4q2019 Financial Statements

PLDT INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2019 AND 2018

AND FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017
F-1
PLDT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at December 31, 2019 and 2018
(in million pesos)
2019 2018
ASSETS
Noncurrent Assets
Property and equipment (Notes 9 and 22) 232,134 195,964
Right-of-use assets (Note 10) 15,890 —
Investments in associates and joint ventures (Note 11) 53,863 55,427
Financial assets at fair value through profit or loss (Note 12) 3,369 4,763
Debt instruments at amortized cost – net of current portion (Note 13) — 150
Investment properties (Notes 6 and 14) 778 777
Goodwill and intangible assets (Note 15) 67,834 68,583
Deferred income tax assets – net (Note 7) 23,623 27,697
Derivative financial assets – net of current portion (Note 28) 1 140
Prepayments – net of current portion (Notes 19 and 25) 48,933 23,338
Financial assets at fair value through other comprehensive income – net of current portion
(Notes 6 and 25) 162 2,749
Contract assets – net of current portion (Note 5) 750 1,083
Other financial assets – net of current portion (Note 28) 1,986 2,275
Other non-financial assets – net of current portion 136 230
Total Noncurrent Assets 449,459 383,176
Current Assets
Cash and cash equivalents (Note 16) 24,369 51,654
Short-term investments (Note 28) 314 1,165
Trade and other receivables (Note 17) 22,436 24,056
Inventories and supplies (Note 18) 3,412 2,878
Current portion of contract assets (Note 5) 1,997 2,185
Current portion of derivative financial assets (Note 29) 41 183
Current portion of debt instruments at amortized cost (Note 13) 150 —
Current portion of prepayments (Note 19) 11,298 8,380
Current portion of financial assets at fair value through other comprehensive income
(Notes 6 and 25) 2,757 1,604
Current portion of other financial assets (Notes 20 and 28) 8,086 7,008
Current portion of other non-financial assets 717 461
Total Current Assets 75,577 99,574
TOTAL ASSETS 525,036 482,750
EQUITY AND LIABILITIES

Equity
Non-voting serial preferred stock (Note 20) 360 360
Voting preferred stock (Note 20) 150 150
Common stock (Note 20) 1,093 1,093
Treasury stock (Note 20) (6,505) (6,505)
Treasury shares under employee benefit trust (Note 26) (394) (854)
Capital in excess of par value (Note 20) 130,321 130,526
Other equity reserves (Note 26) 276 697
Retained earnings (Note 20) 18,063 12,081
Other comprehensive loss (Note 6) (31,368) (25,190)
Total Equity Attributable to Equity Holders of PLDT (Note 28) 111,996 112,358
Noncontrolling interests (Note 6) 4,303 4,308
TOTAL EQUITY 116,299 116,666
See accompanying Notes to Consolidated Financial Statements.
F-2
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)

As at December 31, 2019 and 2018
(in million pesos)
2019 2018
Noncurrent Liabilities
Interest-bearing financial liabilities – net of current portion (Notes 21 and 28) 172,834 155,835
Lease liabilities – net of current portion (Note 10) 13,100 —
Deferred income tax liabilities (Note 7) 2,583 2,981
Derivative financial liabilities – net of current portion (Note 28) 25 —
Customers’ deposits (Note 28) 2,205 2,194
Pension and other employee benefits (Note 26) 8,985 7,182
Deferred credits and other noncurrent liabilities (Note 22) 4,557 5,284
Total Noncurrent Liabilities 204,289 173,476
Current Liabilities
Accounts payable (Note 23) 77,845 74,610
Accrued expenses and other current liabilities (Notes 24 and 27) 100,815 95,724
Current portion of interest-bearing financial liabilities (Notes 21, 25 and 28) 19,722 20,441
Current portion of lease liabilities (Note 10) 3,215 —
Dividends payable (Notes 20 and 29) 1,584 1,533
Current portion of derivative financial liabilities (Note 28) 88 80
Income tax payable 1,179 220
Total Current Liabilities 204,448 192,608
TOTAL LIABILITIES 408,737 366,084
TOTAL EQUITY AND LIABILITIES 525,036 482,750
F-3
CONSOLIDATED INCOME STATEMENTS

For the Years Ended December 31, 2019, 2018 and 2017
(in million pesos, except earnings per common share amounts which are in pesos)
2019 2018 2017

REVENUES
Service revenues (Note 5)* 161,355 152,369 150,172
Non-service revenues (Note 5) 7,832 10,545 8,761
169,187 162,914 158,933
EXPENSES
Selling, general and administrative expenses (Note 5) 68,230 73,916 68,990
Depreciation and amortization (Notes 9 and 10) 39,656 47,240 51,915
Cost of sales and services (Note 5) 13,429 14,427 13,633
Asset impairment (Note 5) 4,833 8,065 8,258
Interconnection costs* 3,638 5,493 6,626
129,786 149,141 149,422
39,401 13,773 9,511
OTHER INCOME (EXPENSES) – NET (Note 5) (7,065 ) 9,042 5,058

INCOME BEFORE INCOME TAX 32,336 22,815 14,569
PROVISION FOR INCOME TAX (Note 7) 9,550 3,842 1,103

NET INCOME 22,786 18,973 13,466
ATTRIBUTABLE TO:
Equity holders of PLDT (Note 8) 22,521 18,916 13,371
Noncontrolling interests 265 57 95
22,786 18,973 13,466
Earnings Per Share Attributable to Common Equity Holders
of PLDT (Note 8)
Basic 103.97 87.28 61.61
Diluted 103.97 87.28 61.61
For the years ended December 31, 2019 and 2018, the total service and non-service revenues pertains to revenue from contracts with
customers.
* Certain amounts in 2018 and 2017 were adjusted to reflect the effects of matters discussed in Note 5 – Income and Expenses –
Adjustments.
F-4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in million pesos)
2019 2018 2017

