Pioneering. Innovating. Leading.
2017 ANNUAL REPORT
Our Cover
For 90 years, PLDT has
been connecting Filipinos
and their families to each
other and to the world.
In this exciting digital
era, PLDT continues to
pioneer, innovate, and lead
– providing people with
a growing array of digital
services that enrich their
lives while at home, work,
or on the go.
As PLDT celebrates its
90th anniversary, the
Company is pursuing a
comprehensive digital
transformation program.
This effort involves a
massive modernization
of its networks and IT
platforms to deliver rich
digital services and
solutions. But the thrust of
this transformation springs
from an old-fashioned
idea: it’s the customer that
counts. It’s about serving
you in the best possible
way, in the personalized
manner that digital
technology makes possible.
1928
Governor General
Henry Stimson signed
into law on November
28 Act No. 3436,
which provided then
Philippine Long Distance
Telephone Company
(PLDT) the franchise to
establish and operate
telephone services in
the country. International
calls became possible
with Commonwealth
President Manuel L.
Quezon receiving the
first call.
1936
A nationwide telephone
system linked the
Philippines at strategic
points in Luzon, Visayas,
and in Mindanao on July 7.
Nucleus of operations
included Manila, Cebu,
Negros, and Iloilo.
1967
A new era of PLDT
leadership was ushered in
as the Company became
a Filipino-controlled
corporation when a group
of Filipino industrialists and
businessmen headed by
Ramon Cojuangco acquired
the block of shares owned
by the General Telephone
and Electronics (GTE)
Corporation of New York
on December 20.
1987
The country’s first cellular
telephone network was
established, which were
then bulky and installed
only in cars, enabling
people to communicate
while on the go.
1978
System modernization
involved the introduction
of direct distance dialing
(DDD) for domestic and
overseas toll services, and
introduction of electronic
telephone special
services; upgrading
of toll centers from
analog to digital; data
transmission facilities.
DDD was made available
to 6,397 subscribers
and 117 countries and
from Manila to 23 cities
in the country. The
electronic switching
system provided for
automated special
services, call barring,
hotline, call waiting,
abbreviated dialing,
recorded messages,
and subscriber number
change notification.
1933
Overseas radio-
telephone service
was also established
between the Philippines
and the US and other
parts of the world
linking Filipinos to the
world with the first
overseas calling service.
1953
The Company had 33,712
stations by December,
exceeding for the first time
the number of telephones
in service before the war.
1991
Anticipating the
liberalization of
the Philippine
telecommunications
industry, a group of
Filipino investors led
by Orlando B. Vea
and David T. Fernando
organized Smart
Communications,
Inc., (then named
Smart Information
Technology, Inc.).
1968
The Filipino group, formally
assumed PLDT management
on January 1 with Gregorio
Licaros, Sr. as chairman
of the board and Ramon
Cojuangco as president.
The first major television
broadcast via the facilities
of Intelsat II-F4 and PLDT
was brought to the
Philippines direct from the
US during the funeral of
Senator Robert F. Kennedy.
Another milestone in
satellite communications
was achieved, with PLDT
playing a major role, in the
subsequent TV coverage of
the Apollo 8 flight.
1982
DDD was becoming
a byword for Filipinos.
Subscribers then could call
long distance to nine major
cities across the nation and
22 countries around the
world and reach through
direct dialing more than
400 million telephones
overseas.
1985
DDD service eventually
evolved into National
Direct Dialing (NDD)
and International Direct
Dialing (IDD).
1993
Smart was granted
provisional authority
to operate a mobile
cellular service.
1997
PLDT led the
establishment of the
first internet hub in
the country called the
Philippine Internet
Exchange or PhIX after
signing a deal with US-
based software giant
Oracle Corporation that
enabled internet surfing.
1999
PLDT formed a strategic
partnership with NTT
Communications Corp.
(NTTCom), a wholly-
owned subsidiary of
Nippon Telegraph and
Telephone Corp. of
Japan, the world’s leading
telecommunications
company in terms of
revenues. Smart, the
country’s largest mobile
phone operator, was
also acquired by PLDT
with the issuance of 35.1
million new common
shares to Smart’s
shareholders at a value
of P37.9 billion.
2012
The PLDT Group
continued its efforts
to provide the most
powerful, reliable and
extensive network
services maintaining its
position as the leading
network provider of
landline, fiber, wireless,
internet and Cloud
infrastructure projects.
2010
PLDT transformed the
face, feel and future of
the fixed line business
with a new bundled
landline service featuring
a touch-screen tablet
and high-speed myDSL
service all under one
service plan.
2017
PLDT increased
the coverage of its
fiber-powered fixed
broadband network by
1.2 million homes passed
to over four million
homes passed by year-
end. In the same period,
it doubled its fixed
broadband capacity to
over one million lines.
2000
PLDT invested in
information and
communications technology
(ICT) with the formation
of ePLDT Inc., the
PLDT Group’s principal
vehicle for investments
in internet, e-commerce,
and multimedia businesses
and served as the holding
company for PLDT’s existing
interests in a number of
businesses including the
cable television operator,
Home Cable, and internet
service provider Infocom.
1998
PLDT announced the entry
of Hong Kong-based First
Pacific Co. Ltd. acquiring
a 17% stake in PLDT for
approximately P29.7 billion
or some US$749 million.
The entry of the First
Pacific Group brought in a
new culture in PLDT and
new expertise. Manuel V
Pangilinan replaced Antonio
O. Cojuangco as president
and chief executive officer.
Cojuangco then assumed
the position of chairman of
the board.
2016
PLDT and Smart welcomed a new day with
a fresh brand identity that reflects their
desire to empower their customers who are
increasingly embracing digital services in their
daily lives. The new logo also comes with
the recent change in name of the company
from Philippine Long Distance Telephone
Company to PLDT Inc. to better represent
the Company’s current thrust to decisively
shift its business to data-driven services.
2011
PLDT acquired 51.55%
of the shares of Digital
Telecommunications
Philippines, Inc. (Digitel) from
JG Summit Holdings and thus
enhanced its ability to provide
customers with the best
range of products in terms of
price and quality -- including
“unlimited” offerings.
Contents
06 Comparative Highlights
07 Consolidated Financial Performance Highlights
08 Message from the Chairman and CEO
14 The PLDT Group Corporate Milestones
22 The PLDT Group Corporate Social
Responsibility Report
People and Culture
30
32 The PLDT Group Corporate Governance Report
56 The PLDT Group Enterprise Risk
Management Report
Executive Officers
58 Board of Directors
58 Advisory Board/Committee
62
66 Officers
67
107 Audit Committee Report
108 Statement of Management’s Responsibility
Financial Review
for Consolidated Financial Statements
109 Independent Auditor’s Report
114 Consolidated Statements of Financial Position
116 Consolidated Income Statements
117 Consolidated Statements of Comprehensive Income
118 Consolidated Statements of Changes in Equity
119 Consolidated Statements of Cash Flows
121 Notes to Consolidated Financial Statements
274 Contact Information
2 PIONEERING. INNOVATING. LEADING.
PLDT is the leading telecommunications and digital services
provider in the Philippines. Through its principal business
segments – fixed line, wireless, digital and others – PLDT offers
the most diversified range of communications and digital services
across the Philippines’ most extensive fiber optic, wireless and
fixed line networks.
PLDT is listed on the Philippine Stock Exchange (PSE:TEL) and
its American Depositary Shares are listed on the New York Stock
Exchange (NYSE:PHI). In 2017, 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
Subsidiaries
WIRELESS
Smart Communications, Inc. and Subsidiaries
Digitel Mobile Philippines, Inc.
Smart Broadband, Inc. and Subsidiary
Voyager Innovations, Inc. and Subsidiaries
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
The PLDT headquarters, an iconic landmark in the
Makati Commercial and Business District, was designed
by National Artist for Architecture Leandro V. Locsin.
PLDT 2017 ANNUAL REPORT
5
Comparative Highlights
FINANCIAL INFORMATION
(in million pesos, except cash dividends
declared per common share)
Revenues
Service Revenues
Non-Service Revenues
Expenses
Selling, general and administrative expenses
Depreciation and amortization
Cost of sales and services
Interconnection costs
Noncurrent asset impairment
Provisions
Net Income for the Year
Continuing operations
Discontinued operations
Core income
Continuing Operations
Discontinued Operations
EBITDA
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
2013(1)
2014(1)
2015(1)
2016(1)
2017
168,211
163,932
4,279
125,514
67,252
30,304
11,806
10,610
2,142
3,400
35,453
33,384
2,069
38,717
38,816
(99)
77,432
581,286
388,621
192,665
28,838
104,090
71,467
137,147
170,835
164,943
5,892
130,457
68,483
31,379
14,129
10,420
3,844
2,202
34,090
34,090
-
37,410
37,410
-
76,750
605,598
413,614
191,984
34,759
130,123
102,821
134,364
171,103
162,930
8,173
139,268
70,289
31,519
17,453
10,317
5,788
3,902
22,075
22,075
-
35,212
35,212
-
70,218
632,918
437,136
195,782
43,175
160,892
113,008
113,608
165,262
157,210
8,052
140,559
67,196
34,455
18,293
9,573
1,074
9,968
20,162
20,162
-
27,857
27,857
-
61,161
665,653
462,465
203,188
42,825
185,032
143,572
108,175
159,926
151,165
8,761
150,415
68,990
51,915
13,633
7,619
3,913
4,345
13,466
13,466
-
27,668
27,668
-
66,174
690,520
503,613
186,907
40,299
172,611
138,632
106,842
179
156
122
77
76
OPERATING INFORMATION
Number of Mobile Subscribers
Number of Fixed Line Subscribers
Number of Broadband Subscribers
Wireless
Fixed Line
Total Number of Subscribers
Number of Stockholders
Number of Employees
Wireless
Fixed Line
2,069,419
1,415,478
436,094
979,384
72,063,359 72,511,422
2,207,889
1,481,109
331,781
1,149,328
75,548,256 76,200,420
11,880
17,496
7,786
9,710
12,005
17,899
7,745
10,154
2,303,454
1,514,640
258,776
1,255,864
68,612,118 62,763,209
2,438,473
1,720,753
270,203
1,450,550
72,430,212 66,922,435
11,774
18,038
7,343
10,695
11,837
17,176
7,505
9,761
58,293,908
2,663,210
1,950,881
237,354
1,713,527
62,907,999
11,712
17,779
7,042
10,737
(1) Certain comparative information for 2013 - 2016 were reclassified to conform with the 2017 presentation.
6 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
7
Consolidated Financial
Performance Highlights
151.2
66.2
27.7
77.4
76.8
70.2
61.2
163.9
164.9
162.9 157.2
48.9
51.5
53.7
58.1 63.8
115.0 113.4 109.2
99.1 87.4
160
140
120
100
80
60
40
20
0
80
70
60
50
40
30
20
10
0
38.7
37.4
35.2
27.9
40
35
30
25
20
15
10
5
0
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
SERVICE REVENUES
(in billion pesos)
WIRELESS
FIXED LINE
EBITDA
(in billion pesos)
CORE INCOME
(in billion pesos)
62.9
56.1
319.8
72.4 66.9
73.8
66.0
69.7
49.0
576.1
627.9
445.1 294.9
75.5
1.4
2.1
76.2
1.5
2.2
1.5
2.3
1.7
2.4
1.9
2.7
72.0
72.5
68.6
62.8
58.3
80
70
60
50
40
30
20
10
0
80
70
60
50
40
30
20
10
0
600
500
400
300
200
100
0
6 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
7
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
SUBSCRIBER BASE
(in millions)
MOBILE
FIXED LINE
BROADBAND
CASH FLOW FROM
OPERATIONS
(in billion pesos)
MARKET
CAPITALIZATION
(Year-end, in billion pesos)
Convergence has
acquired a deeper
meaning today, when
digital connectivity,
content and solutions
are coming together to
provide customers with
richer experiences.
8 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
9
Message from the Chairman and CEO
TO MY FELLOW SHAREHOLDERS
Over the past year, through painstaking and persistent efforts, we have sustained
the upward momentum of PLDT’s fixed line business and stemmed the decline of
our wireless business. This has resulted in stabilizing our overall business and laying
the ground for future growth. We have done this by building on our strengths and
leveraging our capabilities as the country’s leading integrated fixed and mobile telecoms,
and digital services provider. As a result, we have moved further along the path of
digital transformation that we set in 2016, particularly in undertaking three critical tasks
that I identified at the start of this process:
First, we have made significant progress in rolling out our fiber-
powered high-speed fixed and mobile networks in various
parts of the country. Our customers are now feeling the
difference. This has enabled us to further drive the growth of
our data and digital businesses – the key to our future. Second,
PLDT and Smart have begun to offer converged service
packages that combine fixed and mobile connectivity with
digital content and services and in certain instances, the video
content of Cignal TV. Third, we have taken further steps to
reshape the organization, culture and capabilities of PLDT and
Smart into a much more collaborative mold and with a digital
mindset so that we can better understand the changing needs
of our customers and thus provide them better converged and
personalized services moving forward.
Convergence has acquired a deeper meaning today, when
digital connectivity, content and solutions are coming together
to provide customers with richer experiences. PLDT is
uniquely positioned to meet this need. This advantage is
providing us a critical edge in building our Company’s future
and helping the country become a Smart Nation.
OUR FINANCIAL RESULTS
Our full year results for 2017 still present a mixed picture, but
the overall direction of change is encouraging.
Our Consolidated Service Revenues (net of interconnection
costs) reached P143.5 billion. This represents a 3% reduction
from the previous year, similar to the 3% decline in 2016.
However, in 2017, we posted three quarters of modest
sequential increases in service revenues, starting in the second
quarter. This is unlike 2016, when service revenues fell quarter
on quarter.
As in the previous year, the Home and Enterprise Business
Groups continued to set the pace, boosting revenues to
P33.0 billion and P34.1 billion, growth rates of 13% and 11%
respectively. Wireless Consumer Group revenues slipped 11%
to P58.9 billion. However, on a quarterly basis, revenues were
relatively stable, with a modest uptick in the last quarter.
We made steady progress in shifting the base of our revenues
towards data and digital services. Across all business groups,
revenues from data, broadband and digital platforms grew 11%
to P67.0 billion, raising their share of service revenues from
41% to 47%.
Consolidated EBITDA for 2017 reached P66.2 billion – 8%
higher than the previous year and in sharp contrast to 2016,
when EBITDA went down by 13%. This was due to reduced
subsidies and provisions offsetting lower service revenues,
higher cost of services and manpower reduction program
(MRP) expenses. Excluding MRP expenses of P1.6 billion,
Consolidated EBITDA was higher by 11%. Consolidated
EBITDA margin increased from 39% in 2016 to 44% in 2017,
as both fixed line and mobile businesses improved their
margins.
Our Recurring Core Income increased 11% to P22.3 billion
versus the previous year. Consolidated Core Income was
1% lower at P27.7 billion, including the impact of gains from
assets sales, MRP costs, accelerated depreciation and EBITDA
adjustments. Reported Net Income declined 33% to P13.4
billion due to non-core capex-related expenses of P16.7 billion,
related to PLDT’s aggressive network upgrade which aimed to
achieve dramatic improvements in customer experience.
In line with the Company’s dividend policy, 60% of 2017 core
earnings of P27.7 billion has been declared as dividends.
PLDT’s Net Debt and Net Debt to EBITDA stood at US$2.8
billion and 2.10x, respectively, as of end December 2017.
Gross Debt stood at US$3.5 billion, of which only 8% was
unhedged. Maturities are well distributed and 92% of the
Company’s debt are fixed-rate. PLDT’s Credit Ratings remain
investment grade.
8 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
9
DELIVERING WORLD-CLASS INTERNET
The focus of our efforts in 2017 was the transformation of our
fixed and mobile networks so that we can deliver world-class
internet services. This is the lynchpin of our digital shift and, in
this pivotal area, we made substantial progress.
PLDT expanded the coverage of its fiber-powered broadband
network to over 4 million homes passed by end-2017, adding
1.2 million homes from end-2016. At the same time, we
doubled available port capacity to over one million lines. In
this expansion program, PLDT is deploying fiber-to-the-home
(FTTH) and technologies such as VVDSL and G.fast that
deliver fiber-fast speeds over copper lines.
Meanwhile, Smart more than doubled the number of LTE
base stations in its mobile phone network to over 8,700 and
increased by 60% to over 4,300 the cell sites equipped with
LTE base stations. Smart also increased its 3G base stations to
about 9,850 and its cell sites equipped with 3G base stations
to about 7,500. Base stations are the cellular radio equipment
that run on specific radio frequencies like 700 Mhz and 1800
Mhz while cell sites refer to the towers that house several of
these base stations.
As a result, Smart’s mobile data speeds and coverage have
improved markedly, as confirmed by third party studies. In its
report covering November 2017 to January 2018, for example,
mobile analytics firm OpenSignal gave Smart its Best in 4G
download speed award for posting data rates of 12.5 Mbps
(versus 7.69 Mbps of the competition). Smart also won the
awards for Best in Overall Download Speed, and Best in 4G
and 3G Latency Performance.
Complementing this network build-up, PLDT and Smart
signed multi-year agreements with leading global technology
companies – Huawei Technologies and Amdocs – to overhaul
and manage the IT systems and platforms that support their
network management and business operations. This will
enable PLDT and Smart to design and deliver more relevant
and personalized services to their customers individually, and
as well in a converged manner.
