Telecom firm Philippine Long Distance Telephone Co. (PLDT) sees core income this year to grow by 5 percent to P37 billion over last year, as it closely monitors inflation, exchange rate and overseas Filipino worker (OFW) remittance levels seen to may affect its financial performance.

Despite rising inflation, PLDT reported a 21-percent increase in net income for the first quarter of the year to P10.4 billion on the back of a strong mobile-phone business.

From January to March this year, core net income, which excludes currency savings and derivative gains, rose to P9.3 billion, up 11 percent over P8.4 billion in the same period last year.

“We are closely watching the inflation, foreign exchange rate and remittances from the OFWs. We are observing the market and we have put in place measures to mitigate these adverse developments,” said PLDT president Napoleon Nazareno. The Philippine inflation rate for March stood at 6.4 percent, bringing the 2008 average to 5.6 percent. April inflation hit 8.3 percent.

“Rising inflation could affect the spending power of consumers but bigger ticket items like property amortization and electricity will more likely feel the impact of any reduced consumer spending,” said Nazareno. 

He added: “In terms of telco spending, the impact on our wireless business may be somewhat mitigated because the cost of a SIM card is now as low as P30 and the one day top-up denomination has been reduced to P10.”

The exchange rate, he explained further, will continue to affect the company’s financials but Nazareno assured that initiatives to manage the dollar exposure are in place.

He also said that OFW remittances will continue to grow with the continued increase of worker seeking employment abroad. “The multiplier effect of remittances will reach more households and a part of this will continue to find its way to communications spending,” added Nazareno. 

In a statement, PLDT chairman Manuel Pangilinan said the company’s sustained growth in the first quarter indicates that the teeth of inflation and rising prices have yet to bite deeply into its business.

“Nonetheless, we realize that a global slowdown will undoubtedly take its toll on all businesses eventually, and that the peso/dollar exchange rate will continue to impact our financials,” he said. 

During the press briefing, Nazareno explained said PLDT’s overall net profit partly rose due to a P1.7-billion gain from forex and derivative. Service revenues rose 6 percent to P34.9 billion. 

Philippine Airlines (PAL) will proceed with its programmed purchase of six Boeing 777s as it plans to explore new destinations.

Ayala-owned water utility posts 22% earnings rise

MANILA Water Co. (MWC), the water distribution arm of the Ayala group, said net profit for the first quarter of the year grew 22 percent to P625 million as revenues increased 16 percent on the back of higher billed volume and improvements in operating efficiency.

After years of maintaining a minor role in the domestic electronics market, Taiwanese-owned Asus now wants to take its role higher by opening its first dedicated service center in the Philippines.

THE listing of business process outsourcing (BPO) provider SPi Global Solutions, the outsourcing unit of Philippine Long Distance Telephone Co. (PLDT), has been postponed.

Telecom firm Philippine Long Distance Telephone Co. (PLDT) sees core income this year to grow by 5 percent to P37 billion over last year, as it closely monitors inflation, exchange rate and overseas Filipino worker (OFW) remittance levels seen to may affect its financial performance.

An unincorporated entity, which represented itself to be a corporation, will be estopped from denying its corporate capacity in a suit against it by a third person who relied in good faith on such representation.