NET INCOME 22,786 18,973 13,466
OTHER COMPREHENSIVE INCOME (LOSS) – NET OF TAX
(Note 6)
Fair value changes of financial assets at fair value through
other comprehensive income (loss) (Note 25) 127 (29 ) —
Foreign currency translation differences of subsidiaries 23 117 (18 )
Net transactions on cash flow hedges: (256 ) (271 ) (376 )
Net fair value losses on cash flow hedges (Note 28) (330 ) (286 ) (411 )
Income tax related to fair value adjustments charged directly
to equity (Note 7) 74 15 35
Net gains on available-for-sale financial investments: — — 3,364
Unrealized gains from changes in fair value adjustments
recognized during the year (Note 12) — — 2,826
Impairment recognized in profit or loss — — 540
Income tax related to fair value adjustments charged directly
to equity (Note 7) — — (2 )
Share in the other comprehensive income of associates and joint
ventures accounted for using the equity method (Note 11) — — 112
Net other comprehensive income (loss) to be reclassified to
profit or loss in subsequent years (106 ) (183 ) 3,082
Revaluation increment on investment properties: (2 ) (2 ) 1
Depreciation of revaluation increment in investment properties
transferred to property and equipment (Note 9) (3 ) (2 ) (2 )
Income tax related to revaluation increment charged directly
to equity (Note 7) 1 — (1 )
Fair value adjustment to property and equipment transferred to
investment properties during the year — — 4
Actuarial losses on defined benefit obligations: (6,074 ) (1,222 ) (1,091 )
Remeasurement in actuarial losses on defined benefit
obligations (Note 26) (8,672 ) (1,788 ) (1,566 )
Income tax related to remeasurement adjustments (Note 7) 2,598 566 475
Share in the other comprehensive income of associates and joint
ventures accounted for using the equity method (Note 11) — — 194
Net other comprehensive loss not to be reclassified to profit or loss
in subsequent years (6,076 ) (1,224 ) (896 )
Total Other Comprehensive Income (Loss) – Net of Tax (6,182 ) (1,407 ) 2,186
TOTAL COMPREHENSIVE INCOME 16,604 17,566 15,652
ATTRIBUTABLE TO:
Equity holders of PLDT 16,343 17,504 15,550
Noncontrolling interests 261 62 102
16,604 17,566 15,652
F-5
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in million pesos)
Treasury
Shares Total Equity
under Capital in Other Attributable to
Preferred Common Treasury Employee Excess of Other Equity Retained Comprehensive Equity Holders Noncontrolling Total
Stock Stock Stock Benefit Trust Par Value Reserves Earnings (Loss) of PLDT Interests Equity
Balances as at January 1, 2019 (as previously stated) 510 1,093 (6,505 ) (854 ) 130,526 697 12,081 (25,190 ) 112,358 4,308 116,666
Effect of adoption of PFRS 16 (Note 2) — — — — — — (924 ) — (924 ) — (924 )
Balances as at January 1, 2019 (as restated) 510 1,093 (6,505 ) (854 ) 130,526 697 11,157 (25,190 ) 111,434 4,308 115,742
Treasury shares under employee benefit trust (Note 26) — — — 460 (130 ) — — — 330 — 330
Other equity reserves (Note 26) — — — — — (421 ) — — (421 ) — (421 )
Cash dividends (Note 20) — — — — — — (15,615 ) — (15,615 ) (15 ) (15,630 )
Total comprehensive income (loss): — — — — — — 22,521 (6,178 ) 16,343 261 16,604
Net income (Note 8) — — — — — — 22,521 — 22,521 265 22,786
Other comprehensive loss (Note 6) — — — — — — — (6,178 ) (6,178 ) (4 ) (6,182 )
Distribution charges on perpetual notes (Note 20) — — — — — — — — — (236 ) (236 )
Acquisition and dilution of noncontrolling interests — — — — (75 ) — — — (75 ) (15 ) (90 )
Balances as at December 31, 2019 510 1,093 (6,505 ) (394 ) 130,321 276 18,063 (31,368 ) 111,996 4,303 116,299
Balances as at January 1, 2018 (as previously stated) 510 1,093 (6,505 ) (940 ) 130,374 827 634 (19,151 ) 106,842 4,341 111,183
Effect of adoption of PFRS 9 (Note 2) — — — — — — 4,101 (4,627 ) (526 ) — (526 )
Effect of adoption of PFRS 15 (Note 2) — — — — — — 2,553 — 2,553 — 2,553
Balances as at January 1, 2018 (as restated) 510 1,093 (6,505 ) (940 ) 130,374 827 7,288 (23,778 ) 108,869 4,341 113,210
Treasury shares under employee benefit trust (Note 26) — — — 86 — — — — 86 — 86
Other equity reserves (Note 26) — — — — — (130 ) — — (130 ) — (130 )
Total comprehensive income (loss): — — — — — — 18,916 (1,412 ) 17,504 62 17,566
Net income (Note 8) — — — — — — 18,916 — 18,916 57 18,973
Other comprehensive income (loss) (Note 6) — — — — — — — (1,412 ) (1,412 ) 5 (1,407 )
Distribution charges on perpetual notes (Note 20) — — — — — — (236 ) — (236 ) — (236 )
Acquisition and dilution of noncontrolling interests — — — — 152 — — — 152 (80 ) 72
Balances as at December 31, 2018 510 1,093 (6,505 ) (854 ) 130,526 697 12,081 (25,190 ) 112,358 4,308 116,666
Balances as at January 1, 2017 510 1,093 (6,505 ) — 130,488 — 3,483 (20,894 ) 108,175 362 108,537
Treasury shares under employee benefit trust (Note 26) — — — (940 ) — — — — (940 ) — (940 )
Other equity reserves (Note 26) — — — — — 827 — — 827 — 827
Total comprehensive income: — — — — — — 13,807 1,743 15,550 102 15,652
Net income (Note 8) — — — — — — 13,371 — 13,371 95 13,466
Other comprehensive income (Note 6) — — — — — — 436 1,743 2,179 7 2,186
Perpetual notes (Note 20) — — — — — — — — — 4,165 4,165
Distribution charges on perpetual notes (Note 20) — — — — — — (177 ) — (177 ) — (177 )
Acquisition and dilution of noncontrolling interests — — — — (114 ) — — — (114 ) (222 ) (336 )
Balances as at December 31, 2017 510 1,093 (6,505 ) (940 ) 130,374 827 634 (19,151 ) 106,842 4,341 111,183
F-6
CONSOLIDATED STATEMENTS OF CASH FLOWS