In 2018, we are stepping up our efforts. PLDT will double
the capacity of its fiber-fast broadband network to over 2.2
million ports and expand its coverage to 5.1 million homes
passed by end-2018. By 2019, virtually all of PLDT’s 1.2 million
copper-based DSL subscribers will be upgraded to fiber-fast
broadband.
In mobile, Smar t will double the number of LTE base stations
to about 17,700 and raise the number of LTE-equipped cell
sites to over 6,800. With this massive rollout, Smart is raising
the ante fur ther : As it installs multiple LTE base stations in
cell sites, it is activating LTE Advanced or LTE-A with carrier
aggregation – which combines the capacity of two or up to
four frequency bands. We have already fired up LTE-A with
four carriers or frequency bands in Marikina and Quezon
City and have star ted work in the rest of Metro Manila. We
are also doing this in key cities and towns in many areas of
the country.
Combined with the right handsets, LTE-A delivers world-class,
high-speed mobile internet to Smart, TNT and Sun customers.
Smart’s internal tests in areas like Marikina and Quezon
City have shown that download speeds using smartphones
like Samsung Galaxy S8 or S8+, which can handle carrier
aggregation of four bands (4CC), averaged over 60 Mbps while
peak speeds topped 240 Mbps. Tests in Marikina of five-carrier
aggregation (5CC) using capable handsets like Samsung Galaxy
S9 and S9+ produced peak download speeds of over 500 Mbps.
Smart is also deploying another LTE-based technology called
4x4 Multiple Input Multiple Output (MIMO) which uses multiple
antennas to push more data traffic through available radio
frequencies. Designed for use in densely populated areas,
MIMO has posted peak download speeds of up to 400-500
Mbps on live network tests using MIMO-capable handsets.
Underpinning these network transformation efforts is the
continuing expansion of PLDT’s fiber optic network. We
grew the coverage of this fiber network by 45% from 120,000
kilometers (kms) in end-2015 to over 174,000 kms by end-
2017. We will add another 33,000 kms of fiber cable in 2018,
raising the total to about 210,000 kms. At the same time, we
are increasing the capacity of our overseas fiber cable system
by 80% to 8.9 Terabits per second (Tbps) by end-2019 from 5.0
Tbps in end-2017.
TARGETTED CAPEX
To support network transformation, PLDT is investing resources
at unprecedented levels.
In 2017, our capital expenditures reached P40.3 billion, or over
roughly one-fourth of our service revenues. This amount was
split approximately 70-30 between mobile and fixed networks.
For 2018, we have allotted P58 billion in capex, with a little
over 50% to be invested in the fixed line. The higher allocation
for fixed will support the more aggressive roll-out of fiber
broadband to address the strong demand for fiber service
and which providentially also supports high-speed mobile data.
Moreover, we expect that capex for 2019-2020 will stay at
approximately the 2018 level.
Aside from its size, what sets this historic capex program apart
is that it is very targeted and coordinated. Our network team
has worked closely with our business units so that the final
capex plan was guided by clearly-defined priorities that would
serve the largest number of customers in the most rapid
and efficient way. The process of setting these priorities was
informed not only by data analytics derived from network-
generated and other information but also by on-the-ground
feedback from our sales teams and trade partners.
This unprecedented collaboration explains how the network
roll-out has given our business a quick lift. For instance, PLDT
Home’s robust 13% revenue growth rate in 2017 was driven by
the 12% growth in subscriptions, which added some 431,000
new Home customers. That subscriber growth was powered
largely by the increase in fiber customers which grew by 131%
– an increase made possible by the roll out of fiber lines in the
priority areas identified during the network planning process.
In short, we are building where we know there are ready
customers for fiber services.
10 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
11
Meantime, Voyager’s FINTQnologies (FINTQ) fortified its
leadership in providing inclusive financial services. Its Lendr is
the country’s premier platform for digital lending, with over
P27 billion in loans disbursed since 2015. Last year, it launched
KasamaKA, a national program that combines a referral and
community income building component with micro-savings,
micro-investments and micro-insurance.
These and other Voyager services have become part of the
growing portfolio of services being offered by PLDT Enterprise
through its Smart City program. The first initiative of this
program was #Ready which equips local governments with
digital communications and information management solutions
to better manage emergency and disaster situations. We now
have begun to offer platforms and services that improve public
services, people’s welfare and stimulate local economic and
social development.
PayMaya, for instance, is now increasingly being used by local
governments as a secure and efficient channel for distributing
benefits for senior citizens and student scholars. Nearly 50
LGUs have signed up and are in the process of onboarding
In a related initiative, PLDT Enterprise has partnered with Go
Negosyo to launch the SME e-commerce enablement program.
Working with the Department of Trade and Industry and
local governments, the program will train and enable small
businesses to set up and manage online stores using Tackthis!,
Voyager’s online store builder. This platform also provides small
businesses with nationwide logistics support, online payments
via PayMaya and marketing support through Takatack (www.
takatack.com), Voyager’s virtual marketplace.
ONE CONSUMER ORGANIZATION
To enable our consumer businesses to become more effective,
we have brought PLDT Home and the Wireless Consumer
Group under a single Consumer Organization with two pillars.
The first pillar is led by Consumer Market Development
Group, which handles product development, marketing and
loyalty, customer experience and consumer analytics. The
second is run by the Consumer Customer Development
Group, which handles revenue generation from all consumer
sales channels.
With this One Consumer Group, we will be able to align the
efforts of the PLDT and Smart organizations to serve our
Home and Wireless Individual customers by shifting from
silo-driven to converged ways of working. Together with
our Enterprise Group which has been converged for the past
several years, we will be a better position to address the needs
of all our customers at home, at work and on the move.
THE ENHANCED POWER OF CONVERGENCE
Faster internet on our fixed and mobile networks is naturally
stimulating customer demand and usage of more data and
digital services and solutions. Our approach to this unfolding
situation is not just to offer more connectivity services, but also
to move up the value chain of services and solutions to deliver
richer, more fullfilling experiences for our customers.
Our Enterprise Group for example posted robust double-digit
growth rates in 2017 in all its business lines. The pace was set
by the Group’s ICT revenues, which increased 26% to P3.3
billion. ICT growth was led by Managed ICT Security Services
which jumped by 59%. This includes such services as Managed
Service Desk, Managed Infrastructure and Application Lifecycle
Support. Next were cloud services (such as infrastructure-as-
a-service and software-as-a-service) which rose 49%. These
are the high-value services that build more enduring customer
relationships.
PLDT Home and the Wireless Consumer Group have both
launched enhanced data plans for our fixed fiber and LTE-
powered mobile data services. Smart has for example
launched several data plans that enhance video streaming.
Recently, it unveiled a path-breaking promo in partnership
with Youtube to provide Smart, TNT and Sun subscribers free
one-hour viewing time daily on the world’s most popular video
sharing service.
Our consumer business units are raising the bar further by
pushing bundled offers. In December 2017, PLDT Home
launched its first “Best Buy Bundle” as a Christmas promo.
Under this package, customers can sign up for two or three
services – either a PLDT Home Fibr plan, a Smart mobile
phone subscription and/or a Cignal TV subscription – with
discounts ranging from 10% to 15% off their combined bill.
There are more Best Buy Bundles in the pipeline.
In February 2018, PLDT and Smart launched its Most Valuable
Partner (MVP) Rewards Program, which offers converged
customer benefits. Under this program, PLDT, Smart and Sun
customers earn reward points by paying their bills on time and
putting load into their prepaid mobile phones. Points earned
are converted to cash and placed in a virtual PayMaya prepaid
wallet that customers can use to pay for online purchases.
Members also have the option of getting a physical MVP
Rewards Visa card linked to their PayMaya wallet which they
can use to pay when shopping or dining in about 37 million
establishments worldwide.
Indeed, PayMaya and the other digital payments and
marketing services of Voyager Innovation are growing not
only as standalone businesses; these are also becoming vital
components of converged programs of PLDT and Smart.
In the past year, PayMaya strengthened its position as the
country’s leading mobile payment app by introducing PayMaya
in Messenger, which allows users to access the payment app
via the popular messaging service. PayMaya has also made
available its scan-to-pay PayMaya QR at the payment counters
of many large merchants.
10 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
11
CORPORATE ACTION:
RESPONDING TO URGENT NEEDS
The year 2017 posed special challenges to the country that
required extraordinary corporate action.
The six-month battle for Marawi City between Government
forces and Islamic State-inspired militants devastated the
Philippines’ only Islamic City and drove about 400,000 people
from their homes. Working with kindred companies and
corporate organizations, PLDT through the PLDT Smart
Foundation (PSF) provided immediate relief to soldiers and
affected communities.
Under the banner of Tulong Kapatid of TV5, PLDT joined hands
with Meralco, Philex Mining Corporation and Metro Pacific
Investments Corporation (MPIC) to deliver food packs to
more than 1,000 people in evacuation centers near Marawi.
Working with the Duterte Cabinet Spouses Association, Tulong
Kapatid also gave financial assistance to the families of about
100 soldiers and officers who were killed in the fighting. On
its own, the PSF gave 1,000 food packs to soldiers of the 4th
Mechanized Infantry Brigade in Iligan City. It also provided 100
portable water filters to both government troops and evacuees.
Moving forward, PLDT has pledged support for the
rehabilitation of Marawi in cooperation with the Philippine
Business for Social Progress (PBSP) and the Philippine Disaster
Resilience Foundation (PDRF). In this way, we are continuing
our practice to actively participate in the recovery efforts
of areas hit hard by calamities. In line with this, the PSF,
in cooperation with One Meralco Foundation and Ciena
Communications, turned over the Tulong Kapatid Multi-Purpose
and Evacuation Center to the Archdiocese of Palo, Leyte which
had been heavily damaged by Typhoon Yolanda in November 2013.
We also remained very active in disaster preparedness.
Through the PDRF, we joined the effort to set up the
Emergency Operations Center (EOC) in Clark, Pampanga,
which was inaugurated in April 2018. Smart invested in and
activated its Emergency Cell Broadcast System which provides
the government a rapid channel for issuing disaster alerts.
Smart also conducted disaster preparedness training programs
for seven state universities, five dioceses of the Catholic
Church and 10 communities in various parts of the country.
We also stayed focused on education, particularly public
schools. In 2017, the Gabay Guro Program (the flagship
program of the PLDT Managers’ Club and the PSF) celebrated
its 10th anniversary by supporting 542 public school teacher
scholars. PLDT’s Infoteach Program is providing digital literacy
training for about 6,000 public high school teachers and students
in the school year 2017-2018. It also introduced a new training
curriculum to include current concerns such as media and social
media literacy, cybercrime law and data privacy.
Smart’s education programs cover the primary level to college,
and also include out of school youth. Its School-in-a-Bag program,
for example, uses backpacks loaded with an LED TV, a laptop, five
tablets for students, a solar power pack, hard drive and a mobile
WiFi device to bring 21st Century learning content and systems
to barangay grade schools and out-of-school youth in remote
communities. Since the start of the program in 2016, about 65
schools and communities have been reached by this program with
pledges from partners to support the deployment to 50 more.
The Smart Wireless Engineering Education Program delivered
industry-grade training to engineering and IT colleges in 42
partner schools also over the country. The SWEEP Innovation
Challenge to develop mobile innovations drew 312 entries from
78 schools.
OUTLOOK
In my message last year, I highlighted the need for us to reboot
the business and to use 2016 as the period for resetting our
profitability to a new baseline of P20.2 billion in recurring core
income without exceptionals. The intention was to gradually raise
profitability, starting with an increase in underlying core income to
P21.5 billion in 2017 as our target. As it turned out, we exceeded
that goal, as recurring core income for 2017 reached P22.3 billion.
Moving forward, our task is to build on these modest, but real
gains. In terms of business units, the targets are clear. Home and
Enterprise must maintain their double-digit momentum, while our
Individual Wireless Group must stabilize revenues, or better yet
register some growth. Given this, we expect service revenues
to rise by about 4% and our recurring core income to grow by
between P1.0 to P2.0 billion to P23.0 to P24.0 billion in 2018,
excluding the impact of Voyager Innovations.
To achieve this goal, we must remain focused on executing our
key tasks. This means pursuing our aggressive network roll out
to bring world-class fixed and mobile internet services to more
parts of the country, as well as provide added capacity to handle
the growing data traffic arising from greater data usage of our
customers. We shall also develop and deploy more compelling,
converged, personalized digital services and solutions for both our
consumer and enterprise customers. And finally, we shall keep
transforming our organization to make it more nimble, innovative
and customer-focused.
And despite all the disruptions and changes happening around
us, serving our customers in the best possible way remains our
overarching goal. As our tagline for PLDT’s 90th anniversary
this year says: “It’s you that counts” – it is all about serving each
customer better.
Let me close by thanking our shareholders for their generous
support, our Board of Directors for their judicious counsel, and
our Management and Staff for their relentless efforts to put our
Company back on the path of growth and profitability – and for
building a robust and inclusive digital economy.
Manuel V Pangilinan
Chairman of the Board and Chief Executive Officer
12 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
13
And despite all the disruptions and
changes happening around us, serving
our customers in the best possible way
remains our overarching goal. As our
tagline for PLDT’s 90th anniversary this
year says: “It’s you that counts” – it is all
about serving each customer better.
12 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
1313
PLDT 2017 ANNUAL REPORT Connecting people today conveys
much more color, content and meaning.
14
PIONEERING. INNOVATING. LEADING. THE PLDT GROUP
Corporate Milestones
In line with its digital pivot, PLDT stepped up in 2017 the roll-out of high-speed
internet on its fixed and mobile networks, launched converged digital bundles and
fine-tuned its service offers to better serve its customers.
bands like 1800 MHz and 2100 MHz to increase capacity. Third
party studies confirm that Smart’s LTE speeds and coverage
have improved significantly. A report of mobile analytics firm
OpenSignal covering the last quarter of 2017 cited Smart for its
leadership in LTE data speeds and LTE and 3G latency.
Leveraging on its LTE deployment, Smart activated LTE-
Advanced (LTE-A) in more cell sites, particularly its carrier
aggregation feature which combines the capacity of two or
more frequency bands to deliver progressively higher data
speeds. First, in Boracay and then in Marikina and Quezon City,
it fired up LTE-A using four frequency bands or four component
carriers (4CC), thus boosting mobile data speeds to more than
200 Mbps using 4CC-capable smartphones such as the Samsung
Galaxy S8 and S8+. Smart is also firing 3CC in more cell sites in
different parts of the country.
To complement its fixed and mobile internet roll outs, PLDT
is also rolling out carrier-grade WiFi in more areas throughout
the country. By early 2018, Smart WiFi had been installed in
nearly 400 sites nationwide offering high-speed, carrier-grade
internet service. These areas included key transport hubs, such
as airports, seaports, bus terminals and train stations all over the
country. In June 2017, for example, Smart expanded its Free
WiFi service along the MRT line on EDSA. Smart WiFi has
also been deployed in schools, malls and commercial areas, and
public spaces of local governments.
Complementing their network transformation activities, PLDT
and Smart are also overhauling the IT systems and platforms
that support their network and business operations. Leading
global technology companies Huawei Technologies and Amdocs
have been tapped to install and manage new IT platforms and
solutions that will enable PLDT and Smart to better serve their
customers in terms of service provisioning and after sales. They
will also be able to develop and deliver more personalized
services for customers.
FIBERIZING THE NATION
By end-2017, PLDT’s fiber network had grown in reach to
174,000 kilometers, stretching as far north as Ilocos Norte
and to down south in the provinces of Davao and Sarangani.
This enabled PLDT to expand the coverage of its fiber-fast
broadband network to four million homes passed and to
increase its capacity to over one million lines.
The fiber roll-out was two-pronged. PLDT deployed fiber-to-
the-home (FTTH) facilities that can deliver speeds of up to 1
Gbps and “fiberized” its existing copper network through the
use of hybrid fiber technologies like G.fast and VVDSL capable
of speeds of up to 600 Mbps.
To speed up its fiber roll-out, PLDT launched the “Smart City”
program which was implemented with the cooperation of Local
Government Units (LGUs). The first Smart City was set up in
Toledo City, Cebu in March 2017, followed by General Santos
City, Naga, South Metro Manila, East Metro Manila, and central
business districts like Rockwell Makati and Bonifacio Global City,
while Cavite became the first “Smart Province.”
Aside from the Smart Cities, the PLDT Home Fibr rollout also
covered key areas in and around Metro Manila, including Makati,
Pasay, Parañaque, Las Piñas, Antipolo, Marikina, Pasig, Taguig,
Laguna, and Caloocan. Fiber was also deployed in key areas
in Luzon, such as the cities of Laoag, Baguio, Vigan, Tuguegarao,
Tarlac, Cabanatuan, San Fernando, Puerto Princesa, El Nido,
Sorsogon, and Legazpi. Cities in Mindanao such as South
Cotabato, Cotabato, Davao, Koronadal, Zamboanga, Sarangani,
and Sultan Kudarat were also covered.
POWERING UP LTE
Alongside the aggressive fixed network expansion was the
massive upgrade of Smart’s mobile network. Smart doubled the
number of LTE base stations in its cellular network to over 8,700
and increased its 3G base stations to about 9,850.
This has boosted Smart’s mobile internet coverage, particularly
in key metropolitan areas like Metro Manila, Cebu, Davao and
other parts of the country. This new LTE base stations are
using low-frequency bands such as 700 MHz and 850 MHz to
provide better indoor coverage combined with high-frequency
15
PLDT 2017 ANNUAL REPORT
SERVING THE DIGITAL CUSTOMER
As it worked on turning its fixed and mobile networks into
high-speed internet highways, PLDT and Smart expanded
their portfolio of digital solutions for entertainment, home and
personal security, automation, and connectivity.
