unpaid dividends distributions, employees for benefits and other related obligations, and various business and operational related agreements. Total obligations under these various agreements amounted to approximately Php116,304 million and Php133,811 million as at December 31, 2025 and 2024, respectively. See Note 22 – Accounts Payable and Note 23 – Accrued Expenses and Other Current Liabilities.
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Significant commitment in respect of major network vendors, net of advances and deliveries, amounted to about Php19,700 million and Php15,900 million as at December 31, 2025 and 2024.
Commitments related to non-major capital expenditure vendors, net of advances and deliveries amounted to Php16,900 million and Php11,200 million as at December 31, 2025 and 2024, respectively.
Collateral
There are no pledges as collaterals with respect to our financial liabilities as at December 31, 2025 and 2024.
Foreign Currency Exchange Risk
Foreign currency exchange risk refers to the potential impact of exchange rate fluctuations on the fair value and future cash flows of financial instruments.
The revaluation of our foreign currency-denominated financial assets and liabilities as a result of the appreciation or depreciation of the Philippine Peso is recognized as foreign exchange gains or losses as at the end of the reporting period. The extent of foreign exchange gains or losses is largely dependent on the amount of foreign currency denominated financial assets and liabilities. While a certain percentage of our revenues are either linked to or denominated in U.S. Dollars, a substantial portion of our capital expenditures, a portion of our indebtedness and related interest expense and a portion of our operating expenses are denominated in foreign currencies, mostly in U.S. Dollars. As such, a strengthening or weakening of the Philippine Peso against the U.S. Dollar will decrease or increase in Philippine Peso terms both the principal amount of our foreign currency-denominated debts and the related interest expense, our foreign currency-denominated capital expenditures and operating expenses as well as our U.S. Dollar-linked and U.S. Dollar-denominated revenues. In addition, many of our financial ratios and other financial tests are affected by the movements in the Philippine Peso to U.S. Dollar exchange rate.
To manage our foreign exchange risks and to stabilize our cash flows in order to improve investment and cash flow planning, we enter into forward foreign exchange contracts, currency option contracts and other hedging products aimed at reducing and/or managing the adverse impact of changes in foreign exchange rates on our operating results and cash flows. Further details of the risk management strategy are recognized in our hedge designation documentation. We use forward foreign exchange purchase contracts, currency swap contracts and currency option contracts to manage the foreign currency risks associated with our foreign currency-denominated financial liabilities. We accounted for these instruments as either cash flow hedges, wherein changes in the fair value are recognized in our consolidated other comprehensive income until the hedged transaction affects our consolidated income statements or transactions not designated as hedges, wherein changes in the fair value are recognized directly as income or expense for the year.
The impact of the hedging instruments on our consolidated statements of financial position as at December 31, 2025 and 2024 are as follows:
CarryingAmount
Line item in our Consolidated Statements
(U.S. Dollar)
(Php)
of Financial Position
Long-term foreign currency options
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The impact of the hedged items on our consolidated statements of financial position as at December 31, 2025 and 2024 are as follows:
Cash flowhedgereserve
Cost ofhedgingreserve
Cash flowhedge reserve
PLDT:
US$300M Notes 2031
(1,197
(1,360
US$140M PNB
(147
The effect of the cash flow hedge on our consolidated statements of financial position as at December 31, 2025 and 2024 are as follows:
Total hedging loss recognized in OCI
Line item in ourConsolidated Statements of Financial Position
(1,344
(1,567
The following table shows our consolidated foreign currency-denominated monetary financial assets and liabilities and their Philippine Peso equivalents as at December 31, 2025 and 2024:
Php(1)
Php(2)
3,704
2,980
Trade and other receivables – net
6,593
5,596
Derivative assets
179
8,606
Total Financial Assets
189
11,124
8,991
653
38,395
667
38,575
Total noncurrent financial liabilities
38,428
668
38,604
594
34,932
685
39,621
190
11,182
232
13,448
809
797
Total current financial liabilities
799
47,000
933
53,963
Total Financial Liabilities
1,453
85,428
1,601
92,567
As at April 27, 2026, the Philippine Peso-U.S. Dollar exchange rate was Php60.68 to US$1.00. Using this exchange rate, our consolidated net foreign currency-denominated financial liabilities would have increased in Philippine Peso terms by Php2,393 million as at December 31, 2025.
