PLDT hikes share repurchase program to 3 million shares

Philippine Long Distance Telephone Co. (PLDT) is increasing the number of common shares under its second share buyback program from two million to three million.

The PLDT board of directors on Tuesday authorized the repurchase of the three million PLDT common shares through open market purchases, block trades or other modes.

Earlier this year, the PLDT board approved the extension of last year’s share buyback program involving two million common shares to cover an additional two million shares.

As far as the first share buyback program is concerned, company officials said with the buyback of close to two million shares, PLDT’s earnings per share registered a net increase of 1.3 percent.

“The approved additional share buyback program allows us to take advantage of our undervaluation with our share price being adversely affected by the weak and volatile equities market. These capital management initiatives, along with our increased capital expenditure level, underscore the strength of our free cash flow,” PLDT group chairman Manuel Pangilinan said.

Meanwhile, Pilipino Telephone Inc., a subsidiary of PLDT’s wholly-owned wireless company Smart Communications, reported that last Dec. 9, it acquired 50,000 of its common shares at a price of P7 per share under its own share buyback program totaling 58 million common shares.

With this purchase, Piltel now has 3.35 million treasury shares and 11.77 million outstanding shares.

In another development, PLDT emphasized it is not engaging in the advertising business with the launch of PLDT Sweetspots.

PLDT assistant corporate secretary Florentino Mabasa explained that the new service does not involve selling ad spots, nor will PLDT earn advertising revenue should Sweetspots clients decide to use the service to sell ad spots.

“Through Sweetspots, PLDT provides broadband connectivity and enabling infrastructure (content management system) for a fixed monthly fee. The service enables advertisers, which are companies/enterprises with a wide network of customer touch points, to implement their own digital signage network,” he said.

Earlier, Catanduanes Rep. Joseph Santiago, chairman of the House information and communications technology committee, cautioned PLDT against engaging in advertising which under the Constitution is an industry reserved only to entities at least 70 percent owned by Filipinos.

Santiago was reacting to the plan of PLDT to venture into the non-traditional advertising business through end-to-end fully-managed digital signage network solutions.

“The Constitution couldn’t be more categorical about the 70-percent minimum Filipino ownership. PLDT is banned from engaging in advertising for the same reason it is forbidden from venturing into media: Foreigners already materially own the company,” said Santiago, also vice chairman of the House legislative franchises committee, which oversees telecommunication service providers, media broadcasting firms and other franchised entities.

Santiago said local television and radio broadcasting firms are free to engage in advertising because, being 100-percent Filipino-owned entities, they are all automatically considered compliant with the 70-percent minimum Filipino ownership requirement.

The Constitution also mandates that all local media entities must be 100-percent Filipino-owned and-controlled.

He noted that foreigners own 40 percent of PLDT’s outstanding common shares, with three large entities — JP Morgan Asset Holdings (Hong Kong) Ltd., Japan’s NTT DoCoMo Inc. and NTT Communications Corp. — controlling a combined 39.77 percent (or 74,654,652 shares), plus 14 other aliens holding another 0.23 percent (or 401,027 shares).

A separate list filed with the New York Stock Exchange, where PLDT shares are also traded, shows that as of Sept. 30, at least 20 other foreign institutions and mutual funds own another 16.69 percent (or 31,401,256 shares) of the telecommunication service provider.

They include Lazard Asset Management LLC (4.22 percent or 7,936,749 shares); Credit Agricole S.A. (2.19 percent or 4,116,352 shares); Renaissance Technologies LLC (1.84 percent or 3,456,300 shares); Lazard Emerging Markets Portfolio (1.49 percent or 2,805,060 shares); Capital Research Global Investors (1.40 percent or 2,636,940 shares); and Mondrian Investment Partners Ltd. (1.26 percent or 2,364,333 shares), among others.