The most visible use case for fiber-speed internet is high
definition video. In June 2017, PLDT made video viewing much
easier through a partnership with American video streaming
pioneer Roku Inc. It launched a new TVolution box – an all-in-
one, plug-and-play entertainment solution loaded not only with
video-on-demand titles from iFlix and Netflix, but also pay-TV
channels from Cignal, free content from YouTube, and over 100
other streaming channels.
To promote peace of mind at homes, PLDT brought Australia’s
top parental control device FAM ZONE to the country. This
device helps parents manage the internet usage of their children
to create a safe internet experience for the entire family while
enjoying the benefits of a digitally connected smart home.
PLDT also introduced the Whole Home WiFi - the Philippines’
first intelligent wifi technology designed to blanket the entire
home with wireless connectivity. The Whole Home WiFi
Plan comes with a 50 Mbps Fibr connection. The design and
installation service is provided by the Home Geek Squad, a
group of technical architects pioneered by PLDT Home to
provide subscribers end-to-end servicing.
In a sign of what’s to come, PLDT launched in December 2017
its first “Best Buy Bundle” that combines its fiber connectivity
packages with pay TV offers of Cignal and mobile phone service
plans of Smart. Aside from the convenience of a unified bill,
subscribers can save up to 15% off their combined bill when
they choose to sign up for two or three services from PLDT
Home, Smart, and Cignal TV.
On mobile, PLDT’s cellular brands Smart, TNT, and Sun focused
on offering targeted, largely data-driven packages to identified
groups of subscribers.
TNT was repositioned from being a call-and-text, value brand to
a data-oriented service addressing a young, digital market with
an enhanced, LTE-powered service. The shift started in 2016
when Talk N Text was rebranded to TNT and started offering
sachet data packs called Babad Apps, which let customers use his
data load for an app of his choice such as Facebook, Instagram
or Viber. In 2017, TNT offered open-access data packs – first
with SuperCombo30 with 200 Mb of open access data load and
then later with Panalo Data 30 and 60 which offered 500 Mb
and 1 Gb open access data load.
Similarly, Sun was relaunched with a strong data thrust as well,
offering LTE service with new SIMs and devices.
As part of the growing emphasis on mobile video, Smart offered
in April 2017 Fox+ subscription, a new loaded app that features
the latest movie blockbusters, TV series, documentaries, and live
sporting events. This service was accessible for Smart, PLDT,
and Cignal subscribers, to be added on top of any postpaid plan
for P390 per month.
Postpaid customers also enjoyed data access even while
travelling abroad with Surf Abroad 550. They can avail of Surf
Abroad with no need for registration, no manual network
selection and usage charged as part of the plan’s consumables.
Smart offered Smart Travel WiFi powered by virtual SIM
technology, which enabled local connectivity for up to five
devices and provided high-speed internet service in over 100
countries. Smart Travel WiFi offered both 3G and 4G services
for as low as P290 per day for select Asian countries and P490
per day for the rest of the world.
Smart also launched its groundbreaking app RoamFree, which
allows users to connect to travel services without data roaming
charges. A one-stop portal, RoamFree gives free instant access
to up to 21 partner apps at the user’s destination, even without
a roaming data package.
The app is now available for use in 26 destinations, including the
United States, Australia, Canada, China, Hong Kong, Macau, Japan,
Singapore, Thailand, Taiwan, and United Kingdom.
But it wasn’t all data. In June 2017, Smart offered ALL TALK 299
for postpaid plans 1499 and above, that allowed subscribers to
call across all networks, with 300 all-net minutes.
To foster loyalty among its retail trade partners and distributors,
Smart provided incentives via the Ka-Partner Rewards program,
which culminated in annual conventions in Metro Manila, Cebu,
and Davao featuring the country’s top celebrities and a raffle
draw for a brand-new car and P1 million. Smart also conducted
financial literacy sessions for its Ka-Partner Millionaires Circle.
16 PIONEERING. INNOVATING. LEADING.
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17
HELPING IN NATION-BUILDING
Carrying out its mandate of nation-building, PLDT Enterprise
launched its Smart City program to offer local governments
and communities digital connectivity and solutions that would
promote economic growth, public safety, citizen welfare and
digital infrastructure.
The first initiative under this program was #READY, which seeks
to boost the ability of local governments to handle and manage
emergency and disaster situations. One solution being offered
through this initiative is the Smart SOS Dispatch, an emergency
communications and information management system.
To assist its customers in addressing new challenges, PLDT
Enterprise mounted several major events such as the Cyber
Security Summit in February 2017 and the Philippine Digital
Convention in June 2017 with the theme “Redefining the
Experience.”
To strengthen the country’s digital infrastructure, the VITRO
Network of Data Centers continued its expansion program
across the Philippines, with two new locations in Clark,
Pampanga and Davao City, the country’s first commercial data
center in Mindanao. This brought the Group’s data center
capacity to over 9,000 racks.
To bring more technology innovations to customers, PLDT
Enterprise sealed key partnerships with leading international and
local technology providers, such as Cignal TV, Cisco Systems, Inc.,
The BT Group and Akamai Technologies, to better serve the
Philippine enterprise Market.
PUSHING DIGITAL LIFE SERVICES
Nearly 20 million Filipinos are now enjoying various digital
services through the platforms of PLDT subsidiary Voyager
Innovations. These include digital payments via PayMaya,
remittances through Smart Padala, digital lending via Lendr, digital
commerce with Takatack, sponsored data access and rewards
with Freenet, as well as digital marketing customer engagement
through Hatch.
To boost the usage of cashless technologies, Voyager’s financial
services arm PayMaya Philippines introduced PayMaya in
Messenger in October 2017, allowing customers to create
a PayMaya wallet and access financial services through the
popular messaging app. It also introduced its scan-to-pay service
PayMaya QR through key merchants such as The SM Store,
Robinsons Retail Holdings and its various brands, McDonalds
and Mercury Drug and many others.
On the enterprise side, Voyager equipped over 300 businesses
– ranging from banks to government agencies, large firms, and
small and medium enterprises (SMEs)–so they can expand their
reach and enrich their services to customers through digital
channels. To support this thrust, Voyager launched its Voyager
DigiHub Program in December 2017, as well as affordable
bundles for micro, small and medium enterprises (MSMEs)
under its Digital Plus packages, in cooperation with PLDT.
On the financial technology side, Voyager’s FINTQnologies
(FINTQ) now has the most extensive digital lending footprint
nationwide, with over P27 billion in loans disbursed through its
Lendr platform since 2015.
In September 2017, Voyager launched KasamaKA, a cost-efficient,
convenient, secured, and transparent shared services platform
to help Filipinos access banking services. At the same time,
KasamaKA is also a community income builder program whose
members are rewarded for doing financial transactions. Through
KasamaKA, FINTQ is providing one million free microinsurance
policies to unbanked and underserved Filipinos, in cooperation
with the Liga Ng mga Barangay sa Pilipinas, through its
KasamaKA Microinsurance program.
To encourage greater participation in the growing digital
economy, Voyager has also expanded its free internet platform
Freenet beyond merely providing sponsored data access to its
partner apps and sites. It is now also providing reward points
that users can exchange to redeem prepaid load and data
packages from all mobile networks within the Freenet app.
TackThis!, Voyager’s online store builder platform, signed
a partnership with Go Negosyo to provide e-Commerce
capabilities to MSMEs all around the country. Through TackThis!,
small merchants from the 81 provinces of the Philippines will
be able to create their own online storefronts and expand their
market to the rest of the country.
16 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
17
THE PLDT GROUP
Awards and Recognitions
INVESTOR RELATIONS
ePLDT
Institutional Investor All-Asia Executive Team
• Best IR Professional #2 – Melissa Vergel de Dios
• Best Website #3
Finance Asia
• Best at Investor Relations #2
• Best at Social Corporate Responsibility #5 – PLDT
• Most Committed to Corporate Governance #4
SMART
Asia Communications Awards (ACA)
• Digital Service Provider of the Year
• Welcome Change Campaign: Best Brand Campaign
World Communication Awards (WCA)
• Welcome Change Campaign: Best Brand Campaign
• SHINE OS+ (Secured Health Information Network and
Exchange): Social Contribution Award
International Public Relations Association’s Golden
World Awards (GWA)
• SHINE OS+ (Secured Health Information Network and
Exchange): Healthcare Category
• TNT Super Panalo Day: Events Management Category
Public Relations Society of Philippines (PRSP)
Anvil Awards
• Company of the Year for second consecutive year
(with 17 Gold Anvils and seven Silver Anvils)
International Association of Business Communicators
Philippine Quill Awards
• 2nd Runner-up: Company of the Year
(with 12 Excellence Awards and nine Merit Awards)
Open Signal Awards
• Fast Network Overall in the Philippines
• Fastest LTE Network in the Philippines
• Lowest Latency on LTE in the Philippines
• Lowest Latency on 3G in the Philippines
LinkedIn Awards
• Most Socially Engaged Company
World Branding Institute
• Asia’s Best Employer Brands
• 2017 Microsoft Country Partner of the Year
• Cisco 2-Tier Partner of the Year
• AGS subsidiary: ToP SAP Business One Award for the
Philippines & Southeast Asia
• AGS: SAP certifications – SAP S4 HANA Partner Center of
Expertise, SAP SuccessFactors Certified Partner, and SAP
C4C Certified Partner
PLDT ENTERPRISE
PRSP Anvil Awards
• PLDT ALPHA
- 2017 Customer Engagement Campaign
- Changing the Way You Do Business Campaign
- Customer Satisfaction Campaign
- Hot Joe Magazine Volumes 24 – 28
• PLDT SME Nation
- BIG Talks Series
- Make it BIG Campaign
- #BeTheBoss Awards
- Tech Mobile
- TechIsland 3.0: Challenge, Change, Conquer
IABC Quill Awards
• PLDT ALPHA
- Hot Joe Magazine Volumes 24 -28
- PLDT Pasasalamat Night
- 2016 Philippine ICT Leadership Convention: Digital Now!
• PLDT SME Nation
- #BeTheBoss Awards
- BIG Talks Series
- TechIsland 3.0: Challenge, Change, Conquer
MEF 2017 Awards
• Retail Service Provider of the Year – APAC
• Wholesale Service Provider of the Year – APAC
• Enterprise Application of the Year – Business Process
Services
18 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
19
PLDT HOME
PRSP Anvil Awards
• PLDT HOME ULTERA: Strengthening the Volleyball
Community with the Volleyfriends
GOLD AWARD for PR Programs Directed at Specific
Stakeholders – Communities
PR Week Asia 2017
• PLDT HOME ULTERA: Strengthening the Volleyball
Community with the VolleyFriends
Quill Awards 2017
• FINALIST for Brand Development Campaign of the Year
(Service)
• PLDT HOME DSL: #MostBeautifulConnection Video
GOLD AWARD for PR Tools Multimedia / Digital – Online Video
• PLDT HOME: Pay to Win with PLDT Home
Category: Communication Management - Customer Relations
• PLDT GABAY GURO
GOLD AWARD for PR Programs on a Sustained Basis –
• PLDT Gabay Guro Training and Scholarships
Category: Communication Training and Education
Social Responsibility
• PLDT Home Fibr Planner
Category: Communication Skills—Publications
• PLDT Home DSL #MostBeautifulConnection Video
Category: Communication Skills—Audio/Visual
Readers’ Digest Trusted Brand 2017
• PLDT HOME Fibr
GOLD AWARD for Broadband Services
• PLDT HOME
PLATINUM AWARD for Landline Phone Services
World Communication Awards by Total Telecom
• PLDT Home
Finalist – Digital Lifestyle Award
• PLDT Home Fibr
Finalist – The Broadband Pioneer Award
PLDT
JobStreet Awards
• Among Top Ten Companies Filipinos Aspire To Work For
• PLDT GABAY GURO: Teacherfest
SILVER AWARD for PR Tools, Exhibits, and Special Events –
Milestones
• PLDT HOME: Regine Series Nationwide Tour
SILVER AWARD for PR Tools, Exhibits and Special Events –
Launches
• PLDT HOME FIBR: Planner
SILVER AWARD for PR Tools Publications
• PLDT HOME DIGITAL SERVICES: New Kiddie Gadget
Alert—the Smart Watch by PLDT Home!
SILVER AWARD for PR Programs Directed at Specific
Stakeholders – External Consumers
• PLDT HOME DSL: Data Sharing with PLDT Home
SILVER AWARD for PR Programs Directed at Specific
Stakeholders – External Consumers
PANATA Awards 2017
• PLDT HOME DIGITAL SERVICES: New Kiddie Gadget
Alert—the Smart Watch by PLDT Home!
Awardee for Brand-Integrated Program-Tactical
(Promotions) Category
• PLDT HOME DSL: Data Sharing with PLDT Home
Awardee for Brand-Integrated Program-Tactical
(Promotions Category)
• PLDT GABAY GURO: TeacherFest
Awardee for Brand-Single Medium-Activation Category
18 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
19
Enabling a
delightful
digital lifestyle.
20
PIONEERING. INNOVATING. LEADING. 21
PLDT 2017 ANNUAL REPORT Opening doors for young minds.
22
PIONEERING. INNOVATING. LEADING. THE PLDT GROUP
Corporate Social Responsibility
Report
Continuing its effor ts to improve the lives of Filipinos, PLDT pursued
innovative programs in various fields such as education, health,
disaster resiliency and preparedness, environmental protection,
and spor ts – with an increasingly digital spin.
PROMOTING DIGITAL LITERACY
In 2017, PLDT’s Infoteach Outreach Program provided digital
literacy training for some 3,400 teachers and 3,000 students in
10 schools divisions of the Department of Education (DepEd)
covering 15 cities and municipalities. This brought the total
graduates of the program since its launch in 2004 to over
25,000. Working with the University of the Philippines Open
University (UPOU), PLDT Infoteach launched its latest training
curriculum, which included modules on such subjects of
current interest as social media for education and responsible
citizenship; media literacy on fake news and alternative facts;
global citizenship including computer ethics, cybercrime law
and data privacy. Other partners in the program were DepEd,
the UPOU Foundation, the Department for Information
and Communications Technology (DICT) and the local
governments where the participating schools are located.
2017 also marked the 10th anniversary of the Gabay Guro
Program, the flagship program of the PLDT-Smart Foundation
(PSF) and the PLDT Managers’ Club, Inc. (MCI). The program
supported 542 public school teacher-scholars of which 155
graduated – 67 with Latin honors. In addition, 80 Gabay Guro
scholars passed the Licensure Examinations for Teachers
(LET). Gabay Guro also continued its advocacy on equal
learning opportunities for all. They participated anew in
Brigada Eskwela (School Brigade) through the Juan M. Alberto
Memorial Elementary School, which was in disrepair due to
the damage inflicted by typhoon Nina in 2016.
TEACHERS AND
3,400
3,000
STUDENTS WERE
PROVIDED DIGITAL
LITERACY TRAINING
542
GABAY GURO PUBLIC
SCHOOL TEACHER-
SCHOLARS IN 2017
Photo from left to right:
The annual Gabay Guro Teacher Fest is a
fitting tribute to all pillars of education.
The PLDT Broadband Quiz under the PLDT
Infoteach Program showcases the IT know-
how of teachers and students beneficiaries.
23
PLDT 2017 ANNUAL REPORT
In August 2017, the Pamantasan ng Lungsod ng Maynila (PLM)
inaugurated a high-tech facility for its IT and Engineering
students with upgraded equipment and an improved
learning environment that was built through the financial
assistance of PLDT and Smart Chairman and CEO Manuel
V. Pangilinan, the PLDT-Smart Foundation (PSF) and the One
Meralco Foundation (OMF). Called the MVP Technology
and Innovation Center, this facility was set up through the
renovation and re-fitting of PLM’s five-storey College of
Engineering building.
Smart Communications further advanced its School-in-a-Bag
(SIAB) and Technocart programs, which use technology to
promote education, especially for schools in remote areas
with no power or water, and, for the out-of-school youth.
In 2017, Smart distributed 18 Technocarts and 17 Schools-
in-a-Bag. A TechnoCart contains 20 tablets, a projector, a
laptop-tablet, and a pocket Wi-Fi with starter load, and can
be wheeled from one classroom to the next. The tablets and
laptops are preloaded with educational content. Each School-
in-a-Bag comes in a large backpack containing solar power
equipment, an LED TV, a laptop and teacher’s tablet, five tablets
for students, and Wi-Fi with starter load. Fourteen of these
backpacks were given to schools in remote areas, while three
were given to mobile teachers who teach out of school youth
in 31 schools. Interestingly, the School-in-a-Bag program has
become a partnership vehicle for like-minded companies
and organizations. For example, UBS Investments Philippines
donated funds through the PSF for 10 School-in-a-Bag units,
of which four were delivered in 2017. More units that were
donated in 2017 will be delivered to schools and communities
in 2018.
In 2017, the SWEEP provided industry-level training for over
1,100 teachers and students of its 42 partner engineering
and IT schools in various parts of the country. The SWEEP
Innovation and Excellence Award Competition was won by
the University of San Jose Recoletos for its mobile app
“Blood Seeker” which is designed to expedite the search
for blood donations.
In 2017, Smart partnered with the DepEd and various colleges
and universities to develop mobile apps in various local
languages to help improve learning in the primary grades.