Approximately 13% and 14% of our total consolidated debts (net of consolidated debt discount) was denominated in U.S. Dollars as at December 31, 2025 and 2024, respectively. Our consolidated foreign currency-denominated debt decreased to
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Php38,879 million as at December 31, 2025 from Php39,015 million as at December 31, 2024. See Note 20 – Interest-bearing Financial Liabilities. The aggregate notional amount of our consolidated outstanding derivatives allocated for debt were US$345 million and US$381 million as at December 31, 2025 and 2024, respectively. Consequently, the unhedged portion of our consolidated debt amounts was 6% (or 5%, net of consolidated U.S. Dollar cash balances allocated for debt) as at December 31, 2025 and 2024.
Approximately 15% of our consolidated revenues for the years ended December 31, 2025 and 2024 and 13% for the year ended December 31, 2023 were denominated in U.S. Dollars and/or were linked to U.S. Dollars. Approximately 15%, 14% and 12% of our consolidated expenses for the years ended December 31, 2025, 2024 and 2023, respectively were denominated in U.S. Dollars and/or linked to the U.S. Dollar. In this respect, the higher weighted average exchange rate of the Philippine Peso against the U.S. Dollar increased our revenues and expenses, and consequently, affects our cash flow from operations in Philippine Peso terms. In view of the anticipated continued decline in dollar-denominated/dollar-linked revenues, which provide a natural hedge against our foreign currency exposure, we are progressively refinancing our dollar-denominated debts in Philippine Pesos.
The Philippine Peso depreciated by 1.63% against the U.S. Dollar to Php58.79 to US$1.00 as at December 31, 2025 from Php57.85 to US$1.00 as at December 31, 2024. As a result of our consolidated foreign exchange movements, as well as the amount of our consolidated outstanding net foreign currency financial assets and liabilities, we recognized net consolidated foreign exchange losses of Php550 million and Php36 million for the years ended December 31, 2025 and 2024, respectively and net foreign exchange gains of Php1,149 million for the year ended December 31, 2023.
Management conducted a survey among our banks to determine the outlook of the Philippine Peso-U.S. Dollar exchange rate until December 31, 2025. Our outlook is that the Philippine Peso-U.S. Dollar exchange rate may weaken/strengthen by 2.06% as compared to the exchange rate of Php58.79 to US$1.00 as at December 31, 2025. If the Philippine Peso-U.S. Dollar exchange rate had weakened/strengthened by 2.06% as at December 31, 2025, with all other variables held constant, consolidated profit after tax for the year ended December 31, 2025 and stockholders’ equity as at December 31, 2025 would have been approximately Php858 million and Php32 million, respectively, lower/higher, mainly as a result of consolidated foreign exchange gains and losses on conversion of U.S. Dollar-denominated net assets/liabilities and mark-to-market valuation of derivative financial instruments.
Interest Rate Risk
Interest rate risk arises from fluctuations in market interest rates that may impact the fair value or future cash flows of financial instruments.
Our exposure to the risk of changes in market interest rates relates primarily to our long-term debt obligations with floating interest rates.
Our policy is to manage interest costs through a mix of fixed and variable rate debts. We evaluate the fixed to floating ratio of our loans in line with movements of relevant interest rates in the financial markets. Based on our assessment, new financing will be priced either on a fixed or floating rate basis. We enter into interest rate swap agreements in order to manage our exposure to interest rate fluctuations. Further details of the risk management strategy are recognized in our hedge designation documentation. We make use of hedging instruments and structures solely for reducing or managing financial risk associated with our debt obligations and not for trading purposes.
There are no outstanding interest rate hedges as at December 31, 2025 and 2024.
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The following tables set out the carrying amounts, by maturity, of our financial instruments that are expected to have exposure on interest rate risk as at December 31, 2025 and 2024. Financial instruments that are not subject to interest rate risk were not included in the table.
