In Partial Fulfillment of Requirements for the Degree of Bachelor of

Science in Business Administration Major in Financial

Management Code # 06581 (FIN 22A)

Submitted by:
Carl Angelo P. Montinola
Rannil John Cañada

Submitted to:
Prof. Krizzelle Anne Gellangarin

MARCH 2019
Strength

1. 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). PLDT has
one of the largest market capitalizations among Philippine listed companies.

2. Corporate Governance of PLDT was the cornerstone of strategy when First Pacific
made its investment in PLDT in 1998. It continue to build upon this foundation and
recognize the critical role of good corporate governance in ensuring PLDT’s sustained
growth and profitability.

3. The Home and Enterprise Business Groups led the way, increasing their revenues to
P33.0 billion and P34.1 billion, respectively, posting growth rates of 13% and 11%,
respectively. Their combined service revenues accounted for 47% of total consolidated
service revenues, surpassing the 41% contribution of Wireless Consumer Group. Though
revenues of the Wireless Consumer Group went down 11% to P58.9 billion, the decline
levelled off and stabilized as the year progressed.

4. With its PLDT’s LTE and 3G services progressively improving, mobile data revenues
grew 5% year-on-year to P23.5 billion. Moreover, the contribution of data to total revenue
rose quarter on quarter from 35% in the fourth quarter of 2016 to 42% in the fourth of
2017.

5. PLDT has an Consolidated Service Revenues amounted to P36.7 billion, up P1.1 billion
or 3% higher than the first quarter of 2017. Though relatively modest, the increase in
service revenues posted in the first quarter of 2018 represents a P3.8 billion swing over
the past two years when set against the P2.7 billion decline registered in the first quarter
of 2017 versus the previous year.
Weaknesses

1. High Day Sales Inventory: The time it takes for products to be purchased and sold
are higher than the average, meaning that PLDT Inc builds up on inventory adding
unnecessary cost to the business.

2. Low current ratio: The current ratio that shows the company’s ability to meet its
short term financial obligations, is lower than the industry average. This could
mean that the company could have liquidity problems in the future.

3. Cash Flow Problems: There is a lack of proper financial planning at PLDT Inc
regarding cash flows, leading to certain circumstances where there isn’t enough
cash flow as required leading to unnecessary borrowing.

4. Rented Property: A significant proportion of the property that PLDT inc owns is
rented rather than purchased. It has to pay large amounts of rent on these adding
to its cost.

5. Financial planning is not done properly and efficiently. The current asset ratio and
liquid asset ratios suggest that the company can use the cash more efficiently than
what it is doing at present.
Opportunities

1. Opening up of new markets because of government agreement – the adoption of

new technology standard and government free trade agreement has provided
PLDT Inc. an opportunity to enter a new emerging market.

2. Government green drive also opens an opportunity for procurement of PLDT Inc.
products by the state as well as federal government contractors.

3. Stable free cash flow provides opportunities to invest in adjacent product

segments. With more cash in bank the company can invest in new technologies
as well as in new products segments. This should open a window of opportunity
for PLDT Inc. in other product categories.

4. New customers from online channel – Over the past few years the company has
invested vast sum of money into the online platform. This investment has opened
new sales channel for PLDT Inc.. In the next few years the company can leverage
this opportunity by knowing its customer better and serving their needs using big
data analytics.

5. Decreasing cost of transportation because of lower shipping prices can also bring
down the cost of PLDT Inc.’s products thus providing an opportunity to the
company - either to boost its profitability or pass on the benefits to the customers
to gain market share.
Threat

1. New competitor or market disruptor could be a serious threat to the industry in

medium to long term future. With the Telstra and San Miguel tie-up poised to
challenge the duopoly of PLDT and Globe Telecom, Incorporated in 2016,
Pangilinan said it will be a "threat" to expanding its market share for postpaid and
prepaid.

2. With intense competition, the telcos’ margins have come under pressure even as
demand for more network services increased. Chairman Manuel Pangilinan
pointed out that while daily outbound text messages increased from between 800
million and 900 million to 1.2 billion, yields declined from 18 centavos to 13
centavos per text. In 2010, revenues from cellular data and text dropped 13
percent to P31 billion despite a 25-percent increase in volume.

3. There are predictions that the fixed line market will drop as the future nears. With
new communication technologies coming out at a very fast rate, the public are now
considering of using those new technologies that offer more comfort and
convenience. Even for PLDT, who holds the market for fixed line, may be affected
of this drop in sales.

4. Presently, there are already different competitors providing the same services as
PLDT and SMART have, not to mention other competitors that may still enter the
playing field. If one of those competitors will be able to introduce a new product
that may interest the public, then there’s a chance that customers will consider
having a deal with those competitors.

5. Changing demographics - As the babyboomers are retiring and new generation

finding hard to replace their purchasing power. This can lead to higher profits in
the short run for PLDT ADR but reducing margins over the long run as young
people are less brand loyal and more open to experimentation.
 Reference

http://pldt.com/news-center/article/2018/03/08/pldt-announces-full-year-2017-
financial-and-operating-results#.XIw2imIRWEc
http://www.pldt.com/news-center/article/2018/05/10/pldt-announces-2018-first-
quarter-results#.XI2mGGIRWEd
http://pldt.com/news-center/article/2018/03/08/pldt-announces-full-year-2017-
financial-and-operating-results#.XIw2imIRWEc
http://www.pldt.com/corporate-governance-in-pldt/message-from-the-chairman
http://www.pldt.com/corporate-governance-in-pldt/message-from-the-chairman
http://www.sunstar.com.ph/static/ceb/2006/01/14/bus/pldt.keeps.eye.on.prices.of.pcs
.for.opportunities..html
http://72.14.235.104/search?q=cache:rRwjHAY9YckJ:www.ijcim.th.org/v12n2/pdf/p1
05-110-Kibanoff_pldt-
LearNet.pdf+pldt+training+employee&hl=tl&ct=clnk&cd=1&gl=ph
Philippine Long Distance Telephone (PLDT) Company Intelligence Report
http://www.the-infoshop.com/study/iti29928-philippine-l-d-telephon.html
http://blueoceanuniversity.com/frontpage/swotcoanalysis/31572-pldt-adr
https://opinion.inquirer.net/5035/pldt-digitel-
deal?utm_expid=.XqNwTug2W6nwDVUSgFJXed.1