This is in support of the DepEd’s implementation of Mother
Tongue-Based Multilingual Education.
The first two learning apps include one being developed with
the Bangsamoro Development Agency (BDA) and the Far
Eastern University – Institute of Technology that is aligned
with the Tahderiyyah kindergarten curriculum. Another is an
app that teaches Arabic language and Islamic values while
promoting independent learning among Arabic Language
and Islamic Values Education (ALIVE) students in General
Santos and Saranggani. An Ilokano learning is now under
development in partnership with the Mariano Marcos State
University in Batac, Ilocos Norte while a Cebuano literacy app
is being done in collaboration with the University of Cebu.
Smart has integrated the Dynamic Learning Program (DLP) as
a teaching strategy into its various programs like School-in-a-
Bag and the learning apps. Developed by Ramon Magsaysay
awardees Dr. Christopher Bernido and Dr. Ma. Victoria Carpio-
Bernido, DLP has proved to be an effective system for helping
students learn under challenging circumstances.
ENHANCING DISASTER PREPAREDNESS
AND RESILIENCY
2017 was a difficult year for the Philippines as the scenic
lakeside City of Marawi in Lanao del Sur became the
battleground between government troops and Islamic groups
linked to the Islamic State of Iraq and the Levant (ISIL). Over a
thousand people were killed, communities were devastated by
bombs and bullets, and, tens of thousands of families were left
homeless by five months of intense fighting.
In response, PLDT and Smart joined hands with kindred
companies to help the displaced communities and the soldiers.
The largest such effort was the relief mission conducted by
the PSF and the OMF in cities of Iligan and Marawi, where
P500m
EMERGENCY CELL
BROADCAST SYSTEM
ACTIVATED
Photo from left:
School-in-a-Bag and TechnoCart program beneficiaries
from remote areas enjoy the benefits that come with
the packages.
Kids have fun at the Puppet Show during the Marawi
Kids CSR Day led by MVP Tulong Kapatid.
24 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
25
many families fleeing the fighting had sought refuge. The PSF
donated food packs and clothing for 500 people while OMF
and Smart gave additional food packs for more than 1,000
people in evacuation centers. PSF also delivered ice cream to
the Maria Cristina evacuation center in Iligan, to bring some
much-needed cheer to the children.
Working with the Duterte Cabinet Spouses Association, PSF,
OMF, the Philex Mining Corporation, and the MPIC, extended
help to the families of 98 soldiers and three police officers
who were killed during the Marawi siege.
PSF also provided 1,000 “care packs” for soldiers of the 4th
Mechanized Infantry Brigade, in Iligan City as well as 100
portable water filtration devices to address the problem of
potable water for both the troops and the evacuees. The
care packs contained snacks, cookies, and sports drinks to
supplement the soldiers’ usual food rations. PSF also donated
lifesaving chest seals and hemostatic agents to the Camp
Evangelista Hospital in Cagayan de Oro.
Smart set up a mobile cell site to serve government troops in
the Marawi military camp. PLDT and Smart provided internet
service so that soldiers could communicate more easily with
their families at home. Smart also set up Libreng Tawag (Free
Calls) booths for evacuees and provided text blast services
via Smart Infocast to help government and the military
communicate with the public.
Looking forward, PLDT, Smart, Meralco and MPIC also
pledged support for the rehabilitation of Marawi during with a
summit sponsored by the United for Marawi consortium. The
consortium is made up of the PDRF and the PBSP which are
both chaired by Pangilinan.
In 2017, PSF conducted follow-through activities to help
communities hard hit by Super Typhoon Yolanda in 2013.
In partnership with One Meralco Foundation and Ciena
Communications, PSF inaugurated the Tulong Kapatid Multi-
Purpose and Evacuation Center. Donated to the Archdiocese
of Palo, Leyte, this multi-purpose center can accommodate up
to 1,500 people during emergencies. It can also be used for
gatherings and community events during normal times. The
Kapatid Village Program was also started where PSF, OMF and
MPIC pledged a total of 40 houses to the Siasi Municipality, an
island municipality of Sulu.
Meanwhile, Smart has enhanced the capability of the National
Disaster Risk Reduction and Management Council (NDRRMC)
to issue disaster alerts by activating its P500-million Emergency
Cell Broadcast System (ECBS). Smart’s ECBS issues quick
location- and hazard-specific alerts using a communications
channel separate from that used by calls and text messages,
which may get congested in times of calamities. This makes
ECBS a more effective disaster communications system. It is
now being used by the NDRRMC.
24 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
25
Smart also provided anew emergency communications
support during the National Simultaneous Earthquake Drills
held in Cebu, Davao and Cavite. The services deployed
include mobile cell sites, ECBS, free calls and charging, satellite
communications, and the SOS Dispatch solution, which enables
LGUs to monitor, record, and dispatch reported incidents
while keeping responders connected in near real-time.
Smart rolled out its TNT Tropang Ready Caravan in
state universities to train the students in mobilizing their
communities in times of disasters. Tropang Ready schools
include Batangas State University, Bulacan State University,
Southern Leyte State University, University of Science and
Technology of Southern Philippines–Cagayan de Oro,
University of Baguio, Isabela State University, Eastern Visayas
State University and public and private educational institutions
in Ormoc, including St. Peter’s College.
PDRF also began to build the permanent Emergency
Operations Center (EOC) in Clark, Pampanga. The EOC in
Pampanga serves as the first national private sector emergency
center of its kind. It monitors typhoons and earthquakes, helps
with disaster response, and engages members in table-top
exercises, workshops, and drills.
QUALITY HEALTHCARE
PLDT continued to conduct the “Dugong PLDT” blood-letting
program in offices of PLDT and the Philippine Red Cross
(PRC). This was done in partnership with Philippine Children’s
Medical Center (PCMC) and PRC. Some 700 PLDT employees
from various offices and some outsiders donated blood in
support of the Department of Health’s (DOH) campaign of
providing safe blood to those in need.
In early 2017, Smart unveiled the latest version of the
Operation Smile app for both Android and iOS mobile
devices. The updated app was launched as part of Operation
Smile Philippines’ (OSP) 35th anniversary, with the campaign
#UntilWeHeal. The app, being used by volunteers from OSP
and International Care Ministries, helps in digitizing medical
information and mapping cleft patients. It enables OSP to plan
medical missions in a more efficient manner, by identifying
areas with high number of children with cleft conditions.
Smart supported OSP’s medical missions in the following
areas: Batangas, Bacolod, Dumaguete, and Iloilo. Since the
organization’s launch in 1982, more than 31,000 children in
the Philippines have been operated upon by Operation Smile
volunteer doctors. This year alone, around 900 beneficiaries
have been treated, while more than 600 patients have been
encoded in the app.
PROTECTING THE ENVIRONMENT
PLDT has continued its support for the Motolite-PBSP
Balik-Baterya Program which promotes proper disposal and
recycling of used batteries. Funds from donated used batteries
are used to support CSR projects identified by both PLDT and
PBSP. In 2017, PLDT raised P10.7 million from this program.
These funds will be used in 2018 to fund key programs like
schools in Marawi and other areas.
Harnessing technology to protect the environment, Smart
teamed up with technology partner Ericsson to implement the
Connected Mangroves project in Bangkung Malapad, Sasmuan,
Pampanga. This IoT (internet of things) solution uses Smart’s
wireless connectivity to transmit data about the condition of
the mangroves, such as water level, humidity, soil moisture
and temperature.
26 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
27
Smart also collaborated with startup Instigators Inc. for the
Biosentinel environment monitoring system, to be deployed in
Mt. Makiling Forest Reserve. The system has three components:
the web dashboard; the app, which can be used by forest
patrollers; and the analytics data software.
Smart and PSF also renewed their commitment to the
Marikina Watershed Initiative (MWI) by expanding their
livelihood assistance to the communities working to
rehabilitate the protected area. They also provided funding
in support of the Tayabasang Umuusad ng Pangkatutubong
Asosasyon (Tupai) community and Forest Families project,
which give incentives to families for their efforts to protect
forest areas. The two organizations are committed to the
protection of 13 hectares of remaining forest and restoration
of five hectares within the high conservation areas of the
Marikina watershed for a period of five years.
UNIFYING THE NATION THROUGH SPORTS
The MVP Sports Foundation (MVPSF) actively supported the
Philippine participation in the 29th Southeast Asian (SEA)
Games and 9th Association of Southeast Asian Nations
(ASEAN) Para Games held at Kuala Lumpur, Malaysia. The
country competed in 38 sports categories garnering a total
of 121 medals – 24 gold, 33 silver, and 64 bronze. MVPSF
supported athletes in eight sports, namely: badminton,
basketball, boxing, cycling, football, golf, rugby, and taekwondo.
The big sports news for 2017 was the successful bid of the
Samahang Basketbol ng Pilipinas (SBP) for the Philippines to co-
host the 2023 FIBA World Cup together with Indonesia and
Japan. This is the first time that this global competition will be
co-hosted by several countries. Though the tournament is still
several years away, preparations have begun.
Photo from left:
A student volunteer uses SHINE OS+ to encode the health
information of a resident from the Gawad Kalinga Ark of
Noah community in Bocaue, Bulacan.
An Operation Smile volunteer takes a photo of a young
cleft patient using the Operation Smile app during a
medical mission in Batangas City.
This phone screen shows the Connected Mangroves
dashboard, which reflects data transmitted by sensors
attached to the mangrove trees in Sasmuan, Pampanga.
A big day for Philippine basketball with SBP’s successful bid
to co-host the 2023 FIBA World Cup.
P10.7M
RAISED THROUGH
BALIK-BATERYA PROGRAM
MORE THAN
31,000
LIVES CHANGED BY
OPERATION SMILE
26 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
27
A fresh
view of our
changing
world.
28
PIONEERING. INNOVATING. LEADING. 29
PLDT 2017 ANNUAL REPORT PEOPLE AND CULTURE
Enhancing Employee Experience
2017 was a pivotal year for the ongoing business and culture transformation jouney of PLDT and Smart.
Amid all the challenges that rapid changes bring, our people are rising to the challenge of reinventing our
business and organization as a digital market leader. This task has become more urgent with the advent
of new technologies such as 5G, artificial intelligence and the internet of things (IoT). While embracing
disruption, our people’s passion for their work continues to be driven by our rich heritage of connecting
families and individuals, empowering businesses and building communities and the nation.
EMPLOYEE EXPERIENCE:
Central to Culture Transformation
In the digital economy, experience is the new currency. To deliver
awesome customer experience (CX), we have set employee
experience (EX) as central to our culture transformation. It rests
on the simple premise that the way we treat our employees
influences how they deliver service to our customers. In designing
and assessing people programs and processes, we are guided by
the EX principles: leader-led, employee-owned, and digital-enabled.
PERFORMANCE AND REWARDS:
Fundamentals for Aspiring
for a High Performance Culture
In 2017, we focused on two key steps to shift PLDT and Smart
onto transformation mode:
• Align groups and individuals to the company’s High 5 goals;
• Ensure the performance management system is business-
driven, merit-based, goals/values-oriented, and coaching-
centered.
To lay the foundation for a pay for performance culture, we
revamped our total rewards program addressing both shor t-term
and long-term transformation goals, anchored on our two-pronged
philosophy of rewarding for impact and line of sight.
We standardized the performance management system using
a global online platform across PLDT and Smar t to provide
a common yardstick in assessing, managing, and rewarding
performance. A combination of mobile learning and social
communication helpdesk was deployed to equip employees for
the new performance excellence program (PEP).
Going beyond the basics of performance management, we piloted
a talent tiering program geared towards the retention of critical
talents. While the program roll-out is still at its infancy stage, this
has already yielded positive results in improving the retention of
identified top-tier talents.
WORKFORCE 2020:
Empowering Employees
to Own Their Development
Going digital requires digital skills adoption. Our comprehensive
corporate university provides a rich por tfolio of learning
experiences and culture-building interventions. We launched
a new Workforce Learning 2020 Curriculum aligned with new
technology requirements of PLDT and Smar t (such as 5G, IPv6,
SDN, Cloud, Virtualization, Ar tificiaI Intelligence, Programming
and Coding) coupled with our internally-crafted competency
requirements for all employees.
About 25 learning sessions are held weekly in our learning center’s
classrooms, PC Training rooms, as well as IP and equipment
laboratories. The learning ecosystem also includes a residence hall,
a digital learning por tal and a multi-media library to ensure real-
time Learning and Development (L&D) capability-building for all
our critical talents.
30 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
31
The creation of a synergized L&D group across PLDT and Smar t
in 2017 has widened the reach of our corporate academe to
address the competency development requirements of employees.
About 66% of the employee population went through PLDT-
Smar t’s corporate training programs in 2017. They took various
courses on technology, behavioral, leadership and business,
and process skills trainings. In terms of e-learning, there were
more than 26,000 course completions on both mandatory and
development-oriented digital learning modules. This brings our
Classroom to E-learning Ratio to 1:3, signifying a high comfor t
level among employees to now learn in the digital mode which is a
more efficient delivery of learning programs.
The development of Globally Cer tified Technical Talents has been
a priority of our Learning and Development Center. In 2017, PLDT
produced a total of 243 new technical cer tifications on Computing
Technologies Industries Association (CompTIA) Network
Professional, Metro Ethernet Forum Carrier Ethernet Cer tified
Professional (MEF-CECP), Professional Project Management, Fiber
Optics, Huawei and Cisco (i.e. Cisco Cer tified Network Associate
(CCNA) Wireless, Cisco Cer tified Network Professional (CCNP)
and including Cisco Cer tified Internet Exper ts (CCIE) – the
highest level of cer tification in the Cisco standard). As of end-
December 2017 PLDT and Smart has more than 1,000 globally
cer tified employees in its roster of key technical talents, including
32 CCIEs.
LEADERSHIP DEVELOPMENT:
Inspiring a New Breed of Talents
The tidal wave of digital disruption sweeping businesses all over
the world requires a new breed of leadership talent. To address
this need, we have implemented the Next Generation Leaders
Program where new officers are put through a year-long series of
mentoring and practical skill-building activities where the Chairman
and CEO and the Top Management Team take on the role of
coaches and mentors.
We have also defined a new leadership standard for PLDT and
Smar t, with attributes much needed in a digital environment:
strategic foresight, data-driven decision-making, customer
obsession, innovation and creativity, change leadership, constructive
communication, and technology aptitude.
CULTURE:
Amplifying Digital Vehicles
for Engagement
Behind the success of every digital business transformation is
culture transformation. In this regard, PLDT and Smar t were the
first companies in the Philippines to conduct a culture assessment
survey in 2017. The Top Management and senior leaders defined
the ideal performance culture based on transformation objectives.
Hitting over 93% survey par ticipation rate and completing over
thir ty (30) qualitative world coffee sessions attested to a strong
interest across the organization to shift to a more high-performing
digital culture.
One of the fundamental culture-shaping actions in 2017 was to
define and cascade “High 5” - the first ever company goals shared
across PLDT and Smar t. This was deployed largely through digital
channels complemented by face-to-face huddles facilitated
by leaders.
By end of 2017, 90% of executives had already aligned their
respective group’s functional goals with High5. The new
performance excellence program and the enhancements on total
rewards are anchored likewise anchored on High 5 goals.
An effective internal communication process is impor tant in
shaping culture. For this, we have increasingly tapped social and
digital communication platforms. Employee response has been
generally positive. Digital Dialogues conducted by top management
reached over 15,000 internal social engagement while the online
communication platform has a weekly average of 4,000 active
employees.
The creation of a synergized communication and engagement team
across PLDT and Smar t has opened the doors for more high-impact
programs catering to a multi-generation workforce while at the
same time maintaining cost. Our reach is an average of two (2)
engagement programs per employee with an engagement coverage
ratio of 212% (i.e. total attendees versus total population). The
recognition program, Heroes and Rock Stars, has been synergized
for adoption across PLDT and Smar t.
EMPLOYER BRAND:
Back-to-back-to-back Wins
While the road to 2020 stretches ahead of us, we have already
reached three significant milestones in raising our employer brand
with PLDT ranking among the top companies Filipinos aspire to
work for and with Smar t being recognized as among Asia’s best
employer brands and the most socially engaged in the country.
30 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
31
Securing sustainable value for the
Company and its stakeholders.
32
PIONEERING. INNOVATING. LEADING. THE PLDT GROUP
Corporate Governance Report
Corporate Governance is the cornerstone of our strategy. It ensures that
our business environment breeds a culture of good governance, excellence and
commitment to achieve our Mission and strategic objectives. It entails working
together in order to secure sustainable value for the Company to the benefit
of our stakeholders. In the PLDT Group, corporate governance is ever yone’s
business - the Board, Management and employees, who have pledged to
uphold the Company’s core principles of integrity, accountability, fairness, and
transparency in all business dealings and transactions.
PLDT follows the corporate governance standards
prescribed by Philippine law and rules and regulations of
the Philippine Securities and Exchange Commission (PSEC)
and the Philippine Stock Exchange (PSE). As a foreign
private issuer with American Depositary Shares listed and
traded In the New York Stock Exchange (NYSE), PLDT
also complies with cer tain governance standards laid out
in the relevant laws of the U.S. and rules and regulations
of the U.S. Securities and Exchange Commission (US SEC)
and NYSE. Being an associated company of First Pacific
Company Ltd., a company listed in the Hong Kong Stock
Exchange, PLDT also benchmarks with the governance
standards of Hong Kong.
