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Contents
Comparative Highlights
Consolidated Financial Performance Highlights
A Message from the Chairman
A Letter from the President and CEO
2009 In Review: Fast Forward
The PLDT Group CSR Report: Recognizing Everyday Heroes
Corporate Governance Report
The Board of Directors
Key Officers
Financial Review
Audit Committee Report
Statement of Management’s Responsibility for Financial Statements
Independent Auditors’ Report
Consolidated Statements of Financial Position
Consolidated Income Statements
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Contact Information
About the Cover
The transformation of icons on the cover – landlines, cellphones,
personal computers, television sets – shows how quickly the country’s
technological and business landscapes are changing. It is as if someone
is pressing the fast forward button. This report on the PLDT Group’s
activities, as well as the results for the year 2009, bears this out.
pldtAR09_0423_FINAL.indd 2
4/24/10 12:09 AM
PLDT is the leading telecommunications service provider in the
Philippines. Through its three principal business groups—wireless,
fixed line, and information and communications technology—PLDT
offers the largest and most diversified range of telecommunications
services across the Philippines’ most extensive fiber optic backbone
and wireless, fixed line, broadband and satellite networks.
PLDT is listed on the Philippine Stock Exchange (PSE:TEL) and its
American Depositary Shares are listed on the New York Stock
Exchange (NYSE:PHI). In 2009, PLDT was one of the largest
Philippine-listed companies in terms of market capitalization.
Mission/
Vision
PLDT will be the preferred full service provider of voice, video
and data at the most attractive levels of price, service quality,
content and coverage, thereby bringing maximum benefit to the
Company’s stakeholders.
Values
Accountability
We take full responsibility for our actions and decisions.
Integrity
We are honest, moral and legal. We do the right thing.
Fairness
We uphold justice and fair play.
Transparency
We are truthful. We disclose accurate and prompt information.
Subsidiaries
Wireless
Smart Communications, Inc. and Subsidiaries
Pilipino Telephone Corporation
Smart Broadband, Inc. and Subsidiaries
Chikka Holdings Limited and Subsidiaries
Connectivity Unlimited Resources Enterprise, Inc.
ACeS Philippines Cellular Satellite Corporation
Mabuhay Satellite Corporation
Fixed Line
PLDT Clark Telecom, Inc.
PLDT Subic Telecom, Inc.
PLDT Global Corporation and Subsidiaries
PLDT-Philcom, Inc. and Subsidiaries
PLDT-Maratel, Inc.
Bonifacio Communications Corporation
Smart-NTT Multimedia, Inc.
Information and Communications Technology
ePLDT, Inc. and Subsidiaries
SPi Technologies, Inc. and Subsidiaries
ePLDT Ventus, Inc.
Vocativ Systems, Inc.
Parlance Systems, Inc.
Infocom Technologies, Inc.
BayanTrade, Inc. and Subsidiaries
Digital Paradise, Inc.
netGames, Inc.
Level Up! (Philippines), Inc.
comparative
highlightS
FINANCIAL INFORMATION (in millions, except
cash dividends declared per common share)
Revenues
Service Revenues
Non-Service Revenues
Expenses
Depreciation and Amortization
Compensation and Employee Benefits
Repairs and Maintenance
Selling and Promotions
Cost of Sales
Asset Impairment
Others
2005 2006 2007 2008 2009
Php121,104
Php124,976
Php135,478
Php142,873
Php145,647
3,312
124,416
30,822
14,136
6,705
5,093
6,501
2,756
2,967
2,480
2,709
2,346
127,943
137,958
145,582
147,993
31,869
18,359
6,886
4,907
5,625
2,766
28,613
20,470
7,310
5,541
5,127
1,317
24,709
20,709
8,569
5,695
5,252
4,180
25,607
23,100
8,631
5,749
5,432
5,061
11,629
11,643
16,078
16,672
16,531
Php77,642
Php82,055
Php84,456
Php85,786
Php90,111
Net Income Attributable to Equity Holders of PLDT
Php34,135
Php35,138
Php36,004
Php34,635
Php39,781
Property, Plant and Equipment
Php331,537
Php347,407
Php364,972
Php377,220
Php390,692
Accumulated Depreciation, Amortization and Impairment
154,563
183,217
205,558
216,894
229,436
Net
Capital Expenditures
Short and Long-Term Debts
Php176,974
Php164,190
Php159,414
Php160,326
Php161,256
Php14,990
Php20,674
Php24,824
Php25,203
Php28,069
Php103,544
Php80,154
Php60,640
Php73,911
Php98,729
Equity Attributable to Equity Holders of PLDT
Php72,729
Php102,521
Php111,113
Php105,531
Php98,575
Cash Dividends Declared Per Common Share
Out of the Earnings for the Year
Php70
Php140
Php184
Php200
Php218
OPERATING INFORMATION
Number of Cellular Subscribers
Number of Fixed Line Subscribers
Number of Broadband Subscribers
Wireless
Fixed Line
20,408,621
24,175,384
30,041,030
35,224,604
41,328,641
1,842,507
1,776,647
1,724,702
1,782,356
1,816,541
117,586
28,775
88,811
264,649
579,095
995,916
1,614,407
131,490
133,159
314,804
264,291
563,333
432,583
1,054,743
559,664
Number of Stockholders
2,193,525
2,189,374
2,185,395
2,183,666
2,183,194
Number of Employees
18,926
28,225
30,255
29,904
29,035
Wireless
Fixed Line
ICT
2 COMPARATIVE HIGHLIGHTS
5,137
9,197
4,592
5,358
8,711
5,415
8,080
5,602
7,813
5,507
7,947
14,156
16,760
16,489
15,581
CONSOLIDATED FINANCIAL PERFORMANCE HIGHLIGHTS 3
consolidated
FinAnCiAl PerFOrMAnCe highlightS
Service Revenues
(in billion pesos)
Subscriber Base
(in millions)
9.5
9.7
9.6
39.8
40.3
41.1
2.8
5.9
41.3
44.4
1.6
1.8
1.0
1.8
0.6
1.7
0.3
1.8
0.1
1.8
73.9 77.8 86.1 93.1 94.9
20.4 24.2 30.0 35.2 41.3
121.1 125.0 135.5 142.9 145.7
22.3 26.3 32.3 38.0 44.7
Wireless Fixed Line ICT
Wireless Fixed Line Broadband
Cash Flows
from Operations
(in billion pesos)
76.7
77.4
78.3
74.4
69.2
Market Capitalization
(Year-end, in billion pesos)
Share Price
(Year-end, in pesos)
599.3
480.5
489.4
396.5
331.7
1,835
2,550
2,620
2,115
‘05 ‘06 ‘07 ‘08 ‘09
‘05 ‘06 ‘07 ‘08 ‘09
‘05 ‘06 ‘07 ‘08 ‘09
2 COMPARATIVE HIGHLIGHTS
CONSOLIDATED FINANCIAL PERFORMANCE HIGHLIGHTS 3
a message from
the ChAirMAn
The sight of flooded cities and of
families stranded on the rooftops
of their watery homes could be the
defining image of 2009. It was indeed
a year when storms – both physical
and financial – inflicted considerable
harm on the country. Through it all,
however, your Company continued
to produce strong financial results
that have set another historic
high in core profitability, whilst
providing the consumer with essential
communications services.
4 A MESSAGE FROM THE CHAIRMAN
A MESSAGE FROM THE CHAIRMAN 5
Core income for the Group reached
Php41.1 billion in 2009, up 8% from
the previous year. Core profitability
was the highest even for a Philippine
company. Reported net income rose
15% to Php39.8 billion.
PLDT generated Php44 billion of
free cash flow in 2009, lower by 8%
than the previous year due to higher
compensation and maintenance
costs, in addition to interest expense
being higher for the year. Additional
loans were contracted to make up
for internally-generated funds used
to fund new investments – principally
the 20% equity interest in Manila
Electric Company (Meralco) through
Pilipino Telephone Corporation
(Piltel) – for our capital expenditures
and, to a certain extent, refinancing
of maturing loan obligations.
Overall, the Company’s cash position
remained robust, making it possible
for PLDT to declare a 100% cash
dividend payout for the third
consecutive year. This consisted of
regular and special cash dividends
totaling Php218 per share, translating
to an aggregate sum of Php40.7
billion dividends paid out of 2009
income.
Changing Dynamics
It is important to bear in mind the
changing context within which
PLDT attained this level of financial
performance. In our Annual Report
for 2008, I stated that the global
recession had cast a long shadow
on prospects for the following year.
For a while, it seemed that the
Philippines had somehow managed
to stay out of that shadow. By
mid-2009, however, the impact of
the slowdown was finally felt in
the country, dampening consumer
spending and adversely affecting a
broad range of industries.
4 A MESSAGE FROM THE CHAIRMAN
A MESSAGE FROM THE CHAIRMAN 5
“Our strategic focus on broadband has enabled PlDt to fortify its
leadership in this fast-growing business. the combined subscriber base
of our PLDT myDSL, SmartBro and WeRoam services grew to more than
1.6 million, a 62% increase from end-2008.”
The downturn was deepened by the onslaught of
Typhoons Ondoy and Pepeng which ravaged Metro
Manila and Northern Luzon in September, causing
damages and losses in excess of US$4 billion, representing
approximately 2.5% of the Philippine gross domestic
product in 2009.
Moreover, the telecommunications industry itself went
through major changes that manifested themselves in
2009. Further growth in the mobile phone business,
for instance, was constrained by the attainment of
approximately 83% market penetration (in terms of the
number of SIMs) and the proliferation of multiple-SIM
usage.
Subscriber behavior continued to shift in favor of
bucket or flat-rate plans and increased usage of social
networking as a means of communication, affecting
both mobile and fixed voice services – especially texting.
Indeed, the internet became increasingly fused with
telecommunications, undermining prevailing business
models and creating new ones.
The changing dynamics of the telecommunications
industry have not invalidated the four-pronged strategy
that has served us well in the past three years. We must
and shall continue to (i) optimize our mainstream voice
and text businesses; (ii) build aggressively our data and
broadband operations; (iii) continue to invest heavily
in our network infrastructure; and (iv) keep our cash
operating expenses under tight control.
Our strategic focus on broadband has enabled PLDT to
fortify its leadership in this fast-growing business. The
combined subscriber base of our PLDT myDSL, SmartBro
and WeRoam services grew to more than 1.6 million, a
62% increase from end-2008. Broadband and internet
service revenues increased by 25% to Php13.8 billion,
accounting for 9% of total revenues.
We have introduced various offers in order to sustain
this growth momentum. For example, PLDT Watchpad
and SmartBro Sandbox offer personal computer (PC)
and laptop users free video and music content in order
to win new subscribers and generate increased usage.
In the meantime, SmartBro SurfTV hopes to grow the
web community in the country by enabling households
without PCs to browse, chat and email via the internet
using an inexpensive access device attached to a
television set.
The intense attention to broadband has been accompanied
by continued innovation in our mainstream voice and text
businesses. Our bucket-price offers have, for example,
enabled us to grow voice usage by 4%, reversing the trend
of the past few years.
Transformation: The Next Level
Maximizing our mainstream businesses has given us the
space and the means to pursue the ongoing transformation
of PLDT.
First, we are continuing to transform our people and
organization through a process driven by our Business
Transformation Office. Now on its 3rd year, our
transformation program, as described on page 16 of this
Annual Report, is now extending its reach and deepening
its roots within the entire PLDT organization.
Second, we are shifting our networks to an all-internet
protocol (IP), broadband platform, enabling us to introduce
progressively richer multimedia content and services as we
are seeing in our PLDT myDSL and SmartBro platforms.
Third, the events of the past year highlight the need to
consider new directions for pursuing growth in light of
changing realities. This rethinking process must embrace
not only the ongoing shifts in industry business models but
also the changed internal circumstances of the PLDT Group
itself, particularly in view of its investment in Meralco.
Transformation in PLDT has taken on an added dimension
as a result of our investment in Meralco. Teams from PLDT,
Smart Communications, Inc. (Smart) and Meralco are
now busy pursuing operational and revenue-generating
synergies among their respective organizations. They
are working on eight areas of cooperation that include
infrastructure, networks, facilities, mapping systems,
platforms, procurement, marketing and customer service
that could offer either significant gains in efficiencies or
new revenue sources in the medium-term.
The recent consolidation of Piltel’s Meralco holdings with
those of Metro Pacific Investments Corporation (MPIC)
via Beacon Electric Asset Holdings, Inc. (Beacon) has
enhanced the controlling position of Piltel and MPIC as
common shareholders in Meralco, and further emphasizes
the importance of synergies between PLDT and Meralco
moving forward.
6 A MESSAGE FROM THE CHAIRMAN
A MESSAGE FROM THE CHAIRMAN 7
PLDT and Smart are pursuing similar cooperative activities
with Maynilad Water Services, Inc. (Maynilad), the Manila
North Tollways Corp., and the various hospitals of MPIC.
Taken together, these synergy initiatives are bringing the
Group’s transformation process to the next level – where
telecommunications also serves as a powerful enabler
for vital infrastructure networks and services. Given the
rapidly changing industry landscape and the need to
generate more revenues, it is imperative that we fast
forward our transformation efforts not only within the
PLDT Group itself but also with our sister companies.