(in million pesos)
2019 2018 2017

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax 32,336 22,815 14,569
Adjustments for:
Depreciation and amortization (Notes 9 and 10)* 39,656 47,240 51,915
Interest on loans and other related items – net (Note 5) 7,275 6,783 7,014
Asset impairment (Note 5) 4,833 8,065 8,258
Equity share in net losses (earnings) of associates and joint ventures
(Notes 5 and 11) 1,535 87 (2,906 )
Accretion on lease liabilities (Notes 5, 10, 21 and 29) 1,061 —
Pension benefit costs (Notes 5 and 26) 1,018 1,855 1,607
Amortization of intangible assets (Notes 5 and 15) 758 892 835
Incentive plan (Notes 5 and 26) 638 208 827
Losses (gains) on derivative financial instruments – net
(Notes 5 and 28) 284 (1,086 ) (533 )
Accretion on financial liabilities (Notes 5 and 21) 122 145 219
Losses (gains) on disposal of property and equipment (Note 9) 88 (12 ) 159
Impairment of investments (Note 11) 34 172 2,562
Foreign exchange losses (gains) – net (Notes 5 and 9) (424 ) 771 411
Interest income (Note 5) (1,745 ) (1,943 ) (1,412 )
Gains on disposal of investments in subsidiaries – net (Note 11) — (144 ) —
Gains on deconsolidation of subsidiary (Note 10) — (12,054 ) —
Gains on disposal of investment property (Note 14) — — (80 )
Gains on disposal of investments in associates – net (Note 11) — — (6,512 )
Others 994 (1,076 ) (2,443 )
Operating income before changes in assets and liabilities 88,463 72,718 74,490
Decrease (increase) in:
Prepayments (28,898 ) (4,318 ) (212 )
Other financial and non-financial assets (198 ) — 162
Trade and other receivables (1,560 ) (12,175 ) (10,674 )
Inventories and supplies 12 26 (542 )
Contract assets 337 390 —
Increase (decrease) in:
Customers’ deposits 12 (250 ) 13
Pension and other employee benefits (7,965 ) (5,733 ) (5,841 )
Other noncurrent liabilities 2,141 (11 ) 38
Accounts payable 18,768 7,729 4,622
Accrued expenses and other current liabilities 4,375 5,184 (1,392 )
Net cash flows generated from operations 75,487 63,560 60,664
Income taxes paid (2,097 ) (2,444 ) (4,550 )
Net cash flows from operating activities 73,390 61,116 56,114
* For 2019, this includes the depreciation or amortization of right-of-use assets.
F-7
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in million pesos)
2019 2018 2017

