PLDT secures another upgrade from S&P

MANILA, Philippines - Dominant carrier Philippine Long Distance Telephone Co. (PLDT) got another upgrade from New York-based Standard & Poor’s Ratings Services, bringing the company’s credit rating a notch higher than that of the Philippines.

PLDT chairman Manuel V. Pangilinan said in a statement that the company would continue to benefit from the continued improvement of the economic conditions of the Philippines.

“We are pleased to benefit from the improving economic conditions in the country that resulted in another investment grade rating for the Philippines,” Pangilinan stressed.

He added that the ratings upgrade would better reflect the potential of PLDT.

S&P upgraded PLDT’s foreign currency corporate credit rating and unsecured credit rating to ‘BBB’ or one notch above investment grade from ‘BBB-’ or investment grade.  The outlook is ‘stable’.

PLDT’s ASEAN regional scale rating was also improved from ‘aXA-’ to ‘aXA’, also one notch above the sovereign rating.

“The rating reflects the company’s strong position in the domestic market, diversified services, integrated network, and solid cash flow measures,” S&P said in a statement.

It added that “the country and macroeconomic risk of the Philippines and intense competition in the mature domestic cellular market temper these strengths.”

The Philippines got its second investment grade rating from S&P last Thursday after receiving its first investment grade rating from London-based Fitch Ratings last March 27.

S&P has raised its sovereign credit ratings on the Philippines to investment grade at ‘BBB-/A-3’ from ‘BB+/B’ on the country’s strengthening external profile, moderating inflation, and declining reliance on foreign currency debt.

For his part, PLDT president Napoleon Nazareno said the upgrade reaffirms the soundness of PLDT’s business strategy to transform into a fully integrated telco operator offering a complete suite of advanced communications services.

Nazareno pointed out that the completion of PLDT’s P67.4 billion network transformation program last year resulted in a super-charged network that is unrivalled in terms of coverage, capacity, and resiliency.

PLDT remains the leading player in the local telecoms sector with over 60 percent market share in the cellular, broadband and fixed line businesses.

PLDT earlier earned the distinction of being the first Philippine corporate to be given investment grade credit ratings by all three major international credit watchers – S&P, Fitch Ratings, and New York-based Moody’s Investors Services.

PLDT’s net income jumped 12 percent to P35.5 billion last year from P31.7 billion in 2011, while consolidated revenues rose 10 percent to P169.33 billion from P153.96 billion.

The PLDT Group’s total cellular subscriber base stood at 69.9 million subscribers with 28.4 million from Talk ‘N Text, 25.5 million from Smart, and 15.7 million from Sun Cellular of Digital Telecommunications of the Philippines (Digitel).

PLDT is spending about P29 billion for its capital expenditures this year or 20 percent lower than the P36.4 billion outlay in 2012.