PLDT Annual Report 2016 | Quarterlytics

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FY2016 Annual Report · PLDT

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D i g i ta l l i k e n e v e r b e f o r e

raD!

goals!

2 0 1 6 a n n u a l r e p o r t

PLDT 2016 ANNUAL REPORTdigital like never beforeour Cover

Breaking boundaries.

Defying limitations.

Engaging in a millennial way.

This is PLDT, bringing to the

fore the exciting lifestyle of the

digital age to every home, every

enterprise, every generation.

PLDT opens the door to

numerous opportunities.

Optimizing great opportunities.

Ushering in new technologies.

And heralding earth-shaking

innovations. All these – and more –

like never before.

Contents
02 Comparative Highlights

03 Consolidated Financial Performance Highlights
04 Message from the Chairman, President and CEO
The PLDT Group Corporate Milestones
09
The PLDT Group Corporate Social Responsibility Report
17
The PLDT Group Corporate Governance Report
23
The PLDT Group Enterprise Risk Management Report
41
Board of Directors
42
45 Advisory Board
PLDT Executive Officers
46
PLDT Officers
48
Financial Review
49
93 Audit Committee Report
94

Statement of Management’s Responsibility
for Consolidated Financial Statements
Independent Auditor’s Report

95
100 Consolidated Statements of Financial Position
102 Consolidated Income Statements
103 Consolidated Statements of Comprehensive Income
104 Consolidated Statements of Changes in Equity
105 Consolidated Statements of Cash Flows
107 Notes to Consolidated Financial Statements
246 Contact Information

ShAreD CompAny GoAlS

Deliver awesome CX
through superior network
and reliable products,
services and touch points

Accelerate Group-wide
synergy and collaboration as
a competitive advantage

Achieve business
profitability by hitting our
target core net income

Transform our culture
and talent to be the
employer of choice

Be the undisputed
market leader in all key
businesses

PLDT is one of the leading telecommunications and digital
services providers in the Philippines. Through its principal
business segments – wireless, digital, fixed line and others
– PLDT offers the largest and most diversified range of
telecommunications services across the Philippines’ most
extensive fiber optic backbone, wireless and fixed line networks.

subsiDiaries
Wireless
Smart Communications, Inc. and Subsidiaries
Digitel Mobile Philippines, Inc.
Smart Broadband, Inc. and Subsidiary
Voyager Innovations, Inc. and Subsidiaries

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 2016, PLDT was one of the largest
Philippine-listed companies in terms of market capitalization.

vision
Lead and inspire Filipinos to create a better tomorrow.

mission
Empower Filipinos everywhere with customer-focused digital
innovations that unlock and share their infinite potential.

values
Deliver awesome customer experience
Take care of our people
Collaborate to win
Fast is better than perfect
Malasakit
Humility to listen and learn

Fixed line
PLDT Clark Telecom, Inc.
PLDT Subic Telecom, Inc.
PLDT Global Corporation and Subsidiaries
PLDT-Philcom, Inc. and Subsidiaries
PLDT-Maratel, Inc.
Digital Telecommunications Philippines, Inc.
ePLDT, Inc. and Subsidiaries
Pilipinas Global Network Limited and Subsidiaries

Others
PLDT Communications and Energy Ventures, Inc.
PLDT Digital Investments Pte. Ltd. and Subsidiaries
PLDT Global Investments Holdings, Inc.
PLDT Global Investments Corporation
Mabuhay Investments Corporation

Comparative highlights

2012

2013

2014

2015

2016

FInAnCIAl InFormATIon
(in million pesos, except cash dividends
declared per common share)

Revenues

Service Revenues
Non-Service Revenues

Expenses
Depreciation and Amortization

Compensation and Employee Benefits
Cost of Sales
Repairs and Maintenance
Asset Impairment
Interconnection Costs
Professional and Other Contracted Services
Selling and Promotions
Rent
Others

Net Income for the Year

Continuing Operations
Discontinued Operations
Core Income

Continuing Operations
Discontinued Operations
EBITDA

159,619
3,295
162,914

32,354
21,999
8,747
12,604
5,286
11,105
6,050
9,708
5,860
8,816
122,529
36,099
35,556
543
36,907
36,356
551
75,269

163,932
4,279
168,211

30,304
21,369
11,806
13,107
5,542
10,610
7,173
9,776
6,041
9,786
125,514
35,453
33,384
2,069
38,717
38,816
(99)
77,432

162,930
8,173
171,103

157,210
8,052
165,262

164,943
5,892
170,835

31,379
18,749
13,512
14,988
6,046
10,420
7,748
10,619
6,692
10,304
130,457
34,090
34,090

31,519
21,606
16,389
15,035
9,690
10,317
8,234
9,747
6,376
10,355
139,268
22,075
22,075

37,410
37,410
-
76,750

35,212
35,212
i-
70,218

34,455
19,928
16,753
15,212
11,042
9,573
9,474
7,687
6,912
9,523
140,559
20,162
20,162
-
27,857
27,857
-
61,161

Property and Equipment
Accumulated Depreciation, Amortization
and Impairment
Carrying Value
Capital Expenditures
Short and Long-Term Debts
Net Debt
Equity Attributable to Equity Holders of PLDT
Cash Dividends Declared Per Common Share
Out of the Earnings for the Year

481,033

581,286

605,598

632,918

665,653

280,955
200,078
36,396
115,792
78,057
145,550

388,621
192,665
28,838
104,090
71,467
137,147

413,614
191,984
34,759
130,123
102,821
134,364

437,136
195,782
43,175
160,892
113,008
113,608

462,465
203,188
42,825
185,032
143,572
108,175

172

179

156

122

operATInG InFormATIon

Number of Mobile Subscribers(1)
Number of Fixed Line Subscribers
Number of Broadband Subscribers
Home Broadband (Wireless)(1)

Fixed Line Broadband
Total Number of Subscribers
Number of Stockholders

71,798,246
2,063,794
1,331,096
427,236
903,860
75,193,136
12,169

72,063,359
2,069,419
1,415,478
436,094
979,384
75,548,256
12,005

72,511,422 68,612,118 62,763,209
2,438,473
2,303,454
2,207,889
1,720,753
1,514,640
1,481,109
270,203
258,776
331,781
1,450,550
1,149,328
1,255,864
76,200,420 72,430,212 66,922,435
11,774

11,880

11,837

Number of Employees
Wireless

17,899
7,745
10,154
(1) Mobile and Home Broadband (Wireless) subscribers were adjusted to conform with the 2016 presentation.

19,125
8,663
10,462

Fixed Line

17,496
7,786
9,710

17,176
7,505
9,671

18,038
7,343
10,695

PLDT 2016 ANNUAL REPORTdigital like never before

Comparative highlights

ConsoliDateD finanCial
performanCe highlights

160

140

120

100

157.2

61.2

27.9

36.9

38.7

37.4

35.2

159.6

163.9

164.9

162.9

75.3

77.4

76.8

70.2

47.5

48.9

51.5

53.7

58.1

112.1

115.0

113.4

109.2

99.1

2012 2013 2014 2015 2016

ServICe revenueS
(in billion pesos)

Wireless

Fixed line

ebitdA
(in billion pesos)

Core InCome
(in billion pesos)

66.9

49.0

294.9

75.2
1.3
2.1

75.5
1.4
2.1

76.2
1.5
2.2

72.4

1.5
2.3

1.7
2.4

71.8

72.0

72.5

68.6

62.8

2012 2013 2014 2015 2016

80.4

73.8

66.0

69.7

546.6

576.1

627.9

445.1

600

500

400

300

200

100

2012 2013 2014 2015 2016

SuBSCrIBer BASe
(in millions)

moBIle

Fixed line

brOAdbAnd

CASh Flow From
operATIonS
(in billion pesos)

mArkeT
CApITAlIzATIon
(Year-end, in billion pesos)

PLDT 2016 ANNUAL REPORTdigital like never beforemessage from the Chairman,
presiDent anD Ceo

TO MY FELLOW SHAREHOLDERS

In 2016, we set off on a three-year journey to transform PLDT into
the country’s leading integrated provider of digital services, solutions,
and digital content. We were aware at the outset that this would be
a difficult and complex process and that indeed has been the case, as
shown by the Company’s financial results for the year. The ride this
year has been rough at times with stops and starts, and we have had
to make adjustments along the way. In any event, despite a tough start,
your Company has clearly set the direction of its digital journey and
steady progress has been made in the three key tasks that I listed in
my message to you last year.

First, we are upgrading and expanding the reach of our fixed and
mobile networks, enabling us to better meet the rising demand for
data and digital services. Second, we are broadening the range of
compelling digital services that we offer our consumer and enterprise
customers. And third, we have pressed ahead in transforming the
PLDT group of companies into an integrated, digitally-empowered and
customer-centric organization.

These tasks have acquired even greater urgency as the world
moves rapidly towards a global digital economy driven by quantum
technologies, machine learning and artificial intelligence. Many of
these changes are now upon us and the Philippines must accelerate
its own efforts to go digital. PLDT shall play a leading role in the
transformation of the country into a Smart Nation.

Our Key results

Our financial and operating results for 2016 reflect not only the
challenges and opportunities posed by digital transformation, but also
the intense competition within the industry.

Consolidated service revenues, net of interconnection costs, totaled
P147.6 billion, 3% less than the prior year. Excluding international and
national long distance (ILD and NLD) revenues and interconnection
costs, service revenues reached P133.5 billion, just 1% less than 2015.

Data, broadband and digital platforms powered the growth of
our business, their aggregate revenues rising 18% to P60.2 billion,
accounting for 41% of consolidated services revenues, up from 34% in
the previous year. This class of revenues now make up 60% and 31%
of fixed line and wireless service revenues, respectively. However, SMS
and landline and mobile domestic voice revenues declined 14% and
12%, to P28.1 billion and P43 billion, respectively.

Consolidated core income amounted to P27.9 billion, in line with
our guidance provided earlier in the year. This is about 21% less
than the previous year, due to lower EBITDA and costs arising from
higher capital expenditures for the roll-out of the fixed and mobile
networks of PLDT and Smart Communications, respectively. Recurring
core income reached P20.2 billion, net of asset sales, accelerated
depreciation, one-time provisions and subsidies, as well as lower taxes
from deferred tax assets recognized during 2016.

Consolidated core eBITDA declined 6% to P65.8 billion, largely due
to lower wireless service revenues and higher provisions, moderated
by lower cash operating expenses. Including one-time provisions and
handset subsidies, the underlying EBITDA stood at P61.2 billion versus
our guidance of P60 billion. Consolidated EBITDA margin was 39%,
after margins improved in the 2nd half of the year.

In line with our dividend policy, dividends per share amounted to P77,
equivalent to 60% of 2016 core earnings.

As of end-2016, PLDT’s net debt and net debt to EBITDA rose to
US$2.9 billion and 2.36 times, respectively. This was due to added
obligations stemming from our acquisition of half of the telecom
business of San Miguel Corporation (SMC). Gross debt stood at
US$3.7 billion, of which only 9% is unhedged. Refinancing facilities for
2017 maturities are in place, including a US$228 million bond which
was repaid on 6th March 2017. As of end-December 2016, PLDT’s
investment grade ratings remain unchanged.

What’s worth highlighting is the elevated contribution of PLDT Home
and Enterprise to consolidated service revenues, growing by 10% to
P29.3 million and 9% to P30.6 billion, respectively. These are traditional
areas of strength for PLDT, and have now acquired greater value
because industry revenue on fixed is forecasted to grow much faster
than wireless revenue in the medium-term. Given the rising demand
for digital services in the Home and Enterprise markets and our
superior infrastructure and brand strength, PLDT Home and Enterprise
will continue to set the pace for revenue growth and will likely account
for more than half of total revenues by 2017 and onwards.

The Wireless Consumer Group – which handles mobile services for
Smart, TNT, and Sun individual subscribers – posted revenues of P66.4
billion, 9% less than the prior year. But there were bright spots, such as
the 20% growth in mobile data which accounted for 34% of wireless
consumer revenues, edging out SMS and domestic voice for the first
time, which had shares of about 33% each. The challenge for us is
precisely the manner of accelerating the shift to mobile data and digital
services, and to help our customers make that transition as quickly and
efficiently as possible.

All these business initiatives hinge to a large degree on the success of
our ongoing network modernization and expansion efforts.

Cutting-edge digital
infrastruCture

Our network strategy is straightforward: We are building the latest,
fastest, most resilient and extensive fixed and mobile data networks in
the country. To accomplish this, we are pouring substantial resources
and effort into developing this digital infrastructure. Our capex budget
for 2017 is P46 billion, inclusive of carryovers from 2016. In 2016, we
spent P42.8 billion of the P48 billion programmed last year.

On the wireless front, Smart is rolling out two complementary
technology platforms: LTE and WiFi.

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PLDT 2016 ANNUAL REPORTdigital like never before

Smart is undertaking a three-year program through to 2018 that
will bring its LTE and 3G coverage to 95% of the country’s over
1,500 cities and municipalities. This roll-out, which started in the
metropolitan centers of Davao, Cebu and Manila in 2016, is using
a combinations of low- and high-band frequencies for LTE and 3G,
including the 700 MHz and other frequencies obtained through the
acquisition of the telecoms business of SMC.

Smart’s efforts are producing the desired results. In Metro Davao, for
example, where the network roll out was completed in October 2016,
internal tests show that our subscribers are benefiting from much
improved LTE coverage, particularly indoors where people use data
services the most. Internal tests show that average 3G data download
speeds rose six times to 6 Mbps, while average LTE speeds jumped
four times to 17 Mbps.

As I write this message, similar positive results are being achieved in
Metro Manila and Metro Cebu where average LTE and 3G speeds
of around 20 Mbps and 5 Mbps, respectively, are being posted in
a growing number of areas, as the roll out proceeds in the first
few months of 2017. Indeed, third-party studies are providing
corroborating information that Smart’s LTE is the fastest in the country.

Moreover, Smart has also installed LTE-Advanced (LTE-A) equipment
in a number of cell sites, enabling LTE-A capable handsets to post data
speeds of up to 80 to 90 Mbps. This positions us to take our mobile
internet service to the next level quickly. As more LTE-A capable
handsets become available, it becomes relatively easy to boost wireless
internet services to the next level by deploying LTE-A.

Complementing our LTE/3G mobile internet roll-out, Smart is also
building an extensive network of carrier-grade WiFi hotspots, taking
advantage of PLDT’s extensive fiber network in the country. Initially,
Smart WiFi was installed in key transportation facilities like airports,
seaports and the Light Rail Transit (LRT) System in Metro Manila. In
2017, this wireless service is being deployed in a growing number
of public spaces, schools, malls, retail and entertainment areas. The
combination of Smart’s LTE/3G mobile data and Smart WiFi network
will provide subscribers the best possible wireless data experience.

For its part, PLDT is rolling out its Fibr City program to bring its
ultra-fast fiber-to-the-home (FTTH) service to more areas all over the
country. Working with the local governments of these cities, PLDT
set up the first Fibr Cities in Toledo, Cebu and General Santos, South
Cotabato where residents can now use FTTH to experience equal
upload and download speeds of up to 1 Gbps. The target is to expand
the footprint of PLDT’s FTTH network from 2.8 million homes passed
as at end-2016 to 4.4 million homes by end-2017, and to 6 million
by 2020.

At the same time, PLDT is deploying hybrid fiber technologies such
as G.fast, which can deliver fiber-like data speeds through our copper
wires in buildings and residences. We intend to equip 1.7 million of
PLDT’s copper-line connections with G.fast. This will raise the quality
of customer experience for those on copper, and enable PLDT to
increaser its data subscribers. Eventually, all of PLDT’s data customers
will be using either an FTTH or G.fast connection within two years.

Another key component of PLDT’s digital infrastructure is its network
of Data Centers, the largest and most resilient in the country. Through
its subsidiary ePLDT, PLDT operates nine data centers, including its
newest in the Clark Freeport Zone in Pampanga. By end-2017, its
10th data center will go online in Cebu, raising the total capacity of our
data center network to over 9,000 racks.

Bundled, COnverged,
targeted serviCes

As we expand and strengthen our fixed and mobile data
infrastructure, PLDT is further able to enrich the portfolio of digital
services and solutions we offer to consumer and enterprise customers.

PLDT Home, for example, is using its high-speed connectivity to
enhance its suite of family-friendly services under its Smart Home
program. Its entertainment package, for example, already provides
Filipino families the broadest range of live TV and video-on-demand
content with the help of its affiliate, Cignal TV, and its partnerships with
leading global and local content providers and aggregators like iflix,
Netflix, Roku and iWant TV. Smart Home also offers family security
services such as Fam Cam, the CCTV service that lets parents monitor
their homes while at work, and, Fam Zone, which enables parents to
manage their children’s access to the Internet.

Faster data speeds enable PLDT and Smart to offer popular video
content across their fixed and mobile networks. Smart’s popular
prepaid load Giga Surf 50, for example, provides 1 GB of open access
data allowance, bundled with 300 MB for access to iflix, the music
service Spinnr and YouTube.

Increasingly, data is becoming the headline offer of our product
bundles with communications services like voice calls and text
included as sweeteners in the package. In Smart’s All Out Surf
packages, for example, data is blended with Unli All-Net SMS and
allocations for calls to Smart, TNT and Sun. Moreover, other bundles
include calls to PLDT, such as Sun’s prepaid package TU200 which
provides five hours of calls to Sun, Smart, TNT and PLDT landlines.

Converged offers are a competitive advantage of PLDT that we
are increasingly utilizing. Leveraging its large overall subscriber base,
PLDT offers the country’s first data sharing plan that lets its fixed line
customers to share their data allocation with up to four Smart mobile
phones bundled with the plan. PLDT Home also combines fixed line
voice and data with CignalTV content under the offer “Cignal over
Fibr”. More such initiatives are forthcoming.

Banking on its extensive ties in Government and the business
community, PLDT Enterprise has been actively offering converged
services for several years now. Increasingly, Enterprise is offering
cloud-based services delivered through fixed and mobile platforms.
A recent example is the Smart SOS Dispatch, a cloud-based
emergency communications system designed for local governments,
communities and corporations. Such services take advantage of
PLDT’s unmatched ability to support cloud-services through its
extensive data center network.

The Enterprise Group is also offering the eCommerce and ePayment
solutions developed by the Voyager Innovations Group, the digital arm
of PLDT and Smart. Voyager solutions like TackThis! and Takatack,
for example, now enable the online stores of companies Philippine
Airlines, Uber, ShopTV and fashion brands like Giordano. Voyagers
freenet enables companies to increase usage of their apps and
websites by offering their customers free sponsored access. The
PayMaya app continues to be the leading mobile payment application
in the Philippines, its growth fueled by strong adoption among
millennials. PayMaya Business remains the leading mobile payments
acquirer in the Philippines and enables companies to accept card
payments via their mobile app, website or point of sale terminals.

Moving forward, we are endeavoring to make our product and service
offers more and more relevant to our customers. We are doing this
for example by building an Enterprise team that better understands
the changing needs of our corporate customers, and can act as their
trusted adviser in acquiring the right solutions for their businesses.

PLDT 2016 ANNUAL REPORTdigital like never before
In the Consumer business, we are using more extensively big data
analytics in combination with a more engaged marketing and sales
organization in order to develop and deliver compelling products
to customers in the right place at the right time and at the most
affordable price.

integrated and empOwered
OrganizatiOn

PLDT also remains active in the fields of environmental protection,
livelihood promotion and health care. We are also committed
to developing Philippine sports. Working with the MVP Sports
Foundation (MVPSF), PLDT continues to support collegiate and
national programs in basketball, boxing, golf, cycling, badminton, football,
taekwondo, amongst others. A relatively recent focus of interest is
weight lifting, which has got a big boost following the Silver Medal win
of Hidilyn Diaz in the 2016 Olympics.

To serve our customers with converged digital services more
effectively, the PLDT organization, including its wireless and digital
subsidiaries, needs to become more integrated and collaborative than
ever before.