PLDT’s corporate governance framework is embodied in
the integrated system of governance structures, policies
and processes set for th in PLDT’s Ar ticles of Incorporation,
By-Laws, Manual on Corporate Governance (CG Manual),
Code of Business Conduct and Ethics (Code of Ethics) and
Corporate Social Responsibility Statement. Our business
principles are threshed out in implementing policies
including the Supplier/Contractor Relations Policy, Conflict
of Interest Policy, Expanded Whistleblowing Policy, Policy
on Gift-Giving Activities, Policy on Gifts, Enter tainment and
Sponsored Travel, Guidelines on Related Par ty Transactions,
and Disclosure Rules, among others.
On May 12, 2017, the Board of Directors approved the
Company’s new CG Manual which contains most of the
governance standards and best practices recommended
in the Code of Corporate Governance for Publicly-Listed
Companies issued by the PSEC on November 22, 2016
(the “New CG Code”).
HIGH LIGHTS IN 2017
• Board Charter and Board
Diversity Policy
• New Corporate
Governance Manual
• Annual Stockholders’ Meeting
• 12 Board Meetings and 29 Board
Committee Meetings
• Training on Governance and
Customer Experience; People
and Culture Transformation
Strategies; Risks and Strategies
in the Digital Age
• Transformation Incentive Plan
33
PLDT 2017 ANNUAL REPORT
CORPORATE GOVERNANCE & COMPLIANCE SYSTEM
SHAREHOLDERS
Election
Report
Accountability
BOARD OF DIRECTORS
Report
Appointment
EXTERNAL
AUDITOR
Report
Appointment
Committee Charter
Designation
Report
Assurance
Appointment
BOARD COMMITTEES
AUDIT
COMMITTEE
RISK
COMMITTEE
EXECUTIVE
COMPENSATION
COMMITTEE
TECHNOLOGY
STRATEGY
COMMITTEE
GOVERNANCE
& NOMINATION
COMMITTEE
Oversight
Guidance
Report
Report
Oversight
Guidance
Oversight
Guidance
Report
Information
INTERNAL
AUDIT
CFO/GROUP
RISK MGMNT
DEPARTMENT
CORPORATE
GOVERNANCE
OFFICE
Audit
Report
Guidance
Oversight
Guidance
Oversight
Guidance
Appointment
Oversight
Annual Audit
CEO
MANAGEMENT
Report
Accountability
BOARD OF DIRECTORS
Charter
Our Board of Directors (“Board”) adopted its Char ter on
November 9, 2017. The Char ter is intended to serve as guide
for the Board and each director in performing their functions
and fiduciary duties.
Duties and Responsibilities
The primary responsibility for ensuring good corporate
governance in PLDT is vested in our Board. As the body
entrusted with authority to act for and on behalf of
the Company, acts of the Board are expressions of the
Company’s will, including its exercise of the corporate
powers, conduct of business and control of the proper ties 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 of the Company and reviews the same annually
in relation to corporate performance in its annual
strategic planning session with Management.
• Management oversight. The Board exercises oversight
on Management in its execution of the strategic direction
and implementation of the policies set by the Board.
• Corporate Social Responsibility and Stakeholder
engagement. 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, including
the Company’s disclosure of material and reportable
information regarding non-financial and sustainability
issues, with focus on the management of economic,
environmental, social and governance (EESG) issues of
the business.
• 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 repor ting, internal control
system, internal audit and independent audit mechanisms.
34 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
35
• 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. To facilitate the succession planning process
within the PLDT Group, a succession planning process
referred to as the Leadership Succession Planning and
Development has been established. The Board is assisted
by the Executive Compensation Committee in developing
the compensation philosophy or policy consistent with
the culture, strategy and control environment of
the Company.
• 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. Each Board Committee also conducts an annual
self-assessment of its performance.
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.
Board Diversity
The Company recognizes that diversity at the Board level
in a broad range of aspects including, but not limited to,
knowledge, skills, professional or business experience, cultural
and educational background, ethnicity, gender, age, length of
service, and mix of executive, non-executive and independent
directors, contributes to the enhancement of the quality of
performance and decision-making capability of the Board. It also
considers having an optimally performing diverse Board as an
essential element for the attainment of the Company’s strategic
objectives and its sustainable development. Accordingly, on
November 9, 2017, the Board approved the Company’s Board
Diversity Policy. This policy provides that without infringing
the cardinal right of the stockholders to nominate and vote
for the election of directors, the Governance and Nomination
Committee and the Board shall consider the appropriate
mix, complementation and interplay of the various diversity
aspects in the selection of qualified director-nominees, including
independent director-nominees, who will be recommended
for election by the stockholders or the Board, as the case may
be, for the Company to achieve the benefits of Board diversity
as well as to fairly and effectively promote the interest of all
the stakeholders, par ticularly the long term interest of the
stockholders of the Company.
For the purpose of selecting the members of our Board,
the Governance and Nomination Committee 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, exper tise 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 Board Diversity Policy and the Company’s Mission, Vision
and strategic objectives.
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PLDT 2017 ANNUAL REPORT
35
Composition
Our Board is composed of 13 members, with 3 independent
directors, 7 non-executive directors and 3 executive directors.
Three directors are female and two are Japanese citizens.
All the members of our Board are qualified and competent
directors with diverse and complementing skills, exper tise,
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. At
least three of our non-executive directors have extensive
experience in the telecommunications industry.
Board Composition
14
12
10
8
6
4
2
0
ED (3)
ID (3)
NED (7)
FEMALE
(3)
MALE (10)
ROLE
GENDER
81-90 (1)
71-80 (5)
61-70 (4)
51-60 (2)
41-50 (1)
AGE
JAPANESE
(2)
<10 (3)
FILIPINO
(11)
10-20 (6)
>20 (4)
ETHNICITY
TELECOM-ICT
EXPERIENCE
(YEARS)
Directors’ Professional Background
12
10
8
6
4
2
0
(10)
77%
(4)
31%
(4)
31%
BUSINESS
LEGAL
ENGINEERING
-ICT
(3)
23%
PUBLIC
ADMIN
Independent Directors. Our independent directors, namely,
former Supreme Cour t Chief Justice Ar temio 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, apar t
from his fees and shareholdings, is free from any business
or other relationship with the Company which could, or
could 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.
Chairman. The Chairman provides leadership for the Board
and ensures that the Board works effectively and performs
its duties responsibly. He presides and facilitates discussions
in Board meetings focusing on strategic matters, risk
management, key issues and governance concerns that will
affect the business operations.
The incumbent Chairman, Mr. Manuel V. Pangilinan,
concurrently holds the position of President and CEO since
January 1, 2016. With the guidance of the Governance and
Nomination Committee, Mr. Pangilinan is managing the search
for a new President and CEO of PLDT. Meanwhile, the Board
is assured of the benefit of independent views with the
checks and balances in place: (i) clearly defined duties and
responsibilities of the Chairman and the President & CEO in
the By-Laws, CG Manual and Board Char ter ; (ii) independent
Board oversight, suppor ted by 3 independent directors,
7 non-executive directors, Audit Committee composed
entirely of independent directors, and Governance
and Nomination Committee, Executive Compensation
Committee and Risk Committee with independent directors
constituting majority of their respective voting members;
and (iii) Company policies and procedures which have been
established to manage conflicts of interests.
Directorships in other 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.
36 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
37
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, risk management reports and CSR programs.
Once every quarter, our Board reviews the quarterly financial
reports.
In 2017, our Board held 12 meetings (9 regular Board meetings,
2 special Board meetings and 1 organizational Board meeting).
In each meeting, a quorum of at least two-thirds of the Board
members, including at least one independent director, was
present. All independent directors were present in the Annual
Stockholders’ Meeting held on June 13, 2017. The respective
Chairmen of the Audit, Governance and Nomination, Executive
Compensation, Risk, and Technology Strategy Committees were
likewise present in the said meeting.
The 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 2017.
Compensation. All 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.
Stakeholder Engagement and CSR
Governance Framework
Enterprise Risk Management
14%
13%
4%
19%
Board
Acitivites
21%
Strategic Direction and
Corporate Performance
Financial Reporting,
Internal Controls and
Independent Audit
29%
Management Oversight
36 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
37
ATTENDANCE IN BOARD MEETINGS AND ANNUAL STOCKHOLDERS’ MEETING
Board Meetings
Annual Stockholders’ Meeting
Director
Manuel V. Pangilinan
Ray C. Espinosa
Ma. Lourdes C. Rausa-Chan
Bernido H. Liu
Artemio V. Panganiban
Pedro E. Roxas
Helen Y. Dee
James L. Go
Shigeki Hayashi
Hideaki Ozaki
Albert F. del Rosario
Atsuhisa Shirai
Amado D. Valdez
Marife B. Zamora
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
Hideaki Ozaki
Shigeki Hayashi
Albert F. del Rosario
Atsuhisa Shirai
Amado D. Valdez
Marife B. Zamora
Total
Designation
Executive Director
Executive Director
Executive Director
Independent Director
Independent Director
Independent Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
12/12
11/12
12/12
12/12
12/12
12/12
11/12
12/12
5/5
7/7
12/12
12/12
11/12
12/12
BOARD REMUNERATION IN 2017 (IN PHP)
Remuneration for ASHM
and Board Meetings Attended
Remuneration for
Committee Meetings Attended
2,750,000
2,500,000
2,750,000
2,750,000
2,750,000
2,750,000
2,500,000
2,750,000
1,500,000
1,250,000
2,750,000
2,750,000
2,500,000
2,750,000
1,625,000
750,000
750,000
2,500,000
2,875,000
2,500,000
--
2,500,000
--
--
750,000
3,500,000
--
--
--
Total
4,375,000
3,250,000
3,500,000
5,250,000
5,625,000
5,250,000
2,500,000
5,250,000
1,500,000
1,250,000
3,500,000
6,250,000
2,500,000
2,750,000
35,000,000
17,750,000
52,750,000
* Only one per diem was given to directors for attendance in the Annual Stockholders’ Meeting, Regular Meeting and Organizational Meeting on June 13, 2017.
38 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
39
Training
The Board keeps abreast of industr y developments,
business trends and legal requirements relevant to
the Company and its operations. In this regard, the
Company conducts regular and continuing training for its
directors, including PLDT’s Annual Corporate Governance
Enhancement Session which provides an oppor tunity for
its leadership to engage in discussion with international
and local exper ts on selected topics, including emerging
technologies, new laws, and best business practices. In
2017, the Company organized an Annual Corporate
Governance Enhancement Session for its directors and
officers on: (i) Governance & Customer Experience: A Sur vey
of Global Customer Experience Strategies, (ii) People and
Culture Transformation Strategies in the Digital Age, and (iii)
Charting the Digital Age, its Risks and Strategies, through
Governance and a Responsive Corporate Culture.
For the orientation of new directors, the Chairman, President
and CEO, Chief Financial Officer, Corporate Secretary and
Chief Governance Officer give 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
Ar ticles, By-Laws, Annual Report, CG Manual, Code of
Ethics, and the Char ters of the Board Committees. Updates
on business and governance policies and requirements
principally from the PSEC, PSE, US SEC, and NYSE, and new
laws applicable or relevant to the Company and its business,
par ticularly on financial repor ting and disclosures and
corporate governance, are presented in Board meetings and/
or furnished to the directors.
Program
Date of Training
Training Institution/Speaker
Name of Director
BOARD TRAINING
Governance & Customer Experience:
A Survey of Global Customer
Experience Strategies
September 7, 2017
Ralph W. Brunner
Chief Customer Experience and Data Analytics
Advisor, PLDT Inc. & SMART Communications, Inc.
People and Culture Transformation
Strategies in the Digital Age
Charting the Digital Age, its Risks and
Strategies, through Governance, and a
Responsive Corporate Culture
Maria Elizabeth S. Sichon
Chief People and Culture Officer, PLDT Inc. &
SMART Communications, Inc.
Aaron Dignan
Founder, The Ready
Manuel V. Pangilinan
Albert F. del Rosario
Bernido H. Liu
Ma. Lourdes C. Rausa-Chan
Pedro E. Roxas
Atsuhisa Shirai
Marife B. Zamora
5th Annual GGAPP Forum on Good
Governance, Ethics and Compliance
May 24, 2017
Good Governance Advocates and Practitioners
of the Philippines (GGAPP)
Albert F. del Rosario
Corporate Governance Seminar
August 9, 2017
SGV & Co.
Artemio V. Panganiban
Cybersecurity Seminar with Anti-Money
Laundering Updates
September 26, 2017
Rizal Commercial Banking Corporation
Helen Y. Dee
Shigeki Hayashi
Ray C. Espinosa
Corporate Governance Seminar
December 6, 2017
SGV & Co.
Corporate Governance & AMLA Seminar:
Updates on Corporate Governance
Regulatory Developments in 2016 &
Pointers to Ensure Effective Corporate
Governance
Corporate Governance & AMLA Seminar:
Corporate Risk Management – An Effective
Framework in Corporate Governance
Corporate Governance & AMLA Seminar:
Compliance with Anti-Money Laundering Law
December 20, 2017
Catherine N. Saplala
Former Director, Investments & Research Dept.
Securities and Exchange Commission
Mercedes B. Suleik
Former Deputy Director, Bangko Sentral ng Pilipinas;
Former Vice-President, Development Bank of the
Philippines
Richard David C. Funk II
Former Deputy Director/Head, Compliance &
Investigation Group
Anti-Money Laundering Secretariat, Bangko Sentral
ng Pilipinas
38 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
39
Board Assessment
Our directors take par t 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. The Board assessment process is fur ther
discussed under the Section Monitoring and Evaluation of
this report.
BOARD COMMITTEES
Advisory Committee
Our Board is suppor ted by an Advisory Committee that
provides guidance and suggestions, as necessary, on matters
deliberated upon during Board meetings. Our Advisory
Committee is composed of Mr. Rober to R. Romulo,
Mr. Benny S. Santoso, Mr. Orlando B. Vea, Mr. Christopher
H. Young, Mr. Oscar S. Reyes and until October 7, 2017,
Mr. Washington Z. SyCip.
PLDT’s other Board Committees, namely Audit, Governance
and Nomination, Executive Compensation, Risk, and
Technology Strategy Committees assist the Board in the
performance of its functions and responsibilities. The
respective char ters 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.
Audit Committee (AC)
The Audit Committee 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 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. de la Paz-
Bernardo, a former member of our Board. Ms. Corazon S.
de la 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/corporate-governance-files/committee-charter/
amended-ac-charter-jan22-2018.pdf. The purposes, duties and
powers of the AC are set forth in its charter.
Activities of the AC in 2017 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), the AC discussed, reviewed and approved, or noted:
• SGV & Co.’s report on the results of its integrated audit of
the 2016 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, within the meaning of
the US Securities Exchange Act and Philippine Securities
Regulation Code;
• Various audit, audit-related and non-audit services and fees
of SGV & Co. and EY for PLDT and its subsidiaries;
• Evaluation, re-appointment and engagement of SGV & Co.
as PLDT’s external auditor for the year 2017;
• SGV & Co.’s integrated plan for the audit of PLDT’s and its
subsidiaries’ financial statements and review of ICFR; and
• Non-audit engagements of SGV & Co., Ernst & Young LLP
(Singapore) and Ernst & Young Myanmar (EY Myanmar)
in 2017.
With respect to the Internal Audit group, the AC discussed,
reviewed and approved, or noted:
• PLDT Internal Audit and Fraud Risk Management Group’s
(IAFRMG) performance report for the year 2016;
•
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;
• Internal Audit’s report on PLDT Group’s Sarbanes-Oxley
Act – Section 404 (SOX 404) Compliance for 2016
and Management’s Overall Assessment and Conclusions
regarding ICFR as of December 31, 2016;
• Periodic status report on: (i) the PLDT Group’s readiness
for SOX 404 compliance as of yearend 2016 and as of
yearend 2017; (ii) PLDT IAFRMG’s major internal audit and
fraud risk management activities and accomplishments and
organizational updates; (iii) Smart Communications, Inc.
(Smart) and Digitel Mobile Philippines, Inc. (DMPI) Internal
Audit’s major internal audit activities and accomplishments;
(iv) PayMaya Internal Audit’s major internal audit activities
and accomplishments;
40 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
41
BOARD
Advisory Committee
Audit
Committee
(AC)
Governance &
Nomination
Committee
(GNC)
Executive
Compensation
Committee
(ECC)
Risk
Committee
(RC)
Technology
Strategy
Committee
(TSC)
Members
Designation
No. of Board Meetings
Annual Stockholders’ Meeting
ADVISORY COMMITTEE MEETINGS
Oscar S. Reyes
Roberto R. Romulo
Benny S. Santoso
Washington Z. SyCip
Orlando B. Vea
Christopher H. Young
Advisor
Advisor
Advisor
Advisor
Advisor
Advisor
12/12
12/12
12/12
8/9
12/12
12/12
• The Group-wide Internal Audit Plan for 2018, jointly with
• PLDT’s unaudited consolidated financial results and reports
the Smart and Digitel Audit Committees; and
• Revised PLDT Internal Audit Charter which was
subsequently endorsed to and adopted by the Board.
for the three months ended March 31, 2017, the six
months ended June 30, 2017, and the nine months ended
September 30, 2017, and the related party and significant
unusual transactions during the period.