Our Awards
As in previous years, 2009 yielded a bountiful harvest of
major awards and recognition for PLDT. Among the most
gratifying were the Employer of the Year Award given
to PLDT by the People Management Association of the
Philippines (PMAP) and the Support and Improvement
of Education Award given to Smart for its Kabalikat sa
Edukasyon (Your Partner in Education) by the Asian CSR
Awards.
It is also noteworthy that Smart’s special programs to serve
the “bottom of the pyramid” market won the support of
major international groups. The GSM Association, through
its Development Fund, provided financing to support
Smart’s “Islands Activation Program” which seeks to bring
mobile money services to poor, remote communities.
Smart, working with the Philippine Business for Social
Progress (PBSP), developed an innovative project that will
apply SMS technology to disaster management – this won
a US$200,000 grant for this purpose in an international
competition organized by the World Bank.
Broadening Our Social Commitment
PLDT, Smart and the PLDT-Smart Foundation, Inc. (PSF)
stepped up their corporate social responsibility
programs in the fields of education, livelihood through
microfinancing, community-building and youth
development (discussed in more detail on pages 17-21 of
this Annual Report).
The Group’s social agenda has significantly broadened as
a result of my involvement as Chairman of the Philippine
Disaster Recovery Foundation (PDRF) which was set up to
work with the Government to help rebuild communities
ravaged by Typhoons Ondoy and Pepeng. The PDRF has
initiated projects which aim to help improve the country’s
early warning system for typhoons, develop private
sector housing initiatives for displaced communities,
and rehabilitate and reforest the Marikina
Watershed.
There is a third dimension of the Group’s social
involvement that is often and easily overlooked,
because it is in plain view of everybody. And that is the
great lengths that we go to ensure that the public’s
communications needs are served even under the
most extreme circumstances. This usually comes to the
fore during natural disasters when our infrastructure
is under greatest stress – at a time precisely when our
services are most needed by the public.
In this regard, I must commend the men and women
of PLDT, Smart and ePLDT for keeping our networks
and services running despite the extraordinary
dislocations caused by Typhoons Ondoy and Pepeng.
Careful planning and quick, courageous action
before and during the time of the emergencies
enabled us to provide the uninterrupted services
that the national and local governments, relief
agencies (domestic and international) and the
affected communities needed to respond to the
exigencies of these disasters.
Conclusion
It is a truism that crises compel us to focus on the
essential. They focus the mind, and they show
that what matters is a single-minded pursuit to
serve the public in the best and worst of times.
That is what inspired PLDT, and infuses it with the
energy and enthusiasm needed in fast tracking the
transformational process.
In closing, allow me to extend my sincerest
gratitude to our entire Management and staff
for their excellent work in the past year. I wish to
thank as well, the Board of Directors for their wise
counsel, and our shareholders for their continued
generous support. With your continuing help, we
shall build a new and better future for PLDT.
MANuEL V. PANGILINAN
Chairman of the Board
6 A MESSAGE FROM THE CHAIRMAN
A MESSAGE FROM THE CHAIRMAN 7
a letter from the
PreSiDent AnD CeO
8 A LETTER FROM THE PRESIDENT AND CEO
A LETTER FROM THE PRESIDENT AND CEO 9
Dear Fellow Shareholders:
You will be pleased to note that your
Company registered another year of
solid performance in 2009 in the face of
difficult challenges.
PLDT’s consolidated service revenues grew 2% to Php145.6 billion in 2009. The
increase was propelled by the continued momentum of our data and broadband
business which increased 3% from the prior year and now accounts for 54% of
total service revenues.
Reported net income for 2009 improved by 15%, or Php5.2 billion, to Php39.8
billion year-on-year. Core income increased by Php3 billion, or 8%, to Php41.1
billion in 2009. The growth in core income resulted from the surge in service
revenues, reduced corporate income tax rate and the recognition of our share in
the earnings of Meralco.
EBITDA declined by 2% to Php86.2 billion year-on-year, with margin lower at
59%. This reflects the impact of softer revenues, some one-off cost increases such
as bandwidth rental expense, and the growth of the broadband business, where
margins are lower than our traditional cellular and fixed line businesses.
At Php44 billion, free cash flow was lower by Php3.9 billion compared to previous
year, as a result of higher capital expenditures (capex) and interest expense.
In line with our dividend policy, the Board approved the payment of Php76 per
share final dividend for 2009, in addition to the interim cash dividend of Php77
per share paid earlier, for a total of Php153 regular cash dividend per share
equivalent to 70% cash dividend payout. In addition, and consistent with the
“look back” approach, the Board also approved the payment of a special cash
dividend of Php65 per share, or another 30% cash dividend payout, bringing
total dividend payout to 100% for the third consecutive year.
Financial Position
PLDT’s consolidated statements of financial position remained strong in 2009
despite an increase in consolidated gross debt to US$2.2 billion, due to additional
borrowings to finance capital expenditures and refinance maturing loan
obligations as our cashflows were redirected to fund the Meralco acquisition.
Net debt to EBITDA rose slightly to 0.7 times, but remains well within optimum
gearing levels. PLDT maintained a healthy debt profile with maturities well
spread out.
8 A LETTER FROM THE PRESIDENT AND CEO
A LETTER FROM THE PRESIDENT AND CEO 9
“Smart’s combined cellular
subscriber base grew by 17%
to 41.3 million in 2009. this
represents net additions of
6.1 million cellular subscribers,
surpassing the net additions of
5.2 million cellular subscribers
in 2008. this was a notable
achievement given the already
high market penetration.”
In 2009, capex rose by 11% over 2008 to Php28.1 billion.
The increase went largely to support broadband takeup
and to further seed its growth. About 58% of total
capex was for the wireless business, while about 40%
went to fixed line business.
In 2010, we expect capex to increase to about Php29
billion, representing continued investment in our
broadband business and in the roll-out of our Next
Generation Network, as well as network upgrades to
enable more aggressive voice offers.
Broadband: Leading the Change
Our broadband business led the way in 2009 as PLDT
further strengthened its market leadership in this
segment.
PLDT’s combined broadband subscriber base grew by
62% to 1.6 million in 2009. Of this total, there were
1 million wireless broadband subscribers and 560,000
DSL subscribers. Broadband and internet revenues for
2009 grew by 25% year-on-year to Php13.8 billion, and
now accounts for 9% of total service revenues.
The combined strength of our fixed and wireless
networks has given the group the edge in the market,
establishing PLDT as the clear leader in subscribers and
revenues, and bringing us nearer to our objective of
“broadbanding the nation.”
Wireless: Managing New Dynamics
Smart’s combined cellular subscriber base grew by 17%
to 41.3 million in 2009. This represents net additions
of 6.1 million cellular subscribers, surpassing the net
additions of 5.2 million cellular subscribers in 2008.
This was a notable achievement given the already high
market penetration.
Wireless service revenues for 2009 reached Php95.8
billion, or 2%, year-on-year. This relatively less vigorous
growth in wireless service revenues reflects both the
impact of weak consumer spending in 2009 as well
as the changing consumer preferences. In response
to growing market appetite for voice services, Smart
introduced more voice plans in 2009. These included
Smartalk and Smartalk Plus, which allowed subscribers
to make unlimited voice calls.
EBITDA declined by 2% in 2009 to Php59.4 billion due
to softer revenues and higher cash operating expenses
such as rental expense, and taxes and licenses.
Fixed Line: Growing Steadily
Our fixed line service revenues rose 4% in 2009 to
Php51.1 billion. This growth was driven chiefly by
corporate and data revenues which grew 16% year-on-
year to Php21.6 billion and now accounts for 42% of
total fixed line service revenues.
The changing revenue mix of our fixed line business
in favor of corporate business and small-and-medium
enterprises (SMEs) is a positive development as this
10 A LETTER FROM THE PRESIDENT AND CEO
A LETTER FROM THE PRESIDENT AND CEO 11
presents a more stable customer base and a rich revenue
source.
broadband over the power lines, both of which are
presently undergoing technical trials.
At the same time, DSL has given retail fixed lines a fresh
boost even as long distance toll revenues declined due to
the prevalence of cellular and the growing popularity of
voice over internet protocol (VoIP) and other web-based
communications services.
Striking a Fine Balance
For 2010, PLDT must continue to strike a fine balance
between protecting our traditional businesses
while strengthening our leadership in the emerging
broadband arena.
ePLDT: Moving Forward
ePLDT, Inc. (ePLDT) service revenues grew by 5% to
Php10.9 billion in 2009, accounting for 7% of total service
revenues. This improved performance reflects the gains
resulting from the streamlining of the business which we
undertook in 2008.
ePLDT’s data center operations registered the strongest
growth with a 67% increase in service revenues year-
on-year. On the other hand, our customer interaction
solution and knowledge processing solution operations
showed declines due to the impact of adverse global
conditions on their clients’ businesses.
EBITDA posted a 26% growth in 2009, with margin
having improved to 12% compared to 10% in 2008. To
sustain this momentum and to allow greater focus, we
are reorganizing our knowledge processing solutions
businesses by combining the voice and non-voice
operations in one entity.
Meralco: Fortifying our Stake
Our 2009 results reflected our share in the earnings of
Meralco following the acquisition of a 20% stake in the
power distribution utility in March 2009.
Within our traditional businesses, market dynamics
are changing. With high market penetration and
increasing subscriber preference for bucket plans,
we face headwinds in growing our wireless business.
Nonetheless, there are new opportunities to exploit.
We need to respond to the demand for lower-
priced voice services in wireless business. Economic
recovery is expected to boost growth, particularly
in the outsourcing industry as well as the SMEs.
This will increase demand for corporate and SME
telecommunications services. Our ICT businesses have
gone through streamlining and are better positioned
to capitalize on growth opportunities.
One of our key objectives for 2010 is to sustain the
growth in our broadband subscriber base and revenue
streams. This will require not only considerable
investments in our networks but also leaps in
developing and aggregating content. We have already
made significant progress in this direction as evidenced
by the provision of video and audio content by services
such as PLDT Watchpad and SmartBro Sandbox. We
shall pursue even more ambitious initiatives as PLDT
moves further down the path of transforming itself
into a communications and multi-media group.
Furthermore, as a result of its investment in the upgrade
of its systems, Meralco also showed improvements in
operating performance with its systems loss below the
9.5% cap in 2009.
Even as PLDT pursues this transition, we shall continue
to control our costs. Cash operational expenses shall be
managed prudently and greater efficiencies pursued
relentlessly.
In March 2010, we announced our plan to contribute
154.2 million of our 223 million Meralco shares, held
by Piltel together with the 163.6 million Meralco shares
held by MPIC into a special purpose vehicle to be named
Beacon. Piltel and MPIC would each own a 50% stake in
Beacon. In addition, Beacon was granted a call option
on approximately 6.6% of Meralco shares owned by the
Lopez group. With the call option having been exercised
on March 30, 2010, the combined Beacon and Piltel stake
in Meralco will now amount to approximately 40.9%,
including the 68.8 million Meralco shares retained by
Piltel. These initiatives are expected to strengthen our
ownership of Meralco.
Both PLDT and Meralco have been working more closely
to pursue possible synergies between their respective
businesses. Early wins include the signing of a three-year
joint pole agreement allowing PLDT the use of Meralco’s
towers and poles. There are initiatives involving co-
location of facilities and the use of each other’s fiber
optic networks, among others. Medium-term initiatives
are in the areas of prepaid metering and the delivery of
I see PLDT’s journey as being similar to climbing a
mountain peak and 2010 as the point in time where
we reach base camp. Getting to this point has already
required much effort, but there are greater heights to
scale. Base camp is just a stop over, where the climbers
get a chance to regroup and prepare to climb the
summit.
Rest assured that your team at PLDT remains
undaunted and are committed to bringing your
Company to greater heights.
NAPOLEON L. NAzARENO
NAPOLEON L. NAzARENO
President and CEO
President and CEO
10 A LETTER FROM THE PRESIDENT AND CEO
A LETTER FROM THE PRESIDENT AND CEO 11
2009
in review
PLDT myDSL has become the most preferred
brand for broadband service in the country.
Broadband continued to be the growth
story – and the new battleground – for
Philippine telecoms in 2009. The PLDT
Group led the way, offering wired and
wireless services that have brought high-
speed internet services to many more
homes, offices, shops and schools all over
the country.
12 2009 IN REVIEW
2009 IN REVIEW 13
Pushing Activation
Broadband has breathed new life into fixed lines.
Growth in DSL combined with corporate data have
enabled fixed line service revenues to improve by 4%
despite the continued decline in toll revenues from
domestic and international calls.
Last year, the combined broadband subscriber base of
PLDT and Smart grew by 62% to more than 1.6 million
broadband subscribers, raising service revenues by 25%
to Php13.8 billion.
This growth was achieved through a series of
aggressive activation programs. The first shot in this
drive was fired in February 2009 when PLDT staged
the country’s biggest broadband and PC event at the
Virra Mall in Greenhills called the “Ultra Broadband
Blowout”. Attractive PC and laptop deals were bundled
with PLDT myDSL. The event was supported by leading
PC and laptop brands such as Lenovo, Acer, HP and
Neo, and various major PC dealers.
Bundling terminals with connectivity proved to be a powerful
approach and this was used by both PLDT and Smart
repeatedly in promos and events throughout the year.