Our dream of hosting the FIBA Basketball World Cup in 2023 through
the Samahang Basketbol ng Pilipinas burns bright as ever. We may win,
or we may not. Either way, the pursuit of this dream will help us raise
our level of excellence in the sport.

That is why new senior executives were appointed in the areas
of Human Resources, Customer Experience and Data Analytics,
Platforms and Networks in the later part of 2016. The designation
of Ernesto R Alberto as Chief Revenue Officer places all the major
revenue-generating business units – PLDT Home, Enterprise and
Wireless Consumer – under one head and opens the door to greater
collaboration among them. Placing Corporate Services across PLDT
and Smart under Ray C Espinosa as Chief Corporate Services Officer
aims to strengthen support for the frontline business units.

We have also reinforced our Customer Experience and Data Analytics
groups so that we can utilize the most advanced digital tools to
understand better our customers’ changing needs and tastes. This is a
fast-moving field, where global technology giants are rewriting the rules
of the games. We intend to keep apace by strengthening our internal
capabilities and partnering with global leaders in this field.

COrpOrate aCtiOn:
pursuing the digital shift

In step with our business, our corporate social action programs are
pursuing an increasingly digital tack. In education, for example,
teacher and student training remains a strong focus and is increasingly
going online.

Gabay Guro (2G), the flagship program of the PLDT Smart
Foundation (PSF) and the PLDT Managers’ Club, Inc. (MCI), the PLDT
Infoteach Outreach Program and the Smart Wireless Engineering
Education Program (SWEEP) provided various sorts of training for
about 7,900 teachers and students of public schools all over the
country in 2016. In the case of 2G, the stress is on raising the level of
teacher competencies, while the Infoteach Outreach Program focused
on Internet and computer literacy. For SWEEP, the objective is to help
colleges and universities to produce more industry-ready graduates,
an effort that won for Smart inclusion in the “Change the World” list
of Fortune Magazine – a yearly recognition given to 50 companies
from around the world for conducting programs with significant
social impact.

Some of our programs have produced digital innovations. For
example, PLDT launched a new disaster preparedness mobile app
called Handa through which employees of PLDT and Smart and
their subsidiaries can receive relevant safety information, real-time
situation updates and send calls for help during emergencies. Smart
launched SHINE OS+, the mobile app version of the Secured Health
Information Network and Exchange – an open-source electronic
medical record platform developed in partnership with the Ateneo
Java Wireless Competency Center.

But we still have plenty of brick and mortar activities. 2G is still
building and turning over public school classrooms – 43 as of end-
2016. In disaster resilience, PLDT built and turned over 30 “butterfly
houses” to families in Tacloban, Leyte which had been displaced by
Typhoon Yolanda. This was part of a joint program of the US AID and
the Philippine Disaster Resilience Foundation (PDRF).

OutlOOK

In this era of alternative facts, fake news, and populist politics, there
is growing unease about the widening circles of creative disruption
being caused by digital technologies like artificial intelligence, machine
learning and robotics. There are fears for example that AI-driven
software will wipe out work in our business process outsourcing
industry, just as workers in advanced countries are worried that
increasingly more affordable robots will take over their manufacturing
jobs. If our experience is any guide, embracing change is ultimately
more beneficial than trying to hold it back. We have learned ourselves
that resisting change is a futile exercise – it will come anyway whether
one likes it or not. The painful lessons are simply these – embrace
change, disrupt yourself, get ahead by pivoting digitally.

That is why in our current efforts, we are profoundly mindful not only
of the urgent needs of today, but also the emerging challenges and
opportunities of tomorrow. For example, even as we roll out our
LTE network, we are designing this deployment so that this will help
us prepare for the coming of 5G in just three years from now. This
explains why Smart conducted 5G tests with our technical partner
Nokia in December 2016 and why PLDT signed an agreement
with Huawei Technologies in February 2017 to do research and
development (R&D) work on 5G.

We are building the digital infrastructure of tomorrow – today. And
we are working with the best partners here and abroad to develop
the ecosystems of digital services that will transform business,
government and improve the lives of our people.

To get from here to there requires us to disrupt the businesses we
have – profitable as they were in the past. We have pressed the
2016 Start Button as a period for resetting. Profitability was adjusted
to a lower but realistic level, taking into account how our business,
customer base and organization are being reshaped by the forces of
technology and market changes. Our new baseline is P21.5 billion in
2017 in underlying core income without exceptionals, compared with
the 2016 core of P20.2 billion. Moving forward, we aim to progressively
raise profitability, starting with this baseline of P21.5 billion in 2017. To
get back on this path of sustained growth and profitability, all of us in
the PLDT group of companies need to exert concerted, relentless
efforts to serve our customers in the best possible way. Digitally.
Like never before.

Let me close by thanking our shareholders for their unstinting support,
our Board of Directors for their wise counsel, and our Management
and Staff for their tenacity and creativity in overcoming obstacles to
building a new future for our Company, our Customers and our Country.

Manuel V Pangilinan
Chairman of the Board, President and Chief Executive Officer

PLDT 2016 ANNUAL REPORTdigital like never beforelove!

bonding like never before
Capture golden moments with precious ones
– anytime, anywhere!

PLDT 2016 ANNUAL REPORTdigital like never beforeTHE PLDT GROUP
Corporate milestones

enriching the Digital experience

The PLDT Group is enriching the digital life of Filipinos like
never before with innovative products and services for
home, enterprises, and individual customers.

In line with its digital pivot, the parent company changed its
name from “Philippine Long Distance Telephone Company”
to “PLDT Inc.” to represent its decisive shift from being a
telecommunications firm into a digital services provider.

Along with this brand identity change, PLDT adopted a
new logo shaped like a triangle to represent its meaningful
innovations, exceptional people, and reinvigorated mission to
always delight its customers. The new logo also symbolizes
the powerful convergence of PLDT and its wireless unit,
Smart Communications, with both companies carrying the
same triangle symbol.

Building the smart hOme

PLDT is making Filipino homes safer, more comfortable and more enjoyable via
its growing suite of Smart Home services which combine powerful connectivity
with innovative products and services that provide peace of mind, rich
entertainment, automation and converged communications.

PLDT Home offers the widest range of video content via live TV and video-
on-demand. To accomplish this, the PLDT Group established partnerships
with leading global and Philippine content providers and aggregators. These
include leading US video streaming platform Roku Inc. for Internet TV; global
internet television leader Netflix for an extensive library of award-winning

PLDT 2016 ANNUAL REPORTdigital like never before

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TV and movie titles; e-commerce giant Amazon for online shopping; and
iWant TV, the leading player in the over-the-top (OTT) content platform in
the Philippines. These complement PLDT’s partnerships with iflix for Asian
video-on-demand and Fox International Channels for live streaming and
catch-up TV.

The entertainment suite at home also includes well-loved kid-friendly
content like games and e-books via Disney through Telpad, sports through
Fox Sports and NBA Premium HD via Cignal, and gaming with Steam.
Subscribers also enjoy the benefits of compact access to information
and entertainment through the most powerful PC in a stick – the
TVolution Stick.

PLDT Home also enhanced its family security services by adding the
Fam Zone, which enables parents to manage their children’s access to the
Internet, and Smart Watch, which lets parents track the location of their
children. It had earlier launched Fam Cam, the CCTV service that lets
homeowners check and talk with their children at home while they
are outside.

To provide customers converged fixed and mobile communications, PLDT
HOME introduced in January 2016 the country’s first data sharing plan that
allowed fixed line subscribers to share their data allocation with up to four
Smart mobile phone lines bundled with the plan.

To deliver these communications and digital services, PLDT has accelerated
the roll-out of its fiber-to-the-home (FTTH) facilities, extending its reach to
2.8 million homes passed at the end of 2016 – the most extensive in the
country. With the strength of fiber, PLDT can offer asymmetrical speeds of
up to 1 gigabit per second (Gbps) to families nationwide.

PLDT also deployed advanced hybrid fiber technologies that can deliver
fiber-fast broadband service through regular phone lines in buildings and
residences in partnership with Huawei Technologies Co. Ltd. Called G.fast,
this technology solution can provide data speeds per user of up to 600
to 700 megabit per second (Mbps), depending on the length of the local
copper loop.

enhanCed mOBile serviCes

In 2016, Smart Communications stepped up the roll out of its LTE and
3G networks to address the growing demand for mobile data services.
It launched a three-year program to expand LTE coverage to 95% of the
country’s cities and municipalities by 2018. To support this effort, Smart
began utilizing the 700 MHz and other radio frequency bands that it
acquired access to as a result of PLDT’s participation in the acquisition of
the telecom business of SMC.

Riding on this network enhancement program, Smart introduced more
data and digital services. For example, it released the enhanced version of
its My Smart application, allowing subscribers to manage their postpaid and
prepaid accounts virtually anywhere, view their account usage in real-time,
and buy load and add-ons directly on the app. The new app also provided
easy access to content such as videos, music, daily live streaming of TV5
and Fox Sports. In August 2016, the Smart Life app streamed live and for
free the 2016 Rio Olympics, bringing Filipinos closer to the world’s biggest
sports event.

In partnership with MCA Music, Smart Music Live treated subscribers to
a series of concerts including ones that featured Selena Gomez, Nathan
Sykes, Autotelic, Up Dharma Down and Ely Buendia among others. Smart
users were treated to tickets and meet and greet events.

PLDT 2016 ANNUAL REPORTdigital like never before

In August 2016, Smart offered free access to the phenomenal hit game
Pokemon GO, followed by free access to Snapchat app for subscribers.
These treats aimed to introduce more subscribers to the digital lifestyle
and enjoy the enhanced mobile experience offered by Smart.

In November 2016, Smart introduced Chat Abroad, the country’s first
chat-only data roaming subscription, which allows Smart subscribers to
stay connected in over 130 countries, via six top chat apps – Facebook
Messenger, Line, Telegram, Viber, WeChat and WhatsApp – at a very
affordable rate of only P150 per day.

Smart also launched Smart Travel WiFi, a pocket WiFi rental service that
allows Smart and non-Smart users to enjoy and share mobile internet
access across multiple gadgets in over 100 countries for as low as
P390 per day.

For its prepaid customers, Smart introduced several offers that help them
enjoy the digital lifestyle. Its leading data offer has been GigaSurf 50, which
provides a 1 Gb data package plus 300 Mb for popular apps like iFlix,
Spinnr and YouTube and Unli text to all networks. Other popular prepaid
offers include ItsATropaTreat and Babad Apps.

Smart also continued to engage the digital Filipino youth with “Smart
Launchpad,” a first-of-its-kind online talent search that aims to discover
and nurture the next generation of YouTube content creators. From
1,537 entries, the top 100 advanced to the workshop where they were
mentored by industry experts and top online stars. Three finalists were
ultimately named the Next Big Pinoy Creators.

Smart’s value brand, TNT, also launched its new logo, brand ambassadors
and theme song “It’s a Tropa Thing” in June 2016, expanding its target
market to include the more tech-savvy, fun-loving and budget-conscious
Filipino youth belonging to Generation Z.

For postpaid subscribers, Smart launched Giga Plans which offer up to ten
times more than Smart’s previous data allocations, plus call and text credits,
and a free subscription to their choice of value added services (VAS) such
as iFlix, Spinnr, YouTube, and other streaming services. Sun Cellular, on the
other hand, enhanced its data plans to include a free phone and tablet
bundle, plus unlimited calls and texts to Sun, more text messages to other
networks and higher data allocation for surfing.

In February 2016, Smart Bro signed a multi-year partnership with UFC, the
world’s largest mixed martial arts organization, to bring the fast-growing
sport closer to Filipinos through digital offers, exclusive experiences and
promos.

Smart Bro also brought the BRO-kada, comprised of today’s favorite
millennial celebrities, around the country to make data more accessible to
its target market, offering the Prepaid Pocket WiFi and the iPad Mini 2 at
affordable plans. It has also partnered with PLDT to offer the Pocket WiFi
even in far-flung areas that can be served with the wireless broadband
access that Smart Bro can provide.

In celebration of Independence Day, Smart offered free Viber and Viber
Out calls to any mobile and landline here and select destinations abroad
from June 12 to 14, 2016 – the first time in the world that it was offered
free to mobile subscribers. The service allowed Smart subscribers to
connect to any number in the Philippines, India, US, Uk, Canada, Norway,
Nigeria, Australia, China, korea, Malaysia, Italy, Qatar, Singapore, Hong kong
kuwait, Japan, Taiwan and Bahrain.

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PLDT 2016 ANNUAL REPORTdigital like never before

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mOst trusted partner fOr enterprises

To bolster its leadership in the enterprise market, PLDT further expanded
its network of world-class data centers. By March 2017, PLDT was operating
nine data centers in different parts of the country including its biggest facility
at the Makati central business district, another one in the Clark Freeport
Zone, and one more in Davao City, the first data center in Mindanao. This
brought the capacity of its data center network to over 9,000 racks, the
largest in the country.

Alongside the Davao VITRO Data Center, PLDT set up its fourth cable
landing station and a state-of-the-art Innovations Laboratory (Innolab)
– the company’s seventh. These facilities will further support economic
development in Mindanao.

To support its development of digital infrastructure, PLDT partnered with
NTT Communications, the ICT solutions and international communications
business within the NTT Group, strengthening the Company’s global network
infrastructure by leveraging the 100Gbps connectivity powered by NTT
Com’s Tier 1 Global IP backbone.

On the global front, PLDT launched a digital Mobile Virtual Network
Operator (MVNO) in Japan, its first in this country. It also established its
newest global Point-of-Presence (PoP) in Australia, the sixth in PLDT’s fast
growing global network which includes PoPs currently serving international
customers in the U.S., U.k., Singapore, Japan, and Hong kong.

To help improve local internet traffic, PLDT established a bilateral IP peering
arrangement with Globe Telecom that improves the internet experience
of subscribers of both operators. This followed the setting up of a link to
the Philippine Open Internet Exchange (PHOpenIX) of the Department of
Science and Technology in order to improve access to government websites.

Starting July 2016, the PLDT Group rolled-out carrier-grade Smart WiFi in
key transport hubs, identified by the Department of Transportation, in line
with the Group’s commitment to make available to the public internet at
world-class speeds. Apart from the Ninoy Aquino International Airport, the
country’s biggest airport, Smart WiFi is now available in key airports all over
the country, including Davao City’s Francisco Bangoy International Airport,
Laguindingan Airport in Misamis Oriental, Bacolod-Silay International Airport
and Iloilo International Airport, Roxas Airport, Zamboanga Airport, Clark
International Airport, Dumaguete-Sibulan Airport, Laoag International Airport,
General Santos International Airport, kalibo International Airport and Puerto
Princesa International Airport.

Smart WiFi was also installed in the sea ports of Batangas City and Calapan
in Mindoro. It is scheduled for rollout in more regional airports, sea ports,
and the rail-based MRT and LRT lines 1 and 2 in Metro Manila and the rest
of the country.

Innovating the way enterprises make their hotlines available to their
customers, PLDT Enterprise introduced the PLDT #MyNumber to
businesses that make hotlines easier to remember as well as accessible to
customers nationwide.

keeping close to its customers, the PLDT Group together with the
International Data Corporation hosted “Digital Now,” a Philippine ICT
Leadership Convention participated in by top Philippine companies to take
a close look at how digital technologies are changing the rules of the game
for their businesses. PLDT also named a new generation of digital business
leaders under its #BeTheBoss Awards.

PLDT also launched Facebook at Work (now called Workplace), creating
a virtual community for the over 17,000 employees of PLDT, Smart and
Voyager Innovations. With its useful productivity features, Workplace enables
employees to quickly connect and hold online meetings with colleagues using
features like the Work Chat app.

PLDT 2016 ANNUAL REPORTdigital like never before

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vOyager innOvatiOns

keeping its focus on eCommerce and ePayments, Smart subsidiary Voyager
Innovations through its solutions such as TackThis! and Takatack are now
supporting the online stores of leading companies like Philippine Airlines,
Uber, MyPhone, ShopTV, and top fashion brands like Giordano and Folded
& Hung. Its Takatack Rewards is enabling companies like Unionbank and a
number of business outsourcing companies to engage their employees with
rewards and benefits.

Voyager’s freenet is enabling companies to engage customers with free
sponsored data access to their apps and websites while HATCH and VYGR
deliver rich mobile marketing and digital advertising campaigns
for enterprises.

Meanwhile, PayMaya remains the leading mobile payment application in the
country, retaining its No.1 spot in Google Play Philippines since November
2015. PayMaya has entered into strategic collaboration with top global tech
brands like Uber and Paypal to help sustain its growth. It also powered the
Smart Mastercard, the prepaid payment card for Smart, Sun, and
TNT subscribers.

PayMaya is also the leading mobile payments acquirer in the Philippines
that allow leading companies to accept card payments through their mobile
app, website, or physical point of sale terminals. Recently, it partnered with
Metro Pacific Tollways Corp. to enable the first Mastercard contactless and
beep card payments acceptance in the North Express Tollways and the
Cavite Expressway.

glOBal and natiOnal awards

In 2016, the PLDT Group’s efforts to serve its customers garnered
numerous awards and recognitions from Philippine and global
organizations.

Finance Asia Awards
Best Investor Relations #2 Philippines – PLDT
Best Corporate Social Responsibility #8 Philippines – PLDT
Most Committed to Corporate Governance #5 Philippines – PLDT
Best Managed Company #9 Philippines – PLDT

Institutional Investors’ Governance Award
For publicly-listed companies with US$10 billion and up of market cap – PLDT

Fortune’s Change the world list
36th in the list – Smart for Smart Wireless Engineering Education Program
(SWEEP)

PLDT 2016 ANNUAL REPORTdigital like never before

Institutional Investor magazine’s 2016 All-Asia executive Team
Best Investor Relations Program – Telecommunications (Sell-side) – PLDT
Best IR Professional – Melissa Vergel de Dios (#3)
(Overall and Sell-side) – PLDT

15th Annual CIo Asia Awards
Leadership category – PLDT Home (data sharing plan with Smart)
Included in the Roll of Honour list (1 of 5) – PLDT Home

voyager Awards
Cards and Payments Asia Smart Awards
Best eCommerce Technology Provider – TackThis!

Asia Communications Awards
Best SME Service – TackThis!
Best SME Service Award – TackThis! E-Commerce Platform

Telecom Asia Awards
Best Mobile Security Innovation of the Year – LockByMobile

Customer experience in Financial Services (CXFS) Asia Awards 2016
Best in Customer Experience award for mobile – FINTQ &
LANDBANk’s Mobile Loan Saver

9th Annual emerging payments Awards
Best online payments solution for enabling instant access to the
digital economy – PayMaya

visa
Best New Digital Product of 2016 – PayMaya

lafferty Global Awards 2016
Excellence in Lending – FINTQ’s LANDBANk Mobile Loan Saver

International Finance magazine
Best Innovative Lending Platform – FINTQ’s Mobile Loan Saver

IABC
CEO Excel Award – Eric Alberto (as CEO of ePLDT)

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PLDT 2016 ANNUAL REPORTdigital like never beforeQuill Awards
Excellence Awards
PLDT’s annual Gabay Guro Grand Gathering for teacher-beneficiaries
PLDT Gabay Guro’s classroom donations for calamity-affected areas
PLDT ALPHA Enterprise’s Annual Track Day
PLDT ALPHA Enterprise’s HOT JOE Magazine
PLDT Smart SME Nation’s Bossing Ako campaign

Merit Awards
PLDT Gabay Guro’s Teacher Training Program
PLDT Gabay Guro’s Crossover video
PLDT ALPHA Enterprise’s PLDT Pasasalamat Night:
A Glittering ALPHA Experience
Enterprise Customer Care Engagement campaign
PLDT Smart SME Nation’s Small Business Month campaign

Anvil Awards
Gold Awards for PR Tools: Multi-Media category
PLDT Alpha’s Hot Joe Magazine
PLDT Home’s Most Beautiful Connection video

Gold Awards for PR Programs
PLDT Home’s “Strengthening the Volleyball Community with
the Volley Friends”
PLDT Home’s “Gabay Guro 2016”

Silver Awards for PR Tools: Publications
PLDT Annual Report: Virtual is Real
PLDT Home Fibr Planner

Silver Awards for PR Tools: Multi-media Digital and Social Media
PLDT Alpha’s Customer Testimonials AVPs
PLDT Inc.’s “Changing the Way You Do Business.”