The AC also conducted an evaluation of the qualifications and
performance of the incumbent Head of the Internal Audit
organization and resolved to re-appoint Mr. Jun R. Florencio
as Chief Audit Officer/Internal Audit Head. With respect to
financial reporting and controls, the AC reviewed and discussed
the following with PLDT Finance Officers and SGV & Co.:
Relative to governance, general internal controls and risk
management process, the AC discussed and noted, or reviewed
and approved the:
• Summary results of the AC’s Self-Assessment and
Performance Evaluation for 2016;
• PLDT’s audited financial statements for 2016 prepared in
• AC’s Report which was included in the 2016 Annual Report;
accordance with PFRS and IFRS, and the related party and
significant unusual transactions during the period; final results
and report of SGV & Co. on its integrated audit of 2016
PFRS and IFRS financial statements and ICFR; PLDT’s 2016
Annual Report on Form 17-A (for PSEC filing) and Annual
Report on Form 20-F (for US SEC filing); and
• Draft of the revised AC Charter which was endorsed to the
PLDT Board for approval and adoption;
40 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
41
• Corporate Governance Office (CGO)’s Group-wide
Whistleblowing Status Reports on whistleblowing
complaints as of March 31, 2017, June 30, 2017, and
September 30, 2017;
• Results of the special review of the investment of PLDT
Beneficial Trust Fund in MediaQuest Holdings Inc. conducted
by Mrs. Corazon S. de la Paz-Bernardo, Audit Committee
Adviser, and the AC Recommendation/Resolution Memo
regarding the results of such special review for endorsement
to the PLDT Board;
• The materials for the 2017 annual stockholders’ meeting
(Notice and Agenda, Information Statement/Proxy Form),
the status of the Company’s compliance with regulations
and applicable laws, and updates on significant legal matters
presented by the Corporate Secretary, Chief Legal Counsel
and Chief Governance Officer;
• The PLDT Group Enterprise Risk Management (ERM)
Officer’s updates on ERM activities, processes, and coverage;
• Business and operational unit heads’ operational and internal
control updates in their respective functional areas, as
presented in executive sessions of the AC; and
• The following related party transactions presented by
the PLDT Group Chief Financial Officer: (i) sale of PLDT
Communications and Energy Ventures, Inc.’s 25% ownership
in Beacon Electric Asset Holdings, Inc. to Metro Pacific
Investments Corporation; (ii) renewal of PLDT’s and Smart’s
Property Insurance for 2017-2018; (iii) extension of PLDT’s
Subordinated Shareholder Advances to Smart for the
purposes of partially funding the final payment to DMPI
for the transfer of Sun Postpaid and Broadband trademark/
brands and subscriber base from DMPI to Smart.
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 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. Ms. Maria Elizabeth S. Sichon 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://pldt.com/
docs/default-source/corporate-governance-files/committee-charter/
amended-gnc-charter-jan22-2018.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 2017 included the following:
• With regard to policy review and development, reviewed
the (i) Supplier/Contractor Relations Policy; (ii) Expanded
Whistleblowing Policy; (iii) Policy on PLDT’s Gift-Giving
Activities; and (iv) Policy on Gifts, Entertainment and
Sponsored Travel, and determined that the said policies
remain to be compliant with applicable law, regulations and
best practices and are appropriate for the Company, and
approved the recommendation to continue to improve the
programs to communicate, monitor, enforce and align the
policies with the Company’s strategic objectives; and
• Reviewed and recommended for Board approval PLDT’s
Board of Directors Charter, amended Governance and
Nomination Committee Charter, Board Diversity Policy, and
new Manual on Corporate Governance.
• With regard to education and communication, provided
guidance on and approved the content of PLDT’s Annual
Corporate Governance Enhancement Session for Directors
and Officers which covered topics relevant to PLDT’s digital/
cultural transformation strategy and corporate governance:
(i) Governance & Customer Experience: A Survey of Global
Customer Experience Strategies; (ii) People and Culture
Transformation Strategies in the Digital Age; and
(iii) Charting the Digital Age, its Risks and Strategies,
through Governance, and a Responsive Corporate Culture; and
• Selected and approved the theme entitled, Digital to Real
and related creative concepts for the 2018 Corporate
Governance communication materials, calendars and posters.
• With regard to compliance and enforcement, reviewed the
reports on PLDT’s Expanded Whistleblowing (EWB) cases
and the investigation and dispositions thereof, including
those of certain PLDT subsidiaries (Smart Communications,
Inc., PLDT Global Corporation, ePLDT, Inc., Digital
Telecommunications Philippines, Inc. and Digitel Mobile
Philippines, Inc.);
• Reviewed and noted or approved, as applicable, the Conflict
of Interest (COI) Disclosures of key employees; and
• Assisted the Board in implementing its Board Assessment
for 2016 performance, which included the performance
evaluation of the Board Committees and Individual Directors.
42 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
43
• As part of its oversight function on governance matters,
received updates from: (i) the Sustainability Reporting
team led by Public Affairs, FinRepCon and PLDT-
Smart Foundation, on PLDT’s social, environmental and
sustainability program; and (ii) Internal Audit and Fraud Risk
Management Group on governance in significant subsidiaries;
• Received updates on the Company’s compliance with the
new SEC Code of Corporate Governance for Publicly-Listed
Companies; and
• Reviewed and approved PLDT’s Corporate Governance
Report for 2016.
In the performance of its nomination functions, the GNC’s
activities in 2017 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
13, 2017;
• Screened and recommended to the Board the appointment
of a director to fill the vacancy in the Board;
The charter of the ECC may be viewed and downloaded from
the PLDT website through the following link: http://pldt.com/
docs/default-source/corporate-governance-files/committee-charter/
amended-ecc-charter-mar8-2018.pdf. The purposes, duties and
powers of the ECC are set forth in the charter.
In 2017, the ECC discussed and approved or endorsed to the
Board for approval the following:
• Total Rewards Philosophy, Strategy and Plan for PLDT
and Smart;
• PLDT-Smart Short-Term Incentive Plan (STIP) Policies
and Structure, which replaced the previous variable pay
structure as performance-based compensation for officers
and executives;
• PLDT-Smart Long-Term Incentive Plan, referred to as the
“Transformation Incentive Plan” (TIP);
• TIP Rules, and the appointment of TIP administrators who
will implement and administer the TIP with the assistance of
the Compensation, Rewards and Performance Management,
under the People & Culture Group and Treasury, under the
Finance Group; and
• The appointment of Metropolitan Bank & Trust Company as
• Reviewed and confirmed People and Culture Group’s
the Trustee Bank under the TIP.
evaluation of the qualifications of officers and recommended
their re-appointment as such at the Organizational Meeting
of the Board of Directors held on June 13, 2017; and
• Reviewed and confirmed People and Culture Group’s
evaluation of proposed appointments of new officers and
promotions to officer rank for approval by the Board.
Finally, the GNC submitted the following reports to the Board
in 2017: (i) PLDT’s Consolidated Annual Corporate Governance
Report for 2016; (ii) Consolidated Report on the 2016 Board
Performance Assessment; (iii) GNC Annual Report of Activities
for 2016; and (iv) GNC Performance Assessment for 2016.
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.
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 chairman of this committee.
Ms. Maria Elizabeth S. Sichon is the non-voting member.
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, Mr. Pedro
E. Roxas, Mr. Bernido H. Liu and former Supreme Court Chief
Justice Artemio V. Panganiban 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/corporate-governance-files/committee-charter/
amended-rc-charter-jan-22-2018.pdf. The purposes, duties and
powers of the RC are set forth in the charter.
In 2017, the major accomplishments of the RC are the following:
• Reviewed and approved Smart and Digitel’s Risk Committee
Charter and the updated PLDT Group Risk Charter;
• Reviewed and noted the framework and process followed
by the Group Enterprise Risk Management Department
(GRMD);
• Reviewed and noted the Risk Appetite Statement of the
PLDT Group;
42 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
43
• Reviewed the top risks of the PLDT Group as identified by
the CEO Council;
• Reviewed and noted the progress of GRMD in conducting
Enterprise Risk Management (ERM) Workshops with core
operational groups; and
A copy of the charter of the TSC may be viewed and
downloaded from the PLDT website through the following
link: http://pldt.com/docs/default-source/corporate-governance-files/
committee-charter/amended-tsc-charter-jan22-2018.pdf.
The purposes, duties and powers of the TSC are set forth
in the charter.
In 2017, the TSC, together with the Technology Group and
PLDT Top Management:
•
reviewed the network and technology capital expenditure
budget for presentation to, and approval by, the Board;
• discussed the technology roadmap, projects, initiatives and
plans, including, among others, projects that will improve LTE
coverage and provide for capacity expansion;
• discussed the status of the network, including upgrades and
Technology Group achievements; and
• cleared the Amended TSC Charter for presentation to, and
approval by, the Board.
• Reviewed and discussed with Management the (i) Risk
Profile of the Information Technology Office, the People
and Culture Office, the Corporate Services Office, and the
Revenue Office; (ii) American Depository Receipt facility of
PLDT; and (iii) the Digital Transformation Project.
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.
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**
Albert F. del Rosario
Atsuhisa Shirai**
Roberto R. Romulo**
Oscar S. Reyes
Orlando B. Vea
8/10
10/10
10/10
10/10
10/10
10/10
6/6
6/6
6/6
6/6
5/6
5/6
3/3
2/3
3/3
2/3
3/3
4/4
4/4
3/4
4/4
4/4
Corazon S. de la Paz-Bernardo**
9/9
Maria Elizabeth S. Sichon***
6/6
3/3
*Independent Director
**Advisor to the Audit Committee
***Non-voting member
4/6
6/6
6/6
6/6
6/6
6/6
6/6
44 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
45
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
implementation of the corporate governance policies and
requirements are discussed below.
President and CEO. The President & CEO has general care,
management and administration of the business operations of
the Company. 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. He provides leadership for
Management in developing and implementing business strategies,
plans and budgets to the extent approved by the Board. In
order to enable the members of the Board to properly fulfill
their duties and responsibilities, the CEO provides the Board
with a balanced and understandable account of the Company’s
performance, financial condition, results of operations and
prospects on a regular basis. He directs Management to provide
the Directors/Board with adequate and timely information
about the matters to be taken up in their Board meetings.
He ensures that the Directors have independent access to
Management. The President & CEO: (i) communicates and
implements the Company’s vision, mission, values and overall
strategy and promotes the appropriate enhancement in the
organization or its stakeholder engagement in relation to the
same; and (ii) serves as the link between internal operations
and external stakeholders. Management formulates, under
the oversight of the Audit Committee, financial reporting and
internal control systems, rules and procedures. Other duties of
the President are set forth in the CG Manual.
Corporate Secretary. The Corporate Secretary assists the
Board in the conduct of its meetings, including preparing
the schedule, agenda and minutes of Board meetings, and
ensuring that all Board procedures and rules are observed. The
Corporate Secretary contributes to the flow of information
between the Board and Management, the Board and its
Committees, and the Board and the Company’s stakeholders,
including stockholders.
Internal Audit Organization. The Internal Audit organization
determines whether the Company’s 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 are
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 the
Company are recognized and addressed appropriately.
44 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
45
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 the Company’s processes for controlling
activities and managing risks;
• Report significant issues related to the processes of
controlling activities, including potential improvements to
such processes, as well as 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.
The charter of the Internal Audit organization complies with the
International Standards for the Professional Practice of Internal
Auditing of the Institute of Internal Auditors. Other duties of the
Chief Audit Officer/Internal Audit Head are set forth in the
CG Manual.
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 the external auditor’s staff; 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 corporate
governance through the implementation of its corporate
governance (CG) policies, including the CG Manual, Code
of Ethics and related policies.
CG Manual. Our new CG Manual defines our corporate
governance framework and structure. Supplementary to
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.
46 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
47
The implementation of the Code of Ethics is reinforced by
enabling policies such as the Supplier/Contractor Relations
Policy, Expanded Whistleblowing Policy, Gifts, Entertainment and
Sponsored Travel Policy, and Policy on Gift-Giving Activities which, in
conjunction 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 (COI) 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 COI. 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 subject to review
and approval by the designated authorities. The review’s
principal focus is on whether an RPT is on arm’s length terms
and in the best interest of PLDT and its shareholders 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 (Gifts
Policy) and Policy on Gift-Giving Activities. The Gifts Policy
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 of their duties to the Company. 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, respectful of the intended
recipient’s gifts policy, 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.
Expanded Whistleblowing Policy (EWB Policy). This policy
provides guidelines on handling employee disclosures or
complaints regarding (i) violations of corporate governance
rules, including the aforementioned policies; (ii) questionable
accounting and auditing matters; and (iii) violations or offenses
(other than those in (i) and (ii) above) covered by the
Company’s Human Resources 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 2017, there was one new whistleblowing complaint received
by the CGO. This was referred for further investigation to the
appropriate investigating unit of a PLDT subsidiary since the
complaint pertained to that subsidiary’s employees. The other
four cases, which were pending as at December 31, 2016,
were closed as at December 31, 2017. The complaints covered
allegations of violation of the Code of Ethics, Conflict of Interest
Policy, Gifts Policy, Supplier/Contractor Relations Policy, Policy on
Employees Running for Public Office and the Human Resources
Manual. Moreover, the CGO received two concerns that fall
under the jurisdiction of line Management, or were found to be
insufficient or invalid, or outside the scope of the EWB Policy.
The recommendations were submitted to Management for
appropriate action.
The CGO did not receive any complaint on retaliation in 2017.
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 laws and regulations.
PLDT’s key subsidiaries have adopted corporate governance
policies and rules 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.
Protection of Data Privacy. On February 1, 2017, the Data
Privacy Office was created and the Chief Data Privacy Officer
was appointed. PLDT has a Personal Data Privacy Policy which
aims to ensure that the Company complies with the relevant
data protection laws and regulations, protects the rights of its
data subjects, is transparent about how it processes personal
data, and protects itself from the risk of data breach.
46 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
47
TRAINING AND EDUCATION
MONITORING AND EVALUATION
The Company provides continuous training for its Board,
Management and employees. In 2017, the Company organized
an annual corporate governance enhancement session for its
Board and Management on the following topics: (i) Governance
& Customer Experience: A Survey of Global Customer Experience
Strategies; (ii) People and Culture Transformation Strategies in the
Digital Age; and (iii) Charting the Digital Age, its Risks and Strategies,
through Governance, and a Responsive Corporate Culture.
Apart from participating in the PLDT-organized training, some of
our directors also attended external training sessions presented
in this report. One of our directors, Mr. James L. Go, has been
granted by the PSEC permanent exemption from its corporate
governance training requirement.
In addition to orientation and periodic training sessions for
employees, the CGO conducted a corporate governance
refresher session in November, 2017 with newly-promoted
PLDT supervisors as part of the People and Culture Group’s
Seminar on Administrative Policies and Procedures Course.
Education and training is supplemented by the production and
dissemination of relevant communication materials, including
thematic posters and calendars, Instaguides, and advisories
on corporate governance. In December 2017, three focus
group discussions were held in order to: (i) gather employees’
perception about the state of the Company’s corporate
governance culture building efforts and the CGO’s education
and communication programs; (ii) solicit comments and
suggestions on how to further enhance the effectiveness of
corporate governance programs; (iii) seek feedback regarding
the relevance and effectiveness of past and current CG themes,
including the communication medium used; and (iv) receive
suggestions and recommendations for possible CG themes in
the future, including appropriate materials and medium.
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 2017, PLDT
confirmed for the 2016 performance period, 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 US 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 on May 29, 2017 and filed its PSE Corporate Governance
Guidelines Disclosure Report on March 30, 2017. The Company,
in its new CG Manual approved by the Board of Directors on
May 12, 2017, has adopted substantially all of the recommended
best practices in the new CG code and will disclose any non-
compliance therewith in its Intergrated Annual Corporate
Governance Report.
The annual self-assessment is conducted by the Board to
evaluate the performance of the Board as a whole as well as
each Board Committee, 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. 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: (i) for
the Board - Leadership, Roles and Responsibilities, Independence,
Stewardship, Reporting and Disclosure, Shareholders’ Benefits
and Training; (ii) for the Board Committees – Performance and
Compliance; and (iii) for individual directors - the specific duties
and responsibilities of a director. On the other hand, the Board
Committees’ self-assessment questionnaire contains the following
criteria: Performance & Compliance and Committee Governance.
For the 2016 performance period, the results of the assessment
process was duly reported to, and discussed with, the Board in
2017. Prospectively, the annual self-assessment shall, as practicable,
be supported by an external facilitator every three years and allow
for a feedback mechanism for stockholders, to conform with the
recommendation in the New CG Code.
PLDT monitors and evaluates 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 New CG Code 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.
48 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
49
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 analysed 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 Corporate
Social Responsibility 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.
The Board ensures that the Company makes timely disclosures
and filings with the PSEC, PSE and as applicable, with the US
SEC and NYSE of material information and transactions that
could potentially affect the market price of the Company’s
shares. In this regard, information on, among other matters,
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.
The 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 and other administrative
impediments to stockholders’ participation in annual and
special stockholders’ 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.
Relevant meeting materials such as the Notice, Agenda,
Information Statement and Annual Report are 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 ensures the disclosure and filing of reports with the PSEC,
PSE and, as applicable, US SEC and NYSE and posting on the
Company’s website, immediately after the meeting or the day
after the meeting, of all significant actions taken in the meeting
and the votes obtained for each of such actions.
The Company held its Annual Stockholders’ Meeting on June 13,
2017, with holders of 88.12% of total outstanding capital present
or represented by proxy in the meeting. To view the Minutes
of the 2017 PLDT Annual Stockholders’ Meeting, please access
this link http://pldt.com/docs/default-source/annual-meeting-of-
stockholders/2017/minutes-of-annual-meeting-of-stockholders_june-
13-2017.pdf?sfvrsn=0.