CASH FLOWS USED IN INVESTING ACTIVITIES
Interest received 1,723 1,115 1,217
Proceeds from:
Collection of notes receivable 1,771 11,707 2,001
Maturity of short-term investments 1,415 6,102 20,254
Disposal of financial assets at fair value through profit or loss
(Note 12) 1,023 11,643 —
Disposal of property and equipment (Note 9) 224 345 484
Disposal of investment properties (Note 14) 11 — 290
Disposal of investments in associates and joint ventures (Note 11) — 1,710 14,884
Redemption of investment in debt securities — 105 456
Disposal of investments available-for-sale — — 1,000
Dividends received (Note 11) — — 833
Payments for:
Acquisition of investments in associates and joint ventures (Note 11) (20 ) (111 ) (5,633 )
Acquisition of investments in subsidiaries – net of cash acquired (80 ) (2,814 ) (266 )
Purchase of short-term investments (572 ) (5,992 ) (18,424 )
Interest capitalized to property and equipment (Notes 5 and 9) (1,455 ) (1,524 ) (816 )
Purchase of property and equipment (Note 9) (88,246 ) (47,247 ) (36,616 )
Acquisition of intangible assets (Note 15) — (21 ) (137 )
Purchase of investments available-for-sale — — (76 )
Increase in other financial and non-financial assets 36 (72 ) (511 )
Net cash flows used in investing activities (84,170 ) (25,054 ) (21,060 )
CASH FLOWS USED IN FINANCING ACTIVITIES
Proceeds from:
Availments of long-term debt (Notes 21 and 29) 37,500 20,500 26,255
Derivative financial instruments (Notes 28 and 29) — 886 218
Issuance of perpetual notes (Note 20) — — 4,165
Payments for:
Derivative financial instruments (Notes 28 and 29) (50 ) — —
Debt issuance costs (Notes 21 and 29) (195 ) (38 ) (153 )
Distribution charges on perpetual notes (Note 20) (236 ) (236 ) (177 )
Interest – net of capitalized portion (Notes 5, 21 and 29) (7,143 ) (6,614 ) (7,076 )
Obligations under lease liabilities (Notes 10 and 29) (9,543 ) — —
Cash dividends (Notes 20 and 29) (15,592 ) (13,928 ) (16,617 )
Long-term debt (Notes 21 and 29) (20,494 ) (18,740 ) (39,199 )
Long-term financing for capital expenditures (Note 29) — — (7,735 )
Decrease (increase) in treasury shares under employee benefit trust (4 ) 26 —
Net cash flows used in financing activities (15,757 ) (18,144 ) (40,319 )
NET EFFECT OF FOREIGN EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS (748 ) 831 (552 )
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (27,285 ) 18,749 (5,817 )
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE YEAR (Note 16) 51,654 32,905 38,722
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
(Note 16) 24,369 51,654 32,905
F-8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
PLDT Inc. (formerly Philippine Long Distance Telephone Company), which we refer to as PLDT or the
Parent Company, was incorporated under the old Corporation Law of the Philippines (Act 1459, as amended)
on November 28, 1928, following the merger of four telephone companies under common U.S. ownership.
Under its amended Articles of Incorporation, PLDT’s corporate term is currently limited through 2028. In
1967, effective control of PLDT was sold by the General Telephone and Electronics Corporation, then a
major shareholder since PLDT’s incorporation, to a group of Filipino businessmen. In 1981, in furtherance
of the then existing policy of the Philippine government to integrate the Philippine telecommunications
industry, PLDT purchased substantially all of the assets and liabilities of the Republic Telephone Company,
which at that time was the second largest telephone company in the Philippines. In 1998, certain subsidiaries
of First Pacific Company Limited, or First Pacific, and its Philippine affiliates (collectively the First Pacific
Group and its Philippine affiliates), acquired a significant interest in PLDT. On March 24, 2000, NTT
Communications Corporation, or NTT Communications, through its wholly-owned subsidiary NTT
Communications Capital (UK) Ltd., became PLDT’s strategic partner with approximately 15% economic
and voting interest in the issued and outstanding common stock of PLDT at that time. Simultaneous with
NTT Communications’ investment in PLDT, the latter acquired 100% of Smart Communications, Inc., or
Smart. On March 14, 2006, NTT DOCOMO, Inc., or NTT DOCOMO, acquired from NTT Communications
approximately 7% of PLDT’s then outstanding common shares held by NTT Communications with NTT
Communications retaining ownership of approximately 7% of PLDT’s common shares. Since March 14,
2006, NTT DOCOMO has made additional purchases of shares of PLDT, and together with NTT
Communications, beneficially owned approximately 20% of PLDT’s outstanding common stock as at
December 31, 2019. NTT Communications and NTT DOCOMO are subsidiaries of NTT Holding
Company. On February 28, 2007, Metro Pacific Asset Holdings, Inc., a Philippine affiliate of First Pacific,
completed the acquisition of an approximately 46% interest in Philippine Telecommunications Investment
Corporation, or PTIC, a shareholder of PLDT. This investment in PTIC represented an attributable interest
of approximately 6% of the then outstanding common shares of PLDT and thereby raised First Pacific
Group’s and its Philippine affiliates’ beneficial ownership to approximately 28% of PLDT’s outstanding
common stock as at that date. Since then, First Pacific Group’s beneficial ownership interest in PLDT
decreased by approximately 2%, mainly due to the holders of Exchangeable Notes, which were issued in
2005 by a subsidiary of First Pacific and exchangeable into PLDT shares owned by First Pacific Group, who
fully exchanged their notes. First Pacific Group and its Philippine affiliates had beneficial ownership of
approximately 26% in PLDT’s outstanding common stock as at December 31, 2019. On October 26, 2011,
PLDT completed the acquisition of a controlling interest in Digital Telecommunications Phils., Inc., or
Digitel, from JG Summit Holdings, Inc., or JGSHI, and its affiliates, or JG Summit Group. As payment for
the assets acquired from JGSHI, PLDT issued approximately 27.7 million common shares. In November
2011, JGSHI sold 5.81 million and 4.56 million PLDT shares to a Philippine affiliate of First Pacific and
NTT DOCOMO, respectively, pursuant to separate option agreements that JGSHI had entered into with a
Philippine affiliate of First Pacific and NTT DOCOMO, respectively. As at December 31, 2019, the JG
Summit Group beneficially owned approximately 8% of PLDT’s outstanding common shares.
On October 16, 2012, BTF Holdings, Inc., or BTFHI, a wholly-owned company of the Board of Trustees for
the Account of the Beneficial Trust Fund, or PLDT Beneficial Trust Fund, created pursuant to PLDT’s
Benefit Plan, subscribed to 150 million newly issued shares of Voting Preferred Stock of PLDT, or Voting
Preferred Shares, at a subscription price of Php1.00 per share for a total subscription price of Php150 million
pursuant to a subscription agreement between BTFHI and PLDT dated October 15, 2012. As a result of the
issuance of Voting Preferred Shares, the voting power of the NTT Group (NTT DOCOMO and NTT
Communications), First Pacific Group and its Philippine affiliates, and JG Summit Group was reduced to
12%, 15% and 5%, respectively, as at December 31, 2019. See Note 20 – Equity – Preferred Stock – Voting
Preferred Stock and Note 27 – Provisions and Contingencies – In the Matter of the Wilson Gamboa Case
and Jose M. Roy III Petition.
F-9
The common shares of PLDT are listed and traded on the Philippine Stock Exchange, Inc., or PSE. On
October 19, 1994, an American Depositary Receipt, or ADR, facility was established, pursuant to which
Citibank N.A., as the depositary, issued American Depositary Shares, or ADSs, with each ADS representing
one PLDT common share with a par value of Php5.00 per share. Effective February 10, 2003, PLDT
appointed JP Morgan Chase Bank as successor depositary for PLDT’s ADR facility. The ADSs are listed on
the New York Stock Exchange, or NYSE, in the United States and are traded on the NYSE under the symbol
“PHI”. There were approximately 26.9 million ADSs outstanding as at December 31, 2019.
PLDT and our Philippine-based fixed line and wireless subsidiaries operate under the jurisdiction of the
Philippine National Telecommunications Commission, or NTC, which jurisdiction extends, among other
things, to approving major services offered and certain rates charged to customers.
We are the largest and most diversified telecommunications company in the Philippines which delivers data
and multi-media services nationwide. We have organized our business into business units based on our
products and services and have three reportable operating segments which serve as the bases for
management’s decision to allocate resources and evaluate operating performance. Our principal activities
are discussed in Note 4 – Operating Segment Information.
Our registered office address is Ramon Cojuangco Building, Makati Avenue, Makati City, Philippines.
Information on our structure is provided in Note 2 – Summary of Significant Accounting Policies – Basis of
Consolidation. Information on other related party relationships of the PLDT Group is provided in Note 25 –
Related Party Transactions.
Our consolidated financial statements as at December 31, 2019 and 2018, and for the years ended December
31, 2019, 2018 and 2017 were approved and authorized for issuance by the Board of Directors on March 5,
2020 as reviewed for approval by the Audit Committee on March 4, 2020.
2. Summary of Significant Accounting Policies