Silver Awards for PR Tools: Exhibits
PLDT Home’s Regine Series Nationwide Tour 2016
PLDT Gabay Guro’s Teacher Fest 2016
PLDT SME Nation’s Techmobile
Tech Island 2.0.

Silver Awards for PR Programs
PLDT Home’s Data Sharing
PLDT Home’s Smart Watch
PLDT Alpha for its Customer Engagement
PLDT SME Nation’s “Big Talks”
PLDT SME Nation’s “Be The Boss”
PLDT SME Nation’s “Make It Big”

International Conference on education and Social
Science in Singapore
Excellence Award for Best Presentation and Content
– PLDT for Infoteach Outreach Program

Business in the Community’s 2016 Annual responsible
Business Gala in london
UPS International Disaster Relief Award – Philippine Disaster
Resilience Foundation (PDRF)

Asia Communication Awards in Singapore and the world
Communications Awards in the united kingdom
Social Contribution Award – Smart for Smart Technocart

plDt, smart unveil
new logo in line with
‘digital pivot’

plDT and its mobile subsidiary, Smart

Communications, welcomed a new day
in 2016 with a fresh brand identity that
reflects their desire to empower their
customers who are increasingly embracing
digital services in their daily lives. A new
logo was launched in line as well with the
recent change in its name from “philippine
long Distance Telephone Company” into
“plDT Inc.” The change was implemented
to better represent its new thrust to
decisively shift its business to data-driven
services.

The new logo symbolizes the powerful
convergence of plDT and Smart, combining
fixed and wireless technologies to serve
individual and enterprise customers. Shaped
like a triangle, the three sides represent
people, innovations, and customers. The
triangle is also the symbol for Delta, the
fourth letter in the Greek alphabet, which
stands for “Change.”

The new plDT logo replaces the iconic
33-year old Company logo formed through
a repetition of the abstract figure of the
telephone receiver to complete four sides.

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1940s

1970s

1983

1996

2016

PLDT 2016 ANNUAL REPORTdigital like never before

great!

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connecting like never before
Coach him about things that matter
– about life, love and the future!

PLDT 2016 ANNUAL REPORTdigital like never beforeTHE PLDT GROUP
Csr report

PLDT and its subsidiaries
pursued their various corporate
social responsibility (CSR)
programs in 2016 with a more
pronounced digital thrust in
various fields – particularly
education, disaster preparedness
and resiliency, health, livelihood
and sports. And garnered
recognition along the way.

ClASSroom
dOnAtiOns

542

GABAy Guro puBlIC
SChool TeACher
SCholArS In 2016

26,140

STuDenTS & TeACherS
GrADuATeS oF The plDT
InFoTeACh TrAInInG
CourSe

prOpagating digital literaCy

Education continued to be a major focus of the PLDT Group’s
CSR efforts.

In 2016, 2G supported 542 public school teacher scholars of
which 150 graduated – 34 with distinction. Moreover, 79 2G
scholars passed the Licensure Examinations for Teachers (LET).

The flagship program of PSF and MCI, 2G also entered into a
partnership agreement with 51Talk, an online English tutorial
service for Chinese-speaking students, to provide opportunities
for over 2,500 teachers to augment their income.

In line with its school building program, 2G has turned over
43 classrooms – an ongoing project until March 2017. In
partnership with Asian Carriers Conference and Huawei,
2G provided 50 laptops and 50 Samsung tablets to 3 public
high schools in Cebu province during the 2016 Asian Carrier
Convention. The program also donated three laptops to the
Arnel Pineda Foundation, Inc. under its Libreng Aral Libreng Turo
Tuwing Linggo Project.

To date, 2G has built strong partnerships with 47 universities
and colleges.

The plDT Infoteach outreach program provided digital and
computer literacy training to some 3,000 student and 3,320
teachers from 139 public schools in 10 school divisions of the
Department of Education in 18 cities and municipalities in
Luzon, the Visayas and Mindanao. Over the past 12 years, the
program has benefitted 26,140 student and teacher graduates
of its training courses.

In cooperation with the University of the Philippines Open
University (UPOU), the program also provides scholarship
grants to outstanding teachers, enabling them to enroll in the
Diploma in Computer Science program or other programs
offered online by the UPOU. Participants eligible for this grant
are the Division level grand champion winners per area during
the PLDT Home DSL Broadband Quiz which is held at the end
of the training program.

Managed by PLDT’s Community Relations, the program won
an Excellence Award for Best Presentation and Content at the
International Conference on Education and Social Science
in Singapore.

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PLDT 2016 ANNUAL REPORTdigital like never before

Angelica Marie Zamora is a senior high school
teacher from Lucban, Quezon Province and is one of
the raffle winners during the 2G Teacher Fest.

The PLDT Infoteach Outreach Program is culminated
by the regional quiz bee which gathers all top seeds
hailed during the regional competition.

The award-winning UPOU program has provided
scholarship grants enabling beneficiaries to enroll in
UPOU online programs.

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PLDT also supported the launching of the PLDT Community
Outreach Alternative Learning System Community Learning.
Program mentors were teacher-graduates of the PLDT Infoteach
Outreach Program at Brgy. Lanit, Iloilo City. It is the only learning
center for the indigenous people or ati in the City of Iloilo.

To enlist high technology in nation-building, PSF and leading
educators Dr. Chris and Marivic Bernido, designed the Semana de
Trabajo program for experts from different universities to gather
and discuss the potential impact of Big Data on businesses and
the challenge of addressing shortage of skills in this area.

PLDT’s mobile subsidiary Smart Communications had a bumper
crop of awards for its education programs.

The Smart wireless engineering education program (SWEEP),
which helps colleges and universities produce industry-ready
graduates and future technology entrepreneurs, was recently
included in the yearly “Change the World” list of Fortune
magazine. This recognition is given to 50 companies around
the world that “do well by doing good.”

Smart was particularly cited for helping improve engineering and
ICT education in the country. In 2016, SWEEP provided training
to 995 students and faculty, bringing the grand total to 34,676
over the past 13 years.

The Smart Technocart program won two international awards
– the Social Contribution Award at the Asia Communication
Awards in Singapore and the World Communications Awards
in the United kingdom. The Technocart is a mobile digital
laboratory that helps public school kindergarten students learn
to read and write. It contains 20 tablets, a laptop loaded with
various educational applications bundled with a projector and
mobile WiFi unit. In 2016, Smart deployed 20 Technocarts in
public schools in different parts of the country.

Smart also launched School-in-a-Bag, a learning tool package
donated to public schools in remote areas without electricity.
The bag contains a solar panel and battery, LED TV, laptop and
tablet for the teacher, five tablets for students, lapel mic, hard
drive, and pocket WiFi with starter load. It also includes teachers’
training on a 21st century teaching pedagogy, k+12 content,
learning activity sheets, and a learning management system.
Smart donated 20 units to remote schools in Luzon, Visayas,
and Mindanao.

School-in-a-Bag nicely complements the Smart Technocart and
both have evolved into easy-to-implement partnership programs.
For example, UBS Philippines, a subsidiary of the global financial
firm, struck a partnership with the PLDT Smart Foundation in
order to provide educational assistance to remote communities.
UBS donated P1 million to the PLDT Smart Foundation in order
to fund the deployment of 10 School-in-a-Bags to schools of
their choice.

PLDT 2016 ANNUAL REPORTdigital like never before

A group of school children navigate through one of
the gadgets found in Smart’s Technocart.

School kids happily hold together Smart’s innovative
School-in-a-Bag.

PLDT, through USAID’s Breach Project in partnership
with PDRF, turns over “30 butterfly houses”.

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TeChnoCArTS provIDeD
All over The CounTry

34,676

TrAInInGS provIDeD By
Sweep over The pAST 13
yeArS

“BuTTerFly houSeS”
TurneD over To
TACloBAn

rallying fOr disaster resilienCe
and reCOvery

Disaster resilience begins at home – and the work place. In this
spirit, PLDT launched a new mobile app called Handa through
which employees can receive relevant safety information, real-time
situation updates in their area, and send calls for help with their
location details. The app was developed by the Enterprise
Business Continuity and Resilience Office of the PLDT Group
of Companies.

Working with the USAID, PLDT turned over 30 “butterfly
houses”, in Tacloban, Leyte for the benefit of the families rendered
homeless by Super Typhoon Yolanda. This was part of the joint
effort of USAID and PDRF to help families in Leyte get back on
their feet through the Building Resilient and Economically Adept
Communities and Households (BREACH) program.

PLDT won the UPS International Disaster Relief Award at the
Business in the Community’s 2016 Annual Responsible Business
Gala in London. PLDT’s award was in recognition for its role in
developing the PDRF into an effective platform for collaboration
between the private sector, national and local government, and
international agencies for disaster resiliency programs. Initially
set up after Typhoon Ondoy, PLDT helped PDRF to effectively
mobilize the resources of the private sector in response to
Super Typhoon Yolanda.

PLDT 2016 ANNUAL REPORTdigital like never before

Working with the National Disaster Risk Reduction and
Management Council (NDRRMC), Smart helped organize
disaster communications summits, or, ICT Bayanihans in eight
regions of the country. Each summit was attended by at least
100 representatives from the police and military, radio and
TV broadcast companies, local two-way radio groups, schools,
government agencies and businesses that have communications
equipment. The summit participants threshed out disaster
communications protocols and set up rapid emergency telecoms
teams (RETTs) in each region in order to respond to disaster
situations. Smart network teams have become part of these RETTs.

Smart also kicked off a disaster-readiness educational caravan
nationwide, dubbed “Tropang Ready” especially designed for
children, featuring the video series Maging Laging Handa which
covers precautionary measures and safety tips for various
calamities. Maging Laging Handa materials are also being used
by DepEd as additional resources for the disaster risk reduction
education of elementary students.

MVP Tulong kapatid, the CSR consortium of the companies
led by MVP in partnership with the provincial government of
Davao Oriental, formally turned over 266 housing units to the
families rendered homeless by Typhoon Pablo. The five-hectare
resettlement site in Barangay Lambajon was developed by PSF,
with support from TV5’s Alagang kapatid Foundation, One
Meralco Foundation, First Pacific Leadership Academy, MPIC
Foundation, First Pacific, North Luzon Expressway, Makati Medical
Center Foundation, Philex Group Foundation, and Maynilad.

enaBling livelihOOd OppOrtunities

PLDT Smart SME Nation and PSF, with the Micro Business
Group, hosted the kick-off meeting of the leaders of the ASEAN
Business Women Working Group and the ASEAN Women
Entrepreneurs’ Network. The group launched the GREAT
Women Forum, a Stakeholders “Market Match” Forum and
Trade Exchange. Empowering women’s economic growth, the
event encouraged stakeholders to purchase and source from
women vendors under the GREAT WOMEN Platform.

PLDT Smart SME Nation, in partnership with PSF, Business and
Professional Women Makati, and IBM Philippines developed the
GREAT WOMEN ICT Platform to enable women entrepreneurs
to use broadband internet connectivity and digital services to
grow their businesses. PSF is also one of the members of the
Gender Responsive Economic Actions for the Transformation of
Women program led by the Philippine Commission on Women.

prOmOting Better health Care

In 2016, Smart launched SHINE OS+, the mobile app version
of the Secured Health Information Network and Exchange
(SHINE) — an open-source electronic medical record (EMR)
platform developed in partnership with Ateneo Java Wireless
Competency Center (AJWCC). In 2016, SHINE was used by 34
municipalities mostly in Central and Western Visayas, generating
over 160,000 records.

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PLDT 2016 ANNUAL REPORTdigital like never before

To promote the use of SHINE OS+, Smart, in partnership with
the Department of Health and the Department of Science
and Technology-Philippine Council for Health Research and
Development, held #ThinkOpenHealth, the country’s first health
hackathon where developers were challenged to design plug-ins
and modules for SHINE OS+ that can be customized to fill
current gaps in the health sector.

Smart and the Ateneo Java Wireless Competency Center piloted
the Operation Smile Patient Mapping App which aims to track
cleft patients, digitize their medical information and store it for
future reference and further research.

prOteCting the envirOnment

Advocating a clean and greener environment, PLDT has
consistently supported the Balik-Baterya Program of Motolite
and Philippine Business for Social Progress (PBSP). The
program aims to encourage proper disposal and recycling of
used batteries. Funds from donated used batteries are used
to support CSR projects of PLDT and PBSP. In 2016, PLDT
donated 163,000 kilos of batteries amounting to almost
P4 million.

PLDT remains to be the biggest benefactor of the program with
a total donation of two million kilos of used-lead acid batteries
(ULABs) amounting to P48 million as of December 31, 2016.

empOwering grassrOOts spOrts

The MVP Sports Foundation (MVPSF) maintained its support
for collegiate and national programs in such sports as basketball,
boxing, golf, and cycling.

MVPSF forged partnerships with universities, associations, and
organizations such as the Samahang Basketbol ng Pilipinas (SBP),
Association of Boxing Alliances in the Philippines (ABAP), LBC
Sports Development Corp., National Golf Association of the
Philippines (NGAP), San Beda College, and the Ateneo de
Manila University.

MVPSF also extended its support to Filipino athletes who
competed during the 2016 Olympics held in Rio de Janeiro,
Brazil. Since its inception in 2011, MVPSF has contributed to
the growth of the Taekwondo and Boxing programs in the
Philippines, which greatly helped the three Filipino Olympians
competing in these two sports.

As MVPSF strives to expand its reach in Philippine Sports, it
has been recognized as a partner of the Philippine Weightlifting
Association (PWA) in growing the sport in the Philippines.
Bouyed by the success of 2016 Olympic Silver Medalist, Hidilyn
Diaz, MVPSF and PWA have both committed to further develop
weightlifting through grassroots initiatives and programs in
the Philippines.

2
1

Olympic Silver Medalist Hidilyn Diaz
shows her winning form.

munICIpAlITIeS
uSeD ShIne oS+

266

houSeS TurneD over To
Typhoon pABlo vICTImS

163,000

kIloS oF BATTerIeS
DonATeD AmounTInG To
AlmoST php4 mIllIon

An aerial shot of the 266 MVP Tulong Kapatid Homes officially turned over in February 2016.

PLDT 2016 ANNUAL REPORTdigital like never before

2
2

doing business like never before
Ace that presentation with great confidence
– and win the trust of your customer!

PLDT 2016 ANNUAL REPORTdigital like never beforeTHE PLDT GROUP
Corporate governanCe
report

Corporate Governance is the
cornerstone of our strategy.
It enhances our business
performance and enables us
to safeguard the interests of
our stakeholders by keeping us
focused on our commitments to:

• Seek to enhance value for our
shareholders and proactively
engage with our stakeholders

• Be guided by the principles
of integrity, accountability,
transparency and fairness.

Governance for us is the business
of all - the Board, Management
and employees.

HigHligHts in 2016

• new vision, mission and
Corporate values
• Comprehensive program to
revitalize network and IT
platforms

• business Transformation

program on Culture, people and
processes

• Annual Stockholders’ meeting
• 16 Board meetings and 22
Board Committee meetings

• Training on Digital

Transformation, risk
management & Governance

Our corporate governance framework was established to
enable us to create sustainable value for the Company, fulfill our
commitments to our stakeholders and develop a strong corporate
culture. It is embodied in the integrated system of governance
structures, policies and processes set forth in PLDT’s Articles of
Incorporation, By-Laws, Manual on Corporate Governance (CG
Manual), Code of Business Conduct and Ethics (Code of Ethics)
and Corporate Social Responsibility Statement.

The Company continuously seeks to raise the standards of
its business conduct. We comply with applicable rules and
benchmark with international best practices. PLDT follows the
governance standards of the Philippines as a public company listed
in the Philippine Stock Exchange (PSE) and of the United States
as a foreign private issuer with American Depositary Shares listed
and traded in the New York Stock Exchange (NYSE). PLDT also
benchmarks with the governance standards of Hong kong being
an associated company of First Pacific Company Ltd., a company
listed in the Hong kong Stock Exchange.

BOard Of direCtOrs

duties and responsibilities
The primary responsibility for ensuring good corporate
governance in PLDT is vested in our Board of Directors (“Board”).
The Board has the authority and responsibility to exercise
the corporate powers, conduct the business and control the
properties of the Company. Directors are expected to perform
their duties diligently and in good faith and devote sufficient time
and attention for such purpose. The Board and the directors are
bound to act in the best interest of the Company and for the
common benefit of its stockholders and other stakeholders.

To ensure a high standard of governance for the Company, the
Board performs the following functions and duties with the
assistance of the Board Committees:

• Corporate Governance. The Board, with the assistance of the
Governance and Nomination Committee, establishes the
Company’s corporate governance framework and policies and
oversees their implementation.

• Determination and review of Company’s Vision, Mission

and strategic objectives. The Board, in coordination with
Management, determines the Vision, Mission and strategic
objectives and reviews the same annually.

• Management oversight. The Board exercises oversight on
Management in its execution of the strategic direction and
implementation of the policies set by the Board.

• Stakeholder Engagement and Corporate Social Responsibility.

The Board oversees the Company’s stakeholder engagement
and corporate social responsibility programs. It ensures that
the Company has an investor relations program and programs
for engagement and communication with sectors of the
community in which the Company operates.

2
3

PLDT 2016 ANNUAL REPORTdigital like never before
• Financial reporting, internal control, internal audit and

independent audit. The Board, with the assistance of the
Audit Committee, carries out its oversight responsibilities for
the Company’s financial reporting, internal control system,
internal audit and independent audit mechanisms.

• Enterprise risk management. The Board, with the assistance

of the Risk Committee, fulfills its oversight responsibilities for
the Company’s assessment and management of enterprise
risks, and reviews and discusses with Management the
Company’s major risk exposures and the corresponding risk
mitigation measures.

• Technology. The Board, with the assistance of the Technology
Strategy Committee, reviews and approves the Company’s
technology strategy and roadmap and capital expenditures
for network and technology.

• Succession planning, professional development and

executive compensation. The Board, through its Executive
Compensation Committee, reviews the criteria for
employment and promotion and professional development
plans for Senior Management, keeps track of their
performance, and evaluates their potential career paths.

• Selection process for directors and appointment of officers.
The Board, with the assistance of the Governance and
Nomination Committee, implements a selection process

to ensure that the Board has an effective and balanced mix
of knowledge, expertise, experience and diversity in terms
of, among others, age, gender and ethnicity, and reviews the
qualifications of officers to be appointed.

• Annual Board assessment. The Board conducts an annual self-
assessment to evaluate the performance of the Board as a
whole, the Board Committees and the individual directors.

Our Board and our directors have access to independent
professional advice, at the Company’s expense, as well as access
to Management as they may deem necessary to carry out
their duties.

In July 2016, the Board approved the new Vision, Mission and
Corporate Values for the Company. In pursuit of its Vision to
Lead and Inspire Filipinos to Create a Better Tomorrow, PLDT’s new
Mission is to Empower Filipinos everywhere with customer-focused
digital innovations that unlock and share their infinite potential.

In line with the new Mission, the Board adopted the strategy
to undertake a digital pivot to meet the challenges of rapid
consumer and technological changes. The strategy will be
executed through a roadmap to revitalize the PLDT Group’s
network and IT platforms and a business transformation program
that aim to reshape the organization’s culture, people and
processes to align with the digital pivot.