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.
48 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
49
SHAREHOLDINGS OF THE BOARD AND OFFICERS IN 2017
Number of Company Shares1
Number of Company Shares1
Acquired Disposed
Ending
Balance3
3,000
252,450
8. Ma. Lourdes C. Rausa-Chan
A. Directors
1. Manuel V. Pangilinan
2. Helen Y. Dee
3. Ray C. Espinosa
4. James L. Go
5. Shigeki Hayashi5
6. Bernido H. Liu
7. Artemio V. Panganiban
B. Officers
1. Ernesto R. Alberto
2. Maria Elizabeth S. Sichon7
3. Victorico P. Vargas
4. Alejandro O. Caeg
5. Anabelle L. Chua
6. Jun R. Florencio
7. Juan Victor I. Hernandez
8. Menardo G. Jimenez, Jr.
9. June Cheryl C. Revilla
10. Oscar Enrico A. Reyes
11. Florentino D. Mabasa, Jr.
12. Leo I. Posadas
13. Katrina L. Abelarde
14. Marco Alejandro T. Borlongan
15. Alfredo B. Carrera
16. Leah Camilla R. Besa-Jimenez9
17. Albert Mitchell L. Locsin
18. Aileen D. Regio
19. Martin T. Rio
20. Ricardo M. Sison
21. Emiliano R. Tanchico, Jr.
22. Annette Yvette W. Tirol10
23. Victor Y. Tria
24. Melissa V. Vergel de Dios
25. Minerva M. Agas11
26. Benedict Patrick V. Alcoseba
27. Ariel G. Aznar12
28. Jerameel A. Azurin
29. Rafael M. Bejar
30. Jose Arnilo S. Castañeda
31. Gerardo Jose V. Castro
32. Marissa V. Conde
33. Gene S. de Guzman
34. Aniceto M. Franco III14
Starting
Balance2
249,450
25,0804
15,743
2,000
125,914
10,000
16
1
1,771
-
-8
1,470
200
12,028
515
-
22
-
-
-
10
-
-
300
-8
-
-
-
4,400
1,539
-8
-
-
-8
-
-13
-
-
-
-
-
-
-8
41. Ma. Criselda B. Guhit
1,250
1,250
Starting
Balance2
199
142,410
231
1
1
5
-
-
-
-
-8
-
Acquired Disposed
Ending
Balance3
199
142,410
231
1
1
5
-
-
-
-
-
-
-
-13
-13
-
-
-
-
-
-
-
-13
-
-
-
-8
-13
-8
5,712
4,460
3013
-13
50
-13
-
570
-13
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,712
4,460
30
-
50
-
-
570
-
25,080
9. Albert F. del Rosario
17,743
10. Pedro E. Roxas
135,914
11. Atsuhisa Shirai
1
1
12. Amado D. Valdez
13. Marife B. Zamora
1,771
-
-
35. Gil Samson D. Garcia
36. Joseph Ian G. Gendrano
1,470
37. Elisa B. Gesalta
200
38. John John R. Gonzales
12,028
39. Ma. Gillian Y. Gonzales15
515
40. Ma. Josefina T. Gorres16
-
22
-
-
-
42. Emeraldo L. Hernandez
43. Silverio S. Ibay, Jr.12
44. Gary F. Ignacio12
45. Marven S. Jardiel
10
46. Princesita P. Katigbak
-
-
47. Alexander S. Kibanoff
48. Joseph Nelson M. Ladaban16
300
49. Javier C. Lagdameo
-
-
-
-
50. Joselito S. Limjap17
51. Luis Ignacio A. Lopa
52. Czar Christopher S. Lopez12
53. Paolo Jose C. Lopez
200
4,200
54. Ma. Carmela F. Luque
1,539
55. Oliver Carlos G. Odulio
56. Carlo S. Ople18
57. Harold Kim A. Orbase19
58. Dale M. Ramos20
59. Ricardo C. Rodriguez
60. Genaro C. Sanchez
61. Maria Christina C. Semira12
62. Ma. Merceditas T. Siapuatco21
63. Arvin L. Siena
64. Carla Elena A. Tabuena19
65. Ana Maria A. Sotto22
66. Patrick S. Tang
67. John Henri C. Yanez12
-
-
-
-
-
-
-
-
-
-
-
-
-
1
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 Securities Exchange Commission and
Philippine Stock Exchange, Inc. and posted on the Company website at PLDT Investor Relations>Shareholder Information>Beneficial Ownership.
2 As at December 31, 2016.
3 As at December 31, 2017.
4 Includes 2,780 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.
5 Mr. Shigeki Hayashi was elected as director on August 10, 2017 replacing Mr. Hideaki Ozaki who resigned on even date.
6 As at date of election as director.
7 Appointment as officer of the Company effective December 01, 2016 was confirmed by the Board of Directors in a meeting held on February 07, 2017.
8 As at date of appointment as officer.
9 Appointment as officer of the Company effective February 1, 2017 was confirmed by the Board of Directors in a meeting held on February 7, 2017.
10 Appointment as officer of the Company effective July 01, 2017 was confirmed by the Board of Directors in a meeting held on November 09, 2017.
11 Appointment as officer of the Company effective September 01, 2016 was confirmed by the Board of Directors in a meeting held on February 07, 2017.
12 Promoted as officer of the Company effective November 09, 2017.
13 As at date of promotion as officer.
14 Appointment as officer of the Company effective February 01, 2017 was confirmed by the Board of Directors in a meeting held on May 12, 2017.
15 Appointment as officer of the Company effective June 01, 2017 was confirmed by the Board of Directors in a meeting held on August 10, 2017.
16 Separated effective July 01, 2017.
17 Separated effective October 01, 2017.
18 Appointment as officer of the Company effective December 01, 2016 was confirmed by the Board of Directors in a meeting held on February 07, 2017.
19 Promoted as officer of the Company effective March 23, 2017.
20 Appointment as officer of the Company effective September 16, 2016 was confirmed by the Board of Directors in a meeting held on February 07, 2017.
21 Promoted as officer of the Company effective November 16, 2017.
22 Separated effective July 26, 2017.
50 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
51
2017 RESTRICTIONS ON BUYING AND/OR SELLING PLDT SHARES
Nature of Report
PLDT 2016 Full Year Report
PLDT 2017 Q1 Results
PLDT 2017 Q2 Results
PLDT 2017 Q3 Results
PLDT 2017 Full Year Report
* Based on initial release date of March 8, 2018.
Date of Release
March 7, 2017
May 12, 2017
August 10, 2017
November 9, 2017
March 27, 2018
Blackout Period
February 5 - March 9, 2017
April 27 - May 16, 2017
July 26 - August 14, 2017
October 25 - November 13, 2017
February 6* - April 2, 2018
The Company’s dividend policy was amended by the Board on
August 2, 2016 by reducing the regular dividend payout rate
to 60% from 75% of 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 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 60% of its core earnings
for the year 2017.
PLDT’s Code of Ethics prohibits directors, officers and
employees from dealing in the Company’s shares when in
possession of material non-public information about and
involving the Company. During blackout periods, dealing in
Company shares by directors, officers, and employees in
possession of material non-public information 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. Directors and officers 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.
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 2017, PLDT expanded the coverage of its combined fiber
to the home (FTTH) and hybrid fiber to the households
nationwide. The total capacity of the Company’s fixed
broadband network grew by half a million additional por ts,
allowing more customers in homes and businesses the power
of connectivity. On the other hand, Smar t, working with world-
leading technology par tners, significantly improved its mobile
broadband service by accelerating its deployment of Long Term
Evolution or LTE, the four th-generation mobile technology
also known as 4G. Smar t more than doubled the number of
LTE base stations in 2017 to over 8,700 from the previous
year and increased the number of cell sites equipped with LTE
base stations by about 60% to over 4,300. To complement its
LTE deployment, Smart also added more 3G base stations
and cell sites equipped with 3G base stations. The Company
also improved its signal coverage inside high-rise buildings
through the installation of Indoor Building Solutions (IBS) in
over 100 structures. To improve customer care services, PLDT
embarked on a Customer Care Transformation Program with
the following features:
• Improved hotline call experience. Unified eight hotline
numbers into one customer care hotline number (171)
for easy recall and to improve customer access. This
hotline number is suppor ted by a new and improved voice
recording system (IVRS) with simplified IVRS options and
additional customer enabling features.
• Increased engagement in social media. Improved digital
customer care experience by optimizing channel data
analysis in order provide the appropriate tone and voice
of engagement. Initiative in this area resulted in a 40%
decrease in social media customer waiting time and a 20%
increase in online customer engagement.
• Improved self-help website tools. Enhanced PLDT
Home’s customer suppor t page and provided customers
with a por tal of frequently asked questions and a guide
to troubleshooting and device set-up that altogether
empowered customers with self-help references.
• Data privacy. In compliance with the Data Privacy Act
(R.A. No.10173), reviewed existing business policies and
processes to ensure the protection of customers’ personal
information and/or sensitive personal information.
50 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
51
Employees. PLDT respects the dignity, rights, and interests
of its employees, among which are the right to self-
organization, safe and healthy working conditions, professional
development, and community-building social activities. The
value of employees to the business is underscored by the
inclusion of people and culture transformation among the
shared Company goals. Identifying, developing, and retaining
talent is a core responsibility and accountability of every
leader. Anchored on the foundational premise that the
Company’s treatment of its employees will influence how
employees, in turn, deliver service to customers, PLDT
embeds employee experience at the core of all people
initiatives, programs, and processes. Three principles guide
the employee experience design: leader-led, employee-
owned, digital-enabled.
The vision for digital market leadership is hinged on a
high-performing culture, and PLDT continuously engages
employees to aspire for this goal by aligning groups and
individuals to the Company’s shared goals and ensuring
that the Company’s performance management system
is performance-driven and coaching-centered. A digital
platform has been implemented to enable a standard
performance management system across PLDT and Smart.
Supporting the objective of shaping a high-performing
culture is a Total Rewards Program that is merit-based and
addresses both shor t-term and long-term transformation
goals. Compensation and incentives are determined on the
bases of performance and accomplishment. Management
has approved two major rewards programs, the Shor t-term
Incentive Plan (STIP) and the Transformation Incentive Plan (TIP).
To ensure the success of ongoing business transformation,
PLDT has implemented the Next Generation Leaders
Program where new officers undergo a year-long mentoring
and practical skills-building program where the Chairman and
the Top Management Team assume the roles of coaches
and mentors.
A digital environment requires a strong learning and
development ecosystem. PLDT’s comprehensive corporate
university suppor ts the organizational capability-building
needs. It utilizes a combination of classroom and mobile
learning methodologies. Adequate oppor tunity for career
management and development is provided to employees.
The new digital curriculum, Workforce Learning 2020, has
been launched and it anchors on the digital transformation
skills requirements, new leadership competency mandates,
2020 technologies for fixed and wireless, and foundational
compliance training requirements such as Data Privacy.
PLDT organizes engagement programs that prioritize the
well-being of employees and strengthen the quality of work
relationships. These allow employees to engage in a broad
range of character-developing and relationship-building
activities through CSR, spor ts, special interest groups, and
family-oriented programs. Formal channels for employee
feedback are made available through engagement surveys
conducted at regular intervals to give employees the
oppor tunity to share their perspectives about relevant
Company matters. Digital and social platforms are optimized
for employee crowdsourcing and internal communication.
Management-led digital dialogues provide oppor tunity
for employees across various par ts of the country to
directly interact and voice out their suggestions and
recommendations to top management.
Suppliers. 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 and technical capability, compliance with applicable
laws, including those per taining to industrial relations,
environment, health and safety, and intellectual proper ty
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 repor ts to our creditors
such as our latest cer tified financial statements, no default
cer tification, and cer tification 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 par t of
the mission of promoting inclusive development. With their
technology and services, PLDT and Smar t are well-positioned
to provide much needed assistance to communities. As good
corporate citizens, PLDT and Smar t are leveraging their
infrastructure and services to act as enablers, especially in
communities with greatest need, through their CSR programs
on education, health, community, environment, livelihood
development, youth development and spor ts, and disaster
relief operations.
During emergencies, Smar t and PLDT make available
their network and employees to provide connectivity and
humanitarian assistance via its Libreng Tawag and Charging
Services. In times of disasters, the PLDT Group of Companies
(the “PLDT Group”) work together with the PSF under the
Tulong Kapatid Program, the PLDT Group’s consolidated
disaster preparedness and response initiative.
To create a positive impact on the environment, PLDT and
Smar t have collaborated with the PBSP and Motolite, under
its Balik Baterya Program. This recycling program’s education
component tackled the proper disposal of hazardous waste
from lead-acid batteries while generating program funds for
community education projects through the production of
new automotive and industrial batteries from recycled units.
Since the program began in 2006, PLDT and Smart remain
the two biggest benefactors of the program.
52 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
53
Education programs remain a top priority for both PLDT and
Smar t. PSF, in par tnership with the PLDT Managers’ Club
Inc. (MCI) has nur tured and grown the Gabay Guro program
that provides scholarships to aspiring teachers and seeks to
recognize teachers in an annual teachers’ day celebration.
Smar t, on the other hand, has its TechnoCart and School-
in-a-Bag programs that utilize local educational content
with connectivity and devices to cater to children living in
underserved communities.
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. PLDT is also
implementing 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. Apar t 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
set for th in its Code of Ethics and reinforced in specific
policies such as the Policy on Gift-Giving Activities, Gifts
Policy, Supplier/Contractor Relations Policy, Corporate
Governance Guidelines for Suppliers, which prohibit bribery
or acts which may be construed as bribery involving
third par ties in business dealings with the Company.
These policies are implemented through anti-corruption
programs and measures such as internal controls, training
and communication, whistleblowing system, third party due
diligence, and suppor t for and par ticipation in multi-sectoral
anti-corruption initiatives to eliminate graft and corruption.
PLDT continues to work with institutions and organizations
engaged in programs and advocacy effor ts in the corporate
governance, compliance and business ethics field. As a
sponsoring par tner member of the Ethics and Compliance
Initiative (ECI), PLDT has access to ECI’s vast online library
on governance and related topics and oppor tunities to
interact with other governance and ethics professionals
around the world, and is able to benchmark its 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
par ticipates 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 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, employees and other stakeholders and
adherence to the principles of good governance.
52 PIONEERING. INNOVATING. LEADING.
PLDT 2017 ANNUAL REPORT
53
In an increasingly
connected world, PLDT
is taking the lead in
creating opportunities
for the country.
54
PIONEERING. INNOVATING. LEADING. 55
Photo courtesy of Macky Sevilla, PLDT Lens Club
PLDT 2017 ANNUAL REPORT As we continue to transform our business,
managing risk remains a key concern.
56
PIONEERING. INNOVATING. LEADING. THE PLDT GROUP
Enterprise Risk Management
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.
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 RISKS
A risk assessment exercise was undertaken by the CEO Council
to identify and prioritize the most important risks affecting the
PLDT Group for 2017. These top risks were:
• Competitive situation and economic conditions
• Rapid speed of disruptive innovations and new technologies
• Regulatory changes/scrutiny
• Privacy/ identity management challenges and increase in
information security issues
• Regular occurrence of natural disasters
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 have been put in
place. Risk management activities are continuously monitored and
reviewed to ensure that critical risks are appropriately addressed
across the organization.
ISO 31000: RISK MANAGEMENT PROCESS
ESTABLISH THE CONTEXT
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ANALYZE RISKS
EVALUATE RISKS
TREAT RISKS
57
PLDT 2017 ANNUAL REPORT
Board of Directors
Manuel V Pangilinan
Helen Y. Dee
Ray C. Espinosa
Hon. Artemio V. Panganiban
Ma. Lourdes C. Rausa-Chan
Amb. Albert F. Del Rosario
Advisory Board/Committee
Marife B. Zamora
Oscar S. Reyes
Roberto R. Romulo
58
PIONEERING. INNOVATING. LEADING. James L. Go
Shigeki Hayashi
Bernido H. Liu
Advisory Board/Committee
Pedro E. Roxas
Atsuhisa Shirai
Amado D. Valdez
Benny S. Santoso
Orlando B. Vea
Christopher H. Young
59
PLDT 2017 ANNUAL REPORT Board of Directors
MANUEL V PANGILINAN, 71, 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, and Vice Chairman of Roxas Holdings, Inc., all of which are PSE-
listed companies, and of several subsidiaries or affiliates of PLDT or MPIC, including,
among others: Smart, Digitel Mobile Philippines, Inc., Digital Telecommunications Phils.,
PLDT Communications & Energy Ventures, Inc. Beacon Electric Assets Holdings Inc.
(Beacon), Manila North Tollways Corporation, Maynilad Water Services Corporation
(Maynilad), Landco Pacific Corporation, Metro Pacific Hospital Holdings, Inc.,
Medical Doctors Inc. (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 MediaQuest Holdings Inc. (MediaQuest), Associated
Broadcasting Corporation C(TV5) and PLDT-Smart Foundation.
Mr. Pangilinan founded First Pacific Company Limited (First Pacific), a Hong Kong
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 Hong
Kong’s foreign domestic helpers. He is the Chairman of PBSP, the largest private
sector social action organization made up of the country’s largest corporations. He
is a Co-Chairman of the PDRF, 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, 74, FILIPINO
Director of PLDT since June 18, 1986. She is the Chairperson or a Director of EEI
Corporation, House of Investments, Petro Energy Resources Corporation and Rizal
Commercial Banking 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.