These efforts were complemented by several activation
programs offering quick installation of DSL and/or phone
line connections. In June, PLDT relaunched its myDSL
Quick Install Kit (QIK). Many subscribers enjoyed instant,
plug-’n-play DSL in key areas all over the country. This
was followed through by the Bilis Kabit (Quick Connect)
campaign, which offered installation of phones, and
myDSL and PLDT Call All (wireless landline) services within
24 hours in key areas nationwide. From June to December
2009, PLDT connected 143,000 Call All subscribers.
Capitalizing on Wireless
The largest gains in subscriber base were attained
in wireless. Banking on its High Speed Packet Access
(HSPA) network and its fixed wireless service, Smart
grew its broadband base beyond the one-million
mark. Activations were driven by a strong advertising
campaign that highlighted the results of speed tests in
various parts of the country showing that SmartBro’s
Plug-It service delivers clearly superior performance
versus competing services.
Various services have been launched on the back of
the Group’s extensive wireless networks. One
innovative service introduced in 2009 was SmartBro
Share-It. Using a wireless router running on Smart’s
HSPA network, this service can connect several PCs and
laptops to the internet via WiFi.
Another was the PLDT Internet@Home service, dubbed
as the “Take Home Instant Landline and Internet”
service. A wireless landline and internet package that
can be installed in minutes, this new offer became
an instant hit. This was followed in early 2010 by the
launch of SmartBro SurfTV which enables users to
connect to the Web using an affordable set-top box
with a TV set.
Content and Connectivity
Content enhances the value of connectivity. So, both
PLDT and Smart have launched content packages to
boost their respective offers.
In October, PLDT Watchpad was launched. It was the
country’s first video streaming service, enabling PLDT
customers to watch popular TV channels, award-
winning movies, documentaries and other video
materials via their myDSL-powered PCs.
Smart’s Sandbox
enables Smart
subscribers to keep
in touch through a
portal they can tap
online or through
their cellphones.
PLDT
Watchpad
allows
subscribers
to watch the
hottest TV
channels,
movies,
exclusive live
streaming
and more,
with every
PLDT myDSL
subscription.
PLDT’s endorsers demonstrate PLDT QIK, the
country’s first and only ready-to-use DSL,
which enables more Filipinos to get phone
and broadband services in less than 24 hours
in key areas.
12 2009 IN REVIEW
2009 IN REVIEW 13
Lorem ipsum dolor sit amet
The “Ultra Broadband Blowout” offers attractive PC and laptop deals bundled with PLDT myDSL.
PLDT Negosyo
Boost empowers
SMEs with
cutting edge and
cost-efficient
communication
tools.
PLDT Telepresence keeps executives in touch with
their counterparts abroad without having to burn
aviation fuel and waste time traveling.
PLDT Watchpad was launched with 18 channels,
including CNN, National Geographic, MTV, CNBC, Go,
PBO, Animax, Cartoon Network, E! Entertainment,
History Channel, Bio Channel, Crime and Investigation,
Smart Shopping Network, TBN Word, Living Asia
Channel, Splash, RCTV and PLDT’s own myView
Channel. The following month, PLDT Watchpad
featured the “Fight of the Century” between Manny
Pacquiao and Miguel Cotto Live, exclusive and
commercial-free to PLDT myDSL subscribers.
For its part, SmartBro improved both activations and
usage by offering free music downloads from a library of
over 200,000 licensed songs hosted by its content portal
Sandbox.
Enterprise Solutions
Data communications and IT solutions for corporate and
SME clients were major positive contributors to PLDT’s
overall performance in 2009.
Corporate private data networking portfolio introduced
higher speed PLDT IP-VPN and Metro Ethernet, and
established NNI (Network-to-Network Interface)
interconnections with more International Data Service
Providers.
Enhancing further the corporate portfolio are PLDT
Sweetspots, the first fully-managed digital signage
network solution in the country, and PLDT SNAP, a suite
of managed networking, customer premise equipment
and IT services. Both services garnered first and
runner-up honors, respectively, for “Groundbreaking
Technology of the Year Award” during the 9th eServices
Awards in February 2009.
PLDT also launched PLDT Telepresence, a solution that
enables face-to-face, life-like conferencing experience
and assures participants of unmatched high-definition
audio and video, all on a highly secure and reliable global
network environment. PLDT Shops.Work Unplugged
(SWUP) All-Access, another pioneering and
groundbreaking solution, allowed merchants to have
wireless swipe card terminals that accept all ATM debit and
credit cards, giving them flexibility in accepting payments.
The opening of two more Innovation Laboratories
(Innolabs) in Davao and Subic, both major economic
hubs, highlighted the latest in PLDT’s business solutions.
This brings the total PLDT Innolabs to five, supporting
and fueling innovation across the country.
A sustaining campaign for PLDT myDSL Biz PC Bundle
was launched early during the year which highlighted
how high-speed broadband internet combined with
fast-computing devices can help SMEs nationwide
become more efficient and profitable. PLDT Watcher
was also re-launched, allowing SMEs to see what is
14 2009 IN REVIEW
2009 IN REVIEW 15
PLDT’s Domestic Fiber Optic Network (DFON)
still offers unmatched capacity and resilience to
transmit voice and data traffic nationwide.
With the innovative service called PLDT SWUP, companies
and their customers can now enjoy wireless card
transactions.
The PLDT Group’s outsourcing business remains
to be a leader worldwide.
happening in their business via internet and 3G mobile
phones.
New bundled services were also developed. PLDT Negosyo
Boost featured various bundled services such as business
line, fixed and wireless internet access, a netbook and
a 3-in-1 printer, enabling start-up and allowing SMEs to
immediately start their business operations and be on-line.
Lastly, PLDT Suki, the first online marketplace site for
SMEs, was launched in October, allowing business-to-
business and business-to-customer transactions.
Enhancing Mainstream Businesses
The Group continued to offer innovative and affordable
voice and text packages as it sought to enhance its
mainstream businesses.
PLDT Landline Plus, the wireless fixed line service of
PLDT, provided value offers such as its Todo-DisKwento
Plans, where customers enjoyed not just discounted NDD
and IDD rates but also a month of free unlimited local
calls. PLDT Touch Card, PLDT Budget Card and PLDT Vibe
Prepaid Internet Card offered attractive discounted rates,
new denominations and more calling destinations. To
reward loyal customers, PLDT launched PLDT Telerewards
in October where it partnered with SM Advantage Card
(SMAC), one of the biggest loyalty programs in the
country. Under this partnership, PLDT subscribers can
earn SMAC points whenever they pay their phone bills
on time, use other PLDT services and subscribe to new
services.
In June, Smart launched Smartalk, an unlimited
voice offer available to Smart Buddy and Smart Gold
subscribers. Later, it also introduced Smartalk Plus, a
variant that offers unlimited calling and on-net texting
during off-peak hours and reduced rates during peak
hours. Taken together, these offers helped raise overall
voice revenues of the mobile business. These also
complemented the various bucket or flat-rate promos
being offered by Smart and Talk ‘N Text.
In November, Smart won three innovation awards at the
Asia Mobile Awards of the GSM Association. The awards
were for the “Best Mobile Money Service,” Mobile
Money for the Unbanked and Best Mobile Marketing.
Smart also received three awards at the Asian CSR
Awards for its education and environmental programs.
ePLDT: Moving Forward
VitroTM data center set the pace for ePLDT as its revenues
grew by 67% due to increased contracts for server
hosting, disaster recovery and business continuity
service. Customer interaction solutions (ePLDT Ventus,
Inc.) and knowledge processing solutions (SPi Global
Solutions) revenues declined slightly due to adverse
global economic conditions.
14 2009 IN REVIEW
2009 IN REVIEW 15
PlDt employees’ transformation Journey
PLDT’s transformation journey marked a major milestone in 2009 when the Company
was cited as the “Employer of the Year” by the People Management Association of the
Philippines (PMAP).
A recognition of PLDT’s outstanding accomplishments in people management, the
award also signaled that the Company was making major strides in its efforts to
become an innovative communications and multi-media services group.
People are at the heart of this transformation process. Thus we have a campaign
anchored on the theme: “Yakapin ang Pagbabago” (Embrace Change).
PLDT Chairman Manuel V. Pangilinan, center, together with other PLDT executives and
employee union leaders, accepts the “Employer of the Year” Award from the People
Management Association of the Philippines (PMAP).
These were the initiatives conducted to rally all PLDT employees in support of change:
Jolly Ring-O: The Icon of Change. Jolly Ring-O represents the new and dynamic
PLDT Employee who not only keeps up with change but embraces change.
The PLDT Group Way: The Common Way of Thinking, the Language of
Change. Training on the PLDT Group Way, a unique 3-lens framework for analyzing
problems and finding holistic solutions, was developed and used to train over 7,000
employees of PLDT.
PLDT Transformation Academy: The Learning Vehicle for the
Transformation Journey. The PLDT Training Center established the
“Transformation Academy” within its Innolab Training Center to help re-tool employees
in new technologies and skills and mindset development programs, as well as help
everyone understand and imbibe the new PLDT Group Way. The Academy produced
more than 20,000 training graduates in 2009.
Employee Engagement Programs: The avenues to get involved and
engaged in transformation. These programs include the following: e-Suggest
encourages employees to make suggestions to improve the way PLDT does business,
such as the development of new systems and invention of new tools to speed up service
delivery; e-Refer encourages employees to refer new customers to PLDT to help increase
revenues; i-Care makes it easier for employees to report service outages through
texting; i-Excel recognizes exemplary employees who embody the spirit of excellence in
transformation. As of end 2009, more than 6,000 employees, or 80% of the total, have
joined at least one of these engagement programs.
Creating excitement and awareness was important. Elevators in PLDT buildings were
wrapped with posters containing the business transformation theme and message. Jolly
Ring-O was also put on the cover of the PLDT corporate magazine, ACC:ESS. Brochures
and posters for i-Care, e-Suggest, e-Refer and i-Excel were printed and distributed to
employees. The PLDT Group Way Newsletter was published in “Taglish,” a combination
of Tagalog and English. There were also nationwide roadshows with President Napoleon
Nazareno reaching out to all PLDT business zones where PLDT top management was
able to hear directly the concerns and suggestions of employees. And to capture the
spirit of transformation in music and words, the “Yakapin ang Pagbabago” anthem was
composed, arranged and recorded by in-house talent. The song was played in major
buildings and in all BTO roadshows and events. ∞
Meanwhile, PLDT’s ICT subsidiary
completed various acquisitions in
anticipation of an upswing in business.
In April, ePLDT has increased to 93.5%
its equity interest in BayanTrade, a
technology provider for sourcing and
supply management, business solutions,
and operational and business applications
support. In September, SPi purchased
Laguna Medical Systems, Inc., a medical
coding consulting firm.
SPi continued to win awards and
recognition as a leading knowledge
processing solutions company in the
world. It was named as one of the world’s
best outsourcing providers in the 2009
International Association of Outsourcing
Professionals (IAOP) Global Outsourcing
100. It also won the 2009 ICT Award for
Multi-Sourcing Company of the Year
given by the Business Process Association
of the Philippines and the Canadian
Chamber of Commerce of the Philippines.
“PlDt also completed
its Php3-billion DFOn
expansion, laying
an additional 2,000
kilometers of fiber
optic cables.”
Strengthening Network Infrastructure
To support its growing broadband
business, the Group continued to build
up its network infrastructure.
In March, Smart launched its HSPA
network, which is capable of supporting
speeds of up to 7 Mbps. This significantly
boosted its ability to provide mobile
broadband services and made possible
the rapid growth of its SmartBro Plug-It
service. During the year, it also began
to deploy HSPA Plus which is capable of
even higher speeds of up to 20 Mbps.
In November, Smart marked another
major milestone as its network hosted
the first network trial in the Philippines
using 4G or Long-Term Evolution (LTE)
technology. LTE is a further enhancement
of mobile phone networks with speeds of
up to 100 Mbps.
PLDT also completed its Php3–billion
DFON expansion, laying an additional
2,000 kilometers of fiber optic cables in
key cities around the country, expanding
operating capacity to more than 1,000
Gigabytes, or double that of other
networks. ∞
16 2009 IN REVIEW
CSR REPORT 17
the pldt group
CSr rePOrt
PSF President Rene “Butch” Meily,
2nd from left, leads the relief goods
distribution to typhoon Ondoy’s victims.
reCOgniZing
eVerYDAY herOeS
In 2009, natural calamities added greater
urgency to the community service
initiatives undertaken by the PLDT Group.
16 2009 IN REVIEW
CSR REPORT 17
PlDt group CSr
Statement
At the PLDT Group of companies, corporate social
responsibility (CSR) is grounded in our belief that an
integral part of our business is the imperative to help
improve the overall well-being of the Filipino people.
To achieve this goal, we will address proactively the
interests of our various stakeholders. We believe that
as we seek to enhance value for our shareholders, we
have a responsibility to:
• Provide quality products and services for our
customers;
• Develop our employees;
• Work with our suppliers and business partners in an
ethical and mutually beneficial manner;
• Care for the environment; and
• Improve our communities.
We are conscious about the proper management of our
finite and fragile environment and are taking tangible
measures to lessen our carbon footprint. We will
continue to invest in technical business solutions that
both cut our costs and help save the environment.
By succeeding as a corporation, we create wider
opportunities for employment, entrepreneurship and
the greater well-being of all Filipinos. We believe that
as we help raise the overall economic welfare of the
Filipino, we expand the market of our products and
services. The creed of our Company’s business strategy
is the desire to change lives for the better.