Basis of Preparation
Our consolidated financial statements have been prepared in accordance with Philippine Financial Reporting
Standards, or PFRSs, as issued by the Philippine Financial Reporting Standards Council, or FRSC.
Our consolidated financial statements have been prepared under the historical cost basis, except for financial
instruments at fair value through profit or loss, or FVPL, financial instruments at fair value through other
comprehensive income, or FVOCI, and investment properties that are measured at fair values.
Our consolidated financial statements are presented in Philippine Peso, PLDT’s functional currency, and all
values are rounded to the nearest million, except when otherwise indicated.
Our consolidated financial statements provide comparative information in respect of the previous period.
Basis of Consolidation
Our consolidated financial statements include the financial statements of PLDT and the following
subsidiaries (collectively, the “PLDT Group”) as at December 31, 2019 and 2018:
2019 2018
Place of Percentage of Ownership
Name of Subsidiary Incorporation Principal Business Activity Direct Indirect Direct Indirect
Wireless
Smart: Philippines Cellular mobile services 100.0 — 100.0 —
Smart Broadband, Inc., or SBI, Philippines Internet broadband — 100.0 — 100.0
and Subsidiary distribution services
Primeworld Digital Systems, Inc., Philippines Internet broadband — 100.0 — 100.0
or PDSI distribution services
I-Contacts Corporation Philippines Operations support servicing — 100.0 — 100.0
business
Smart Money Holdings Corporation, Cayman Islands Investment company — 100.0 — 100.0
or SMHC(a)
F-10
2019 2018
Place of Percentage of Ownership
Name of Subsidiary Incorporation Principal Business Activity Direct Indirect Direct Indirect
Far East Capital Limited, or Cayman Islands Cost effective offshore — 100.0 — 100.0
FECL, and Subsidiary, or FECL financing and risk
Group(a) management activities
for Smart
PH Communications Holdings Corporation, Philippines Investment company — 100.0 — 100.0
or PHC
Connectivity Unlimited Resource Philippines Cellular mobile services — 100.0 — 100.0
Enterprise, or CURE
Francom Holdings, Inc., or FHI: Philippines Investment company — 100.0 — 100.0
Chikka Holdings Limited, or British Virgin Content provider, mobile — 100.0 — 100.0
Chikka, and Subsidiaries, or Islands applications development
Chikka Group(a) and services
Wifun, Inc., or Wifun Philippines Software developer and selling — 100.0 — 100.0
of WiFi access equipment
Telesat, Inc.(a) Philippines Satellite communications 100.0 — 100.0 —
services
ACeS Philippines Cellular Satellite Philippines Satellite information and 88.5 11.5 88.5 11.5
Corporation, or ACeS Philippines messaging services
Digitel Mobile Philippines, Inc., or DMPI, Philippines Cellular mobile services — 99.6 — 99.6
(a wholly-owned subsidiary of Digitel)
Fixed Line
PLDT Clark Telecom, Inc., or ClarkTel Philippines Telecommunications services 100.0 — 100.0 —
PLDT Subic Telecom, Inc., or SubicTel Philippines Telecommunications services 100.0 — 100.0 —
PLDT Global Corporation, or PLDT Global, British Virgin Telecommunications services 100.0 — 100.0 —
and Subsidiaries Islands
Smart-NTT Multimedia, Inc.(a) Philippines Data and network services 100.0 — 100.0 —
PLDT-Philcom, Inc., or Philcom, and Philippines Telecommunications services 100.0 — 100.0 —
Subsidiaries, or Philcom Group
Talas Data Intelligence, Inc., or Talas Philippines Business infrastructure and 100.0 — 100.0 —
solutions; intelligent data
processing and
implementation services
and data analytics insight
generation
ePLDT, Inc., or ePLDT: Philippines Information and 100.0 — 100.0 —
communications
infrastructure for
internet-based services,
e-commerce, customer
relationship management
and IT related services
IP Converge Data Services, Philippines Information and — 100.0 — 100.0
Inc., or IPCDSI, and Subsidiary, communications
or IPCDSI Group infrastructure for
internet-based services,
e-commerce, customer
relationship management
and IT related services
Curo Teknika, Inc., or Curo Philippines Managed IT outsourcing — 100.0 — 100.0
ABM Global Solutions, Inc., or AGS, and Philippines Internet-based purchasing, IT — 100.0 — 100.0
Subsidiaries, or AGS Group consulting and professional
services
ePDS, Inc., or ePDS Philippines Bills printing and other — 100.0 — 95.0
related value-added
services, or VAS
netGames, Inc.(a) Philippines Gaming support services — 57.5 — 57.5
MVP Rewards Loyalty Solutions, Inc., Philippines Full-services customer rewards — 100.0 — 100.0
or MRSI(b) and loyalty programs
Digitel: Philippines Telecommunications services 99.6 — 99.6 —
Digitel Information Technology Services, Philippines Internet services — 99.6 — 99.6
Inc.(a)
PLDT-Maratel, Inc., or Maratel Philippines Telecommunications services 98.0 — 98.0 —
Bonifacio Communications Corporation, or BCC Philippines Telecommunications, 75.0 — 75.0 —
infrastructure and related
VAS
Pacific Global One Aviation Company, Inc., Philippines Air transportation business 65.0 — 65.0 —
or PG1
Pilipinas Global Network British Virgin Internal distributor of Filipino 64.6 — 64.6 —
Limited, or PGNL, and Islands channels and content
Subsidiaries
Others
PLDT Global Investments Holdings, Inc., Philippines Investment company 100.0 — 100.0 —
or PGIH
PLDT Digital Investments Pte. Ltd., Singapore Investment company 100.0 — 100.0 —
or PLDT Digital, and Subsidiaries
Mabuhay Investments Corporation, or MIC(a) Philippines Investment company 67.0 — 67.0 —
PLDT Global Investments Corporation, British Virgin Investment company — 100.0 — 100.0
or PGIC Islands
PLDT Communications and Energy Ventures, Philippines Investment company — 99.9 — 99.9
Inc., or PCEV
(a)
Ceased commercial operations.
(b)
On September 14, 2018, MRSI was incorporated and ePLDT made an initial investment of Php50 million.
F-11
Subsidiaries are fully consolidated from the date of acquisition, being the date on which PLDT obtains
control, and continue to be consolidated until the date that such control ceases. We control an investee when
we are exposed, or have rights, to variable returns from our involvement with the investee and when we have
the ability to affect those returns through our power over the investee.
The financial statements of our subsidiaries are prepared for the same reporting period as PLDT. We prepare
our consolidated financial statements using uniform accounting policies for like transactions and other events
with similar circumstances.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of
PLDT and to the noncontrolling interests, even if this results in the noncontrolling interests having a deficit
balance.
Noncontrolling interests share in losses even if the losses exceed the noncontrolling equity interest in the
subsidiary.
A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity
transaction and impact is presented as part of other equity reserves.
If PLDT loses control over a subsidiary, it: (a) derecognizes the assets (including goodwill) and liabilities of
the subsidiary; (b) derecognizes the carrying amount of any noncontrolling interest; (c) derecognizes the
cumulative translation differences recorded in equity; (d) recognizes the fair value of the consideration
received; (e) recognizes the fair value of any investment retained; (f) recognizes any surplus or deficit in
profit or loss; and (g) reclassifies the Parent Company’s share of components previously recognized in other
comprehensive income to profit or loss or retained earnings, as appropriate.
Divestment of CURE
On October 26, 2011, PLDT received the Order issued by the NTC approving the application jointly filed by
PLDT and Digitel for the sale and transfer of approximately 51.6% of the outstanding common stock of
Digitel to PLDT. The approval of the application was subject to conditions which included the divestment
by PLDT of CURE, in accordance with the Divestment Plan, as follows:
 CURE is obligated to sell its Red Mobile business to Smart consisting primarily of its subscriber base,
brand and fixed assets; and
 Smart is obligated to sell all of its rights and interests in CURE whose remaining assets will consist of its
congressional franchise, 10 Megahertz, or MHz, of 3G frequency in the 2100 band and related permits.
In compliance with the commitments in the divestment plan, CURE completed the sale and transfer of its
Red Mobile business to Smart on June 30, 2012 for a total consideration of Php18 million through a series of
transactions, which included: (a) the sale of CURE’s Red Mobile trademark to Smart; (b) the transfer of
CURE’s existing Red Mobile subscriber base to Smart; and (c) the sale of CURE’s fixed assets to Smart at
net book value.
In a letter dated July 26, 2012, Smart informed the NTC that it has complied with the terms and conditions of
the divestment plan as CURE had rearranged its assets, such that, except for assets necessary to pay off
obligations due after June 30, 2012 and certain tax assets, CURE’s only remaining assets as at June 30, 2012
were its congressional franchise, the 10 MHz of 3G frequency in the 2100 band and related permits.
In a letter dated September 10, 2012, Smart informed the NTC that the minimum Cost Recovery Amount, or
CRA, to enable PLDT to recover its investment in CURE includes, among others, the total cost of equity
investments in CURE, advances from Smart for operating requirements, advances from stockholders and
associated funding costs. In a letter dated January 21, 2013, the NTC referred the computation of the CRA to
the Commissioners of the NTC.
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In a letter dated March 5, 2018, PLDT informed the NTC that it is waiving its right to recover any and all
cost related to the 10MHz of 3G radio frequency previously assigned to CURE. Accordingly, CURE will
not claim any cost associated with it in the event of subsequent assignment by the NTC to another qualified
telecommunication company. With the foregoing, PLDT is deemed to have fully complied with its
obligation to divest from CURE as a condition to the sale and transfer of Digitel shares to PLDT.
In 2018, Smart recognized full impairment of its receivable from CURE, due to uncertainty of collectability,
and its investments in PHC and FHI, which holds the 97% and 3% interest in CURE, respectively. These
transactions were eliminated in our consolidated financial statements.
Extension of Smart’s Congressional Franchise