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4

shArehOlders

Election

Report
Accountability

BoArD oF DIreCTorS

Report

Appointment

Appointment
Committee Charter
Designation

Report
Assurance

Appointment

BoArD CommITTeeS

externAl
AuDITor

AuDIT
CommITTee

rISk
CommITTee

eXeCuTIve
CompenSATIon
CommITTee

TeChnoloGy
STrATeGy
CommITTee

GovernAnCe
& nomInATIon
CommITTee

Report

Oversight
Guidance

Report

Oversight
Guidance

Report

Information

internAl
AuDIT

CFo/Group
rISk mGmnT
DepArTmenT

CorporATe
GovernAnCe
oFFICe

Audit

Report

Guidance

Oversight
Guidance

Appointment
Oversight

Annual Audit

Ceo
mAnAGemenT

Report
Accountability

PLDT 2016 ANNUAL REPORTdigital like never beforeComposition
Our Board is composed of 13 members, with three independent
directors, seven non-executive directors and three executive
directors. All the directors are qualified and competent members
with diverse and complementing skills, expertise, experience and
knowledge which enrich the collective processes and practices
of our Board. Our directors have extensive experience in their
respective fields or industries, such as telecommunications,
Information and Communication Technology (ICT), business
processing, infrastructure, power, banking, insurance, real property
development, retail and agriculture businesses, law and public
administration.

Our independent directors, namely, former Supreme Court Chief
Justice Artemio V. Panganiban, Mr. Pedro E. Roxas and Mr. Bernido
H. Liu, were selected pursuant to the specific independence
criteria set out under applicable laws and rules, our By-Laws and
CG Manual. Under our CG Manual, an independent director
is broadly, “a person who is independent of Management and
who, apart from his fees and shareholdings, is free from any
business or other relationship with the Company which could, or
reasonably be perceived to, materially interfere with his exercise
of independent judgment in carrying out his responsibilities as a
director of the Company.” More specific independence standard
criteria are enumerated in our By-Laws and CG Manual.

Diversity. Our CG Manual promotes diversity in our Board
and does not impose restrictions respecting age, race, gender,
cultural or religious belief for directors. Diversity in our Board is
reflected in the composition of the Board in terms of the varied
business experience and professional background, the number of
male and female directors and ethnicity. In 2016, another female
director was appointed, bringing the total of the Company’s
female directors to three.

Directors

ed
(3)

id
(3)

ned
(7)

FemAle
(3)

mAle
(10)

rOle

GenDer

71-80
(4)

61-70
(5)

51-60
(4)

AGe

2
JApAneSe

11
FIlIpInoS

<10
(3)

10-20
(6)

>20
(4)

eThnICITy

TeleCom-ICT
eXperIenCe
(yeArS)

Directors’ Professional Background

(10)
77%

(5)
38%

(4)
31%

BuSIneSS

leGAl

enGIneerInG
-ICT

(3)
23%

puBlIC
ADmIn

Our Board, through the Governance and Nomination
Committee, ensures the diversity of its membership and the
selection of qualified, competent and capable directors and
independent directors through a selection process. The selection
process follows the Company’s Guidelines on the Search,
Screening and Selection of Directors and Screening Checklist
which contain, among others, the criteria and qualifications for
directorship and a matrix on the skills, expertise and experience
relevant to the responsibilities of the Board, and considers other
relevant factors, such as conflict of interest and directorships and/
or positions in other corporations. The process ensures that the
selection of directors and independent directors is aligned with
the Company’s Mission, Vision and strategic objectives.

With regard to directorships in other stock or non-stock
corporations, our Board adheres to a performance-based
standard in determining whether other directorships
compromise the capacity of a director to serve or perform his/
her duties and responsibilities to the Company diligently and
efficiently. Differences in individual capabilities and the nature
and demands of directorships in other companies are given due
consideration in determining fitness and capacity to serve in
our Board.

Chairman and CEO. Mr. Manuel V. Pangilinan, the Chairman of the
Board, concurrently holds the position of President and CEO
since January 1, 2016. With the guidance of the Governance
and Nomination Committee, Mr. Pangilinan shall manage the
search for a new President and CEO of PLDT. The Company
has in place checks and balances to ensure that the Board will
get the benefit of independent views: clearly defined duties
and responsibilities of the Chairman and the President & CEO
in the By-Laws and CG Manual; independent Board oversight,
supported by three independent directors, seven non-
executive directors, the Audit Committee composed entirely
of independent directors, and the Governance and Nomination
Committee, Executive Compensation Committee and Risk
Committee with independent directors constituting majority
of their respective voting members; and Company policies and
procedures which have been established to manage conflicts of
interests (COI).

meetings
Our Board meets, more or less, on a monthly basis in accordance
with the schedule of meetings that it sets at the end of the
preceding year. Invariably, some of these meetings are devoted to
the review and/or approval of the Company’s Vision and Mission,
the strategic plans and budget, business operations updates,
network and technology updates, capital expenditures and
investments, and CSR programs. Once every quarter, our Board
reviews the quarterly financial reports.

In 2016, our Board held 16 meetings. In each meeting, a quorum
of at least two-thirds of the Board members, including at least
one independent director, was present. All of the independent
directors were present in the Annual Stockholders’ Meeting
held on June 14, 2016. The respective Chairmen of the Audit,
Governance and Nomination, Executive Compensation, Risk and
Technology Strategy Committees were present as well in the
said meeting.

2
5

PLDT 2016 ANNUAL REPORTdigital like never beforeAttEnDAnCE in BOARD MEEtings AnD AnnUAl stOCKHOlDERs’ MEEting

Director

Designation

Board meetings

Annual Stockholders’ meeting

Manuel V. Pangilinan

Ray C. Espinosa

Executive Director

Ma. Lourdes C. Rausa-Chan

Executive Director

Bernido H. Liu

Artemio V. Panganiban

Pedro E. Roxas

Helen Y. Dee

James L. Go

Tadashi Miyashita1

Independent Director

Non-Executive Director

Napoleon L. Nazareno2

Non-Executive Director

Hideaki Ozaki

Albert F. del Rosario2

Juan B. Santos3

Atsuhisa Shirai1

Tony Tan Caktiong4

Amado D. Valdez3

Marife B. Zamora4

Non-Executive Director

16/16

12/16

16/16

15/16

12/16

16/16

10/11

9/9

14/16

7/7

14/14

5/5

4/14

2/2

2
6

Director

executive Directors

Manuel V. Pangilinan

Ray C. Espinosa

Ma. Lourdes C. Rausa-Chan

Independent Directors

Bernido H. Liu

Artemio V. Panganiban

Pedro E. Roxas

non-executive Directors

Helen Y. Dee

James L. Go

Tadashi Miyashita

Napoleon L. Nazareno

Hideaki Ozaki

Albert F. del Rosario

Juan B. Santos

Atsuhisa Shirai

Tony Tan Caktiong

Amado D. Valdez

Marife B. Zamora

Total

BOARD REMUnERAtiOn in 2016 (in PHP)

remuneration for AShm
and Board meetings Attended

remuneration for
Committee meetings Attended

3,750,000

2,750,000

3,750,000

3,500,000

3,000,000

3,750,000

2,250,000

2,000,000

3,250,000

1,750,000

3,250,000

1,250,000

1,000,000

500,000

875,000

250,000

500,000

2,125,000

2,500,000

1,875,000

1,375,000

250,000

1,000,000

Total

4,625,000

4,000,000

4,250,000

4,875,000

6,250,000

6,000,000

3,000,000

5,625,000

3,625,000

2,250,000

3,250,000

1,750,000

3,250,000

2,250,000

1,000,000

500,000

43,750,000

13,250,000

57,000,000

* Only one per diem was given to directors for attendance in the Annual Stockholders’ Meeting, regular meeting and organizational meeting on June 14, 2016.

1 Mr. Atsuhisa Shirai was elected as director effective August 30, 2016 vice Mr. Tadashi Miyashita who resigned on August 29, 2016.
2 Mr. Albert F. del Rosario was elected as director effective July 11, 2016 vice Mr. Nazareno who resigned on even date.
3 Mr. Amado D. Valdez was elected as director by the Board on November 14, 2016 vice Mr. Juan B. Santos who resigned on October 24, 2016.
4 Ms. Marife B. Zamora was elected as director by the Board on November 14, 2016 vice Mr. Tony Tan Caktiong who resigned on November 13, 2016.

PLDT 2016 ANNUAL REPORTdigital like never beforeThe Board holds executive sessions with the independent
directors and non-executive directors, excluding executive
directors, at least once a year and at such other times as the
Board may deem necessary or appropriate. The Board held one
executive session in 2016.

Compensation. All of our directors are entitled to a per diem
of Php250 thousand for attendance in each Board meeting
and Php125 thousand for attendance in each meeting of the
Board Committees in which some of them are members. Save
for our executive directors, our directors do not receive stock
options, performance incentives, bonuses or any other form of
compensation from the Company.

Training. The Board keeps abreast of industry developments,
business trends and legal requirements relevant to the Company
and its operations. In this regard, the Company conducts regular
and continuing training for our directors, including PLDT’s Annual
Corporate Governance Enhancement Sessions which provide
an opportunity for our leadership to engage in discussion with
international and local experts on selected topics, including
emerging technologies, new laws, and best business practices.
In 2016, the Company organized Annual Corporate Governance
Enhancement Sessions for its directors and officers on: (i) Digital
Transformation, Risk Management & Governance in the 21st Century,
(ii) Digital Governance: Issues in Emerging Technologies, and (iii) The
Philippine Competition Act and Philippine Competition Commission.

program

Date of Training

Training Institution

name of Director

BOARD tRAining

Digital Transformation, Risk Management
& Governance in the 21st Century

November 23, 2016

Speaker: Mr. Mike Walsh
CEO, Tomorrow

Digital Governance: Issues in Emerging
Technologies

November 23, 2016

Speaker: Mr. Chia Ling koh
Director, Singapore Law Practice of
Queen Street Legal LLC

The Philippine Competition Act and
Philippine Competition Commission

May 3, 2016

Speakers: Attys. Emmanuel M.
Lombos and Arlene M. Maneja
SyCip Salazar Hernandez and
Gatmaitan Law Office

Corporate Governance Seminar on
Financial Reporting and Audit

February 5, 2016

Speaker: SGV & Co.

ESG Reporting – HkEx Requirements

October 12, 2016

Speaker: Mr. Coleman Ng
kPMG Hong kong

Corporate Governance Seminar

December 21, 2016

Speaker: SGV & Co.

December 8, 2016

November 12, 2016

Corporate Governance Orientation
Program

November 23, 2016

August 25, 2016

Corporate Governance Training Program August 8, 2016

SEC Corporate Governance Forum

August 3, 2016

Speaker: Risks, Opportunities,
Assessment and Management,
(ROAM) Inc.

Speaker: Institute of Corporate
Directors

Securities and Exchange
Commission

Cyber Security in the 21st Century:
The Threat Landscape

February 18, 2016

Speaker: Christopher Camejo

Manuel V. Pangilinan
Ray C. Espinosa
Artemio V. Panganiban
Ma. Lourdes C. Rausa-Chan
Albert F. del Rosario
Marife B. Zamora

Manuel V. Pangilinan
Napoleon L. Nazareno
Helen Y. Dee
Ray C. Espinosa
James L. Go
Bernido H. Liu
Tadashi Miyashita
Hideaki Ozaki
Artemio V. Panganiban
Ma. Lourdes C. Rausa-Chan
Pedro E. Roxas
Juan B. Santos
Tony Tan Caktiong

Artemio V. Panganiban
Pedro E. Roxas

Manuel V. Pangilinan
Ray C. Espinosa

Bernido H. Liu
Hideaki Ozaki

Helen Y. Dee

Atsuhisa Shirai

Juan B. Santos

Tony Tan Caktiong

Ma. Lourdes C. Rausa-Chan

Napoleon L. Nazareno
Ray C. Espinosa
Tadashi Miyashita
Ma. Lourdes C. Rausa-Chan

2
7

PLDT 2016 ANNUAL REPORTdigital like never beforeFor the orientation of new directors, the Chairman, President
and CEO, Chief Financial Officer, Corporate Secretary and Chief
Governance Officer give a newly appointed director a briefing
on the Company’s structure, business, operating and financial
highlights, responsibilities of the Board and its Committees
and how each operates. The new director is also furnished
with copies of all relevant corporate documents, including the
Company’s Articles, By-Laws, Annual Report, CG Manual, Code
of Ethics, and the Charters of the Board Committees. Updates
on business and governance policies and requirements principally
from the PSEC, PSE, U.S. Securities and Exchange Commission
(U.S. SEC), and NYSE, and new laws applicable or relevant to

the Company and its business, particularly on financial reporting
and disclosures and corporate governance, are presented in Board
meetings and/or furnished to the directors.

Board Assessment. Our directors take part in an annual assessment
process which reviews and evaluates the performance of the
whole Board, the Board Committees and the individuals that
comprise these bodies. This process enables the Board to identify
its strengths and areas for improvement and elicit individual
directors’ feedback and views on the Company’s strategies,
performance and future direction. Each Board Committee also
conducts an annual self-assessment of its performance.

BOard

advisory Committee

audit
Committee
(aC)

governance &
nomination
Committee
(gnC)

executive
Compensation
Committee
(eCC)

risk
Committee
(rC)

technology
strategy
Committee
(tsC)

2
8

BOard COmmittees

advisory Committee
Our Board is supported by an Advisory Committee. Our
Advisory Committee is composed of Mr. Roberto R. Romulo,
Mr. Benny S. Santoso, Mr. Orlando B. Vea, Mr. Christopher H.
Young, Mr. Oscar S. Reyes and Mr. Washington Z. SyCip. The
Advisory Committee provides guidance and suggestions, as
necessary, on matters deliberated upon during Board meetings.

PLDT’s other Board Committees, namely Audit, Governance
and Nomination, Executive Compensation, Risk and Technology
Strategy Committees, assist the Board in the performance of
their functions and responsibilities. The respective charters of the
Board Committees provide that each shall have the necessary
resources and authorities to discharge their responsibilities,
including obtaining external legal or professional advice.

Advisory Committee

Designation

Board meetings

Annual Stockholders’ meeting

Oscar S. Reyes

Roberto R. Romulo

Benny S. Santoso

Washington Z. SyCip

Orlando B. Vea

Christopher H. Young

Advisor

16/16

15/16

16/16

PLDT 2016 ANNUAL REPORTdigital like never before
AttEnDAnCE in BOARD COMMittEE MEEtings

member

Audit Committee
(AC)

Governance
& nomination
Committee (GnC)

executive
Compensation
Committee (eCC)

risk Committee
(rC)

Technology
Strategy Committee
(TSC)

Manuel V. Pangilinan

Ray C. Espinosa

Ma. Lourdes C. Rausa-Chan

Bernido H. Liu*

Artemio V. Panganiban*

Pedro E. Roxas*

James L. Go

Tadashi Miyashita5

Napoleon L. Nazareno6

Albert F. del Rosario6

Atsuhisa Shirai5

Roberto R. Romulo

Oscar S. Reyes

Orlando B. Vea

9/11

11/11

10/107

4/47

10/107

4/4

4/48

4/4

2/2

1/1

3/4

4/4

3/4

2/2

2/28

Corazon S. Dela Paz-Bernardo

11/117

Menardo G. Jimenez, Jr.

4/48

1/18

audit Committee (aC)
The AC assists the Board in fulfilling its oversight responsibility
for: (i) accounting and financial reporting principles and
policies, system of internal controls and the integrity of
financial statements; (ii) compliance with legal and regulatory
requirements; and (iii) the performance of the internal audit
organization and the external auditors.

Our AC is composed of three members, all of whom are
independent directors. The Audit Committee members are
former Supreme Court Chief Justice Artemio V. Panganiban,
Mr. Bernido H. Liu and Mr. Pedro E. Roxas who is the chairman
of this committee. All of the members of our Audit Committee
are financially literate. The Audit Committee has four advisors,
namely, Mr. Atsuhisa Shirai and Mr. James L. Go, non-executive
members of our Board; Mr. Roberto R. Romulo, a member
of our Advisory Committee; and Ms. Corazon S. Dela Paz-
Bernardo, a former member of our Board. Ms. Dela Paz-
Bernardo has expertise in accounting and financial management
and is a former Chairman and Senior Partner of Joaquin
Cunanan & Company, now Isla Lipana & Co., a member firm of
Pricewaterhouse Coopers.

The charter of the AC may be viewed and downloaded from
the PLDT website through the following link: http://pldt.com/
docs/default-source/company-leadership/audit-committee-charter-.
pdf?sfvrsn=2. The purposes, duties and powers of the AC are set
forth in the charter.

Activities of the AC in 2016 include the following:

With respect to the external auditor SyCip, Gorres, Velayo and Co
(SGV & Co.), a member practice of Ernst & Young Global Limited
(EY), discussed, reviewed and approved, or noted:

2
9

• SGV & Co.’s report on the results of their integrated audit

of the 2015 financial statements of PLDT and its subsidiaries
which were prepared in accordance with the Philippine
Financial Reporting Standards (PFRS) and International Financial
Reporting Standards (IFRS), and of the internal controls
over financial reporting (ICFR) based on criteria established
in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway
Commission in 2013 (COSO IC-IF 2013);

• SGV & Co.’s required communications to the AC, including

their independence from PLDT;

• Various audit, audit-related and non-audit services and fees of

SGV & Co. and EY for PLDT and its subsidiaries;

• SGV & Co.’s plan and status reports on the integrated audit of
PLDT’s and its subsidiaries’ 2016 financial statements and ICFR;

• SGV & Co.’s updates on various new accounting standards

which will become effective in 2018 and 2019; and

• Appointment and engagement of external auditors for PLDT

and certain subsidiaries and affiliates of PLDT.

5 Mr. Shirai was appointed as a member of the GNC, ECC, RC and TSC and an advisor to the AC effective August 30, 2016 vice Mr. Miyashita who resigned on August 29, 2016.
6 Mr. Albert F. del Rosario was appointed as a member of the TSC effective July 11, 2016 vice Mr. Nazareno who resigned on even date.
7 Advisor to the AC
8 Non-voting member

PLDT 2016 ANNUAL REPORTdigital like never before3
0

With respect to the Internal Audit group, discussed, reviewed
and approved, or noted:

• The Internal Audit and Fraud Risk Management Group’s
(IAFRMG) performance report for the year 2015 and
the IAFRMG Head’s statement of compliance with the
International Standards for the Professional Practice
of Internal Auditing, and required confirmation of the
organizational independence of PLDT Internal Audit
organization;

• The retention of the existing PLDT Internal Audit Charter

until the next review in 2017;

• PLDT’s Internal Audit Plans for 2016 and 2017;

• Internal Audit’s report on PLDT Group’s Sarbanes-Oxley

Act – Section 404 (SOX 404) Compliance – Management’s
Overall Assessment and Conclusions as of December 31, 2015;

• The PLDT Group’s SOX 404 compliance scoping and

approach for 2016; and

• The major IAFRMG activities and accomplishments, including
the internal audit organizational updates, and succession plan
for PLDT and Smart internal audit organizations.

The AC also conducted an evaluation of the qualifications
and performance of the incumbent Head of Internal Audit
organization, and resolved to re-appoint Mr. Jun R. Florencio as
the Chief Audit Officer/Internal Audit Head.

With respect to financial reporting and controls, reviewed and
discussed the following with PLDT Finance Officers and/ or
SGV & Co.:

• PLDT’s audited financial statements for 2015 prepared in
accordance with PFRS and IFRS, the report of SGV & Co.
on the final results of its integrated audit of 2015 PFRS and
IFRS financial statements and ICFR, the PLDT Group’s 2015
Annual Report on Form 17-A (for PSEC filing) and Annual
Report on Form 20-F (for US SEC filing); and

• PLDT’s unaudited consolidated financial results and reports
for the three months ended March 31, 2016, the six months
ended June 30, 2016, and the nine months ended September
30, 2016.