In September, Typhoons Ondoy and Pepeng unleashed massive floods in
Metro Manila, North and Central Luzon, dislocating millions of people.
The PLDT Group did its share in responding to this unprecedented crisis.
PLDT and Smart personnel, along with their distributors, set up 38 Libreng
Tawag (Free Calls) Centers and staged 35 missions to distribute over
Php10 million worth of relief goods to disaster victims in the six cities and
towns of eastern Metro Manila and in nine provinces of Northern, Central
and Southern Luzon that were worst hit by the storms. They also held six
medical missions through which they treated several thousand typhoon
victims in Metro Manila and in Pampanga. In these relief and medical
missions, they worked with their colleagues from Manila North Tollways
Corp., doctors and nurses from the Makati Medical Center, Cardinal
Santos Hospital and PLDT Medical Services, and volunteers from the PBSP.
The Group has since become deeply involved in the post-disaster and
reconstruction effort. PLDT and Smart Chair Manuel V. Pangilinan was
tapped by President Gloria Macapagal-Arroyo to head the PDRF, the
private sector commission tasked to work with the Special National Public
Reconstruction Commission in rebuilding the badly affected areas.
Working with government agencies, private companies, non-government
organizations, church and civic organizations, and local communities, the
PDRF has initiated various programs that aim not only to “build back”
but also to “build better”. These include programs to set up an enhanced
early flood warning system for Metro Manila in cooperation with the
Metro Manila Development Authority and Philippine Atmospheric,
Geophysical and Astronomical Services Administration, to help develop
a master flood control plan for Metro Manila, to repair damaged public
schools, to develop housing and relocation plans for informal settlers
living along the waterways and to reforest and rehabilitate the denuded
Marikina Watershed.
ENVIRONMENT
PLDT’s environmental initiatives made major strides in 2009. Smart’s
program using wind and solar energy to power over 100 cell sites in
remote areas won two international awards in 2009: the “Green Mobile
Award” at the 14th GSMA Global Mobile Awards in Barcelona, Spain, in
February and an Award of Excellence at the Asian CSR Awards in Manila,
Philippines, in November.
CNN’s Hero of the Year Efren Peñaflorida, 2nd
from right, gets to teach more underprivileged
kids through the PLDT Group’s support.
18 CSR REPORT
CSR REPORT 19
More than 340,000 seedlings and mangrove propagules
found their place in the sun through the PLDT Group’s
tree-planting activities.
The Group also stepped up its tree-planting activities.
Over 340,000 seedlings and mangrove propagules were
planted in 13 provinces by employees, partner schools,
local governments and civic organizations under PLDT,
Smart, and NTT DoCoMo’s joint SMARTrees program. This
was double the number in the prior year.
PLDT launched its TelePUNO tree-planting project, a
five-year program in partnership with the Department
of Environment and Natural Resources, PBSP, the Multi-
sectoral Watershed Management Council, Inc. and the
local governments of Real and Infanta, Quezon. Under
the program, 80,000 seedlings will be planted in the
80-hectare Real-Infanta Watershed Forest Reserve. PLDT
and Makati Medical Center conducted a tree-planting
activity in the Quezon Watershed Forest Reserve. PLDT
also participated in the PBSP Cebu Hillylands Reforestation
Caravan. To date, 55,317 trees have been planted.
PLDT and the Philippine Eagle Foundation, Inc. signed
an agreement to restore the denuded lands within the
Arakan Valley Conservation Area into viable habitats
for the Philippine Eagle and other wildlife. PLDT will
also help partner communities in the conservation area
through various projects such as a potable water system,
which was turned-over in March 2010, for Sitio Enamong
in Barangay Datu Ladayon.
Smart supported the National Search for Sustainable
Schools, a nationwide search for the cleanest and greenest
school (elementary, high school and tertiary levels)
in partnership with the environment and education
departments. Smart likewise supported Earth Hour,
in partnership with World Wide Fund for Nature –
Philippines.
EDuCATION
The PSF helped the Philippine Christian Foundation,
headed by British national Ms. Jane Walker, construct
an elementary school at “Smokey Mountain,” a former
garbage dump in Manila’s depressed area. Built for poor
children in Tondo, Manila, the school used container vans
to set up classrooms, including a computer lab, in line with
a commitment to former British Prime Minister Tony Blair
during his 2009 visit.
As part of its continuing Employees Education Grant
program, PSF also gave educational grants to 100 children
of PLDT and Smart employees.
In 2009, the PLDT-SME Nation awarded 18 scholarships to
Education students through the Gabay Guro (2G) Program,
a joint activity of the PSF and the PLDT Manager’s Club, Inc.
The scholars came from Bicol University, Eastern Samar State
University, Mt. Province State University, Negros Oriental
State University, Philippine Normal University-Agusan,
Philippine Normal University-Isabela, Philippine Normal
University-Quezon, and Western Mindanao State University.
2G was certified by the Department of Social Welfare
and Development to be a sustainable and strategic
project of PSF encompassing the PLDT Group’s various
businesses involving PLDT Group employee volunteers.
It was considered a key factor for the PLDT Group
winning the Employer of the Year Award from the People
Management Association of the Philippines (see page 16).
2G already has 180 scholars in state universities nationwide
and plans to have at least five scholars per year in every
province. The program also encompasses teachers’
training, teachers’ tribute, livelihood, broadbanding and
computerization of public schools, and housing for teachers
with the Department of Education’s Project Shelter program.
Over 1,000 teachers and students from 60 public schools in
different parts of the country received basic and advanced
computer and internet literacy training under PLDT’s
Infoteach Outreach Program in 2009. This brings the total
number trained under this program to over 6,000. For this
program, PLDT partnered with Netopia Training Academy
2G helps
connect schools
to the internet
with the
assistance of
organizations
such as PSF and
through tie-ups
with events
such as the
Asian Carriers’
Conference.
More and
more students
and teachers
benefit from
the PLDT
Infoteach
Outreach.
Smart Schools Program focuses on
teachers’ training and content
development.
CSR REPORT 19
18 CSR REPORT
zz
Small entrepreneurs keep their
hopes alive with the PLDT
Group’s livelihood programs.
PSF, PLDT and Smart have adopted 10 PLDT-Smart Amazing Gawad
Kalinga (GK) Villages nationwide.
and Microsoft which awarded certificates to those
who completed advanced training in Microsoft Office
applications. As a follow–through activity, PLDT held
its annual myDSL Broadband Quiz wherein graduates
of the Infoteach training program competed for cash
prizes and computer packages for the participating
schools.
The Smart Schools Program (SSP) has shifted its focus
to teachers’ training and content development. As
a result, 160 of its partner high schools have been
able to set up their websites. These high schools have
also been assisted in developing online courseware
through the Doon Po Sa Amin program, which helps
teachers and students prepare course materials based
on local history, culture and economy. Since 2004, the
SSP training activities have benefited 11,527 teachers
and over 430,000 students from 180 public elementary
and high schools. The training activities include
computer literacy, ICT integration in the classroom,
computer troubleshooting, web page development,
content generation, leadership and scholarships for
teachers for a Master of Arts degree in Education,
Major in Instructional Media and Design.
Smart continued its program of helping upgrade the
quality of electronics and communications engineering
and information technology courses of its partner
colleges and universities. This is being done through
the Smart Wireless Engineering Education Program
(SWEEP) and information technology under the
Application Developers Intro School (ADIS). The focus
in 2009 was to provide training in wireless broadband
technologies. Under SWEEP, over 3,000 faculty and
students have been trained and over 1,500 students
have gone through on-the-job-training. Over 2,200
teachers and administrators have participated in lectures,
field visits and courses, including a Leadership Forum
conducted by former British Prime Minister Blair.
The SPi Technologies Foundation, Inc. (SPi Foundation)
continued to help financially-disadvantaged students
in completing their education, improving their
employment skills and securing a job after graduation.
The SPi Foundation supports the SPi College Scholarship
Program, the Computer Training Program conducted in
SPi’s Computer Learning Centers in various locations in
the Philippines and Job Search Seminars, among others.
In 2009, the SPi Foundation awarded ten more
scholarships to students of partner schools Polytechnic
University of the Philippines in Batangas, Negros
Oriental State University and Siliman University in
Negros Oriental. It also trained 165 students from public
colleges in Laguna and Batangas in Adobe Acrobat/
Adobe Photoshop computer software applications.
COMMuNITy DEVELOPMENT AND LIVELIhOOD
PSF, PLDT and Smart have adopted 10 PLDT-Smart
Amazing GK Villages nationwide. In 2009, 30 more
houses were completed in PLDT-Smart Amazing GK
Village in Sooc, Iloilo.
SPi and Springer Science + Business Media also have an
ongoing partnership with GK to build 56 houses in the
SPi-Springer Sunshine Village. Almost 40 houses have
been completed. SPi also built a three-storey multi-
purpose hall which houses a day care center for children
ages three to six, and a computer learning center for
the young adults. Together with employee volunteers,
SPi also conducted a medical mission to more than 200
residents of the SPi-Springer Sunshine Village.
20 CSR REPORT
CSR REPORT 21
The PLDT Group continues to sponsor
sports events and support athletes and
sports organizations.
Philippine Taekwondo Association, Smart supported
the taekwondo national team that harvested gold
medals during the Southeast Asian Games.
Organized in March 2009, with the blessings of the
Samahang Basketbol ng Pilipinas, the Smart Gilas
Pilipinas national basketball team won at the Asian
Men’s Invitational Cup in China, finished 5th in the
FIBA (Fédération Internationale de Basketball) Asia
Men’s Cup in Indonesia, and 3rd in the 21st Dubai
International Basketball Championship. In the
professional league, the Talk ‘N Text Tropang Texters
emerged as the Philippine Basketball Association’s
2009 Philippine Cup Champion.
Smart also sponsored the International Tennis
Federation Women’s Circuit attended by 30 foreign
players, and helped put together the Smart-Head
Junior Tennis Satellite Circuit and the Butch Bacani
Summer Tennis Camps. It also helped organize the
2009 Padyak Pinoy Tour of Champions, joined by
over 150 of the country’s best cyclists. Over 9,000
running enthusiasts, meanwhile, joined the Smart
Subic International Marathon in Subic, Zambales.
JuVENILE REhABILITATION
PSF organized a charity film showing for the
benefit of the PLDT-Smart Bahay Pag-asa Youth
Center, a transformative facility built by De La Salle
University-Dasmariñas, De La Salle Health Sciences
Institute and PSF. ∞
In the past few years, the Group’s focus has shifted
from building villages to developing livelihood
programs for GK villages. With the help of Smart,
the GK Sooc Terracotta Youth Artists, residents of the
GK Village in Iloilo City, held their first exhibit in SM
Iloilo in partnership with artist PG Zoluaga and the GK
Foundation. In partnership with Earth Day Network
and iServe, Smart also launched the Tarp Bag Recycling
Program in Iloilo and trained GK beneficiaries in bag-
making using recycled tarpaulins. Smart has continued
to support the Banglos Sculptors in its community art
program.
PSF continued its program with ASA Philippines
Foundation, giving micro-finance loans to janitors,
waiters, drivers and security guards of PLDT and
Smart to help them start small businesses.
PLDT’s “Pila na, may Doktor Tayo” project brings
doctors and dentists to remote areas and those
affected by calamities for free consultations and
medicines. In 2009, more than 7,000 patients from
seven communities in Bulacan, Laguna, Iloilo and
Pangasinan benefited from this project.
SPORTS
Through Smart, the Group continued to support
sports by sponsoring events and also identifying,
training, and rewarding promising Filipino athletes,
coaches, officials and sports organizations.
Working with the Amateur Boxing Association of the
Philippines, Smart supported the Filipino boxers who
brought home gold medals from the 3rd Asian Indoor
Games held in Vietnam and from the 25th Southeast
Asian Games in Laos. In partnership with the
20 CSR REPORT
CSR REPORT 21
PLDT recognizes the value of good corporate governance in building
and sustaining its long-term growth and profitability. Our corporate
governance philosophy endeavors to move beyond mere compliance
with rules and legislation, through a process of developing the
proper competencies in order to establish an ethical corporate culture
of principled business within the framework of its core values of
accountability, integrity, fairness and transparency.
PLDT’s Board of Directors is committed to a
keen observance of corporate governance
principles and policies.
COrPOrAte
gOVernAnCe
rePOrt
22 CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE REPORT 23
Everyone in the Company, from a director to an employee,
is responsible for creating this desired culture. All share
in contributing to the adoption of appropriate policies
and the latter’s firm, yet even-handed enforcement. More
importantly, everyone is charged with the duty of promoting
the proper attitudes and mindsets to allow genuinely good
corporate governance to take root and flourish in PLDT.
4. Our Board committees, specifically, the governance and
nomination committee, audit committee and executive
compensation committee, the composition and the principal
duties and responsibilities of such committees;
5. The role of our chairman in ensuring compliance with the
corporate governance principles;
PLDT’s comprehensive corporate governance program is made
necessary by very weighty reasons. First, unlike most Philippine
companies, PLDT’s American Depositary Receipts (ADRs) are
listed in the New York Stock Exchange (NYSE). Hence, we
endeavor to conform with the standards set forth in the U.S.