In U.S. Dollars
Below 1 year
1-2 years
2-3 years
Over 5 years
In Php
Discount/DebtIssuance CostIn Php
Carrying Value In Php
In U.S. Dollar
Assets:
Debt Instruments at Amortized Cost
Philippine Peso
369
Interest rate
6.2500%
4.6250% - 4.8750%
6.5000%
Cash in Bank
0.0100% - 0.5000%
5,355
0.0500% - 4.5000%
Temporary Cash Investments
584
3.6100-3.9000%
785
0.2500% - 6.0000%
Short-term Investments
2.0000% - 6.0000%
8,281
8,280
Fixed Rate
U.S. Dollar Notes
495
490
28,819
2.5000% - 3.4500%
344
198
1,060
62,345
61,922
60,052
4.6500% - 5.3500%
4.0000% to 5.2000%
4.0000% to 5.1560%
4.0000%
Variable Rate
U.S. Dollar Loans
4,115
SOFR+ 1.31161%
627
2,370
3,315
194,905
958
193,947
PHP BVAL + 0.4000% to 0.7500%
Notes Payable
6.0249% to 6.0790%
548
368
5,050
4,901
288,191
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CarryingValue In Php
4.250%
6.250%
4.625% - 4.875%
6.500%
0.0500% - 0.5000%
5,296
0.0500% - 5.1000%
4.5000% - 5.2500%
1,069
6.0000% - 6.1000%
139
8,076
8,069
34,708
463
26,811
315
316
205
1,406
81,315
581
80,734
1,306
75,550
4.0000% to 4.6500%
4.0000% to 5.3500%
4.0000% to 5.0880%
4,860
4,859
478
2,101
2,812
162,692
855
161,837
BVAL + 1.0000%
0.5000% to 1.0000% over PHP BVAL (floor rate 4.5000% to 4.6250%)
0.5000% to 0.9000% over PHP BVAL (floor rate 4.5000% to 4.6250%)
0.5000% to 0.7500% over PHP BVAL (floor rate 4.5000%)
475
822
2,920
4,902
269,912
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Fixed rate financial instruments are subject to fair value interest rate risk while floating rate financial instruments are subject to cash flow interest rate risk.
Repricing of our regular floating rate financial instruments is done on intervals of three months and six months, while repricing of our structured floating rate instruments is done every one year or up to five years. Interest on fixed rate financial instruments is fixed until maturity of the particular instrument.
Approximately 67% and 59% of our consolidated debts (net of consolidated debt discount) were variable rate debts as at December 31, 2025 and 2024, respectively. Our consolidated variable rate debt amounted to Php198,347 million and Php166,675 million as at December 31, 2025 and 2024, respectively.
Management conducted a survey among our banks to determine the outlook of the U.S. Dollar and Philippine Peso interest rates until March 31, 2026. Our outlook is that the U.S. Dollar and Philippine Peso interest rates may move 30 basis points, or bps, and 90 bps higher/lower, respectively, as compared to levels as at December 31, 2025. If the U.S. Dollar interest rates had been 30 bps higher/lower as compared to market levels as at December 31, 2025, with all other variables held constant, consolidated profit after tax for the year ended December 31, 2025 and stockholders’ equity as at December 31, 2025 would have been approximately Php1 million and Php31 million, respectively, lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings and loss/gain on derivative transactions. If the Philippine Peso interest rates had been 90 bps higher/lower as compared to market levels as at December 31, 2025, with all other variables held constant, consolidated profit after tax for the year December 31, 2025 and stockholders’ equity as at December 31, 2025 would have been approximately Php46 million and Php63 million, respectively, lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings and loss/gain on derivative transactions.
Credit Risk
Credit risk arises from the possibility that customers, clients and counterparties may default on their contractual obligations, resulting in financial loss.
We manage and control credit risk by setting limits on the amount of risk we are willing to accept for individual counterparties and by monitoring exposures in relation to such limits.
We trade only with recognized and creditworthy third parties. It is our policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis to reduce our exposure to bad debts.
We established a credit quality review process to provide regular identification of changes in the creditworthiness of counterparties. Our credit quality review process allows us to assess the potential loss as a result of the risks to which we are exposed and allow us to take corrective actions.
Maximum exposure to credit risk of financial assets not subject to impairment
The gross carrying amount of financial assets not subject to impairment also represents our maximum exposure to credit risk as at December 31, 2025 and 2024 are as follows:
Maximum exposure to credit risk of financial assets subject to impairment
The table below shows the maximum exposure to credit risk for the components of our consolidated statements of financial position, including derivative financial instruments as at December 31, 2025 and 2024. The maximum exposure is shown gross before both the effect of mitigation through use of master netting and collateral arrangements. The extent to which collateral and other credit enhancements mitigate the maximum exposure to credit risk is described in the footnotes to the table.
For financial assets recognized on our consolidated statements of financial position as at December 31, 2025 and 2024, the gross exposure to credit risk equal their carrying amount.
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For loan commitments and other credit related commitments that are irrevocable over the life of the respective facilities, the maximum exposure to credit risk is the full amount of the committed facilities.
Stage 112-Month ECL
Stage 2Lifetime ECL
Stage 3Lifetime ECL
High grade
14,980
11,128
26,108
Standard grade
7,914
9,129
Substandard grade
12,325
12,331
Default
19,167
Gross carrying amount
16,471
35,134
66,735
Less allowance
Carrying amount
16,201
14,059
11,670
25,729
5,486
5,926
14,456
17,475
14,778
35,208
63,586
14,499
Maximum exposure to credit risk after collateral held or other credit enhancements
Collateral held as security for financial assets depends on the nature of the instrument. Debt investment securities are generally unsecured. Estimates of fair value are based on the value of collateral assessed at the time of borrowing and are regularly updated according to internal lending policies and regulatory guidelines. Generally, collateral is not held over loans and advances to us. Collateral usually is not held against investment securities, and no such collateral was held as at December 31, 2025 and 2024.