With regard to governance, general internal controls and risk
management process:

• Reviewed and approved the 2015 AC Report for inclusion in
the Annual Report and the retention of the amended PLDT
Audit Committee Charter until the next review in 2017;

• Discussed with the Corporate Secretary, Chief Legal Counsel
and Chief Governance Officer the Information Statement for
the annual stockholders’ meeting, the status of Company’s
compliance with regulations and applicable laws, updates
on significant legal matters, and the status of whistleblowing
complaints received by the Corporate Governance Office;

• Discussed with the Group Enterprise Risk Management

Officer the report on PLDT Group’s top key enterprise risks
for 2016 and the corresponding risk responses;

• Discussed the Chief Financial Officer’s updates on the

changes in the governance structures of PLDT’s Beneficial
Trust Fund, MediaQuest and its subsidiaries, the conduct of
an independent review of investments in MediaQuest and its
subsidiaries, and updates on the said independent review;

• Discussed with the various business and operational unit

heads concerned relevant tax rulings, regulatory matters and
compliance with applicable regulations, the Wireless Business
Segment’s “No Payment Since Activation” (NOPSA) issues,
and updates on credit control and collection performance for
Smart’s postpaid business; and

• Discussed with the Head of PLDT’s IAFRMG the Internal

Audit’s research regarding the oversight of subsidiaries, the
Internal Audit’s response to the NOPSA related fraud in
the Wireless Business, and updates on the status of NOPSA
investigations.

The AC submitted to the Board its Semi-Annual Reports of
Activities and Performance Self-Assessment Report for 2015.

governance and nomination Committee (gnC)
The GNC assists the Board in the performance of its functions
to: (i) oversee the development and implementation of
corporate governance principles and policies; (ii) review and
evaluate the qualifications of the persons nominated to the
Board as well as those nominated to other positions requiring
appointment by the Board; (iii) identify persons deemed
qualified to become members of the Board and/or the Board
Committees; (iv) make an assessment of the Board’s effectiveness
in the process of replacing or appointing new members of
the Board and/or Board Committees; and (v) develop and
implement the Board’s performance evaluation process.

Our GNC is composed of five voting members and two non-
voting members. Three of the voting members are independent
directors, namely, former Supreme Court Chief Justice Artemio
V. Panganiban, Mr. Pedro E. Roxas and Mr. Bernido H. Liu; and two
are non-independent directors, namely, Mr. Atsuhisa Shirai and
Mr. Manuel V. Pangilinan who is the chairman of this committee.
Mr. Menardo G. Jimenez, Jr. 9 and Atty. Ma. Lourdes C. Rausa-Chan
are the non-voting members.

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/Governance%20and%20
Nomination%20Committee%20Charter.pdf. The purposes, duties
and powers of the GNC are set forth in the charter.

In the performance of its governance functions, the GNC’s
activities in 2016 included the following:

• With regard to policy review and development, reviewed

and assessed the Code of Ethics and the Conflict of Interest
Policy and determined that the principles and procedures
therein remain sound and continue to be appropriate for the
Company, and approved recommendations to continue to
strengthen the implementation of said policies;

9 Until December 31, 2016. Replaced by Chief People and Culture Officer Maria Elizabeth S. Sichon effective February 7, 2017.

PLDT 2016 ANNUAL REPORTdigital like never before• With respect to education and communication, reviewed and
approved the content for the corporate governance training
and continuing education program, including the Annual
Corporate Governance Enhancement Sessions for Directors
and Officers, the PLDT Corporate Governance Report, and
the themes for PLDT’s communication materials for 2017;

• With respect to compliance and enforcement, reviewed

and noted or approved, as applicable, the COI disclosures of
key personnel and the initial implementation of the online
disclosure systems for COIs and gifts, the whistleblowing
cases and the handling thereof, including those of the
PLDT subsidiaries, and received updates on the Company’s
compliance with circulars issued by the PSEC and PSE
relating to corporate governance;

• Assisted the Board in implementing the Board Assessment
for 2015 performance, which included the performance
evaluation of the Board Committees and Individual Directors,
including the Chief Executive Officer; and

• As part of its oversight on governance matters, received

updates from Management on the Company’s procurement
activities and sustainability reporting in relation to, among
others, the Environmental, Social and Governance (ESG)
reporting requirements of the Hong kong Stock Exchange.

In the performance of its nomination functions, the GNC’s
activities in 2016 included the following:

• Pre-screened candidates nominated to become directors and
the qualifications of candidates for independent directors, and
submitted to the Board the final list of qualified director and
independent director nominees for election at the Annual
Stockholders’ Meeting held on June 14, 2016;

• Pre-screened and recommended to the Board the

appointment of 4 directors to fill the vacancies in the Board
and the Board Committees;

• Reviewed and confirmed the Human Resources Group’s

evaluation of the qualifications of officers and recommended
their re-appointment as such at the Organizational Meeting
of the Board held on June 14, 2016; and

• Reviewed and confirmed the Human Resources Group’s
evaluation of proposed promotions to officer rank for
approval by the Board.

Finally, the GNC submitted the following reports to the Board
for year 2015: (a) Consolidated Report on the Board and Board
Committees Assessment; (b) GNC Annual Report of Activities;
and (c) GNC Performance Self-Assessment.

executive Compensation Committee (eCC)
The ECC assists the Board in the performance of its functions
to: (i) develop a compensation philosophy or policy consistent
with the culture, strategy and control environment of PLDT;
(ii) oversee the development and administration of PLDT’s
executive compensation programs, including long term incentive
plans and equity based plans for officers and executives; and
(iii) conduct the performance evaluation of and succession
planning for officers, including the CEO, and oversee the
development and implementation of professional development
programs for officers.

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Our ECC is composed of five voting members and one non-
voting member. Three of the voting members are independent
directors, namely, former Supreme Court Chief Justice Artemio
V. Panganiban, Mr. Pedro E. Roxas and Mr. Bernido H. Liu; and two
are non-independent directors, namely, Mr. Atsuhisa Shirai and
Mr. Manuel V. Pangilinan who is the chairman of this committee.
Mr. Menardo G. Jimenez, Jr. 10 is the non-voting member.

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/Executive%20
Compensation%20Committee%20Charter.pdf. The purposes, duties
and powers of the ECC are set forth in the charter.

In 2016, the ECC discussed and approved the payout of the
variable pay for officers and executives of PLDT and Smart and
additional variable pay contingent on the 2016 first half results
tracking the Core Income Budget. The ECC submitted to the
Board its Annual Report of Activities and Performance Self-
Assessment Report for 2015.

risk Committee (rC)
The RC assists the Board in the performance of its functions to:
(i) oversee Management’s adoption and implementation of a
system for identifying, assessing, monitoring and managing key risk
areas; (ii) review Management’s reports on the Company’s major
risk exposures; and (iii) review Management’s plans and actions
to minimize, control or manage the impact of such risks.

Our RC is composed of five voting members. Three of the voting
members are independent directors, namely, former Supreme
Court Chief Justice Artemio V. Panganiban, Mr. Bernido H. Liu and
Mr. Pedro E. Roxas who is the chairman of this committee; and
two are non-executive directors, namely, Mr. Atsuhisa Shirai and
Mr. James L. Go.

The Charter of the RC may be viewed and downloaded from
the PLDT website through the following link: http://pldt.com/
docs/default-source/company-leadership/risk-committee-charter.
pdf?sfvrsn=2. The purposes, duties and powers of the RC are set
forth in the charter.

In 2016, the major accomplishments of the RC are the following:

• Reviewed and noted the framework and process followed
by the Group Enterprise Risk Management Department
(GRMD), and the top risks of the PLDT Group as identified
by the CEO Council;

10 Until December 31, 2016. Replaced by Chief People and Culture Officer Maria Elizabeth S. Sichon effective February 7, 2017.

PLDT 2016 ANNUAL REPORTdigital like never before
exeCutive implementatiOn

Our Board exercises oversight on Management in accordance
with the standards set forth in our CG Manual. The roles
of Management and other offices involved in ensuring the
implementation of the corporate governance policies and
requirements are discussed below.

President and CEO. The President and CEO provides leadership
for Management in developing and implementing business
strategies, plans and budgets. He ensures that the business and
affairs of the Company are managed in a sound and prudent
manner and that operational, financial and internal 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.

Corporate Secretary. The Corporate Secretary informs the
directors of the schedule and agenda of Board meetings and
ensures that Management provides the Board with complete
and accurate information that will enable the directors to make
informed decisions on matters that require their approval.

Internal Audit Organization. Our Internal Audit organization
determines whether our structure of risk management, control
and governance processes, as designed and represented by
Management, are adequate and functioning to ensure that:

• Risks are appropriately identified, managed and reported;

• Significant financial, managerial, and operating information are

accurate, reliable and timely;

• Employees’ actions are in compliance with policies, standards,

procedures, and applicable laws and regulations;

• Resources are acquired economically, used efficiently and

adequately protected;

• Programs, plans and objectives are achieved;

• Quality and continuous improvement are fostered in our

control processes; and

• Significant legislative or regulatory issues impacting us are

recognized and addressed appropriately.

The Chief Audit Officer/Internal Audit Head reports functionally
to the AC and administratively to the President and CEO. In the
discharge of his duties, the Chief Audit Officer/Internal Audit
Head is required to:

• Provide annually an assessment on the adequacy and

effectiveness of our processes for controlling our activities
and managing our risks;

• Report significant issues related to the processes of

controlling our activities, including potential improvements to
those processes, and provide information concerning such
issues; and

• Periodically provide information on the status and results
of the annual internal audit plan and the sufficiency of our
internal audit organization’s resources.

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• Reviewed and noted the GRMD’s progress in the conduct of
Enterprise Risk Management Workshops in subsidiaries and
the development of a risk register software; and

• Reviewed and discussed with Management: (i) PLDT’s

Procurement Risk profile; (ii) People Risk; (iii) mitigation
strategies of the Project Management Office on Execution
Risk; (iv) the PLDT Group’s Business Continuity Plan; and
(v) relevant activities of PLDT’s Business Transformation Office.

technology strategy Committee (tsC)
The TSC assists the Board in the performance of its functions
to: (i) review and approve the strategic vision for the role
of technology in PLDT’s overall business strategy, including
the technology strategy and roadmap of PLDT; (ii) fulfill its
oversight responsibilities for PLDT’s effective execution of its
technology-related strategies; and (iii) ensure the optimized use
and contribution of technology to PLDT’s business and strategic
objectives and growth targets.

Our TSC is composed of five voting members and two non-
voting members. The five voting members are non-independent
directors Mr. Manuel V. Pangilinan who is the chairman of the
committee, former Ambassador Albert F. del Rosario, Atty. Ray
C. Espinosa, Mr. James L. Go and Mr. Atsuhisa Shirai; and the two
non-voting members are Mr. Oscar S. Reyes and Mr. Orlando B.
Vea who are members of our Advisory Committee.

A copy of 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/
Technology%20Strategy%20Committee%20Charter.pdf. The
purposes, duties and powers of the TSC are set forth in
the charter.

In 2016, the TSC discussed with the PLDT Top Management
and Technology Group technology projects, initiatives, plans
and concepts, with a focus on projects that will improve quality
of service for better customer experience and operational
efficiency, and support business requirements in terms of
network capacity and growth. Technology innovations in different
stages of implementation were also discussed in its meetings. The
TSC submitted to the Board its Annual Report of Activities and
Performance Self-Assessment Report for 2015.

PLDT 2016 ANNUAL REPORTdigital like never beforeThe charter of the Internal Audit organization complies with the
International Standards for the Professional Practice of Internal
Auditing of the Institute of Internal Auditors.

External Auditor. The Company’s external auditor is appointed
by the AC which reviews its qualifications, performance and
independence. To ensure objectivity in the performance of its
duties, the external auditor is subject to the rules on rotation
and change, every five years, general prohibition on hiring by the
Company of staff of the external auditor, and full and appropriate
disclosure to, and prior approval by, the AC of all audit and non-
audit services and related fees. Approval of non-audit work by
the external auditor is principally tested against the standard of
whether such work will conflict with its role as an independent
auditor or would compromise its objectivity or independence as
such. Our external auditor is SGV & Co., a member practice
of EY.

Group Risk Management Department. The GRMD implements
an integrated risk management program with the goal of
identifying, analysing and managing the PLDT Group’s risks to an
acceptable level, so as to enhance opportunities, reduce threats,
and thus sustain competitive advantage. The implementation of
the enterprise risk management (ERM) process ensures that
high-priority risks are well understood and effectively managed
across all functions and units within the PLDT Group. The ERM
process used by the GRMD is based on the ISO 31000 standard
on risk management. The GRMD reports to the Risk Committee
and the Board on developments with regard to the Group’s risk
management activities.

Chief Governance Officer. The primary responsibilities of the
Chief Governance Officer include monitoring compliance with
the provisions and requirements of corporate governance laws,
rules and regulations, reporting violations and recommending
the imposition of disciplinary actions, and adopting measures to
prevent the repetition of such violations. The Chief Governance
Officer assists the Board and the GNC in the performance of
their governance functions. Under the supervision and direction
of the Chief Governance Officer, the Corporate Governance
Office assists in the implementation of the corporate governance
policies adopted by the Board.

pOliCies and praCtiCes

The Company promotes a culture of good CG through the
implementation of its CG policies, including the CG Manual,
Code of Ethics and related policies.

CG Manual. Our CG Manual defines our corporate governance
framework and structure. Together with PLDT’s Articles of
Incorporation and By-Laws, it assigns and delineates functions
and responsibilities, and entrusts powers, authorities and
resources for the execution of such functions and responsibilities.
The CG Manual provides, among other matters, the composition
and responsibilities of the Board, the Company’s duties towards
its shareholders in general, its minority shareholders and its other
stakeholders, and the Company’s obligation to comply with
applicable disclosure rules. A copy of the CG Manual is posted
at http://pldt.com/docs/default-source/corporate-governance-files/cg-
manual-/pldt-manual-on-corporate-governance-.pdf?sfvrsn=0.

Code of Business Conduct and Ethics (Code of Ethics). Our Code
of Ethics defines the Company’s corporate governance values
of integrity, accountability, transparency and fairness, which the
Company shall observe in the conduct of its business. It sets the
governance and ethical standards that shall govern and guide all
business relationships of the Company, its directors, officers and
employees. A copy of the Code of Ethics is posted at: http://pldt.
com/docs/default-source/policies/pldt-code-of-business-conduct-and-
ethics.pdf?sfvrsn=4.

The implementation of the Code of Ethics is reinforced by
enabling policies such as the Conflict of Interest Policy, Policy on
Gifts, Entertainment and Sponsored Travel, Supplier/Contractor
Relations Policy and Expanded Whistleblowing Policy. The Company
adopted the Policy on PLDT’s Gift-Giving Activities which,
together with the Code of Ethics, embodies the Company’s anti-
corruption policy.

Conflict of Interest Policy. This policy enjoins PLDT’s directors,
employees and consultants to promptly disclose conflict of
interest situations to the relevant authorities. If warranted, the
person concerned should obtain appropriate approvals and
inhibit himself from any action, transaction or decision involving
an existing or potential conflict of interest. The Company has
established an online COI disclosure system to facilitate the
disclosure of conflicts of interests.

Guidelines on the Proper Handling of Related Party Transactions
(RPT Guidelines). This guidelines provides the process of review,
approval and disclosure of the Company’s related party
transactions (RPTs). RPTs are reviewed and approved by the
designated approving authorities. The review’s principal focus is
on whether an RPT is on arm’s length terms and the transaction
is in the best interest of PLDT and its stakeholders, as a whole,
considering all relevant circumstances. Material RPTs are
reviewed by the AC, which is composed entirely of independent
directors, and subject to approval by the Board. The Head of
Financial Reporting and Controllership Sector, in coordination
with the Company’s Disclosure Committee, is responsible for
the disclosure of RPTs in the relevant financial reports of the
Company as required under Philippine Accounting Standard
24, Related Party Disclosures, and other applicable disclosure
requirements.

Policy on Gifts, Entertainment and Sponsored Travel and Policy
on Gift-Giving Activities. The Policy on Gifts, Entertainment
and Sponsored Travel provides safeguards in the receipt and
acceptance of gifts given by third parties to ensure that such
gifts would not affect the objective, independent or effective
performance by directors, officers and employees. The Policy
on Gift-Giving Activities provides guidance and procedural
safeguards with respect to gift-giving activities to government
officials and employees and to business partners, for or on
behalf of, PLDT. The policy seeks to ensure that such activities
are compliant with applicable laws and consistent with the
Company’s core values and policies.

Supplier/Contractor Relations Policy. This policy establishes
clear rules for arm’s length transactions and fair treatment of
prospective and existing suppliers. The policy specifically adopts
the processes of vendor accreditation and competitive bidding
as the general rule to ensure that contracts are awarded only to
qualified and duly-accredited vendors who offer the best value
for money for PLDT’s requirements.

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PLDT 2016 ANNUAL REPORTdigital like never beforeExpanded Whistleblowing Policy (EWB Policy). This policy provides
guidelines on handling employee disclosures or complaints
regarding violations of the CG Manual, Code of Ethics, Conflict
of Interest Policy, Gifts Policy and Supplier/Contractor Relations
Policy, as well as questionable accounting and auditing matters
and violations of the Personnel Manual. The EWB Policy protects
whistleblowers from retaliation and to ensure confidentiality
and fairness in the handling of a disclosure or complaint, PLDT
maintains a Whistleblowing Hotline and other reporting facilities,
such as a dedicated electronic mailbox, post office box and
facsimile transmission system. All employees and stakeholders
who come forward in good faith to report violations or any act
that may be considered as contrary to the Company’s values
may submit a disclosure or complaint regarding such violation to
the CGO. Anonymous disclosures or complaints are allowed and
duly processed, subject to certain conditions.

In all processes and activities related to a whistleblowing
disclosure/complaint, utmost confidentiality is observed in order
to ensure the integrity of the process and protect the parties,
employees or officers who are allegedly involved therein.

For 2016, there were four new whistleblowing complaints
received by the CGO. These were referred to the appropriate
investigating units for further investigation. As at December
31, 2016, four cases are pending while four cases were closed.
The complaints covered allegations of violation of the Code of
Ethics, Conflict of Interest Policy, Gifts Policy, Supplier/Contractor
Relations, Policy on Employees Running for Public Office and the
Personnel Manual. The Company has not received any complaint
on retaliation.

All CG policies, including the Code of Ethics, are reviewed at
least once every two years to ensure that they are appropriate
for PLDT, benchmarked with global best practices, and compliant
with applicable law and regulations.

PLDT’s key subsidiaries have adopted corporate governance
rules and policies similar in substance and form to the foregoing
corporate governance policies and suited to their particular
business environments and contexts, and appointed their
respective corporate governance or compliance officers.

Protection of Technology Resources and Information. PLDT has
a Unified Information Technology Policy that is applicable to
PLDT, Smart and Sun, and which contains policy statements on
social media and data privacy, and provides for the protection of
information assets and the proper use of technology resources.
On February 1, 2017, the Data Privacy Office was created and
the Chief Data Privacy Officer was appointed.

training and eduCatiOn

The Company provides continuous training for its Board,
Management and employees. In 2016, the Company organized
corporate governance enhancement sessions for our Board
and Management on the following topics: (i) The Philippine
Competition Act and Philippine Competition Commission; (ii) Digital
Transformation, Risk Management and Governance in the 21st
Century; and (iii) Digital Governance: Issues in Emerging Technologies.

Apart from participating in PLDT-organized training, our
directors also attend external training. The training sessions
attended by our directors in 2016 are presented in this report.
One of our directors, Mr. James Go, has been granted by the
PSEC permanent exemption from its corporate governance
training requirements.

In addition to orientation and periodic training sessions for
employees, the CGO conducted two refresher sessions on
corporate governance in May and June 2016 with newly-
promoted PLDT managers as part of the Human Resources
Group’s Executive CSI (Competent, Strategic, Inspiring) Course.

Education and training is supplemented by the production and
dissemination of relevant communication materials, including
thematic posters, calendars and newsletters, and advisories on
corporate governance.

mOnitOring and evaluatiOn

PLDT monitors and evaluates the effectiveness of its corporate
governance through the annual performance self-assessment
conducted by the Board and the Board Committees, the
periodic review of the effectiveness of the implementation of
the Company’s CG policies, the annual compliance evaluation
conducted by Management, and other tools employed to
monitor the implementation of the CG policies. In 2016, PLDT
confirmed its compliance with its CG Manual which contains
relevant provisions of the PSEC Revised Code of Corporate
Governance and certain corporate governance standards under
the U.S. Securities Exchange Act and NYSE Listed Company
Manual. In compliance with the respective memorandum
circulars of the PSEC and the PSE, PLDT disclosed its Annual
Corporate Governance Report with Consolidated Changes
for Year 2015 on January 8, 2016 and filed its PSE Corporate
Governance Guidelines Disclosure Report for Year 2015 on
March 30, 2016.