Securities Law and the NYSE Listing Rules. Furthermore, as an
investee company of various Philippine and other affiliates of
First Pacific Company Ltd. (First Pacific), PLDT also endeavors to
conform with certain corporate governance guidelines of First
Pacific which are based on the rules of the Hong Kong Stock
Exchange in which First Pacific’s shares are listed. Second,
PLDT recognizes the reputational and commercial benefits of
good corporate governance, a fact that is supported by recent
developments in the world economy.
Ultimately, however, our most important reason for
continuing our good corporate governance program is
that PLDT considers it to be a duty that all corporate
citizens should fulfill. It is a duty we take seriously, a
duty we owe to all of our stakeholders: shareholders,
employees, customers, partners, suppliers, contractors, and
the community at large.
Our Policies
The starting point for PLDT’s corporate governance program
is our policies. These policies were derived from and
benchmarked against global best practices in corporate
governance, but nevertheless finely-tailored to be of practical
application to PLDT’s unique conditions and culture. PLDT’s
two fundamental policies are its Corporate Governance
Manual and the Code of Business Conduct and Ethics.
Our Corporate Governance Manual (Governance Manual),
which was adopted and approved by our Board of Directors
(Board) in September 2002 and revised and amended on
January 30, 2007, seeks to institutionalize the principles of
good governance that our Board and Management believe to
be a necessary component of sound business management. It
was adopted pursuant to the Code of Corporate Governance
(Philippine SEC Governance Code) that was promulgated by
the Philippine SEC under SEC Memorandum Circular No. 2,
Series of 2002, dated April 5, 2002 .
In compliance with the Philippine SEC Governance Code
and consistent with the relevant provisions of the Securities
Regulation Code and Corporation Code of the Philippines,
our Governance Manual covers the following key areas:
1. The qualifications and grounds for disqualification for
directorship;
2. The requirement that at least two or 20% of the
members of our Board, whichever is lesser, must be
independent directors and the standards/criteria for the
determination of independent directors;
6. The role of our president/chief executive officer in
ensuring that our organizational and procedural controls
are adequate and effective to ensure reliability and integrity
of financial and operational information, effectiveness
and efficiency of operations, safeguarding of assets and
compliance with laws, rules, regulations and contracts;
7. The duties and responsibilities of our corporate secretary/
assistant corporate secretary in terms of the support services
that they need to provide our Board in upholding sound
corporate governance;
8. The duties and responsibilities of the head of our
internal audit organization that would provide our Board,
Management and shareholders with reasonable assurance
that our key organizational and procedural controls are
appropriate, adequate, effective and reasonably complied
with;
9. The functions of our independent auditors that would
reasonably ensure an environment of sound corporate
governance as reflected in our financial records and reports;
the requirement that non-audit work of the independent
auditors should not conflict with their function as
independent auditors; the requirement to rotate, at least
once every five years, the independent auditors or the lead
partner assigned to handle the independent audit of our
financial statements;
10. Our commitment to respect and promote shareholders’
rights such as voting right, pre-emptive right, inspection
right, dividend right, appraisal right, and right to receive
information about the background, business experience,
compensation and shareholdings of our directors and officers
and their transactions with us;
11. The requirement to appoint a compliance officer and
the duties and responsibilities of such compliance officer
including the establishment of an evaluation system to
determine and measure compliance with the provisions of
our Governance Manual; and
12. The penalties for violations of our Governance Manual.
Our Code of Business Conduct and Ethics (Code of Ethics)
was adopted to strengthen the implementation of our
Governance Manual. Approved by our Board on March 30,
2004 and subsequently updated on July 11, 2006, our Code
of Ethics sets out our business principles and values, which
aim to promote a culture of good corporate governance in
our Company. It provides standards that govern and guide all
business relationships of our Company, its directors, officers
and employees, especially with respect to the following:
1. Compliance with applicable laws, rules and regulations;
3. The duties and responsibilities of our Board of Directors
and the individual directors;
2. Ethical handling of conflicts of interest, corporate
opportunities and confidential information;
22 CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE REPORT 23
3. Protection and proper use of Company assets;
4. Fair dealing with our employees, customers, service
providers, suppliers, and competitors;
5. Compliance with our reporting and disclosure obligations
to the relevant regulators and to investors;
6. Compliance with our disclosure and financial reporting
controls and procedures;
7. Assessment and management of risks involved in our
business endeavors; and
8. Adoption of international best practices of good
corporate governance in the conduct of our business.
We also have enabling policies adopted by our Board to
provide specific guidelines on the provisions of the Code of
Ethics:
(a) Conflict of Interest Policy approved on October 24,
2005 – This Policy aims to ensure that work-related actions
of our directors, officers, employees and consultants are
based on sound business principles and judgment devoid
of bias or partiality. It enjoins all employees to be aware
of the possibility of such bias and partiality in dealings
with various entities or individuals in the course of or in
relation to their work. The policy likewise mandates that
employees who find themselves in a possible conflict of
interest situation should promptly disclose the matter
to the relevant authorities, as stated in the policy. If
warranted, the employee concerned should also obtain
appropriate approvals and inhibit himself from any action,
transaction or decision involving an existing or potential
conflict of interest.
(b) Policy on Gifts, Entertainment and Sponsored Travel
approved on January 31, 2006 – This Policy provides
safeguards so that the custom of giving gifts is handled in
accordance with the principles of integrity, accountability,
fairness and transparency. It aims to prevent the
occurrence of situations or actions that could significantly
affect objective, independent or effective performance
of an employee’s duties. Specifically, it prohibits the
solicitation of gifts, sponsored travel and entertainment
from third parties. On the other hand, receipt and
acceptance of gifts voluntarily given by such third parties
are handled according to this policy.
(c) Supplier/Contractor Relations Policy approved on
January 31, 2006 – This Policy seeks to ensure that our
Company upholds the highest professional standards in
business practices and ethics in its dealings with suppliers
and contractors in the procurement of goods and services.
The policy seeks to maintain PLDT’s reputation for equal
opportunity and honest treatment of suppliers in all
business transactions. The policy establishes clear rules for
arm’s-length transactions and fair treatment of prospective
and existing suppliers with the objective of always
obtaining the best value for the Company.
(d) Policy on Employee Disclosure on Violations of the
Corporate Governance Rules, Questionable Accounting or
Auditing Matters, and Offenses covered by PLDT’s Table
of Penalties (Expanded Whistleblowing Policy) approved
on May 9, 2006 – This Policy provides guidelines on
handling employee complaints, protects whistleblowers
from retaliation and ensures confidentiality and fairness
in the handling of a disclosure or complaint. An Expanded
Whistleblowing Hotline and other reporting facilities,
such as a dedicated electronic mailbox, post office box
and facsimile transmission have been installed and are
maintained. Any employee may submit a complaint or
disclosure of the nature of the violation to the Corporate
Governance Office (CGO), or the chief governance officer,
verbally or in writing. The CGO then conducts a preliminary
evaluation to determine the appropriate investigating unit
to which the case shall be assigned for further action. The
CGO monitors the cases reported and ensures appropriate
reporting to our audit committee, governance and
nomination committee, or any other relevant committee
or body on the results of the investigations and the prompt
referrals of findings to the appropriate units concerned.
Our committees on officer or employee discipline, as the
case may be, are responsible for evaluating and approving
the appropriate disciplinary action against erring officers
and employees.
All these policies and rules (collectively, the Corporate
Governance Rules or CG Rules) are periodically reviewed
to ensure that they are appropriate for PLDT and are
compliant with the requirements of the Philippine and
U.S. SEC, NYSE and Hong Kong Stock Exchange corporate
governance rules, as may be applicable.
We have summarized in our website the differences
between our corporate governance practices and those
required of U.S.-listed companies under NYSE Section
303A. To access our Code of Ethics, Governance Manual or
information on how our corporate governance practices
and those required of U.S. listed companies under NYSE
Section 303A.11 differ, please refer to:
http://www.pldt.com.ph/governance/about/Documents/276
23c20007849698da4df57179ec70dPLDT_Code_of_Business_
Conduct_and_Ethics.pdf
http://www.pldt.com.ph/governance/about/Documents/2233
6f71c88c495793d15575c2addffcpldtcorpgov_manual.pdf
http://www.pldt.com.ph/governance/about/Documents/
f7933d17962d4b2c942e50ba4980f21bpldtdisclosure.pdf
As part of embedding corporate governance standards in
performance evaluation of our personnel, we amended
our Policy on Employee Qualification for Incentives and
Rewards in 2007 to include corporate governance policy
violations as a disqualification factor.
To ensure that relations between our Company and its
business partners are imbued with our standards on
good corporate governance, we have developed written
corporate governance guidelines for suppliers and
contractors, to which our suppliers and contractors are
expected to consent in writing, thereby ensuring that they
understand and accept these standards as indispensable in
doing business with us. We have also conducted suppliers’/
contractors’ briefings and communicate to our business
partners, including suppliers, our commitment to, as well as
expectations on, good corporate governance.
Our subsidiaries, and their respective subsidiaries, have
also adopted corporate governance rules and policies
substantially similar in substance and form to our CG
Rules, as well as appointed their respective corporate
governance officers.
24 CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE REPORT 25
Implementing Structures
Our corporate governance program is being implemented through
the governance structure shown below.
Our Board of Directors
Our Board is composed of 13 highly competent individuals with
diverse yet complementary skills and expertise. They bring together
immense value in terms of experience in running and directing
various businesses and organizations. This expertise is applied
in good measure to the pursuit of the Company’s continued
growth and profitability. Such a commitment requires, as well, a
keen observance of corporate governance principles and policies
adopted to ensure the objective performance of its oversight
functions over management.
Chief among the requirements for the smooth performance of its
oversight function is that of board independence. PLDT has four
duly-screened and qualified independent directors, namely: Rev.
Fr. Bienvenido F. Nebres, S.J., Mr. Oscar S. Reyes, Mr. Pedro E. Roxas
and Mr. Alfred V. Ty. These four independent directors comprise
30% of the entire membership of the PLDT Board. This number
surpasses the required number of independent directors under
local regulations of at least two independent directors or 20% of
the entire board membership, whichever is lower.
To further enhance board independence, PLDT maintains the
practice of keeping the posts of Chairman of the Board and the
President and CEO separate. Each position has been given distinct
and separate duties and responsibilities pursuant to the provisions
of PLDT’s By-Laws and Governance Manual.
Our Board has also pioneered in the Philippines the practice of
conducting a periodic performance self–assessment. It is a process
whereby the Board, through its individual members, assesses its
collective performance as well as that of the individuals that
comprise it. Special interest is given to the Board’s structures,
processes and responsibilities, through a self-assessment tool
developed by taking into consideration the Philippine SEC’s
Governance Code and Self-Rating Form, PLDT’s Governance Manual
and Code of Ethics, Sarbanes-Oxley Act (of the United States), NYSE
Rules, the survey questions of the Institute of Corporate Directors
(ICD) and established global best practices. In 2009, the evaluation
process included the Board’s assessment of the board’s committees
and each committee’s self-assessment of their performance. Results
of the assessment are used to develop strategies to ensure the
Board’s, Board committees’ and directors’ optimal performance of
its fiduciary duties.
Our Board endeavors to continuously enhance corporate
governance in the PLDT Group. Earlier, in 2008, our Board, in
coordination with Management, defined our Corporate Social
Responsibility (CSR) philosophy through the formal
articulation of the PLDT Group Statement on CSR, which
directs all companies in the PLDT Group to develop
a more meaningful and authentic approach to our
corporate sharing. In 2009, our Board, through the Audit
Committee, moved to further strengthen our enterprise
risk management which is now integrated in the PLDT
Group’s strategic planning and business processes.
Summarized below are the number of meetings and
the attendance record of the individual directors for
the year 2009. The total amount of per diem paid for
the Directors’ attendance in the meetings in 2009 was
Php44.5 million.
Number of
Meetings Attended
Chairman
Manuel V. Pangilinan
Directors
Tony Tan Caktiong
Donald G. Dee
Helen Y. Dee
Albert F. del Rosario
Ray C. Espinosa
Tatsu Kono
Napoleon L. Nazareno
Bienvenido F. Nebres, S.J.*
Takashi Ooi
Oscar S. Reyes*
Pedro E. Roxas*
Alfred V. Ty*
*Independent Director
15/15
13/15
14/15
14/15
15/15
15/15
15/15
15/15
14/15
12/15
15/15
13/15
12/15
Board Committees
The Board has constituted four working committees, namely:
the Audit Committee, Governance and Nomination Committee,
Executive Compensation Committee and the Technology Strategy
Committee.
The Audit Committee is composed of three independent directors,
and three advisors. Each of the members of the Audit Committee
is financially literate and one of the advisors is a certified public
accountant with financial management expertise.
The Audit Committee has its own Board-approved written
charter, which includes its purposes, functions and responsibilities.
Among the primary purposes of this committee is oversight
responsibility for the external auditor’s qualifications and
independence, the Company’s financial reporting principles,
policies and system of internal controls, and the integrity of its
financial statements. The charter of the Audit Committee may
be viewed and downloaded from the PLDT website through
the following link: http://www.pldt.com.ph/about/management/
Documents/a5730bbf77974d12b4a38cf9772830f6Audit_
Committee_Charter.pdf
In 2009, the Audit Committee discussed, among other matters,
the external auditor’s reports on their integrated audit of the
2008 financial statements prepared in accordance with Philippine
Financial Reporting Standards (PFRS) and International Financial
Reporting Standards (IFRS) and the internal controls over financial
reporting. An evaluation and assessment conducted by the Audit
24 CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE REPORT 25
Committee with respect to the independence of the external
auditors and their performance for the year 2008 resulted in
the reappointment of SGV&Co. as PLDT’s external auditors for
the year 2009. The Audit Committee also reviewed the external
auditor’s integrated plan for the audit of the 2009 financial
statements, as well as the internal controls over financial
reporting of PLDT and its subsidiaries.