Our policies regarding obtaining collateral have not significantly changed during the reporting period and there has been no significant change in the overall quality of the collateral held by us during the year.
We have not identified significant risk concentrations arising from the nature, type or location of collateral and other credit enhancements held against our credit exposures.
An analysis of the maximum exposure to credit risk for the components of our consolidated statements of financial position, including derivative financial instruments as at December 31, 2025 and 2024, follows:
Gross MaximumExposure
Collateral and Other CreditEnhancements(1)
Net MaximumExposure
410
47,158
3,955
3,953
11,737
14,684
14,444
8,117
8,078
6,827
Derivatives used for hedging:
49,008
(1) Includes bank insurance, security deposits and customer deposits. We have no collateral held as at December 31, 2025.
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427
45,684
3,957
9,967
15,023
14,677
7,650
7,613
7,506
47,200
(1)Includes bank insurance, security deposits and customer deposits. We have no collateral held as at December 31, 2024.
The table below provides information regarding the credit quality by class of our financial assets according to our credit ratings of counterparties as at December 31, 2025 and 2024:
Neither past due nor credit impaired
Past duebut not
Class A(1)
Class B(2)
credit impaired
Impaired
3,617
332
10,983
5,472
2,389
11,252
4,412
3,404
6,868
6,689
482
932
1,127
3,635
2,065
872
1,227
1,024
68,585
27,952
9,135
3,956
9,572
439
5,381
9,866
5,124
886
9,013
5,913
381
657
1,026
3,913
2,567
1,340
1,126
1,096
65,102
27,240
5,931
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The aging analysis of past due but not impaired class of financial assets as at December 31, 2025 and 2024 are as follows:
Past due but not credit impaired
Neitherpast duenor credit impaired
1-60days
61-90days
Over 91days
35,237
3,695
1,275
7,361
3,949
5,728
2,028
7,816
788
4,765
599
525
4,762
2,025
37,087
31,655
5,927
586
7,943
5,552
1,710
6,010
3,182
5,283
520
158
4,939
(385
2,222
33,171
Capital Management Risk
We aim to achieve an optimal capital structure in pursuit of our business objectives, which include maintaining healthy capital ratios and strong credit ratings and maximizing shareholder value.
Our approach to capital management focuses on balancing the allocation of cash and the incurrence of debt as we seek new investment opportunities for new businesses and growth areas. On August 5, 2014, the PLDT Board of Directors approved an amendment to our dividend policy, increasing the dividend payout rate to 75% from 70% of our core EPS as regular dividends. However, in view of our elevated capital expenditures to build-out a robust, superior network to support the continued growth of data traffic, plans to invest in new adjacent businesses that will complement the current business and provide future sources of profits and dividends, and management of our cash and gearing levels, the PLDT Board of Directors approved on August 2, 2016, the amendment of our dividend policy, reducing the regular dividend payout to 60% of core EPS. Starting 2019, we base our dividend payout on telco core income. In declaring dividends, we take into consideration the interest of our shareholders, as well as our working capital, capital expenditures and debt servicing requirements. The retention of earnings may be necessary to meet the funding requirements of our business expansion and development programs.
As part of the dividend policy, in the event no investment opportunities arise, we may consider the option of returning additional cash to our shareholders in the form of special dividends or share buybacks. Philippine corporate regulations prescribe, however, that we can only pay out dividends or make capital distribution up to the amount of our unrestricted retained earnings.
Some of our debt instruments contain covenants that impose maximum leverage ratios. In addition, our credit ratings from the international credit ratings agencies are based on our ability to remain within certain leverage ratios.
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No changes were made in our objectives, policies or processes for managing capital during the years ended December 31, 2025, 2024 and 2023.
The following table shows the changes in liabilities arising from financing activities as at December 31, 2025 and 2024:
January 1,2025
Cash flows
Foreignexchangemovement
12,467
623
Lease liabilities
24,430
Derivative financial liabilities
Accrued interests and other related costs
13,261
20,672
340,152
58,958
363,839
254,798
24,722
1,698
18,471
1,033
(1,640
2,157
11,009
20,843
307,446
(18,143
1,798
49,051
Others include the effect of accretion of long-term borrowings, effect of recognition and accretion of lease liabilities, unrealized mark-to-market losses of derivative financial instruments, effect of accrued but not yet paid interest on interest-bearing loans and borrowings and dividend declarations.