Our Board conducts a self-assessment each calendar year to
evaluate the performance of the Board as a whole, the Board
Committees and the individual directors. The process, which
also includes an evaluation of the performance of the CEO and
Management, enables the Board to identify strengths and areas
for improvement and to elicit individual director’s feedback
and views on the Company’s strategy, performance and future
direction. Similarly, each Board Committee also conducts an
annual self-assessment of its performance. The members of the
Board and the Board Committees accomplish their respective
self-assessment questionnaires for this purpose. The Board’s self-
assessment questionnaire contains the following criteria based
on leading practices and principles on good governance: (1) for
the Board: Leadership, Roles and Responsibilities, Independence,
Stewardship, Reporting and Disclosure, Shareholders’ Benefits
and Training; (2) for individual directors: the specific duties and
responsibilities of a director; and (3) for the Board Committees:
Performance and Compliance. The Board Committee’s self-
assessment questionnaire contains the following criteria:
Performance & Compliance and Committee Governance.
For the 2015 performance period, the results of the assessment
process was duly reported to, and discussed with, the Board
in 2016.

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PLDT 2016 ANNUAL REPORTdigital like never beforeThe Board promotes transparency and fairness in the conduct of
the annual and special stockholders’ meetings of the Company.
The Company explores and implements steps to reduce
excessive or unnecessary costs that impede stockholders’
participation in annual and special stockholders’ meetings
and acts with transparency and fairness in said meetings.
Stockholders are encouraged to personally attend such
meetings, raise questions and exercise their voting rights. Within
a reasonable period of time before the meeting, stockholders
are apprised of their right to appoint a proxy, in case they
could not personally attend such meetings and give their voting
instructions in the proxy form provided. Appropriate steps to
remove excessive or unnecessary costs and other administrative
impediments to stockholders’ participation in annual or special
stockholders’ meetings, whether in person or by proxy, are
undertaken. Relevant and timely information is made available
to the stockholders in printed or digital form and through the
Company’s website to enable them to make a sound judgment
on all matters tabled for their consideration or approval. The
Board also ensures the timely disclosure and appropriate filing
with the PSEC, PSE and, as applicable, U.S. SEC and NYSE, of
material information and/or transactions that could potentially
affect the market price of the Company’s shares and such other
information which are required to be disclosed pursuant to
relevant laws and regulations.

Shareholders who wish to raise matters or concerns relating to
the business of the Company, their investments and rights may
elevate such matters to the Corporate Secretary, the Investor
Relations Officer, concerned units of PLDT’s Management or
the Board.

The Company held its Annual Stockholders’ Meeting on June 14,
2016, with holders of 94.6% of total outstanding capital present
or represented by proxy in the meeting. To view the Minutes
of the 2016 PLDT Annual Stockholders’ Meeting, please click on
this link http://www.pldt.com/docs/default-source/annual-meeting-of-
stockholders/2016/minutes-of-annual-meeting-of-stockholders-2016.
pdf?sfvrsn=0.

PLDT’s Code of Ethics prohibits directors, officers and
employees from dealing in the Company’s shares when in
possession of material nonpublic information about and involving
the Company. Directors, officers and employees are enjoined to
report to the Company their dealings in the Company’s shares,
regardless of whether such dealings were effected during or
outside the blackout period, within three trading days from the
date of the transaction, to enable the timely filing of the required
disclosures to the PSEC and the PSE. During blackout periods,
dealing in Company shares by directors, officers or employees
is not allowed and in any exceptional case, prior notice to the
Company should be made of any such dealing in Company
shares, in accordance with the Company’s policy on Blackout
Period/Restriction on Trading of Shares.

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PLDT monitors and assesses compliance with the CG rules
through a cross-functional evaluation system whereby the heads
of the various business and support groups/units conduct an
evaluation of their group/unit’s compliance. The process uses an
evaluation questionnaire consisting of the governance standards
and regulations applicable and relevant to their respective
functions, including the requirements of the PSEC Revised Code
of Corporate Governance and the PSE Corporate Governance
Guidelines. The results of the evaluation conducted by the
heads are submitted to the Chief Financial Officer and the Chief
Governance Officer, who submit the consolidated report to the
President and CEO for approval. The results of the compliance
evaluation are reported to the GNC by the CGO.

In line with all of these, PLDT has incorporated CG standards
in the performance evaluation of employees and has included
violations of CG rules as a cause for disqualification from
incentives and rewards in its Policy on Employee Qualification
for Incentives and Rewards.

PLDT conducts focus group discussions and employee surveys in
order to gain insights into the effectiveness of its CG programs
and initiatives. Valuable information is also obtained and analyzed
from the results of and feedback from our education activities,
reports from business partners, customer complaints, reported
violations and other sources of relevant information.

staKehOlder engagement

Corporate social responsibility
In fulfilling our commitments to our stakeholders, we are guided
by our Code of Ethics and Corporate Social Responsibility
Statement (CSR Statement). The CSR Statement articulates
our belief that helping to improve the overall well-being of the
Filipino people is an integral part of our business. The CSR
Statement enumerates the broad responsibilities that PLDT
assumes as it operates and conducts its business. A copy of the
CSR Statement is posted at http://pldt.com/corporate-governance-
in-pldt/our-stakeholders.

Pursuant to the CSR Statement, the PLDT Group’s social
programs leverage its communications and digital services and
the volunteer spirit of its employees to implement projects in
education, health, livelihood, disaster preparedness and resiliency,
the environment, digital tourism and sports that aim to help
Filipinos change their lives for the better. These CSR programs
and activities are presented in the CSR section of this Annual
Report and in the Company’s Sustainability Report.

Investors/Shareholders. PLDT respects, promotes and upholds
shareholders rights such as: the right to vote; pre-emptive right;
the right to inspect corporate books and records, including
minutes of Board meetings and stock registries, subject to certain
conditions; right to timely receive relevant information, whether
in printed or digital form; right to dividends; and appraisal right. It
makes timely disclosures of material information and transactions
that could potentially affect the market price of the Company’s
shares. In this regard, information on earnings results, acquisition
or disposal of significant assets, off balance-sheet transactions,
related party transactions, Board membership changes,
shareholdings of directors and officers and any changes thereto,
and remuneration of directors and officers are promptly and
accurately disclosed.

PLDT 2016 ANNUAL REPORTdigital like never beforesHAREHOlDings OF tHE BOARD AnD OFFiCERs in 2016

number of Company Shares11

Acquired Disposed

ending
Balance13

Starting
Balance12

Acquired Disposed

3,000

1,945

249,450

8. Ma. Lourdes C. Rausa-Chan

199

25,080

9. Albert F. Del Rosario15

15,743

10. Pedro E. Roxas

206,790

231

134,914

50,000

59,000

125,914

11. Atsuhisa Shirai16

12. Amado D. Valdez18

13. Marife B. Zamora18

7. Artemio V. Panganiban

1,771

Starting
Balance12

246,450

23,13514

15,743

A. Directors

1. Manuel V. Pangilinan

2. Helen Y. Dee

3. Ray C. Espinosa

4. James L. Go

5. Bernido H. Liu

6. Hideaki Ozaki

B. officers

1. Ernesto R. Alberto

2. Isaias P. Fermin19

3. Alejandro O. Caeg

4. Anabelle L. Chua

5. Jun R. Florencio

6. Menardo G. Jimenez, Jr.

7. katrina L. Abelarde

8. Marco Alejandro T. Borlongan

9. Alfredo B. Carrera

10. Cesar M. Enriquez20

11. Juan Victor I. Hernandez

12. Florentino D. Mabasa, Jr

13. Leo I. Posadas

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14. June Cheryl Cabal Revilla

15. Oscar Enrico A. Reyes, Jr.

16. Martin T. Rio

17. Ricardo M. Sison

18. Emiliano R. Tanchico, Jr.

19. Melissa V. Vergel de Dios

20. Benedict Patrick V. Alcoseba21

21. Jerameel A. Azurin21

22. Rafael M. Bejar

23. Jose Arnilo S. Castañeda21

24. Gerardo Jose V. Castro

25 Marissa V. Conde

26. Gene S. de Guzman

27. Margarito G. Dujali, Jr.23

200

12,028

515

300

4,400

1,539

-22

ending
Balance13

199

64,380

142,410

231

117

517

28. Gil Samson D. Garcia

29. Joseph Ian G. Gendrano

200

30. Elisa B. Gesalta

12,028

31. John John R. Gonzales

515

32. Ma. Josefina T. Gorres

33. Ma. Criselda B. Guhit

1,250

34. Emeraldo L. Hernandez

35. Marven S. Jardiel

300

36. Princesita P. katigbak

37. Alexander S. kibanoff

38. Joseph Nelson M. Ladaban

39. Javier C. Lagdameo

40. Joselito S. Limjap

41. Albert Mitchell L. Locsin

42. Luis Ignacio A. Lopa

43. Paolo Jose C. Lopez

4,400

44. Ma. Carmela F. Luque

1,539

45. Oliver Carlos G. Odulio

46. Aileen D. Regio

47. Ricardo C. Rodriguez

48. Genaro C. Sanchez

49. Arvin L. Siena21

50. Ana Maria A. Sotto

51. Julieta S. Tañeca24

52. Patrick S. Tang

53. Victor Y. Tria

5,712

4,460

5022

570

5,712

4,460

570

11 Includes directly and indirectly owned shares in the Company. Changes in shareholdings were disclosed in the Statements of Changes in Beneficial Ownership of Securities filed

with the PSEC and PSE and posted on the Company website at PLDT Investor Relations>Shareholder Information>Beneficial Ownership.

12 As at December 31, 2015 unless otherwise indicated.
13 As at December 31, 2016.
14 Includes 835 shares for the account of Michelle Y. Dee-Santos and 245 shares under the name of Helen Y. Dee, both under PCD Nominee Corporation and 21,957 shares
owned by Hydee Management Corporation. As chairperson and president of Hydee Management Corporation, Ms. Dee may exercise the voting right in respect of the
21,957 shares of Hydee Management Corporation

15 Elected as director effective July 11, 2016.
16 Elected as director effective August 30, 2016.
17 As at date of election as director.
18 Elected as director effective November 14, 2016.
19 Separated effective January 01, 2017.
20 Separated effective September 01, 2016.
21 Appointed as officer of the Company on August 30, 2016.
22 As at date of appointment as officer.
23 Separated effective March 01, 2017.
24 Separated effective March 31, 2017.

PLDT 2016 ANNUAL REPORTdigital like never beforeOn August 2, 2016, the Board approved the amendment of our
dividend policy, reducing the regular dividend payout rate to
60% from 75% of our Core Earnings Per Share (EPS) as regular
dividends. The change in the dividend policy takes into account:
(i) the elevated levels of capital expenditures to build a robust,
superior network to support the continued growth of data
traffic; (ii) plans to invest in new adjacent businesses that will
complement the current business and provide future sources
of profits and dividends; and (iii) management of our cash and
gearing levels. In the event that no investment opportunities
arise, the Company may consider the option of returning
additional cash to shareholders in the form of special dividends
or share buybacks. PLDT was able to pay out approximately 60%
of its core earnings for the year 2016.

Customers. PLDT serves a broad range of customers from
residential, micro, small and medium enterprise (SME) and large
enterprise, including the public sector. PLDT strives to satisfy its
customers’ requirements and expectations regarding innovative
products and services, quality of service, pricing, application
process, service provisioning process, repair and restoration
service and the billing process. We continuously engage with
our customers through various touchpoints with the end in
view of knowing and understanding their product and service
needs, promptly addressing their concerns and identifying areas
where we could further enhance customer experience. In 2016,
the Company significantly increased its capital expenditures to
support the roll-out of high speed data infrastructure in order to
provide a higher level of internet service to its customers.

Employees. PLDT respects the rights of its personnel, among
which are the right to self-organization, safe working conditions,
rest and leisure, and work-life balance. It also provides
opportunities for skills development and improvement,
leadership and competency training as well as career
development. PLDT provides adequate opportunity for career
advancement on a merit-based system. Compensation and
incentives are likewise determined on the basis of performance
and accomplishment. Dedicated staff and facilities are made
available for the training and development programs of the
Company. The Company also organizes programs that support
the well-being of employees, allow them to participate in
PLDT’s CSR activities, and obtains their feedback on Company
concerns. Employees’ surveys are conducted at regular intervals
to gauge employee engagement as well as obtain the pulse of
PLDT employees across the organization at different levels and
positions concerning topics and issues which are prioritized and
addressed in the various people programs of the Company. In
accordance with the Company’s Personnel Manual, the Company
provides medical and dental benefits for our employees, which
include hospitalization, doctor consultation, medicines and
laboratory tests. The Company monitors and submits reports
on employee health and safety in accordance with applicable
regulations.

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PLDT 2016 ANNUAL REPORTdigital like never beforeSuppliers. PLDT aspires to maintain mutually beneficial
relationships only with like principled suppliers that uphold
PLDT’s core values of fairness, accountability, integrity and
transparency in their own businesses. Suppliers are required to
undergo an accreditation process before they engage in business
with PLDT. Among the criteria for accreditation are financial
capability, technical capability, compliance with applicable laws,
including those pertaining to industrial relations, environment,
health and safety, and intellectual property rights. The Company’s
purchases, as a general rule, are made on the basis of
competitive bidding among accredited and qualified suppliers.

Creditors. In accordance with our Code of Ethics, we protect
the rights of our creditors by publicly disclosing all material
information, such as earnings results and risk exposures relating
to loan covenants. Our disclosure controls and procedures
also include periodic reports to our creditors such as our
latest certified financial statements, no default certification, and
certification on compliance with financial ratio limits. PLDT’s
credit has been rated at investment grade by the three major
international credit rating agencies.

Communities. Serving the community is an integral part of the
mission of connecting the digital divide, and with their technology
and services, PLDT and Smart are well-positioned to provide
much needed assistance to communities. As good corporate
citizens, PLDT and Smart are leveraging their core business
and infrastructure to act as enablers, especially in communities
with greatest need, through their CSR programs in education,
health, community, environment, livelihood development, youth
development and sports, and disaster relief operations.

Environment. PLDT is committed to environmental protection
and compliance with environmental laws. To intensify the
environmental compliance of the Company, a Risk Management
and Compliance Division was established to oversee compliance
of all PLDT establishments/buildings with the regulations
and environmental laws. We have also implemented stack
and ambient emission monitoring of standby generator sets,
construction of temporary storage facilities and safekeeping of
hazardous waste, and construction of waste water treatment
plant facility in order to comply with applicable environmental
laws such as the Philippine Clean Air Act (RA 8749), Toxic
Substances and Nuclear Waste Control Act (RA 6969),
Ecological Solid Waste Management Act (RA 9003), Philippine
Clean Water Act (RA 9275) and Pollution Control Law (PD 984).

The PLDT Group has taken tangible measures to reduce its
carbon footprint. As such, it ensures compliance with rules and
regulations of local government regulatory offices and agencies,
institutes programs on energy conservation and waste disposal,
and conducts regular campaigns to raise the awareness and
competency of employees on sustainable business practices.
Energy conservation and resource consumption efficiency are
among the performance key result areas that are monitored
and measured for long-term solutions because effective energy

management directly impacts the business, its competitiveness,
and reliability of service. In line with this, the programs we have
implemented include migration from old Legacy Switches to
the New Generation Network, upgrade of lighting equipment
in our buildings into more efficient technologies, replacement
of old air-conditioners with energy saving-type units, and space
optimization in workplaces. Apart from mitigating the Company’s
environmental footprint, numerous measures to address the
threats arising from climate change impact have been put
in place. Our facilities and network are focused on climate-
proofing efforts to assure business continuity during times of
natural calamities. Structural retrofitting of Company buildings
and offices, relocation to safer location of diesel generators
and strategic deployment of mobile units, and placing more
underground fiber optic cables comprise some of such
resiliency programs.

Advocacy and Networking. PLDT supports the advocacy for
better governance and ethics in business as manifested in the
Company’s policy against corruption and bribery as set forth in
its Code of Ethics and reinforced in specific policies such as the
Policy on Gift-Giving Activities, Policy on Gifts, Entertainment
and Sponsored Travel, Supplier/Contractor Relations Policy,
Corporate Governance Guidelines for Suppliers, which prohibit
bribery or acts which may be construed as bribery involving
third parties in business dealings with the Company. These
policies are implemented through anti-corruption programs and
measures such as internal controls, training and communication,
our whistleblowing system, third party due diligence, and support
for and participation in multi-sectoral anti-corruption initiatives
to eliminate graft and corruption.

PLDT continues to work with institutions and organizations
engaged in programs and advocacy efforts in the corporate
governance, compliance and business ethics field. We are
an active sponsoring partner member of the Ethics and
Compliance Initiative (ECI). Our continuing membership at the
ECI gives PLDT access to its vast online library on corporate
governance and related topics, opportunities to interact with
other corporate governance and ethics professionals around the
world, and benchmark our governance practices against those of
leading companies. Locally, PLDT is a premium member of the
Integrity Initiative, Inc. and a member of the Good Governance
Advocates and Practitioners of the Philippines (GGAPP). PLDT
also participates in the activities of the Institute of Corporate
Directors (ICD) and its sister-institute in the public sector the
Institute for Solidarity in Asia (ISA). PLDT was a major sponsor
of the ISA’s Islands of Good Governance Program in 2015.

PLDT recognizes that corporate governance will be one of
the key factors in its digital pivot and business transformation
program. The Company’s determined focus to achieve its
Mission and strategic objectives shall be sustained by PLDT’s
commitment to its customers, shareholders and stakeholders
and adherence to the principles of good governance.

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PLDT 2016 ANNUAL REPORTdigital like never before3
9

the Company’s determined focus to
achieve its mission and strategic

objectives shall be sustained by
plDt’s commitment to its customers,
shareholders and stakeholders

and adherence to the principles of

good governance.

PLDT 2016 ANNUAL REPORTdigital like never beforesweet!

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create like never before
Share your recipe for success – and allow others
savor the sweet taste of triumph.

PLDT 2016 ANNUAL REPORTdigital like never beforeTHE PLDT GROUP
enterprise risk
management report

the group enterprise risk
management department
The PLDT Group’s commitment to the proactive
management of existing and emerging risks is reinforced
by the Group Enterprise Risk Management Department
(GRMD). The GRMD develops and manages a
comprehensive integrated risk management program that
is implemented across all levels of the organization, with
the goal of managing the Group’s risks to an acceptable
level, so as to enhance opportunities, reduce threats, and
thus create even more value for the business and
its stakeholders.

the pldt group risk management
philosophy statement
The PLDT Group adopts a risk philosophy that
recognizes risks as integral to its business thereby
committing itself to managing these risks with the
aim of attaining its business objectives, thus enhancing
shareholder value.

The PLDT Group operates in a complex and dynamic
business environment which gives rise to a variety of risks
that can be both threat and opportunity. Recognizing that
these risks are an integral part of its business, the PLDT
Group is committed to managing its overall risk exposure
in a systematic way and in such a manner that supports
its strategic decision-making process. Accordingly, the
PLDT Group employs a comprehensive, integrated risk
management program, effected across all levels of the
organization, with the goal of identifying, analyzing and
managing the Group’s risks to an acceptable level, so as
to enhance opportunities, reduce threats, and thus sustain
competitive advantage. The PLDT Group believes that an
effective risk management program will contribute to the
attainment of objectives by PLDT and its subsidiaries, thus
creating value for the business and its stakeholders.

the enterprise risk management
framework and process
The GRMD promulgates and encourages the adoption
of a standard risk evaluation process focused on the
need to properly identify, analyze, evaluate, treat and
monitor risks that may affect the achievement of business
objectives. The ERM process implemented is based on the
International Standard of ISO 31000.

isO 31000: risk management process
The implementation of the ERM process ensures that
high-priority risks are well understood and effectively
managed across all functions and units within the PLDT
Group.

risk Committee
The Risk Committee assists the PLDT Board in overseeing
Management’s adoption and implementation of a system
for identifying, assessing, monitoring and managing key risk
areas. The committee reviews Management’s reports on the
Company’s major risk exposures as well as Management’s
plans and actions to minimize, control or manage the impact
of such risks.

