PLDT capex stays elevated for 2023

MANILA, Philippines — PLDT Inc. will operate on elevated capital expenditures in 2023 and only expects to wind down on spending from 2024 onward.

PLDT   said yesterday that its capex for 2023 would remain on the same level as it was in previous years, as the company looks to address budget overruns it endured between 2019 and 2022.

Further, PLDT said investments made for network upgrades in the past four years reached P379 billion, including an estimated breach of at least P48 billion in spending.

PLDT said   the capex overrun translates to nearly 13 percent in the total budget spent from 2019 to 2022. As such, the telco giant initiated an internal investigation to look into its finances, as well as preliminary discussions with principal vendors with the goal of reconciling accounts.

The investigation so far has uncovered no fraudulent transactions, purchasing anomalies or loss of assets arising from the budget overshoot. With this, principal vendors committed to maintain their transactions with PLDT.

However, PLDT said it would have to go on another year of elevated capex, even when its industry counterparts are starting to wind down their spending.

“Capex for 2023 will continue to be elevated as the capex overruns enter the financial statement this year and next, cushioned, however, by the significant gains on tower sales,” PLDT said.

“Capex levels are expected to be lower from 2024 onward,” it said.

Moving forward, PLDT assured investors that it has overhauled its internal system to prevent a repeat of the capex breach. Likewise, the Pangilinan-led telco has shaken up its leadership that it promised to soon disclose before regulators.

“PLDT is undertaking a management reorganization process and has initiated improvements on its processes and systems to address weaknesses that allowed such budget overruns to occur. A separate announcement will be made once the reorganization is implemented,” it said.

In October PLDT chairman Manuel V. Pangilinan said the telco provider is finding it challenging to stay within the capex guidance of P85 billion for the year, as the peso’s depreciation against the   dollar raises the cost of imported equipment and services.

In turn, Pangilinan signaled then that PLDT may have to run on elevated capex again next year.