Source: PLDT Points to Typhoon Odette and Pandemic for P48 Billion Budget Overrun Issue
PLDT officials blamed the pandemic and Typhoon Odette for the P48 billion budget overrun issue that has rocked the company and has sent its stock tumbling after it was disclosed by the company last Friday. But the company also insisted that it’s “business as usual.”
According to a source, an analyst who attended the company’s investors and analysts briefing on Wednesday, PLDT chairman Manuel V. Pangilinan personally explained how the company incurred billions of pesos in budget overruns.
“The explanation they gave was the typhoon and the pandemic,” the analyst, who declined to be named citing he was not authorized to speak on the matter, said. “They needed to install broadband to houses quick due to pressure from (former President Rodrigo) Duterte and competitors. Vendors have been installing equipment even before asking approval. So they deploy first even before being budgeted in the capex. That’s the only explanation that I understood.”
When personnel requested for capex disbursement, PLDT management reportedly did not ask if this was within the budget, the source added.
“The management acknowledged that they failed to ask,” the analyst said. “Then, at the same time, those who requested for the capex did not provide anything.”
Also on Wednesday, PLDT released a statement to the PSE saying it is cooperating with an investigation into the irregularity launched by the Securities and Exchange Commission (SEC), the Philippine Stock Exchange (PSE) and the Capital Markets Integrity Corporation (CMIC). The company said it has responded to separate requests for clarifications and answers from SEC and PSE, and that it would continue to respond promptly to any further requests.
“The Company is also gathering all the information requested by CMIC,” the statement, attributed to PLDT Assistant Corporate Secretary Abner T. Alberto, added.
The telco also insisted that it did not uncover any “fraudulent transactions, procurement anomalies, or loss of assets arising from the capex spend.”
Alberto said the company needed to understand the range of issues involved and the extent of the matter, and until this information was complete, “any announcement would have been premature.”
Pangilinan was present during the analyst briefing room at the Dusit Thani Hotel Manila on Wednesday although he did not face reporters camped out at the venue.
On Friday (December 16), PLDT announced that it had a “budget overrun” of P48 billion, which represents 12.7 percent of its total capital expenditures (capex) spend of P379 billion over the last four years.
The overruns were uncovered through “ongoing internal forensics” under Pangilinan, who was then chairman, president, and CEO. He was replaced as president and CEO by Alfredo S. Panlilio, who was then chief revenue officer and president of subsidiary Smart Communications Inc. Pangilinan currently retains the position of chairman of the company.
PLDT shares nosedived immediately following the disclosure, dropping 4.2 percent and then a further 19 percent on Monday (December 20), wiping nearly P62 billion in its market value. However, the company rebounded on Wednesday, climbing five percent at the close of the day’s trading, according to Bloomberg.