In terms of its work with internal auditors, the Audit
Committee reviewed the Internal Audit and Fraud Risk
Management Group’s major accomplishments for the year
2008, approved the internal audit plan for 2009, discussed
the periodic status reports on PLDT’s Sarbanes-Oxley Section
404 (SOX 404) compliance and recommended approaches for
SOX 404 compliance and reporting for 2009, and reviewed
other internal audit and fraud risk management activities and
accomplishments.
Relative to financial reporting and controls, the Audit
Committee reviewed with the financial officers of PLDT, the
Company’s full year 2008 audited financial statements and
unaudited financial results and reports for the first three
quarters of 2009.
With respect to its functions relative to governance, general
internal controls and risk management, the Audit Committee
discussed the status of PLDT’s compliance with policies and
applicable laws, updates on significant legal matters, and the
status of whistleblowing complaints received by the CGO.
The Audit Committee also reviewed with the Enterprise Risk
Management Committee updates on the enterprise risk
management (ERM) activities including results of internal risk
assessments and various ERM initiatives.
Shown in the table below are the number of meetings held by
the Audit Committee and the individual attendance record of
each member for the year 2009. A total of Php3.4 million was
paid as per diem to the members of the Audit Committee.
Number of
Meetings Attended
Voting Members
Bienvenido F. Nebres, S.J. (Chairman)*
8/8
Oscar S. Reyes*
Pedro E. Roxas*
Advisors
Corazon S. de la Paz-Bernardo
Tatsu Kono
Roberto R. Romulo
*Independent Director
8/8
8/8
8/8
8/8
7/8
The Governance and Nomination Committee (GNC) is
composed of five voting members, three of whom
are independent directors and the other two are non-
executive directors. The GNC also has three non-voting
members, composed of an independent advisor, the
Human Resources Group Head and the Chief Governance
Officer of the Company. The GNC has its own Board-
approved written charter, which includes its purposes,
functions and responsibilities. Among the purposes
of this committee are to develop and oversee the
implementation of the Company’s corporate governance
standards and evaluate the qualifications of persons
nominated to the board, its committees, or any other
position requiring board-appointment. The charter of
the GNC may be viewed and downloaded from the PLDT
website through the following link: http://www.pldt.com.
ph/about/management/Documents/91f852cbeac24f629c6a
a0e8f74bacd9GNC_Charter.pdf.
In 2009, with respect to its governance function, the GNC:
(a) performed a review and assessment of our Governance
Manual, Expanded Whistleblowing Policy and Supplier/
Contractor Relations Policy and while the committee
determined that they remain to be compliant, it
recommended improvements in the implementation thereof;
(b) assisted in the conduct of the self-assessment process
of the Board, the Board committees and the individual
directors; and (c) also approved the corporate governance
enhancement sessions for the Board and the PLDT Group
senior management, as well as other corporate governance
trainings and seminars for all other employee classifications.
In the performance of its nomination function, the GNC
screened persons nominated as directors or independent
directors and determined, identified and recommended the
final list of director/independent director nominees who were
recommended to the stockholders for election in the 2009
annual meeting of stockholders.
Summarized in the table below are the number of meetings held by
the GNC and the individual attendance record of each member for
the year 2009. A total of Php1.6 million was paid as per diem to the
members of the GNC.
Voting Members
Manuel V. Pangilinan (Chairman)
Tatsu Kono
Bienvenido F. Nebres, S.J.*
Oscar S. Reyes*
Alfred V. Ty*
Non-Voting Members
Artemio V. Panganiban
Ma. Lourdes C. Rausa-Chan
Victorico P. Vargas
*Independent Director
Number of
Meetings Attended
3/3
2/3
2/3
3/3
3/3
2/21
3/3
3/3
The Executive Compensation Committee (ECC) is composed
of five voting members, three of whom are independent
directors, and one non-voting member, who is the Human
Resources Group Head of the Company. The ECC has its own
Board-approved written charter, which includes its purposes,
functions and responsibilities. Among the primary duties of
this committee is to provide guidance and assistance to the
Board in developing a compensation philosophy consistent
with the culture, strategy and control environment of
the Company. The charter of the ECC may be viewed and
downloaded from the PLDT website through the following
link: http://www.pldt.com.ph/about/management/Documents/
b6e66bda40e2457f9de96a3f5f56e56fECC_Charter.pdf.
In 2009, the ECC reviewed, discussed and approved various
compensation-related matters for officers and executives
such as the variable pay (for the years 2008 and 2009) and
1 Former Chief Justice Artemio V. Panganiban was appointed an independent non-voting member only on June 9, 2009 and attended both meetings of the GNC held after such
appointment.
26 CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE REPORT 27
the 2009 merit increase. Non-monetary benefits such as the
proposed life insurance for executives and enhanced life
insurance for officers were likewise the subject of discussion
and approval by the ECC.
Summarized in the table below are the number of meetings
held by the ECC and the individual attendance record of each
member for the year 2009. A total of Php1.6 million was paid
as per diem to the members of the ECC.
Number of
Meetings Attended
Voting Members
Albert F. del Rosario (Chairman)
Tatsu Kono
Oscar S. Reyes*
Pedro E. Roxas*
Alfred V. Ty*
Non-Voting Member
Victorico P. Vargas
*Independent Director
4/4
4/4
4/4
4/4
3/4
4/4
The Technology Strategy Committee (TSC) is composed
of five voting members, one of whom is an independent
director, and two non-voting members. The TSC has its
own Board-approved written charter, which includes
its purposes, functions and responsibilities. Among the
primary responsibilities of the TSC is to provide oversight to
management on the strategic vision, and execution of such
vision, for the role of technology in the Company’s business.
The charter of the TSC may be viewed and downloaded from
the PLDT website through the following link: http://www.
pldt.com.ph/about/management/Documents/5af88909125643
808bf1f20f50db878cTS_Charter.pdf.
The TSC had one meeting in 2009 where it evaluated, discussed
and recommended to the Board the adoption of a multi-vendor
solution for the Company’s critical network elements projects
and reviewed the soundness of and risks associated with the
engagement of supplier/s and the technologies in the Company’s
major investments.
Summarized in the table below are the number of meetings held
by the TSC and the individual attendance record of each member
for the year 2009. A total of Php0.4 million was paid as per diem
to the members of the TSC.
Number of
Meetings Attended
Voting Members
Manuel V. Pangilinan (Chairman)
Ray C. Espinosa
Tatsu Kono
Napoleon L. Nazareno
Oscar S. Reyes*
Non- Voting Members
Manuel M. Lopez
Orlando B. Vea
*Independent Director
1/1
1/1
1/1
1/1
1/1
0/1
0/1
Enhancements and Education
To keep us informed on corporate governance and help in
developing an ethical culture, we have continued our active and
engaging corporate governance education and communication
program. In 2009, we sought to reach out to all PLDT personnel
through face to face and on-line trainings and workshops,
and the production and dissemination of relevant corporate
governance materials. For 2009, the underlying message for the
education and communication program was for each individual
to remain steadfast to his or her commitment to the four core
values of accountability, integrity, fairness and transparency, even
in the trying economic conditions.
In order to achieve this, we conducted various activities such as:
• Directors’ Corporate Governance Enhancement Session – The
session was conducted on December 10, 2009 with Mr. Keith
Darcy, Executive Director of the Ethics and Compliance Officer
Association (ECOA), as the guest speaker. The ECOA is the largest
and most respected organization of Ethics and Compliance
Officers in the world and is based in Massachusetts, USA. Mr.
Darcy discussed the topic of Governing in a Global Crisis: Lessons
from the Great Recession which centered on points to consider
for corporate directors in performing their fiduciary duties in the
light of the current financial crisis.
• Officers’ Corporate Governance Enhancement Session – Mr.
Keith Darcy also addressed the PLDT Officers on December 9,
2009 to talk about corporate governance for senior management
in the light of the current financial crisis. The title of the session
was “A Crisis is a Terrible Thing to Waste: Lessons from the Great
Depression”.
• Implementation of an Expanded e-Learning Program for
PLDT Employees – Two e-Learning modules were released for
mandatory access and compliance. The first, on the Conflict of
Interest Policy, targets supervisory and rank and file employees.
The second is about the Expanded Whistleblowing Policy which
was for PLDT executives with the rank of manager, senior
manager and assistant vice president.
• Refresher for Selected Units (pilot course) – As part of our
efforts to develop measurable outcomes for the impact of PLDT
corporate governance program, a series of workshops was
conducted for critical business units. Personnel of the concerned
units (executives all the way to rank and file employees) went
through a refresher workshop on corporate governance policies
and the Company’s four core values. The participants were also
required to provide inputs on what they consider to be the best
indicators of improved accountability, integrity, fairness and
transparency. These inputs will be consolidated and transformed
into measurable indicators for the concerned business unit.
• Workshop on Ethical Decision Making – Newly-promoted
executives undergo a 1½ day seminar on Ethical Decision Making
as part of their competency development as managers. All other
executives, promoted and hired in the past years, have already
attended the said workshop.
• Continuing Orientation for New Hires – All newly-hired
employees are given a basic orientation on corporate
governance.
• Internal Corporate Governance Campaign Materials – The
internal campaign materials for 2009 centered around the
theme “Buhayin ang galing nating mga Pinoy” (Bring back to
life our strengths as Filipinos). Five posters carrying the theme
were developed for display in PLDT offices nationwide. Each
poster exhorts PLDT employees to live out the Company
CORPORATE GOVERNANCE REPORT 27
26 CORPORATE GOVERNANCE REPORT
values of accountability, integrity, fairness and transparency.
A 2009 calendar of the same theme was distributed to all
PLDT employees.
In 2009, PLDT was again part of a write-shop, organized
by the Office of the Ombudsman to develop monitoring
systems for the commitments of various organizations in anti-
corruption programs.
The general outcome for our corporate governance
program remains to be “embedding and integrating” good
corporate governance and ethical behavior to achieve a
desired culture that embraces and practices the four core
values at every instance of our employees’ work.
In addition to and in support of this, we recognize the
very important role that the over-all business and societal
environment plays in either encouraging or stifling a
desired culture. Thus, in 2009, we reached out to like-
minded groups which promote good governance in both
the public and private spheres. We are continuing our
external advocacy and networking activities to further good
governance in the country.
First of all, we have kept our very strong ties with the
ECOA, as the first and only sponsoring partner of the
association coming from the Philippines. We participated
in the ECOA’s Annual Business Ethics and Compliance
Conference which was held in September 2009 at
Rosemont, Illinois, U.S.A.
PLDT was also involved as a Diamond Sponsor in the
10th Asian Corporate Governance Roundtable of the
Organization for Economic Cooperation and Development,
which was held in Manila in September 2009. The theme
of the Round table conference was Corporate Governance
in Asia: Ten Years From Now. Our corporate governance
executives attended and participated in the various
workshops and breakout groups. PLDT likewise set up an
interactive display at the exhibit area of the conference
where delegates and participants had an opportunity to
learn our company’s corporate governance story and get a
better idea of our corporate governance program.
As part of reaching out internationally, PLDT also
participated in the Asian Investors’ Forum on September
11, 2009. The forum was organized by the Institute of
Corporate Directors (ICD) and brought together corporate
governance advocates and international investor groups
into one forum to discuss trends, best practices and
collective steps in pushing good corporate governance into
the consciousness of more stakeholders.
Our Company also cooperates with our regulators in
the development of corporate governance policies for
Philippine companies by providing feedback on proposed
policies posted by the PSE and Philippine SEC for public
comment, as well as participating in the Companies’ Circle
of the ICD, where the top publicly-listed companies are
given the opportunity to discuss with the Philippine SEC
and PSE corporate governance rules promulgated by said
regulators.
We have also continued our active involvement in other
activities organized by the ICD such as the Companies’ Circle
meetings, Breakfast Roundtable conferences and annual
working sessions.
In addition, PLDT is the only private business organization
that participated in the Office of the Ombudsman’s
activities relative to the United Nations Covenant against
Corruption. PLDT was a participant in the Ombudsman’s
focus group discussions on anti-corruption efforts in 2008.
Performance Evaluation and Continuous Improvement
As previously mentioned, our Board of Directors conducts an
annual evaluation process of its collective performance and
that of the individual directors through a self-rating
questionnaire accomplished individually by our directors.
In 2009, the evaluation process included the Board’s
assessment of the Board’s committees and each committee’s
self-assessment of its performance. Through this process,
performance gaps are identified and next-step
recommendations are converted into an action agenda for
our Board and its individual members, where applicable, to
observe and accomplish.
It is our Chief Governance Officer who is responsible for
monitoring compliance with, interpreting and deciding any
issues arising from, investigating and determining violations
and recommending the disciplinary actions against violators
of our Governance Manual, Code of Ethics and other
corporate governance policies. It is also the Chief Governance
Officer who directs the daily operations of the CG office.