The GRMD reports to the PLDT Risk Committee on a
quarterly basis and to the PLDT Board of Directors on
a semi-annual basis on developments with regard to the
Group’s risk management activities.

pldt group top 10 risks
A risk assessment exercise was undertaken by the CEO
Council to identify and prioritize the most important risks
affecting the PLDT Group for 2016. These top risks were:

1. Competitive Situation
2. Recruitment and Retention of Appropriate Personnel
3. Execution of Network Roll-out
4. Monetization of Data Traffic
5. Changes in Political/Regulatory Landscape
6. Execution of Digital Pivot/Transformation
7. Regular Occurrence of Natural Disasters
8. Dependence on Vendors
9. Exposure to Financial Risk
10. Increase in Cybersecurity Issues

The PLDT Group is committed in pursuing measures
to ensure that all these risks are effectively managed.
Treatment strategies have been developed, and mitigation
initiatives were put in place. Risk management activities are
continuously monitored and reviewed to ensure that critical
risks are appropriately addressed across the organization.

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PLDT 2016 ANNUAL REPORTdigital like never before

manuel v. pangilinan

ray C. espinosa

helen y. dee

James l. go

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boarD of DireCtors

MANUEL V. PANGILINAN • 70, FILIPINO
Director of PLDT since November 24, 1998. He was appointed as Chairman of the
Board of Directors of PLDT after serving as its President and Chief Executive Officer
from November 1998 to February 2004. Effective January 1, 2016, he concurrently
holds the position of President and Chief Executive Officer of PLDT and Smart
Communications, Inc. (Smart). He is the Chairman of the Governance and Nomination,
Executive Compensation and Technology Strategy Committees of the Board of Directors
of PLDT. He also serves as Chairman of Metro Pacific Investments Corporation (MPIC),
Manila Electric Company (Meralco) and Philex Mining Corporation, all of which are
PSE-listed companies, and of several subsidiaries or affiliates of PLDT or MPIC, including,
among others, Smart Communications, Inc. (Smart) Beacon Electric Assets Holdings Inc.
(Beacon), Manila North Tollways Corporation, Maynilad Water Services Corporation
(Maynilad), Landco Pacific Corporation, Medical Doctors Incorporated (Makati Medical
Center), Colinas Verdes Corporation (Cardinal Santos Medical Center), Davao Doctors
Incorporated, Riverside Medical Center Incorporated, Our Lady of Lourdes Hospital and
Asian Hospital Incorporated. He is also the Chairman of PLDT-Smart Foundation, Inc.
Mr. Pangilinan founded First Pacific Company Limited (First Pacific), a Hongkong
Stock Exchange-listed company, in 1981 and served as Managing Director until 1999.
He was appointed as Executive Chairman until June 2003, when he was named as Chief
Executive Officer and Managing Director. Within the First Pacific Group, he also holds
the position of President Commissioner of P.T. Indofood Sukses Makmur Tbk, the largest
food company in Indonesia.
Outside the First Pacific Group, Mr. Pangilinan is the Chairman of the Board of
Trustees of San Beda College and the Hong Kong Bayanihan Trust, a non-stock, non-profit
foundation which provides vocational, social and cultural activities for Hongkong’s foreign
domestic helpers. He is a Co-Chairman of the Philippine Disaster Resilience Foundation,
Inc., a non-stock, non-profit foundation established to formulate and implement a
reconstruction strategy to rehabilitate and rebuild areas devastated by floods and other
calamities, and of the US-Philippine Business Society, a non-profit society which seeks to
broaden the relationship between the United States and the Philippines in the areas of
trade, investment, education, foreign and security policies and culture.
Mr. Pangilinan has received numerous prestigious awards including the Business
Icon Gold Award for having greatly contributed to the Philippine economy through
achievements in business and society by Biz News Asia magazine (2008), Global Filipino
Executive of the Year for 2010 by Asia CEO Awards, and Philippines Best CEO for 2012
by Finance Asia.
Mr. Pangilinan graduated cum laude from the Ateneo de Manila University, with a
Bachelor of Arts Degree in Economics. He received his Master’s Degree in Business
Administration from Wharton School of Finance & Commerce at the University of
Pennsylvania, where he was a Procter & Gamble Fellow. He was conferred a Doctor of
Humanities Degree (Honoris Causa) by the San Beda College (2002), Xavier University
(2007), Holy Angel University (2009) and Far Eastern University (2010).

HELEN Y. DEE • 73, FILIPINO
Director of PLDT since June 18, 1986. She is the Chairperson or a director of
EEI Corporation, House of Investments, National Reinsurance Corporation of the
Philippines, Petro Energy Resources Corporation, Rizal Commercial Banking Corporation
and Seafront Resources Corporation, all of which are PSE-listed companies. She is the
Chairperson, Vice Chairperson or a director of several companies engaged in banking,

insurance and real property businesses. She is also the President and/or Chief Executive
Officer of Hydee Management and Resource Corp., Moira Management, Inc., Tameena
Resources, Inc., YGC Corporate Services, Inc., GPL Holdings, Inc. and Mijo Holdings, Inc.,
and the Vice President of A. T. Yuchengco, Inc. Ms. Dee received her Master’s Degree in
Business Administration from De La Salle University.

RAY C. ESPINOSA • 61, FILIPINO
Director of PLDT since November 24, 1998, and is member of the Technology
Strategy Committee of the Board of Directors of PLDT. He has served as Chief
Corporate Services Officer of PLDT since December 1, 2016 and General Counsel
of Meralco since 2009. In June 2013, he joined First Pacific and was appointed as
First Pacific Group’s Head of Government and Regulatory Affairs and Head of
Communications Bureau for the Philippines. He is also a director of Meralco, Metro
Pacific Investments Corporation and Roxas Holdings, Inc., and an independent director
and Chairman of the Audit Committee of Lepanto Consolidated Mining Company, which
are PSE-listed companies. He is the Chairman of PhilStar Group of Companies, Business
World Publication Corporation, a director and Corporate Secretary of Philippine
Telecommunications Investment Corporation, a director of Metro Pacific Resources, Inc.
and BTF Holdings, Inc. and a trustee of the Beneficial Trust Fund of PLDT and PLDT-
Smart Foundation, Inc.
Atty. Espinosa served as President & CEO of MediaQuest,TV5 and Cignal TV until
May 2013 and, prior thereto, was the President & CEO of ePLDT and its subsidiaries
until April 2010.
Atty. Espinosa has a Master of Laws degree from the University of Michigan Law
School and is a member of the Integrated Bar of the Philippines. He was a partner at
Sycip Salazar Hernandez & Gatmaitan from 1982 to 2000, and a foreign associate at
Covington and Burling (Washington, D. C., USA) from 1987 to 1988.

JAMES L. GO • 78, FILIPINO
Director of PLDT since November 3, 2011, and is a member of the Technology
Strategy and Risk Committees and Advisor of the Audit Committee of the Board of
Directors of PLDT. He is the Chairman and Chief Executive Officer of JG Summit
Holdings, Inc. and Oriental Petroleum and Minerals Corporation, the Chairman of
Universal Robina Corporation and Robinsons Land Corporation, the Vice Chairman of
Robinsons Retail Holdings, Inc., and a director of Cebu Air, Inc and Meralco, which are
PSE-listed companies. He is also the Chairman of JG Summit Petrochemical Corporation
and JG Summit Olefins Corporation, and a director of CFC Corporation, United
Industrial Corporation Limited, Marina Center Holdings Private Limited and Hotel Marina
City Private Limited. He is also the President and a Trustee of the Gokongwei Brothers
Foundation. He was the Vice Chairman and President and Chief Executive Officer of
Digital Telecommunications, Inc. (Digitel) until October 26, 2011. Mr. Go received his
Bachelor of Science Degree and Master of Science Degree in Chemical Engineering from
Massachusetts Institute of Technology, USA.

BERNIDO H. LIU • 54, FILIPINO

Independent director of PLDT since September 28, 2015 and is an independent
member of the Audit, Governance and Nomination, Executive Compensation and Risk
Committees of the Board of Directors of PLDT. He is the Chairman, President and Chief
Executive Officer of Golden ABC, Inc. (GABC), a fashion retail company which creates

PLDT 2016 ANNUAL REPORTdigital like never before

Bernido h. liu

hon. artemio v. panganiban

hideaki Ozaki

amb. albert f. del rosario

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and sells its own clothing, personal care and accessory lines marketed and retailed
under a fast-growing dynamic portfolio of well-differentiated proprietary brands. He is
the Group Chairman and President of LH Paragon Incorporated, a business holdings
company which has under its management GABC and other companies in various
industries, namely, Matimco Incorporated, Oakridge Realty Development Corporation,
Basic Graphics Incorporated, Essentia Medical Group Incorporated, and Red Logo
Lifestyle Inc. He is also the Chairman of Greentree Food Solutions, Inc., a director of
GABC International Pte Limited, Children’s Hour Philippines and Mga Likha ni Inay, Inc.,
a trustee of Philippine Retailers Association, a member of the Visayas Advisory Council
of Habitat for Humanity Philippines and an independent member of the Board of
Trustees of the PLDT-SMART Foundation, Inc.
Mr. Liu graduated with a Bachelor of Science Degree in Architecture from the
University of San Carlos, Cebu, and completed the Executive Education Owner/President
Management Program of the Harvard Business School. Over the years, Mr. Liu has been
recognized by different award-giving bodies. His awards include, among others, the Agora
Award for Outstanding Achievement in Entrepreneurship from the Philippine Marketing
Association, Ten Outstanding Young Men for Entrepreneurship, and Grand Bossing from
PLDT SME Nation.

HIDEAKI OZAKI • 52, JAPANESE
Director of PLDT since December 6, 2011. He is the President and Chief Executive
Officer of NTT Com Asia Ltd, a data center, network and cloud provider in Hong Kong
and the North Asia Regional Headquarters of NTT Communications Corporation
(NTT Com). He served as Vice President of Corporate Planning and Carrier Relations,
Global Business of NTT Com from October 2006 to July 2016 and as part-time Director
of NTT Communications Philippines from July 2009 to February 2012. Prior to that,
he served as Vice President of Global Strategy, Global Business Division of NTT Com
since 2006 and as Director of Legal and Internal Audit Department of NTT Com
from 2003 to 2006. He also served as Vice President of Sales and Corporate Planning
of NTT Communications (Thailand) Co., Ltd. from 1999 to 2003 and as Manager of
Overseas Business Planning, Global Service Division of Nippon Telegraph and Telephone
Corporation from 1995 to 1999.
Mr. Ozaki obtained his Bachelor’s Degree in Law from University of Tokyo and
Master’s Degree in Law from University of Pennsylvania.

HON. ARTEMIO V. PANGANIBAN • 80, FILIPINO

Independent director of PLDT since April 23, 2013 and is an independent member of

the Audit, Governance and Nomination, Executive Compensation and Risk Committees
of the Board of Directors of PLDT. He served as an independent member of the
Advisory Board and an independent non-voting member of the Governance and
Nomination Committee of the Board of Directors of PLDT from June 9, 2009 to May
6, 2013. Currently, he is also an independent director of Meralco, Petron Corporation,
First Philippine Holdings Corporation, Metro Pacific Investments Corporation, Robinsons
Land Corporation, GMA Network, GMA Holdings, and Asian Terminals, Inc., and a
regular director of Jollibee Foods Corporation, all of which are PSE-listed companies.
He also holds directorships in Metro Pacific Tollways Corporation, Tollways Management
Corporation, Liberty Telecoms Holdings, Inc. and Team Energy Corporation, is a senior
adviser of Metropolitan Bank and Trust Company, a member of the Advisory Council of
the Bank of the Philippine Islands and adviser of Double Dragon Properties, Corp. He
is the Chairman of the Board of Trustees of the Foundation for Liberty and Prosperity,
and the Board of Advisers of Metrobank Foundation, Inc., a trustee of Claudio Teehankee
Foundation and Tan Yan kee Foundation, President of the Manila Metropolitan Cathedral-
Basilica Foundation, member of the Board of Advisers of De La Salle University

College of Law, University of Asia and the Pacific College of Law and Johann Strauss
Society, member of the Advisory Board of World Bank (Philippines), Senior Adviser of
V. Mapa Falcon Honor Society, Chairman-Emeritus of the Philippine Dispute Resolution
Center, Inc., Chairman of Philippine National Committee of the Asean Law Association,
consultant of the Judicial and Bar Council, and a column writer of the Philippine
Daily Inquirer.
Hon. Panganiban served the Supreme Court of the Philippines for more than 11
years, first as Associate Justice (October 10, 1995 to December 20, 2005) and later,
as Chief Justice (December 21, 2005 to December 6, 2006) during which he sat
concurrently as Chairperson of the Presidential Electoral Tribunal, Judicial and Bar Council
and Philippine Judicial Academy. He has received over 250 awards in recognition of his
role as jurist, practicing lawyer, professor, civic leader, Catholic lay worker and business
entrepreneur, including as “The Renaissance Jurist of the 21st Century” given by the
Supreme Court on the occasion of his retirement from the Court.
Hon. Panganiban graduated cum laude from Far Eastern University with a Bachelor
of Laws Degree in 1960, and was conferred a Doctor of Laws Degree (Honoris Causa)
by the University of Iloilo (1997), Far Eastern University (2002), University of Cebu
(2006), Angeles University (2006) and Bulacan State University (2006). He was co-
founder and past president of the National Union of Students of the Philippines.

AMB. ALBERT F. DEL ROSARIO • 77, FILIPINO
Director of PLDT since July 11, 2016 and is a member of the Technology Strategy
Committee of the Board of Directors of PLDT. He was the former Secretary of
Foreign Affairs of the Philippines from February 2011 to March 2016 and also served
as Philippine Ambassador to the United States of America from October 2001 to
August 2006. Prior to entering public service, he was on the Board of Directors of
over 50 firms. His business career for over four decades has spanned the insurance,
banking, real estate, shipping, telecommunications, advertising, consumer products, retail,
pharmaceutical and food industries.
Ambassador del Rosario is the Chairman of Philippine Stratbase Consultancy, Inc.,
Gotuaco del Rosario Insurance Brokers, Inc., Stratbase ADR Institute, Inc., and a director
of First Pacific Company, Indra Philippines, Inc., Metro Pacific Investments Corporation
(a PSE-listed company), Metro Pacific Tollways Corporation, Cavitex Infrastructure
Corporation, Sarimonde Foods Corporation, Two Rivers Pacific Holdings Corporation,
Metro Pacific Resources, Inc., Metro Pacific Holdings, Inc., Metro Pacific Asset Holdings,
Inc., Philippine Telecommunications Investment Corporation, Enterprise Investments
Holdings, Inc. and Asia Insurance (Phil.) Corp. He is also a trustee of the Carlos P. Romulo
Foundation for Peace & Development and an Advisory Board of CSIS Southeast
Asia Program.
Ambassador del Rosario received numerous awards and recognition for his valuable
contributions to the Philippines and abroad. In September 2004, he was conferred
the Order of Sikatuna, Rank of Datu, by H.E. President Gloria Macapagal-Arroyo for
his outstanding efforts in promoting foreign relations for the Philippines and the Order
of Lakandula with a Rank of Grand Cross (Bayani) for acting as Co-Chair of the 2015
APEC in December 2015. He was a recipient of the EDSA II Presidential Heroes Award
in recognition of his work in fostering Philippine democracy in 2001 and the Philippine
Army Award from H.E. President Corazon Aquino for his accomplishments as Chairman
of the Makati Foundation for Education in 1991. He was awarded as 2013 Professional
Chair for Public Service and Governance by Ateneo School of Government and the
Metrobank Foundation, 2014 Management Man of the Year by Management Association
of the Philippines, 2016 Outstanding Government National Official by Volunteers Against
Crime and Corruption (VACC), 2016 Asia CEO Awards as Life Contributor, and Manuel
L. Quezon Gawad Parangal as Quezon City’s Most Outstanding Citizens for 2016. He

PLDT 2016 ANNUAL REPORTdigital like never before
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4

pedro e. roxas

dean amado d. valdez

atsuhisa shirai

marife B. zamora

ma. lourdes C.
rausa- Chan

was elevated to the Xavier Hall of Fame in New York City in 2006. He received the AIM
Washington Sycip Distinguished Management Leadership Award in 2011, Doctor of Laws
(Honoris Causa) for “principled commitment to democracy, integrity and the rule of law
both at home and around the globe” conferred by the College of Mount Saint Vincent,
New York City in September 2015, Rotary Club Makati West’s First “Albert del Rosario
Award” (Tungo sa Makatarungang Pamumuhay) in August 2016, Outstanding Leadership in
Diplomatic Service by Miriam College Department of International Studies and Philippine
Tatler’s Diamond Award both in November 2016.
Ambassador del Rosario graduated from New York University with a Bachelor of
Science Degree in Economics.

PEDRO E. ROXAS • 61, FILIPINO
Director of PLDT since March 1, 2001 and qualified as an independent director
since 2002. He is the Chairman of the Audit and Risk Committees and serves as an
independent member of the Governance and Nomination and Executive Compensation
Committees of the Board of Directors of PLDT. He is the Chairman of Roxas Holdings,
Inc. and Roxas and Company, Inc., and an independent director of Meralco, BDO Private
Bank and CEMEX Holdings Phil. Inc., which are reporting or PSE-listed companies. He is
also the Chairman, President or a director of companies or associations in the fields of
agri-business, sugar manufacturing and real estate development including Brightnote Assets
Corporation, Club Punta Fuego, Inc., Hawaiian-Philippine Co. and Philippine Sugar Millers
Association, and a member of the Board of Trustees of Philippine Business for Social
Progress and Fundacion Santiago (where he is also the President) and Roxas Foundation,
Inc.. Mr. Roxas received his Bachelor of Science Degree in Business Administration from
the University of Notre Dame, Indiana, U.S.A.

ATSUHISA SHIRAI • 56, JAPANESE
Director of PLDT since August 30, 2016. He is a member of the Governance and
Nomination, Executive Compensation, Technology Strategy and Risk Committees, and
an Advisor of the Audit Committee of the Board of Directors. From May 2015 to July
2016, he was the President of Mobile Innovation Co., Ltd., a company that provides fleet
management services in Thailand, and through its subsidiaries, in Vietnam and Indonesia,
and through dealers in Myanmar. He served as Director of DOCOMO Wi-Fi Service,
2M2 Business Department and Director of International Roaming, Global Business
Department of NTT DOCOMO from July 2013 to April 2015 and from April 2009 to
June 2013, respectively. He also served as Director of Wireless Broadband Alliance from
July 2010 to June 2015. Prior to that, he was the Director of Singapore Project, Global
Business Office of NTT West Corporation from July 2007 to March 2009, Director of
Housing Services and Data Center, IT Management Services Department and Director
of Internal IT System, Global Business Department of NTT Communications Corporation
from April 2005 to June 2007 and from January 2002 to March 2005, respectively.
Mr. Shirai received his Master’s Degree in Electrical and Electronic Engineering from
Chiba University.

DEAN AMADO D. VALDEZ • 71, FILIPINO
Director of PLDT since November 14, 2016. He is the Chairman of the Social
Security Commission and is an independent director of Radiowealth Finance Corporation.
Dean Valdez’ service in the national government started during the term of then
President Corazon C. Aquino where he served as Director of the Bureau of Agrarian
Legal Assistance and as member of the Cabinet Assistance System. In 2001, he served
as Government Corporate Counsel with the rank of Presiding Justice of the Court of
Appeals. He also served as Senior Undersecretary at the Office of the President of the
Philippines and concurrent Executive Director of the Presidential Commission on the
Visiting Forces Agreement. Prior thereto, he worked as General Attorney at the Law
Center of the U.S. Naval Base Subic Bay and Associate at the law firm Martin, Davis &
Lewis Law Firm in Los Angeles, California.