On April 21, 2017, R.A. No. 10926, which effectively extended Smart’s franchise until 2042, was signed
into law by the President of the Republic of the Philippines. The law was published in a newspaper of
general circulation on May 4, 2017 and took effect on May 19, 2017.
Decrease in Authorized Capital Stock and Amendment of the Articles of Incorporation of MIC
On May 30, 2017, the Board of Directors of MIC approved the (a) reduction of MIC’s authorized capital
stock from Php2,028 million divided into 20 million shares to Php1,602 million by decreasing the par value
per share from Php100.00 to Php79.00, or the Decrease in Capital, and (b) the corresponding amendment to
the Seventh Article of the Articles of Incorporation of MIC, or the Amendment of Articles. On the same
date, the Decrease in Capital and Amendment of Articles were approved by the stockholders representing at
least two thirds of the outstanding shares of MIC. The application for approval of the Decrease in Capital
and Amendment of Articles was filed with the Philippine Securities and Exchange Commission, or
Philippine SEC, on July 11, 2017 and was approved on December 18, 2017.
Transfer of SBI’s Home Broadband Subscription Assets to PLDT

On September 26, 2017, the Board of Directors of PLDT and SBI, a subsidiary providing wireless broadband
services, approved the sale and transfer of SBI’s trademark and subscribers, and all of SBI’s assets, rights
and obligations directly or indirectly connected to its HOME Ultera and HOMEBRO Wimax businesses to
PLDT. The transfer was effective January 1, 2018. Subscription assets and trademark are amortized over
two years and 10 years, respectively, using the straight-line method of accounting.
SBI’s businesses are currently being managed by PLDT pursuant to the Operations Maintenance and
Management Agreement between PLDT and SBI effective October 1, 2012. Subsequent to the transfer, SBI
will continue to provide broadband services to its existing Canopy subscribers using a portion of Smart’s
network. The transfer is in accordance with the said agreement and in order to achieve the expected benefits,
as follows:
 Seamless upgrades of PLDT products;
 Flexibility for business in cross-selling of PLDT products; and
 Enhanced customer experience.
On December 18, 2017, PLDT settled the partial consideration to SBI amounting to Php1,294 million. The
remaining balance of Php1,152 million was fully paid on July 31, 2018.
This transaction was eliminated in our consolidated financial statements.
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Transfer of iCommerce Pte. Ltd., or iCommerce, to PLDT Online
On December 14, 2017, Voyager Innovations Holdings Pte. Ltd., or VIH, and PLDT Online entered into a
Sale and Purchase Agreement whereby VIH sold all of its 10 thousand ordinary shares in iCommerce to
PLDT Online for a total purchase price of SG$1.00. On the same date, VIH assigned its loans receivables
from iCommerce to PLDT Online amounting to US$8.6 million. In consideration, a total of US$8.9 million,
inclusive of interest, was fully paid by PLDT Online to VIH on November 30, 2017.
ePLDT’s Additional Investment in ePDS

On March 5, 2018 and August 7, 2018, the Board of Directors of ePLDT approved the additional investment
in ePDS amounting to Php134 million and Php66 million, respectively, thereby increasing its equity interest
in ePDS from 67% to 95%. On November 7, 2019, ePLDT acquired the 5% minority interest in ePDS for a
consideration of Php20 million, thereby increasing its equity interest in ePDS from 95% to 100%. This
transaction was eliminated in our consolidated financial statements.
Expiration of Digitel’s Legislative Franchise

On February 17, 1994, the Philippine Congress granted a legislative franchise to Digitel under R.A. No. 7678
to install, operate and maintain telecommunications systems throughout the Philippines for public domestic
and international telecommunications, and for other purposes. R.A. No. 7678 expired on February 17, 2019
and was not renewed.
Decrease in PCEV’s Authorized Capital Stock and Par Value of Common Stock
On May 10, 2019 and June 25, 2019, PCEV’s Board of Directors and stockholders, respectively, approved
the following resolutions and amendments to the articles of incorporation of PCEV: (a) decrease in the par
value of common stock; and (b) decrease in the authorized capital stock as follows:
Prior to Amendments After Amendments