On January 26, 2010, our Chief Governance Officer submitted
to the Philippine SEC and PSE our annual certification
confirming, among others, that PLDT’s Governance Manual
conforms with the provisions of the Philippine SEC’s
Governance Code, as well as adopted the leading practices
and principles on good corporate governance; and PLDT has
not deviated from the provisions of the Governance Manual
and has complied therewith and with certain other corporate
governance standards set out in the Sarbanes-Oxley Act,
Section 303A of the NYSE Listing Standards and implementing
rules issued by the U.S. SEC and NYSE.
The said certification was based on the annual evaluation
conducted by our President and Chief Executive Officer,
Treasurer and Chief Financial Officer, and Chief Governance
Officer of our Company’s compliance with the Governance
Manual. In making such evaluation, said officers used our
board-approved corporate governance self-rating form which
has been patterned after a similar form that was issued by the
Philippine SEC under SEC Memorandum Circular No. 5, Series
of 2003, dated April 3, 2003.
Much has been done but still even more work remains in
the future. What sustain the effort in implementing PLDT’s
corporate governance program are the visible and palpable
gains. Early last year, we conducted a preliminary assessment
of PLDT’s corporate governance program. Results of the
assessment show that PLDT executives recognize corporate
governance and ethics as key components of PLDT’s business
and operations. The same can be said about corporate
governance in terms of fighting fraud and irregularities,
establishing a solid and reliable reputation in the community
and ensuring compliance with legal and regulatory
requirements. Supervisors and rank and file employees also
validated the results obtained from the executives when
they expressed appreciation for the continued corporate
governance program which at the start, was widely seen as
mere compliance and window-dressing rather than a serious
and sustained program. Certainly, these results reveal modest
but encouraging progress in working for the desired outcome
of PLDT’s corporate governance program – a well-established
and widely-shared ethical corporate culture built on the
values of accountability, integrity, fairness and transparency. ∞
28 CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE REPORT 29
enterPriSe riSk MAnAgeMent
In 2009, PLDT reinforced its commitment to strengthening its enterprise-wide risk management mandate by reconstituting the Group’s Enterprise Risk Management Committee
(ERMC). With new leadership and composition, the ERMC has been tasked to promulgate, encourage and practice an integrated risk management framework for the organization,
focusing on ensuring critical risks are identified, evaluated, treated and monitored across all functions and units within the PLDT Group.
With the renewed mandate, the ERMC set out to redefine its objectives and identified key elements needed to enhance its integrated framework.
Imperatives of Enterprise Risk Management
Status
Involvement of the Board of Directors
Creation of a central risk function
Establishment of a common definition for risk
Adoption of a standard risk evaluation process
• Issued a mandate and formed the ERMC
• Defined the Group’s risk philosophy and appetite
• Formed the ERMC
• Hired additional staffing support
• Set a standard definition for risk; cascade to organization units on-going; to be formalized and documented in
the Risk Management Manual due by the end of the first half of 2010
• Selected a risk evaluation process based on the Draft International Standard ISO 31000
(discussed below); cascade and workshops with organizational units on-going; to be formalized and
documented in the Risk Management Manual due by the end of the first half of 2010
Creation of an Enterprise Risk Management Knowledge Warehouse
• To be developed as a tool for sharing of information on identified risks
The ERMC’s vision is to cultivate a risk-conscious culture within the organization that recognizes not only the defensive nature of risk management but also the opportunity-creating
value of risk.
In 2009, the ERMC updated its risk identification survey and benchmarked this against the top ten global business risks for telecommunications companies as identified by Ernst and
Young. It was concluded from the assessment that the majority of the Group’s key risk areas are aligned with the top global risks and the Group had mitigation programs in place for
such risks.
Risk Area
Ownership of the client
Regulatory risks
Forecasting returns from technology and infrastructure investments
PLDT Group Initiatives
• Offered converged data/voice programs to increase “stickiness”
• Promoted on-net plans to encourage higher margin users and brand loyalty
• Developed related businesses that create additional “touch” points and revenue opportunities – content,
mobile money, etc
• Strong Group regulatory organization
• Improved coordination across PLDT Group of companies
• Managed capex within an agreed capex-to-service revenue parameters
• Coordinated closely with strategic partners regarding technology upgrades
• Maximized Group infrastructure
Generating sustainable cash flows from new business models
• Continued to lower network costs and subscriber acquisition costs to help preserve margins
• Aggressively expanded into the broadband space while offering reasonable price points
Manage consolidation and M&A
• Enhanced post-acquisition analysis under ERMC, including review of post-acquisition integration
Attracting and managing talent and intellectual capital
Processes and systems to support new business strategies
• Deepened the skills pool by creating/strengthening technical and engineering recruitment
• Recognized need to develop optimal mix of long-term and short-term compensation to incentivize and retain key
employees
• Organized virtual cross-functional teams to review systems and processes to ensure relevance to current business
models and new business strategies
Strategic partnerships
Privacy and security risks
Contain and reduce costs
• Maintained regular and open communications with strategic partners
• Expanded and enhanced corporate communications and Investor Relations
• Appointed IT security consultant to review and reinforce all information security
• Maximized membership and involvement in GSMA to stay abreast of new developments
• Reviewed costs periodically to ensure relevance of assumptions and methodology
• Benchmarked costs and capex against local and regional peer groups
Moving forward, the ERMC will be employing a standard risk management process based on the Draft International Standard of ISO 31000.
COMMuNICATE
AND CONSuLT
ESTABLISh ThE CONTExT
IDENTIFy RISkS
ANALyzE RISkS
EVALuATE RISkS
RISk ASSESSMENT
TREAT RISkS
MONITOR
AND REVIEW
From this process, the ERMC will elevate critical findings and risk treatment progress to Senior Management and to the PLDT Board of Directors on a regular basis. The ERMC will
report quarterly to the PLDT Audit Committee and bi-annually to the PLDT Board of Directors. ∞
28 CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE REPORT 29
the BOArD
of directors
1
2
1
MANuEL V. PANGILINAN
63, Filipino
Director of the Company since November 24, 1998.
He continues to serve as Chairman of the Board
since February 2004, after serving as President and
CEO for fi ve years from November 1998. He is the
Chairman of the Governance and Nomination and
the Technology Strategy Committees of the PLDT
Board. He also serves as Chairman of Smart, Piltel,
ePLDT, MPIC, Landco Pacifi c Corporation, Maynilad,
Manila North Tollways Corporation, Colinas Verdes,
Inc. (Cardinal Santos Medical Center), Davao
Doctors, Inc., Medical Doctors, Inc. (Makati Medical
Center), Philex Mining Corporation, PSF, and PBSP.
He is a member of the Board of Meralco, where he
is also the Chairman of its Executive Committee.
He is the CEO and Managing Director of First
Pacifi c and President Commissioner of P.T. Indofood
Sukses Makmur Tbk, the largest food company in
Indonesia. He also serves as Chairman of the Board
of Trustees of Ateneo de Manila University and San
Beda College.
2
NAPOLEON L. NAzARENO
60, Filipino
Director of the Company since November 24,
1998. He has served as President and CEO since
his appointment on February 19, 2004, and is
concurrently the President and CEO of Smart,
Piltel and Connectivity Unlimited Resources
Enterprise, Inc., positions he has held since
January 2000, November 2004 and April 2008,
respectively. He is a member of the Technology
Strategy Committee of the PLDT Board. He also
serves as Chairman of Smart subsidiaries including
Wolfpac Mobile, Inc., Smart Broadband, Inc., and
i-CONTACTS Corporation. His other directorships
include Mabuhay Satellite Corporation, where he
is Chairman; ACeS Philippines Cellular Satellite
Corporation, where he is the President; PLDT
Global Corporation; ePLDT, Inc.; and Meralco.
He is a non-executive director of First Pacifi c.
Mr. Nazareno is also a Board Member of GSM
Association Worldwide since November 2004.
3
3
DONALD G. DEE
63 , Filipino
Director of the Company since September 30, 2008. He
is a Commissioner of the Social Security System and
the Special Envoy of the President of the Philippines for
Trade Negotiations. He is the Chairman of Zest Airways,
Inc. (formerly “Asian Spirit”) and Central Peak Leisure
& Development, Inc., where he is also the President;
the President of Phoenix Resource and Management
Corp. and a director of Manila Exposition Complex,
Inc. He serves as Chairman Emeritus of the Philippine
Chamber of Commerce and Industry and the Employers’
Confederation of the Philippines, and a member of the
Executive Committee of the Export Development Council.
4
hELEN y. DEE
66, Filipino
Director of the Company since June 18, 1986. She is the
Chairman or a director of several companies engaged
in the banking, insurance, real property and other lines
of businesses including Rizal Commercial and Banking
Corporation, RCBC Savings Bank, Merchants Bank,
Malayan Insurance Company, National Reinsurance
Corporation of the Philippines, Great Pacifi c Life
30 THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS 31
55
8
6
7
4
7
Assurance Corporation, Great Life Financial Assurance
Corporation, Landev Corporation, Pan Malayan Realty
Corporation, EEI Corporation and Petro Energy Resources
Corporation, and the President and/or Chief Executive
Offi cer of Moira Management, Inc., YGC Corporate
Services, Inc., GPL Holdings, Inc., Hydee Management
& Resources, Inc., House of Investments, Inc., Tameena
Resources, Inc., Grepalife Asset Management Corporation,
Grepalife Fixed Income Fund Corporation and Financial
Brokers Insurance Agency, Inc.
5
RAy C. ESPINOSA
54, Filipino
Director of the Company since November 24, 1998. He is
the President and Chief Executive Offi cer of Mediaquest
Holdings, Inc., ABC Development Corporation (TV5),
Mediascape, Inc. (Cignal TV), Nation Broadcasting
Corporation, and other subsidiaries of Mediaquest. He
is also the Chairman of the Board of Trustees of the
PLDT Benefi cial Trust Fund and Head of PLDT Regulatory
Affairs and Policy. He is also a director of Meralco and
MPIC, an independent director of Lepanto Consolidated
Mining Corporation, and the Vice Chairman of Philweb
Corporation.
6
99
TATSu kONO
57, Japanese
Director of the Company since March 28, 2006. He is a
member of the Governance and Nomination, Executive
Compensation and Technology Strategy Committees
and advisor to the Audit Committee of the Board of
Directors of PLDT. He has been a Managing Director
of Corporate Sales Department, Corporate Marketing
Division of NTT DoCoMo since 2003.
REV. FR. BIENVENIDO F.
NEBRES, S.J.
70, Filipino
Director of the Company since November 24, 1998.
He is the Chairman of the Audit Committee and
a member of the Governance and Nomination
Committee of the Board of Directors of PLDT. He is the
Chairman of the Board of Trustees of the Assumption
College, President and a member of the Board of
Trustees of the Ateneo de Manila University, the
Vice Chairman of the Board of Trustees of the Asian
Institute of Management and a member of the Board
of Trustees of several private educational institutions
including Loyola School of Theology, and Sacred Heart
School – Jesuit (Cebu City). He is also a member of the
Board of Trustees of Manila Observatory and Philippine
Institute of Pure and Applied Chemistry.
8
9
TAkAShI OOI
48, Japanese
Director of the Company since November 6, 2007.
He is presently the Senior Vice President for Global
Business of NTT Communications, in charge of
product/service development and global network
design/engineering and proposal/installation/delivery
of global network and solutions for global multi-
national companies.
OSCAR S. REyES
64, Filipino
Director of the Company since April 5, 2005. He
serves as a member of the Audit, Governance and
Nomination, Executive Compensation and Technology
Strategy Committees of the Board of Directors of
PLDT, and is an independent director of Smart. He is
30 THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS 31
1010
1111
12
1313
11
the Chairman of Link Edge, Inc., and MRL Gold Phils.,
Inc., an independent director of Ayala Land, Inc., Basic
Energy Corporation, Manila Water Company, Pepsi
Cola Products Phils., Inc., Sun Life Financials Phils.,
Inc., and a director of various private fi rms engaged
in banking, energy, fi nancial and business advisory
services, manufacturing, mining, shipping, real estate
and related activities.
10
PEDRO E. ROxAS
54, Filipino
Director of the Company since March 1, 2001. He serves
as a member of the Audit and Executive Compensation
Committees of the Board of Directors of PLDT, and is
an independent director of ePLDT. He is the Chairman
and/or Chief Executive Offi cer/President of various
business organizations in the fi elds of agri-business,
sugar manufacturing and real estate development
including Roxas Holdings, Inc., Roxas and Company,
Inc., Roxaco Land Corporation, Fuego Land Corporation
and Hawaiian Philippine Sugar Company, and a director
of Brightnote Assets Corporation and BDO Private Bank.
AMB. ALBERT F. DEL ROSARIO
70, Filipino
Director of the Company since November 24, 1998.
He serves as Chairman of the Executive Compensation
Committee of the Board of Directors of PLDT. He
is the President of Gotuaco, del Rosario Insurance
Brokers, Inc. and of the Philippine Telecommunications
Investment Corporation. He is the Chairman of Philippine
Stratbase Consultancy, Inc., the Vice Chairman of Asia
Insurance (Philippines) Corporation and is a director of
several companies engaged in infrastructure, property
development, media, public utility and mining businesses.