Non-cash Investing Activities
The following table shows our significant non-cash investing activities and corresponding transaction amounts as at December 31, 2025 and 2024:
Acquisition of property and equipment on account
21,158
19,219
Additions to ROU assets
Capitalization to property and equipment of:
Inventories
2,196
4,128
Foreign exchange differences – net
Additional interest in investment in associates
Transfers from(to) property and equipment
45,915
39,223
Non-cash Financing Activities
The following table shows our significant non-cash financing activities and corresponding transaction amounts as at December 31, 2025 and 2024:
Additions to lease liabilities
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Item 19.Exhibits
Exhibits to this report:
ExhibitNumber
Description of Exhibit
1.1
Amended Articles of Incorporation (as amended on June 9, 2020) (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission on April 23, 2021)
1.2*
Amended By-Laws (as amended on March 25, 2021)
2.1*
Description of rights of each class of securities registered under Section 12 of the Securities Exchange Act of 1934
2.2
Form of PLDT Inc.'s Specimen American Depositary Receipt (incorporated by reference to PLDT's prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Exchange Act on August 8, 2016)
2.3
Deposit Agreement (as amended on February 10, 2003) among PLDT Inc., JP Morgan Chase Bank, N.A., and owners and holders of the ADSs (incorporated by reference to PLDT's prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Exchange Act on August 8, 2016)
4.1
Stock Purchase and Strategic Investment Agreement, dated September 28, 1999, by and among PLDT, First Pacific Limited, Metro Pacific Corporation, Metro Pacific Asia Link Holdings, Inc., Metro Pacific Resources, Inc. and NTT Communications Corporation (incorporated by reference to PLDT’s Form 6-K for the month of September 1999) (P)
4.2
Executive Stock Option Plan (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission in May 2001) (P)
4.3
Master Restructuring Agreement, dated June 21, 2000, as amended on December 12, 2000 and December 19, 2000, between PCEV, PCEV (Cayman) Limited, PLDT, The Chase Manhattan Bank, as escrow agent, Metropolitan Bank and Trust Company, as administrative agent and the creditors named therein (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission in May 2001) (P)
4.4
The Cooperation Agreement, dated January 31, 2006, entered into by and among PLDT, First Pacific, Metro Pacific Corporation, Metro Asia Link Holdings, Inc., Metro Pacific Resources, Inc., Larouge B.V., Metro Pacific Assets Holdings, Inc., NTT Communications and NTT DOCOMO (incorporated by reference to Schedule 13D/A (Amendment No. 2) as filed with the United States Securities and Exchange Commission by Nippon Telegraph and Telephone Corporation and NTT Communications Corporation on January 31, 2006)
Sale and Purchase Agreement, dated May 30, 2016, by and among San Miguel Corporation, Philippine Long Distance Telephone Company, Globe Telecom, Inc., and Vega Telecom, Inc. (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission on April 27, 2017)
4.6
First Amendment to the Sale and Purchase Agreement, dated July 26, 2016, by and among San Miguel Corporation, Philippine Long Distance Telephone Company, Globe Telecom, Inc., and Vega Telecom, Inc. (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission on April 27, 2017)
4.7
Sale and Purchase Agreement, dated May 30, 2016, by and among Grace Patricia W. Vilchez-Custodio, Philippine Long Distance Telephone Company, Globe Telecom, Inc., and Brightshare Holdings Corporation. (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission on April 27, 2017)
4.8
Sale and Purchase Agreement, dated May 30, 2016, by and among Schutzengel Telecom, Inc., Philippine Long Distance Telephone Company, Globe Telecom, Inc., and Bow Arken Holding Company, Inc. (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission on April 27, 2017)
8.1*
Subsidiaries
11.1
Insider Trading Policies and Procedures (incorporated by reference to PLDT's Form 20-F as filed with the Securities and Exchange Commission on March 13, 2025)
11.2
Blackout Period/Restriction on Trading of Shares (incorporated by reference to PLDT's Form 20-F as filed with the Securities and Exchange Commission on March 13, 2025)
12.1*
A Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*
A Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1*
A Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2*
A Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1
Incentive-Based Compensation Clawback Policy (incorporated by reference to PLDT's Form 20-F as filed with the Securities and Exchange Commission on March 27, 2024)
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents
Cover Page Interactive Data File (embedded within the Inline XBRL document)
*Filed herewith
(P) – Paper filings
SIGNATURE
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
PLDT INC.
By:
/s/ Joan A. De Venecia-Fabul
JOAN A. DE VENECIA-FABUL