Ms. Dee received her Master’s Degree in Business Administration from De La Salle
University.
RAY C. ESPINOSA, 62, FILIPINO
Director of PLDT since November 24, 1998, and is a member of the Technology
Strategy Committee of the Board of Directors of PLDT. He has been serving as
Chief Corporate Services Officer of PLDT since December 1, 2016, and General
Counsel of Meralco since December 15, 2009. He is a director of Metro Pacific
Investments Corporation and Roxas Holdings, Inc., a director and Chairman of the
Finance Committee of Meralco, an independent director and Chairman of the Audit
Committee of Lepanto Consolidated Mining Company, all of which are PSE-listed
companies, and an independent director and the Chairman of the Risk Management
Committee of Maybank Philippines, Inc.
He is the Chairman of PhilStar Group of Companies and Business World
Publication Corporation, the President of Mediaquest Holdings, Inc., a director of
Voyager Innovations Inc. and Paymaya Philippines Inc., and a trustee of the Beneficial
Trust Fund of PLDT and PLDT-Smart Foundation, Inc. Atty. Espinosa served as
Head of Regulatory and Strategic Affairs of PLDT until 2016, President & CEO of
TV5 Network Inc. and Cignal TV Inc. until May 2013 and, prior thereto, was the
President & CEO of ePLDT and its subsidiaries until April 2010. In June 2013, he
joined First Pacific as Associate Director and was appointed as First Pacific Group’s Head
of Government and Regulatory Affairs and Head of Communications Bureau for the
Philippines.
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. He placed first in the 1982 Philippine
Bar Examinations.
JAMES L. GO, 79, 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 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.
SHIGEKI HAYASHI, 50, JAPANESE
Vice President-Planning/Carrier Relation Global Business of NTT Communications
Corporation (NTT Com). He handles strategy and management of the global business
of overseas subsidiaries, post-merger Integration of NTT Com’s mergers and acquisitions
companies and carrier relation with global carriers of NTT Com. His previous positions
in NTT Com were Director-Planning, Global Business (2012 to 2016), Senior Manager-
Overseas Business Management, Global Business (2007 to 2012) and Senior Manager-Tax
Accounting Division, Accounts and Finance Department (1999 to 2004). He was the
Deputy General Manager-Corporate Management Department of NTT Europe Ltd. from
2004 to 2007.
Mr. Hayashi obtained his Bachelor of Economics Degree from Osaka University.
BERNIDO H. LIU, 55, 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 and Chief Executive
Officer of Golden ABC, Incorporated. (GABC), a fashion retail company which creates
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, Red Logo Lifestyle Inc., Greentree
Food Solutions, Inc., and GABC International Pte Limited. He is a Trustee for Children’s
Hour Philippines and of the Philippine Retailers Association, a director for Mga Likha ni
Inay, Inc., a member of the Visayas Advisory Council of Habitat for Humanity Philippines,
until March 27, 2018, 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 and GABC under his leadership have been recognized by
different award-giving bodies. Awards include, among others, the Agora Award for
Outstanding Achievement in Entrepreneurship from the Philippine Marketing Association,
Ten Outstanding Young Men for Entrepreneurship, and the ASEAN Business Award of
Excellence for Priority Integration Sector in Retail.
ARTEMIO V. PANGANIBAN, 81, FILIPINO
Independent director of PLDT since April 23, 2013 and is serving as 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, as well as a
senior adviser of Metropolitan Bank and Trust Company, a member of the Advisory Council
of the Bank of the Philippine Islands and an adviser of Double Dragon Properties, Corp.
He is also Chairman of the Board of Trustees of the Foundation for Liberty and
Prosperity, and of the Board of Advisers of Metrobank Foundation, Inc., a trustee of
Tan Yan Kee Foundation and Claudio Teehankee Foundation, President of the Manila
Metropolitan Cathedral-Basilica Foundation, a member of the Advisory Board of World
Bank (Philippines), Chairman-Emeritus of the Philippine Dispute Resolution Center, Inc.,
Chairman of the Philippine National Committee of the Asean Law Association, a consultant
of the Judicial and Bar Council, a member of the Permanent Court of Arbitration in The
Hague, Netherlands, 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
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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.
MA. LOURDES C. RAUSA-CHAN, 64, 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 and the Corporate Secretary of ePLDT,
PLDT Global Investments Holdings, Inc., PLDT Communications and Energy Ventures,
Inc., ACeS Philippines Cellular Satellite Corporation and Mabuhay Investments
Corporation and also serves as Corporate Secretary of several other subsidiaries
of PLDT, and of 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.
ALBERT F. DEL ROSARIO, 78, 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 March 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, Metro Pacific Investments Corporation and
Rockwell Land Corporation (both PSE-listed companies), Indra Philippines, Inc., 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 Philippine Cancer Society, Inc. and a member of the Advisory Board of CSIS
Southeast Asia Program and Metrobank Foundation, Inc.
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
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, 62, FILIPINO
Director of PLDT since March 1, 2001 and qualified as an independent
director since 2002. He is the Chairman of the Audit Committee and serves as
an independent member of the Risk, 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, 72, FILIPINO*
Director of PLDT from November 14, 2016 to March 26, 2018. He was the Chairman
of the Social Security Commission from October 2016 to February 2018. He 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, 65, FILIPINO
Director of PLDT since November 14, 2016. She is a member of the Board
of Directors of Convergys Philippines, Inc., the Philippine branch of Convergys
Corporation (NYSE:CVG), a global leader in customer management, and prior
thereto served as its Chairperson from April 2014 to March 2018. She is the 3rd Woman
President and the 68th President of the Management Association of the Philippines
since its inception in 1950, 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.
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.
* Resigned on March 27, 2018 and was replaced by Emmanuel Dooc at the March 27, 2018 Board.
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Executive
Of f icers
(From left)
Manuel V Pangilinan
Ernesto R. Alberto
Alejandro O. Caeg
Anabelle L. Chua
June Cheryl A. Cabal-Revilla
Ray C. Espinosa
Victorico P. Vargas
Maria Elizabeth S. Sichon
Ma. Lourdes C. Rausa-Chan
Jun R. Florencio
Menardo G. Jimenez, Jr.
Juan Victor I. Hernandez
Oscar Enrico A. Reyes, Jr.
ERNESTO R. ALBERTO, 57, FILIPINO
Group Chief Revenue Officer for PLDT and Smart, and a member of PLDT
and Smart top management team, 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 serves as Chairman, President and
Chief Executive Officer of Asia Netcom Philippines Corporation, Digitel Crossing,
Inc., Mabuhay Investment Corporation, and Telesat, Inc., President and Chief Executive
Officer of ePLDT and Digitel Mobile Phils, Inc., and President of i-Contacts Corporation
and Primeworld Digital Systems, Inc. He is the Chairman of ABM Global Solutions,
Bonifacio Communications Corporation, Curo Teknika, ePDS, IP Converge Data
Services, Inc. PLDT Clark Telecom, Inc., PLDT Malaysia Sdn. Bhd., PLDT Maratel,
Inc., PLDT Philcom, PLDT Subic Telecom, Inc., Rack IT Data Center, Inc., and Smart
NTT Multi-Media, Inc., and a director of Asean Telecom Holdings Sdn. Bhd., Paymaya
Philippines, Inc., PLDT Global, Smart, Talas Data Intelligence, Voyager Innovations, Inc. and
WiFun, Inc.
Mr. Alberto has 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.
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JUNE CHERYL A. CABAL-REVILLA, 44, FILIPINO
Controller and Financial Reporting and Controllership Head, 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 Co-Controller of
Vega Telecom, Inc., Eastern Telecommunications Phils, Inc. and Bell Telecommunication
Phils, Inc., the Chief Financial Officer and/or Treasurer of PLDT-Smart Foundation,
Philippine Disaster Recovery Foundation and TOYM Foundation, Comptroller of First
Pacific Leadership Academy Foundation and director of Tahanan Mutual Building and
Loan Association.
Prior to joining PLDT in June 2000 as an executive trainee in the Finance
Group, she 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, 58, FILIPINO
Head of Consumer Business – Customer Development, previously served as Head
of WCD Sales and Distribution of Smart from December 1, 2016 to July 2017 and
as Head of International & Carrier Business from March 1, 2009 until November
30, 2016. 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, 57, FILIPINO
Chief Financial Officer of the PLDT Group, previously served as 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,
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, Risk 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.
She graduated magna cum laude from the University of the Philippines with a
Bachelor of Science Degree in Business Administration and Accountancy.
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JUN R. FLORENCIO, 62, FILIPINO
Internal Audit and Fraud Risk Management Head, 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. He 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. He 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, who is a Certified Public Accountant, 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.
JUAN VICTOR I. HERNANDEZ, 44, FILIPINO
Enterprise Business Head, is responsible for setting and driving the overall business
directions for Corporate and SME businesses of the PLDT Group. He joined the
Company in October 2000 as Executive Trainee under the Corporate Business
Group and served as Head of Corporate Credit Management from August 2001 to
February 2003, Head of PLDT Corporate Business Group –Visayas from 2003 to
2005, Convergence Business B Head from 2003 to July 2009 and Corporate Business
Head from August 2009 to November 2016.
He obtained his BS Agricultural Economics Degree from the University of
the Philippines and Masters in Business Management Degree from the Asian
Institute of Management.
MENARDO G. JIMENEZ, JR., 55, FILIPINO
Business Transformation Office Deputy Head, joined PLDT in December 2001 and
has served in various capacities as Corporate Communications and Public Affairs
Head, Retail Business Head, Human Resources Group Head and Fixed Line Business
Transformation Office Head. He 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.
LEO I. POSADAS, 52, FILIPINO
Treasurer and Treasury Head, has been in PLDT’s service since September 2000.
He handles the treasury management and treasury operations of the Company.
He is a director and Vice President for Treasury of Mabuhay Investments Holdings,
Inc., Treasurer and Head of Treasury of Smart, Treasurer of ePLDT and some other
subsidiaries of PLDT. Prior to joining PLDT, he served as Treasury Manager of Total
Petroleum Philippines, and as Manager for Foreign Exchange Management of San
Miguel Corporation.
Mr. Posadas received his Bachelor of Arts Degree in Economics and Bachelor of
Science Degree in Commerce Major in Management of Financial Institutions from the
De La Salle University.
OSCAR ENRICO A. REYES, JR., 42, FILIPINO
Head of Consumer Business Market Development and concurrent Head of
Consumer Digital Solutions, joined PLDT in February 2015 and was seconded to
CignalTV as Chief Operating Officer until December 31, 2015. Thereafter, he served as
Home Operations Head until December 2016 and as Home Business Head until July
2017. He holds directorships in some subsidiaries of PLDT.
Mr. Reyes, Jr. has extensive experience in consumer marketing and sales both locally
and globally and prior to joining PLDT, he served as General Manager-Consumer
Products Division of L’Oreal Philippines Inc. from June 2012 until January 2015 and
Deputy General Manager-Consumer Products Division from February 2012 until June
2012. He was the Marketing Director of Nutri-Asia Philippines, Inc. from April 2009
to January 2012 and worked for 11 years in Unilever companies, including Unilever
Philippines, Inc. and Unilever Thai Trading Limited, handling marketing and brand
management functions from 1998 to April 2009.
Mr. Reyes obtained his Bachelor of Science Degree in Management Engineering
from Ateneo De Manila University and attended an executive course on Culture
Building in CEDEP, INSEAD and General Management in France, sponsored by L’Oreal.
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PLDT 2017 ANNUAL REPORT
65
Top Management Team
(From left)
Manuel V Pangilinan
Ray C. Espinosa
Anabelle L. Chua
Ernesto R. Alberto
Victorico P. Vargas
Orlando B. Vea
Maria Elizabeth S. Sichon
Advisors
(From left)
Joachim Horn – Chief Technology and Integration Advisor
Ralph Brunner – Chief Customer Experience
and Data Analytics Advisor
MARIA ELIZABETH S. SICHON, 60, FILIPINO
Chief People and Culture Officer, previously held HR roles in high
tech, financial and health care industries across the Americas, Europe,
Middle East and Africa, Asia Pacific and Latin America and 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, she was
VP Human Resources of Hewlett Packard, and VP Human Resources
International of Avaya, Inc.
She received her Master of Arts Degree in Organizational Psychology
from Teachers College, Columbia University and BS Psychology from
the University of the Philippines.
VICTORICO P. VARGAS, 66, FILIPINO
Business Transformation Office Head, is an Assistant Director of First
Pacific since 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 thereto, Mr. Vargas
was the President and Chief Executive Officer of Maynilad Water
Services, Inc. since August 2010.
He 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.
He is the President of the Philippine Olympic Committee, 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.
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PLDT 2017 ANNUAL REPORT
65
Annette Yvette W. Tirol
FVP, Loyalty and Rewards Management
Princesita P. Katigbak
VP, National Key Account Group
Officers
Manuel V Pangilinan
Chairman of the Board,
President and Chief Executive Officer (CEO)
Ricardo M. Sison
FVP, HOME Credit and Business
System Management
Ernesto R. Alberto
EVP and Chief Revenue Officer
Ray C. Espinosa
Chief Corporate Services Officer
Maria Elizabeth S. Sichon
Chief People and Culture Officer
Emiliano R. Tanchico
FVP, HR Services
Victor Y. Tria
FVP, Alpha Business
Victorico P. Vargas
Head, Business Transformation Office
Melissa V. Vergel De Dios
FVP, Investor Relations
Alejandro O. Caeg
SVP, Consumer Business Customer Development
Minerva M. Agas
VP, Logistics
Anabelle L. Chua
SVP, Finance
Chief Financial Officer
Jun R. Florencio
SVP, Internal Audit and Fraud Risk Management
Juan Victor I. Hernandez
SVP, Enterprise Business
Menardo G. Jimenez Jr.
SVP, Business Transformation Office
Ma. Lourdes C. Rausa-Chan
SVP, Corporate Affairs and Legal Services
General Counsel, Chief Governance Officer
Corporate Secretary
June Cheryl A. Cabal-Revilla
SVP, Financial Reporting and Controllership
Controller
Benedict Patrick V. Alcoseba
VP, Disruptive Business
Ariel G. Aznar
VP, Facilities Management
Jerameel A. Azurin
VP, SME Segment Marketing
Rafael M. Bejar
VP, Medical Services
Jose Arnilo S. Castañeda
VP, HOME Product Development
Gerardo Jose V. Castro
VP, Luzon Customer Service Operations
District
Marisa V. Conde
VP, Financial Planning
Gary F. Ignacio
VP, Enterprise Fixed Core Business Solutions
Marven S. Jardiel
VP, Enterprise Customer Operations
Management
Alexander S. Kibanoff
VP, Learning and Development
Javier C. Lagdameo
VP, Corporate Relationship Management
Luis Ignacio A. Lopa
VP, CRO Business Synergy and Assurance
Czar Christopher S. Lopez
VP, Technology Strategy and
Transformation Office
Paolo Jose C. Lopez
VP, HOME Stores and Emerging Channels
Ma. Carmela F. Luque
VP, Financial and Revenue Audit
Oliver Carlos G. Odulio
VP, Enterprise Business Continuity and
Resilience Head and concurrent Asset
Protection and Risk Management Head
Carlo S. Ople
VP, Digital Marketing Strategy
Harold Kim A. Orbase
VP, Enterprise Service Fulfillment
Management
Oscar Enrico A. Reyes, Jr.
SVP, Consumer Business – Market Development
Aniceto M. Franco III
VP, Alpha Relationship Management A
Dale M. Ramos
VP, Network Build
Katrina Luna-Abelarde
FVP, International and Carrier Business
Marco Alejandro T. Borlongan
FVP, HOME Business Development and Operations
Gene S. De Guzman
VP, Enterprise Complex Service Assurance
Management
Ricardo C. Rodriguez
VP, Organization, Policies, HR Analytics and
Workforce Planning Support Services
Gil Samson D. Garcia
VP, Revenue Management and Cash Assurance
Genaro C. Sanchez
VP, International Network
Alfredo B. Carrera
FVP, Regulatory Strategy and Support
Leah Camilla B. Jimenez
FVP, Data Privacy and Information Security
Governance
Albert Mitchell L. Locsin
FVP, SME Nation
Florentino D. Mabasa, Jr.
FVP, Legal Services and Assistant
Corporate Secretary
Joseph Ian G. Gendrano
VP, Enterprise Business
Elisa B. Gesalta
VP, Enterprise and In-Building Solutions Project
Management
John John R. Gonzales
VP, Enterprise Strategic Solutions
Ma. Gillian Y. Gonzalez
VP, Retail Strategy and Development Office
Leo I. Posadas
FVP, Treasury and Corporate Treasurer
Ma. Criselda B. Guhit
VP, Tax Management
Aileen D. Regio
FVP, Contracts Management and Governance/
Regulatory Operations
Martin T. Rio
FVP, Property and Facilities Management
Emeraldo L. Hernandez
VP, Technical Operations Centre
Silverio S. Ibay, Jr.
VP, Spend Management Accounting
Maria Christina C. Semira
VP, Subsidiaries and Affiliates Finance
Ma. Merceditas T. Siapuatco
VP, Treasury Operations and Support
Arvin L. Siena
VP, Core Planning and Engineering Head
Carla Elena A. Tabuena
VP, Enterprise Non-Technical Operations
Patrick S. Tang
VP, Office of the Chief Revenue Officer
John Henri C. Yanez
VP, HOME Marketing
66 PIONEERING. INNOVATING. LEADING.