He also sits in the board of First Pacifi c and is Chairman
of its Remuneration Committee, and is a Commissioner
of P.T. Indofood Sukses Makmur Tbk. He served as the
Ambassador Plenipotentiary and Extraordinary of the
Republic of the Philippines to the United States of America
from 2001 to 2006.
12
TONy TAN CAkTIONG
57, Filipino
Director of the Company since July 8, 2008. He is the
32 THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS 33
1414
1515
161616
1717
18
1919
Chairman and Chief Executive Offi cer of Jollibee
Foods Corporation and the Chairman of Jollibee
Foundation. He is also a director of First Gen
Corporation and a member of the Board of
Trustees of Temasek Foundation, Asian Institute of
Management and St. Luke’s Medical Center.
13
ALFRED V. Ty
42, Filipino
Director of the Company since June 13, 2006.
He serves as a member of the Governance
and Nomination, and Executive Compensation
Committees of the Board of Directors of PLDT. He
is the Chairman of Lexus Manila, Inc., and Asia
Pacifi c Top Management International Resources,
Corp. (Marco Polo Plaza Cebu), the Vice Chairman
of Toyota Motors Philippines Corporation, the
President of Federal Land, Inc., a director of Global
Business Power Corp. and the Corporate Secretary
of Metropolitan Bank and Trust Corporation and
Metrobank Foundation, Inc.
ADVISORy BOARD
14
MANuEL M. LOPEz
15
ARTEMIO V. PANGANIBAN
16
ROBERTO R. ROMuLO
17
BENNy S. SANTOSO
18
ORLANDO B. VEA
19
ChRISTOPhER h. yOuNG
32 THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS 33
keY OFFiCerS
PLDT
From left:
Ernesto R. Alberto, Christopher H. Young (Chief Financial Advisor), Anabelle L. Chua, Napoleon L. Nazareno, René G. Bañez,
Jun R. Florencio
From left:
Menardo G. Jimenez, Jr., Alfredo S. Panlilio, June Cheryl A. Cabal, George N. Lim, Ma. Lourdes C. Rausa-Chan,
Victorico P. Vargas
34 KEY OFFICERS
KEY OFFICERS 35
PLDT key Officers
Ernesto R. Alberto, 49, Filipino, Customer Sales and Marketing Group Head, leads all revenue
generation relationship initiatives of PLDT including product/market development, product
management, marketing, sales and distribution, and customer relationship management. He has
over 20 years of work experience in the areas of corporate banking, relationship management and
business development and, prior to joining PLDT in 2003, was a Vice President and Head of the
National Corporate Group of Citibank N.A., Manila from 1996 to May 2003.
Alfredo S. Panlilio, 47, Filipino, is the President of PLDT Global Corporation with general
management and strategic responsibilities for the international retail business. He has over 15
years of work experience in the fields of business development and information technology.
Prior to joining PLDT in July 1999, he held management positions at IBM Philippines, Inc., and
was the Vice President for Business Development of the Lopez Communications Group (ABS-CBN
Broadcasting, BayanTel and Sky Cable) until June 1999. He holds directorships in some subsidiaries
of PLDT and PLDT Global Corporation.
René G. Bañez, 55, Filipino, Administration and Materials Management Group Head. He was the
Chief Governance Officer of PLDT from October 2004 to March 3, 2008 and the Support Services
and Tax Management Group Head of PLDT from January 1999 to January 2001. He served as
Commissioner of the Philippine Bureau of Internal Revenue from February 2001 to August 2002. Prior
to joining PLDT, he was the Group Vice President for Tax Affairs of Metro Pacific Corporation for three
years until December 1998.
Claro Carmelo P. Ramirez, 50, Filipino, has over 20 years of work experience in the field of
marketing. Prior to joining PLDT, he held various managerial positions in Colgate Palmolive
Philippines, Inc., and served as Associate Director for Global Business Development of Colgate
Palmolive Company in New York and as Marketing Director of Colgate Palmolive Argentina,
S.A.I.C. He holds directorships in Intelligent Network Plus, Inc., and Sidera Technologies, Inc.
Anabelle L. Chua, 49, Filipino, Treasurer and Corporate Finance and Treasury Head of PLDT,
concurrently holds the position of Chief Financial Officer of Smart since 2006. She holds directorships
in Smart and several subsidiaries of PLDT and Smart including ePLDT, Piltel, Wolfpac Mobile, Inc.,
Smart Broadband, Inc., Connectivity Unlimited Resources, Inc., Airborne Access Corporation, Smart
Hub, Inc., and Chikka Holdings Limited. She is a member of the Board of Trustees of the PLDT
Beneficial Trust Fund, and a director of the Philippine Stock Exchange, Inc., and Securities Clearing
Corporation of the Philippines. She has over 15 years of work experience in the areas of corporate
finance, treasury, financial control and credit risk management, and was a Vice President at Citibank,
N.A. where she worked for 10 years prior to joining PLDT in 1998.
Jun R. Florencio, 54, Filipino, Head of Internal Audit and Fraud Risk Management, has over 20 years
of work experience in the areas of external and internal audit, credit management, information
technology, financial management, and controllership. He joined the Company in April 1999 and
previously had various positions in the finance organization of Eastern Telecommunications and was
the Finance Controller of Smart for four years until March 1999.
Menardo G. Jimenez, Jr., 47, Business Transformation Office Lead for Revenue Workstream, was the
Retail Business Head of PLDT from June 2004 to December 31, 2007 and, prior to that, the Corporate
Communications and Public Affairs Head. He had a stint at GMA Network, Inc. where he served
as head of creative services and network promotions. In 2005, he won the first CEO Excel Award
(Communications Excellence in Organizations) given by the International Association of Business
Communicators mainly for effectively using communication strategies in managing the PLDT retail
business team to meet its targets and achieve new heights in the landline business.
George N. Lim, 57, Filipino, Business Transformation Office Lead for Network Workstream, has over
25 years of work experience in telecommunications management. He was the Network Services Head
from February 2003 to December 2007, Network Development and Provisioning Head from February
1999 to January 2003 and Marketing Head from December 1993 to February 1999. Mr. Lim holds
directorships in some subsidiaries of PLDT.
Ma. Lourdes C. Rausa-Chan, 56, Filipino, Corporate Secretary and Corporate Affairs and Legal
Services Head. She also serves as Corporate Secretary of Piltel and several subsidiaries of PLDT.
She concurrently holds the position of Chief Governance Officer of PLDT since March 2008 and
represents PLDT as Sponsoring Member in the Ethics and Compliance Officers Association (USA)
and is a non-voting member of the Governance and Nomination Committee. Prior to joining
PLDT, she was the Group Vice President for Legal Affairs of Metro Pacific Corporation and the
Corporate Secretary of some of its subsidiaries.
Victorico P. Vargas, 58, Filipino, was appointed as Business Transformation Office Head in January
2008, concurrent with his position as Human Resources Group Head, to lead the business
transformation initiatives of PLDT. He has over 20 years of work experience in various industries
(insurance, consumer goods, real estate, banking and finance, telecommunications/information
technology) in the area of human resource management. Prior to joining PLDT in February 2000,
he served as the Country Human Resources Director of Citibank N.A., Manila and spent two years
outside the Philippines as Country Human Resources Director of Citibank, N.A. Bangkok.
June Cheryl A. Cabal, 36, Filipino, Controller and Financial Reporting and Controllership Head. She
is also a director and the chief financial officer/treasurer of certain subsidiaries of PLDT and the PSF.
Prior to joining PLDT in June 2000, she was a senior associate in the business audit and advisory
group of Sycip Gorres Velayo & Co. She was the 2008 Young Achievers Awardee for Commerce
and Industry conferred by the Philippine Institute of Certified Public Accountants. In March 2010,
she was appointed as the youngest member of the Financial Reporting Standards Council of the
Philippines - a body that sets the accounting and financial reporting standards that all companies in
the country must follow to help ensure the financial health of businesses and protect stakeholders.
Christopher h. young, 52, British, is PLDT’s Chief Financial Advisor. He worked in
PricewaterhouseCoopers in London and Hong Kong from 1979 until 1987, at which time he joined
First Pacific in Hong Kong as Group Financial Controller. He joined Metro Pacific Corporation in
1995 as finance director, a position he held until he joined PLDT in November 1998.
Officers
Manuel V. Pangilinan
Chairman of the Board
Napoleon L. Nazareno
President and
Chief Executive Officer
Ernesto R. Alberto
SVP, Customer Sales
and Marketing Group
René G. Bañez
SVP, Administration
and Materials Management Group
Anabelle L. Chua
SVP, Corporate Finance and Treasury/
Corporate Treasurer
Jun R. Florencio
SVP, Internal Audit
and Fraud Risk Management
Menardo G. Jimenez, Jr.
SVP, Business Transformation Office
Revenue Team
George N. Lim
SVP, Business Transformation Office
Network Team
Alfredo S. Panlilio
SVP, PLDT Global Corporation
Claro Carmelo P. Ramirez
SVP, Office of the President and CEO
Ma. Lourdes C. Rausa-Chan
SVP, Corporate Affairs and Legal Services/Chief
Governance Officer/Corporate Secretary
Victorico P. Vargas
SVP, Human Resources Group/Business
Transformation Office Head
June Cheryl A. Cabal
FVP, Financial Reporting and Controllership/
Controller
Alejandro O. Caeg
FVP, International and
Carrier Business
Alfredo B. Carrera
FVP, Regulatory and Telecom
Industry Relations
Cesar M. Enriquez
FVP, Customer Services and Operations
Rebecca Jeanine R. De Guzman
VP, Retail Sales and Dist ribution
Florentino D. Mabasa, Jr.
FVP, Legal Services
and Assistant Corporate Secretary
Ramon Alger P. Obias
FVP, Carrier Relations and Sales Management
Alona S. Dingle2
VP, Financial Reporting
Mario C. Encarnacion
VP, Business Transformation Office
Customer Services Team
Oliver Carlos G. Odulio
VP, Asset Protection
Lilibeth F. Pasa
VP, Retail Market Development
Enrique S. Pascual, Jr.
VP, Customer Installation and Repair
Management
Alejandro C. Fabian
VP, Industrial and Employee Relations
Jose Lauro G. Pelayo
VP, GMM South/West Customer Service District
Gil Samson D. Garcia2
VP, Revenue Management and Cash Assurance
Gerardo C. Peña
VP, GMM North/East Customer Service District
Leo I. Posadas
FVP, Treasury
Nerissa S. Ramos
FVP, Corporate Business
Raymond S. Relucio1
FVP, Core Network Operations
Ricardo M. Sison
FVP, Consumer Credit and Business System
Management
Emiliano R. Tanchico
FVP, Human Resources Management and
Development
Elisa B. Gesalta
VP, Network Services
Project Management
Ma. Josefina T. Gorres
VP, Corporate Billing and
Credit Management
Ma. Criselda B. Guhit
VP, Tax Management
Ricardo C. Rodriguez
VP, Compensation and Rewards Planning and
Management
Genaro C. Sanchez
VP, International Network Operations
Nestor I. Santos2
VP, Network Operations Control and Assistance
Ana Maria A. Sotto
VP, Business Transformation Office
(Project Manager)
Miguela F. Villanueva
FVP, Revenue Planning, Cost and Valuation
Emeraldo L. hernandez
VP, Network Migration Office
Danny y. yu
FVP, PLDT Global Corporation
katrina L. Abelarde
VP, Small and Medium Enterprises Business
Jose A. Apelo
VP, Outside Plant Service Improvement
Management
Rafael M. Bejar
VP, Medical Services
Marco Alejandro T. Borlongan
VP, Customer Care
Renato L. Castañeda
VP, Corporate Relationship Management C
Arnel S. Crisostomo
VP, Customer Provisioning and Facilities
Records Management
Amihan E. Crooc
VP, Information Systems/IS Application
Development and Management
Juan Victor I. hernandez
VP, Corporate Relationship Management B
Julieta S. Tañeca
VP, Consumer Business System Management
Marven S. Jardiel2
VP, Corporate Process Review and
Information Management
Alexander S. kibanoff
VP, Training Development
and Career Management
Joseph Nelson M. Ladaban
VP, Consumer Credit and
Churn Management
Javier C. Lagdameo
VP, Corporate Relationship Management A
Luis Ignacio A. Lopa2
VP, Corporate Marketing Services
Joseph homer A. Macapagal
VP, Property and Facilities Management
Emmanuel B. Ocumen
VP, Luzon Customer Service District
Jesus M. Tañedo
VP, VisMin Customer Service District
Victor y. Tria2
VP, Corporate Business Solutions
Jose Antonio T. Valdez
VP, Retail Marketing
Melissa V. Vergel de Dios
VP, Investor Relations
Fe M. Vidar
VP, Organization, Policies and Procedures
Development
1 Retired effective October 1, 2009.
2 Effective March 26, 2010.
34 KEY OFFICERS
KEY OFFICERS 35
Smart
From left:
René G. Bañez, Anabelle L. Chua, Danilo J. Mojica, Napoleon L. Nazareno, Mario G. Tamayo, Rolando G. Peña,
Orlando B. Vea
ePLDT
From left:
Ian Wilson, Jane C. Walker, Mariano L. Galicia, Jr., Ray C. Espinosa, Helen T. Marquez, Emmanuel P. Dizon,
Celso T. Dimarucut, George H. Tan
36 KEY OFFICERS