His past business, professional, and civic involvement includes holding positions such
as Dean of the University of the East College of Law, President and Chairman Emeritus
of the Pamantasan ng Lungsod ng Maynila and Ospital ng Maynila, President of the
International Association of Constitutional Law-Philippine Branch and the Philippine
Association of Law Schools, member of the Board of Trustee of the Philippine Judicial
Academy and the Universidad de Manila, director of Philex Mining Corporation, John Hay
Management Corporation and Rotary Club of Manila, among others.
Dean Valdez obtained his Bachelor of Laws Degree from the University of the East
and Bachelor of Arts Degree from Manuel L. Quezon University. He also attended
special studies in International Business Law at the National University in Singapore and
completed academic requirements in Master in Business Economics at University of Asia
and the Pacific. He was conferred with Doctor of Humanities Degree by the Laguna State
Polytechnic University and Doctor of Philosophy Degree by the Akamai University in Hawaii.
.
MARIFE B. ZAMORA • 64, FILIPINO
Director of PLDT since November 14, 2016. She is the Chairperson of Convergys
Philippines, Inc., the Philippine branch of Convergys Corporation (NYSE:CVG), a global
leader in customer management. She is the 3rd Woman President and the 68th President
of the Management Association of the Philippines since its inception in1950, a member
of the Board of Directors of the American Chamber of Commerce of the Philippines,
2017-2018, Secretary and member of the Board of Trustees of the Integrity Initiative, and
Board Adviser of ABS CBN Lingkod kapamilya Foundation Inc. She co-founded and is
Chair of the Filipina CEO Circle, an organization of Filipina CEOs who rose through the
ranks to lead large corporations in the country’s private sector. She served as the first
country manager of Convergys Philippines, setting up its first contact center in 2003 and
leading its growth into being the country’s largest private employer. In 2011, she became
managing director for Asia Pacific and EMEA, responsible for Convergys contact centers in
the Philippines, India, United kingdom, and Malaysia. In April 2014, she was named Chair of
Convergys Philippines.

Prior to her work at Convergys Philippines, Ms. Zamora served as managing director

for Headstrong Incorporated, a global provider of integrated solutions and digital
technologies. Previously, she was with IBM Philippines where she held a number of sales,
marketing and management positions during her 18-year tenure with the company.
Ms. Zamora received her Bachelor of Arts Degree (major in Mathematics & History) from
the College of the Holy Spirit and studied in the University of the Philippines and the
Wharton School of the University of Pennsylvania.
Honors conferred on Ms. Zamora include the Asia CEO Awards 2011 Global Filipino
Executive of the Year, the ‘Go Negosyo’ Woman STARpreneuer Award 2012, and the 100
Most Influential Filipino Women in the World Award (Founders & Pioneers Category) 2013.

MA. LOURDES C. RAUSA-CHAN • 63, FILIPINO
Director of PLDT since March 29, 2011 and is a non-voting member of the
Governance and Nomination Committee of the Board of Directors of PLDT. She has
been serving as Corporate Secretary, Corporate Affairs and Legal Services Head and
Chief Governance Officer of PLDT since November 1998, January 1999 and March
2008, respectively. She is a director of ePLDT, PLDT Global Investments Holdings, Inc.,
PLDT Communications and Energy Ventures, Inc. and ACeS Philippines Cellular Satellite
Corporation and also serves as Corporate Secretary of several subsidiaries of PLDT,
PLDT-Smart Foundation Inc. and Philippine Disaster Resilience Foundation, Inc. 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. Ms. Rausa-Chan
received her Bachelor of Arts Degree in Political Science and Bachelor of Laws Degree
from the University of the Philippines.

PLDT 2016 ANNUAL REPORTdigital like never before
aDvisory boarD

roberto r. romulo

Oscar s. reyes

Benny s. santoso

4
5

washington z. sycip

Christopher h. young

Orlando B. vea

PLDT 2016 ANNUAL REPORTdigital like never before4
6

alejandro O. Caeg

anabelle l. Chua

June Cheryl a.
Cabal-revilla

manuel v. pangilinan

ernesto r. alberto

plDt exeCutive offiCers

ERNESTO R. ALBERTO • 56, FILIPINO
Group Chief Revenue Officer for PLDT and Smart since December 1, 2016,
is responsible for generating revenues from all the market segments of the group
(Enterprise, International, Home, and Wireless businesses). Prior thereto, he was the
Head of PLDT Group Enterprise, International and Carrier Business since January 2012.
He also has served as the President and Chief Executive Officer of ePLDT since 2013
and is a member of the PLDT and Smart top management team. He is the Chairman
or a director of several subsidiaries and affiliates of PLDT, Smart and ePLDT. He is also
the Chairman of the Junior Achievement of the Philippines, member of the Board of
Trustees of the Advertising Foundation of the Philippines, member of the Management
Association of the Philippines and Makati Business Club, and founding member of the
Board of Trustees of IBM Analitika Philippines.
Mr. Alberto brings with him over thirty years of extensive experience in
telecommunications, corporate banking, relationship management and business
development, having held key positions in the PLDT Group and leading local and
foreign banks. Prior to joining PLDT in May 2003, he was Vice President, Senior Banker
and Group Head of the National Corporate Group of Citibank, N.A., Manila from
November 1996 to April 2003 and previously served as Vice President and Group
Head of the Relationship Management Group of Citytrust Banking Corporation. He
graduated with a Bachelor’s Degree (major in Economics and minor in Mathematics and
Political Science) from San Beda College and pursued his masters studies in Economics
Research at the University of Asia and the Pacific.

JUNE CHERYL A. CABAL-REVILLA • 43, FILIPINO
Controller and Financial Reporting and Controllership Head and is concurrently
the Chief Financial Officer of Smart since May 18, 2015. She is also a director and/or
the Chief Financial Officer/Treasurer of several subsidiaries of PLDT, the Chief Financial
Officer and Treasurer of PLDT-Smart Foundation, the Philippine Disaster Resilience
Foundation and TOYM Foundation, Comptroller of First Pacific Leadership Academy
Foundation and director and trustee of Tahanan Mutual Building and Loan Association.

Prior to joining PLDT in June 2000 as an executive trainee in the Finance Group,
Ms. Cabal-Revilla was a senior associate in the business audit and advisory group of SGV
& Co.
Ms. Cabal-Revilla received her Bachelor of Science Degree in Accountancy from De
La Salle University and Master’s Degree in Business Management Major in Finance from
Asian Institute of Management.

ALEJANDRO O. CAEG • 57, FILIPINO
Appointed Head of WCD Sales and Distribution of Smart effective December 1,
2016. Prior to that, he served as Head of International & Carrier Business from March
1, 2009 until November 30, 2016. Previously, he was Smart’s representative to the
Conexus Mobile Alliance (one of Asia’s largest cellular roaming alliances), where he
was also designated as its Deputy Chairman until 2012 and Conexus Chairman until
2014. Prior to joining PLDT in 2009, he worked in PT Smart Telecom (Indonesia) as
its Chief Commercial Strategy Officer from July 2008 to December 2008 and as Chief
Commercial Officer from January 2006 to June 2008. He also held various sales,
marketing and customer service-related positions in Smart including that of Group
Head of Sales and Distribution (2003-2005), Group Head of Customer Care and
National Wireless Centers (1998-2001) and Marketing Head of International Gateway
Facilities and Local Exchange Carrier (1997-1998). He also served as President and
Chief Executive Officer of Telecommunications Distributors Specialist, Inc. in 2002 and
as Chief Operations Adviser of I-Contacts Corporation (Smart’s Call Center subsidiary)
from 2001 to 2002. Mr. Caeg graduated with a Bachelor’s Degree in AB Applied
Economics and obtained MBA credits from De La Salle University Manila.

ANABELLE L. CHUA • 56, FILIPINO
Chief Financial Officer of the PLDT Group effective May 18, 2015. She was the Chief
Financial Officer of Smart from 2006 and Chief Financial Officer of Digitel Mobile from
2013 until May 2015. She holds directorships in several subsidiaries of PLDT, Smart and
Digitel. She is also a member of the Board of Directors of Philippine Stock Exchange,

PLDT 2016 ANNUAL REPORTdigital like never before
victorico p. vargas

Jun r. florencio

ray C. espinosa

maria elizabeth s. sichon

ma. lourdes C.
rausa- Chan

menardo g. Jimenez, Jr.

4
7

Securities Clearing Corporation of the Philippines and Philippine Telecommunications
Investment Corporation and the Board of Trustees of the PLDT-Smart Foundation and
PLDT Beneficial Trust Fund (PLDT-BTF), a director of the companies owned by PLDT-
BTF, and a director and member of the Finance, Audit and Nomination and Governance
Committees of the Board of Directors of Meralco.
Ms. Chua has over 30 years of 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.
Ms. Chua graduated magna cum laude from the University of the Philippines with a
Bachelor of Science Degree in Business Administration and Accountancy.

JUN R. FLORENCIO • 61, FILIPINO
As Internal Audit and Fraud Risk Management Head, Mr. Florencio handles the overall
coordination of the internal audit function of the PLDT group of companies and is in-
charge of the fraud risk management function of the PLDT Fixed Line business.
Mr. Florencio has over 25 years of work experience in the areas of external and
internal audit, revenue assurance, credit management, information technology, financial
management, and controllership.
Mr. Florencio was the Financial Controller of Smart for four years before he joined
PLDT in April 1999 as Head of Financial Management Sector. He held various positions in
the finance organization of another telecommunications company prior to joining Smart.
Mr. Florencio received his Bachelor of Science Degree in Commerce, Major in
Accounting from the University of Santo Tomas and attended the Management
Development Program of the Asian Institute of Management.

MENARDO G. JIMENEZ, JR. • 54, FILIPINO

Business Transformation Office Deputy Head effective January 1, 2017. Prior thereto,

he served as Human Resources Group Head and Fixed Line Business Transformation
Office Head from August 1, 2010 to November 30, 2016.
Mr. Jimenez holds directorships in several subsidiaries of PLDT. Prior to joining PLDT,
he had a stint at GMA Network, Inc., where he served as head of a creative services and
network promotions.
Mr. Jimenez received his AB Economics Degree from the University of the Philippines.

VICTORICO P. VARGAS • 65, FILIPINO
Appointed as Business Transformation Office Head effective January 1, 2016.
Mr. Vargas joined First Pacific in January 2016, overseeing First Pacific Group businesses
operating in the Philippines and its region, with particular focus on leading the Business
Transformation of PLDT. Prior to his appointment as Assistant Director of First Pacific,
Mr. Vargas was the President and Chief Executive Officer of Maynilad Water Services, Inc.
since August 2010.
Mr. Vargas joined PLDT in 2000 as its Human Resources Group Head and through his
stay at PLDT got involved in managing the PLDT Business Transformation Office, Asset
Protection and Management Group, and the PLDT International Carrier Business. He has
worked in senior roles at Union Carbide, Pepsi Cola, Colgate Palmolive and Citibank.
Mr. Vargas is a director of PLDT Subic Telecom, Inc. and PLDT Clark Telecom, Inc.,
President and Member of the Board of Trustees of the First Pacific Leadership Academy,
Trustee of the MVP Sports Foundation, and Ideaspace Foundation and President of the
PhilPop Music Fest Foundation.
Mr. Vargas was educated at Ateneo de Manila and University of Santo Tomas with a
Bachelor of Science Degree in Psychology.

MARIA ELIZABETH S. SICHON • 59, FILIPINO
Chief People and Culture Officer effective December 1, 2016. A seasoned global
HR executive, she has previously held HR roles across the Americas, Europe, Middle
East and Africa, Asia Pacific and Latin America in high tech, financial and health care
industries. Most recently she had her own consulting company, Executive HR Coach, LLC
based in Silicon Valley, California, where she worked with companies on their culture
transformation and leadership development.

Prior to this, Ms. Sichon was VP Human Resources of Hewlett Packard, and VP Human

Resources International of Avaya, Inc.
Ms. Sichon received her Master of Arts Degree in Organizational Psychology from
Teachers College, Columbia University and BS Psychology from the University of the
Philippines.

PLDT 2016 ANNUAL REPORTdigital like never before

plDt offiCers

FINANCIAL REVIEW

manuel v. pangilinan
Chairman of the Board,
President and Chief Executive Officer (CEO)

ricardo m. Sison
FVP, Consumer Credit and Business
System Management

Joseph nelson m. ladaban
VP, PLDT Group Corporate-wide Chief Credit,
Collection and Churn Management Officer

ernesto r. Alberto
EVP, Chief Revenue Officer

ray C. espinosa
Chief Corporate Services Officer

ma. elizabeth S. Sichon1
Chief People and Culture Officer
Human Resources

emiliano r. Tanchico
FVP, Human Resources Management
and Development

melissa v. vergel de Dios
FVP, Investor Relations

minerva m. Agas6
VP, Logistics

Javier C. lagdameo
VP, Corporate Relationship Management B

Joselito S. limjap
VP, Mainstream Business Development
and Research

luis Ignacio A. lopa
VP, Enterprise Subsidiaries Account Management

Overview

victorico p. vargas
Head, Business Transformation Office (BTO)

Benedict patrick v. Alcoseba
VP, Disruptive Business

paolo Jose C. lopez
VP, HOME Customer Care and Sales Support

Alejandro o. Caeg2
SVP, Head of Smart WCD Sales and Distrsibution

Jerameel A. Azurin
VP, SME Marketing

maria Carmela F. luque
VP, Financial and Revenue Audit

Anabelle l. Chua
SVP, PLDT Chief Financial Officer

rafael m. Bejar
VP, Medical Services

Jun r. Florencio
SVP, Internal Audit and Fraud Risk Management

Juan victor I. hernandez3
SVP, Enterprise Business

menardo G. Jimenez, Jr.
SVP, Deputy BTO Head

4
8

ma. lourdes C. rausa-Chan
SVP, Corporate Affairs and Legal Services
General Counsel
Chief Governance Officer
Corporate Secretary

Jose Arnilo S. Castañeda
VP, HOME Product
Development

Gerardo Jose v. Castro
VP, Luzon Customer Service
Opeations District

marisa v. Conde
VP, Financial Planning

Gene S. De Guzman
VP, Enterprise Service Assurance
Management

katrina l. Abelarde
FVP, International and Carrier Business

Gil Samson D. Garcia
VP, Revenue and Cash Accounting

marco Alejandro T. Borlongan
FVP, Customer Service Operation Management
Home and Sales Distribution

Joseph Ian G. Gendrano
VP, Enterprise Business

oliver Carlos G. odulio
VP, Asset Protection and Risk Management
– Enterprise Business Continuity and
Resilience Office

Carlo S. ople7
VP, Digital Marketing Strategy

harold kim A. orbase3
VP, Enterprise Service Fulfilment Management
(GMM and Global)

Dale m. ramos8
VP, Network Build

Aileen D. regio
VP, Business Transformation Office

ricardo C. rodriguez
VP, Compensation, Rewards and
Performance Management

Genaro C. Sanchez
VP, Head of International Network and
Concurrent Head of Carrier Business

Arvin l. Siena
VP, Network Planning and Fixed
Network Engineering

Ana maria A. Sotto
VP, Project Management Resource
and Operations Support

Alfredo B. Carrera
FVP, Regulatory Strategy and Support

leah Camilla r. Besa-Jimenez4
FVP, Data Privacy Office

Albert mitchell l. locsin5
FVP, SME Business

Florentino D. mabasa, Jr.
FVP, Legal Services and Assistant
Corporate Secretary

leo I. posadas
FVP, Treasury

elisa B. Gesalta
VP, Buildings and Enterprise Access Network
Project Management

John John r. Gonzales
VP, Enterprise Strategic Solutions

maria Josefina T. Gorres
VP, Office of the Chief Revenue Officer

ma. Criselda B. Guhit
VP, Tax Management

Carla elena A. Tabuena3
VP, Enterprise Client Care

emeraldo l. hernandez
VP, Technical Operations Center

patrick S. Tang
VP, Office of the Chief Revenue Officer

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in

conjunction with our consolidated financial statements and the related notes as at December 31, 2016 and 2015 and

for each of the three years in the period ended December 31, 2016 included elsewhere in this Annual Report. This

discussion contains forward-looking statements that reflect our current views with respect to future events and our

future financial performance. These statements involve risks and uncertainties, and our actual results may differ

materially from those anticipated in these forward-looking statements.

We are the largest and most diversified telecommunications company in the Philippines which delivers data and

multi-media services nationwide. We have organized our business into business units based on our products and

services and have three reportable operating segments which serve as the bases for management’s decision to

allocate resources and evaluate operating performance:



Wireless  wireless telecommunications services provided by Smart Communications, Inc., or

Smart, and Digital Mobile Philippines, Inc., or DMPI, a wholly-owned subsidiary of Digital

Telecommunications Philippines, Inc., or Digitel, our cellular service providers; Voyager Innovations,

Inc., or Voyager, and certain subsidiaries, our mobile applications and digital platforms developers

and mobile financial services provider; Smart Broadband, Inc., or SBI, and Primeworld Digital

Systems, Inc., or PDSI, our wireless broadband service providers; ACeS Philippines Cellular Satellite

Corporation, or ACeS Philippines, our satellite information and messaging services provider; and

certain subsidiaries of PLDT Global Corporation, or PLDT Global, our mobile virtual network

operations, or MVNO, provider;



Fixed Line  fixed line telecommunications services primarily provided by PLDT. We also provide

fixed line services through PLDT’s subsidiaries, namely, PLDT Clark Telecom, Inc., PLDT Subic

Telecom, Inc., PLDT-Philcom, Inc. or Philcom, and its subsidiaries, or Philcom Group, PLDT-Maratel,

Inc., SBI, PDSI, Bonifacio Communications Corporation, PLDT Global and certain subsidiaries and

Digitel, all of which together account for approximately 4% of our consolidated fixed line subscribers;

data center, cloud, big data, managed IT services and resellership provided by ePLDT, Inc., or

ePLDT, IP Converge Data Services, Inc., or IPCDSI, and subsidiary, or IPCDSI Group, ABM Global

Solutions, Inc., or AGS, and its subsidiaries, or AGS Group, Curo Teknika, Inc. and ePDS, Inc., or

ePDS; business infrastructure and solutions, intelligent data processing and implementation services

and data analytics insight generation provided by Talas Data Intelligence, Inc., or Talas; distribution of

Filipino channels and content by Pilipinas Global Network Limited and its subsidiaries; and



Others  PLDT Communications and Energy Ventures, Inc., or PCEV, PLDT Global Investment

Holdings, Inc., Mabuhay Investments Corporation, PLDT Global Investments Corporation, PLDT

Digital Investments Pte. Ltd., or PLDT Digital, and its subsidiary, our investment companies.

Adoption of New Standards and Interpretations

Our accounting policies are consistent with those of the previous financial year except for the adoption of certain

amendments which are effective for annual periods beginning on or after January 1, 2016. The adoption of these

amendments to the standards as at January 1, 2016 did not have any significant impact on our consolidated financial

position or performance. Please see Note 2 – Summary of Significant Accounting Policies to the accompanying

audited consolidated financial statements for further discussion.

June Cheryl A. Cabal-revilla
FVP, Financial Reporting and Controllership

oscar enrico A. reyes, Jr.
FVP, HOME Business

marven S. Jardiel
VP, Enterprise Operations Readiness
and Resource Management

princesita p. katigbak
VP, Office of the Chief Revenue Officer

martin T. rio
FVP, Property and Facilities Management

Alexander S. kibanoff
VP, Organization Development

victor y. Tria
VP, Corporate Business

1 Appointed effective December 1, 2016
2 Effective December 1, 2016
3 Promoted effective March 23, 2017
4 Hired effective February 1, 2017
5 Promoted effective February 7, 2017
6 Hired effective September 1, 2016
7 Hired effective December 1, 2016
8 Hired effective September 16, 2016

PLDT 2016 ANNUAL REPORTdigital like never before