Authorized Number Par Authorized Number Par
Capital of Value Capital of Value
(Php) Shares (Php) (Php) Shares (Php)
(in millions) (in millions)
Common Stock 12,060 1 21,000 4,996 1 8,700
Class I Preferred Stock 67 33 2 67 33 2
Class II Preferred Stock 50 50 1 50 50 1
Total Authorized Capital Stock 12,177 84 5,113 84
The decrease in PCEV’s authorized capital was approved by the Philippine SEC on December 19, 2019.
Consequently, the partial return of capital representing their proportionate share in the decrease in par value
amounting to Php6,825 million and Php4 million were paid to Smart and PCEV’s minority shareholders,
respectively.
Expiration of Philcom’s Legislative Franchise

Effective September 15, 2019, Philcom ceased to operate as a telecommunications service provider, pursuant
to the expiration of its legislative franchise, R.A. 7783. In order to facilitate continued customer service,
arrangements have been made between Philcom and PLDT where PLDT would make its services available
to the affected Philcom subscribers on voluntary basis. The NTC interposed no objection to the transfer of
Philcom’s subscribers to PLDT, subject to certain conditions. Consequently, Philcom and PLDT executed a
Deed of Assignment on September 13, 2019 wherein all property and equipment of Philcom, accounts
receivable, inventories and subscribers were transferred to PLDT for a total consideration of Php2,106
million, after complying with the conditions imposed by NTC. This transaction was eliminated in our
consolidated financial statements.
F-14
Expiration of SubicTel’s Franchise
Effective January 23, 2020, SubicTel ceased to operate as a telecommunications service provider, pursuant to
the expiration of its franchise issued by the Subic Bay Metropolitan Authority, or SBMA. In order to
facilitate continued customer service, arrangements have been made between SubicTel and PLDT where
PLDT would make its services available to the affected SubicTel subscribers on voluntary basis. The NTC
interposed no objection to the transfer of SubicTel’s subscribers to PLDT, subject to certain conditions.
Likewise, the SBMA Board approved the issuance of Certificate of Registration to PLDT to operate within
SBMA. On September 24, 2019, the PLDT Board of Directors approved the acquisition of the assets and
subscribers of SubicTel for a total consideration of Php675 million.
Expiration of Maratel’s Legislative Franchise

Effective April 2020, Maratel will cease to operate as a telecommunications service provider, following the
expiration of its legislative franchise, R.A. 7970. In order to ensure continued customer service, Maratel will
assign its assets and subscribers, or the “Maratel Subscribers”, to PLDT who undertakes to offer its services
to Maratel Subscribers subject to conditions as may be imposed by the NTC. The NTC, has yet to respond to
Maratel’s notice to transfer its subscribers to PLDT. On November 7, 2019, the PLDT Board of Directors
approved the acquisition of the assets and Maratel Subscribers for a total consideration of Php442 million.
New and Amended Standards and Interpretations

The accounting policies adopted are consistent with those of the previous financial year, except that we have
adopted the following new and amended standards and interpretations starting January 1, 2019. Except for
the adoption of PFRS 16, Leases, the adoption of these new and amended standards and interpretations did
not have significant impact on our financial position or performance.
1. Amendments to PFRS 9, Financial Instruments, Prepayment Features with Negative Compensation
2. Amendments to Philippine Accounting Standards, or PAS, 19, Employee Benefits, Plan Amendment,
Curtailment or Settlement
3. Amendments to PAS 28, Investment in Associates and Joint Ventures
4. Annual Improvements to PFRSs 2015-2017 Cycle
 Amendments to PFRS 3, Business Combinations, and PFRS 11, Joint Arrangements, Previously
Held Interest in a Joint Operation
 Amendments to PAS 12, Income Taxes, Income Tax Consequences of Payments on Financial
Instruments Classified as Equity
 Amendments to PAS 23, Borrowing Costs, Borrowing Costs Eligible for Capitalization
5. Philippine Interpretation to International Financial Reporting Interpretations Committee, or IFRIC, 23,

Uncertainty over Income Tax Treatments
This Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that
affects the application of PAS 12, Income Taxes. It does not apply to taxes or levies outside the scope of
PAS 12, nor does it specifically include requirements relating to interest and penalties associated with
uncertain tax treatments. The Interpretation specifically addresses the following:
 Whether an entity considers uncertain tax treatments separately;
 The assumptions an entity makes about the examination of tax treatments by taxation authorities;
F-15
 How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits
and tax rates; and
 How an entity considers changes in facts and circumstances.
The entity is required to determine whether to consider each uncertain tax treatment separately or together
with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of
the uncertainty. The entity shall assume that the taxation authority will examine amounts that it has a right to
examine and have full knowledge of all related information when making those examination. If an entity
concludes that it is not probable that the taxation authority will accept an uncertain tax treatment, it shall
reflect the effect of the uncertainty for each uncertain tax treatment using the method the entity expects to
better predict the resolution of the uncertainty.
Upon adoption of the Interpretation, we assess whether it has any uncertain tax positions and applies
significant judgment in identifying uncertainties over our tax treatments. We determined based on our
assessment that it is probable that our income tax treatments (including those for the subsidiaries) will be
accepted by the taxation authorities. Accordingly, the interpretation did not have an impact on our
consolidated financial statement.
6. PFRS 16, Leases
PFRS 16 supersedes PAS 17, Leases, Philippine Interpretation to IFRIC 4, Determining whether an
Arrangement contains a Lease, Philippine Interpretation to SIC-15, Operating Leases-Incentives and
Philippine Interpretation to SIC-27, Evaluating the Substance of Transactions Involving the Legal Form of a
Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of
leases and requires lessees to recognize most leases on our consolidated statement of financial position. The
standard includes two recognition exemptions for lessees – leases of ‘low-value’ assets (e.g., personal
computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement
date of a lease, a lessee will recognize a liability to make lease payments (i.e., the lease liability) and an asset
representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees
will be required to separately recognize the interest expense on the lease liability and the depreciation
expense on the right-of-use asset, or ROU.
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a
change in the lease term, a change in future lease payments resulting from a change in an index or rate used
to determine those payments). The lessee will generally recognize the amount of the remeasurement of the
lease liability as an adjustment to the ROU.
Lessor accounting under PFRS 16 is substantially unchanged from today’s accounting under PAS 17.
Lessors will continue to classify all leases using the same classification principle as in PAS 17 and
distinguish between two types of leases: operating and finance leases. Therefore, PFRS 16 did not have an
impact for leases where we are the lessor.
PFRS 16 also requires lessees and lessors to make more extensive disclosures than under PAS 17.
A lessee can choose to apply the standard using either a full retrospective or a modified retrospective
approach. The standard’s transition provisions permit certain reliefs.
We applied the modified retrospective approach upon adoption of PFRS 16 on January 1, 2019 and applied
the standard to contracts that were previously identified as leases applying PAS 17 and Philippine
Interpretation to IFRIC 4. We, therefore did not apply the standard to contracts that were not previously
identified as containing a lease applying PAS 17 and Philippine Interpretation to IFRIC 4.
We elected to use the exemptions provided by the standard on lease contracts for which the lease term ends
within 12 months as at the date of initial application, and lease contracts for which the underlying asset is of
low value.
F-16
Our cash flows from operating activities have increased and cash flows from financing cash flows decreased
as repayment of the principal portion of the lease liabilities were classified as cash flows from financing
activities. In addition, our total assets and total liabilities have increased due to the recognition of right-of-
use asset and lease liability. The accounting for operating leases where we act as the lessee will significantly
change due to the adoption of PFRS 16.
The effect of adoption of PFRS 16 as at January 1, 2019 is as follows:
Increase
(Decrease)
(in million pesos)
Assets:
Right-of-use assets (Note 10) 13,824
Deferred income tax assets – net (Note 7) (107 )
Prepayments – net of current portion (461 )
Current portion of prepayments (10 )
Total Assets 13,246
Liabilities:
Lease liabilities – net of current portion (Note 10) 11,880
Deferred credits and other noncurrent liabilities (50 )
Accrued expenses and other current liabilities (507 )
Current portion of lease liabilities (Note 10) 2,847
Total Liabilities 14,170
Net impact on equity:

Retained earnings (924 )
Noncontrolling interests —
Set out below are the amounts by which each financial statement line item is affected for the year ended
December 31, 2019 as a result of the adoption of PFRS 16. The adoption of PFRS 16 did not have a material
impact on other comprehensive income or on our investing cash flows. The first column shows amounts
prepared under PFRS 16 and the second column shows what the amounts would have been had PFRS 16 not
been adopted.
Consolidated income statement for the year ended December 31, 2019
Increase
PFRS 16 PAS 17 (Decrease)
(in million pesos)
Expenses:
Rent (Notes 3 and 5) 1,290 6,571 (5,281 )
Depreciation (Note 10) 4,393 — 4,393
Financing costs (Note 5) 1,061 — 1,061
Net impact on profit for the period 6,744 6,571 173
Tax effect (2,023 ) (1,971 ) (52 )
Net impact on profit for the period – net of tax 4,721 4,600 121
Attributable to:
Equity holders of PLDT 4,721 4,600 121
Noncontrolling interests — — —
F-17
Consolidated statement of financial position as at December 31, 2019
Increase
PFRS 16 PAS 17 (Decrease)
(in million pesos)
Assets:
Right-of-use assets (Note 10) 15,890 — 15,890
Deferred income tax assets – net (Note 7) 23,623 23,228 395
Prepayments – net of current portion (Note 19) 48,933 49,393 (460 )
Current portion of prepayments (Note 19) 11,298 11,308 (10 )
Total Assets 99,744 83,929 15,815
Liabilities:
Lease liabilities – net of current portion (Note 10) 13,100 — 13,100
Deferred credits and other noncurrent liabilities 4,557 4,607 (50 )
Accrued expenses and other current liabilities (Note 24) 100,815 100,223 592
Current portion of lease liabilities (Note 10) 3,215 — 3,215
Total Liabilities 121,687 104,830 16,857
Net impact on equity:

Retained earnings (21,943 ) (20,901 ) (1,042 )
Noncontrolling interests — — —
Consolidated statement of cash flows as at December 31, 2019
(in million pesos)

Net cash flows from operating activities:
Interest paid (Note 10) 1,061
Operating lease payments (5,399 )
Net cash flows from financing activities:

Payment of principal portion of lease liabilities (Note 10) (4,338 )
Upon adoption of PFRS 16, we applied a single recognition and measurement approach for all leases, except
for short-term leases and leases of ‘low-value’ assets. Refer to Section Leases – Right-of-Use Assets for the
accounting policy beginning January 1, 2019.
 Leases previously classified as finance leases
We did not change the initial carrying amounts of recognized assets and liabilities at the date of initial
application for leases previously classified as finance leases (i.e., the ROU and lease liabilities equal the
lease assets and liabilities recognized under PAS 17). The requirements of PFRS 16 was applied to these
leases beginning January 1, 2019.
 Leases previously accounted for as operating leases
We recognized right-of-use assets and lease liabilities for those leases previously classified as operating
leases, except for short-term leases and leases of ‘low-value’ assets. The right-of-use assets were recognized
based on the carrying amount as if the standard had always been applied, apart from the use of incremental
borrowing rate at the date of initial application. Lease liabilities were recognized based on the present value
of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial
application.
We also applied the available practical expedients wherein we:
 Applied the short-term leases exemptions to leases with lease term that ends within 12 months at the
date of initial application;
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 Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial
application; and
 Used hindsight in determining the lease term where the contract contained options to extend or terminate
the leases.
Based on the foregoing, as at January 1, 2019:
 ROU of Php13,824 million were recognized and presented separately in the consolidated statement of
financial position. This includes lease assets recognized previously under finance leases of Php300
thousand that were reclassified from property and equipment.
 Deferred income tax assets – net increased by Php1 million because of the deferred tax impact of the
changes in assets and liabilities.
 Prepayments of Php471 million and accrued expenses and other current liabilities of Php507 million
related to previous operating leases arising from straight lining under PAS 17 were derecognized.
 Lease liabilities of Php14,367 million were recognized and presented separately in the consolidated
statement of financial position.
 The net effect of these adjustments had been adjusted to retained earnings of Php816 million and
controlling interest of nil.
The lease liabilities as at January 1, 2019 can be reconciled to the operating lease commitments as at
December 31, 2018 follows:
(in million pesos)

Operating lease commitments as at December 31, 2018 21,401
Incremental borrowing rate as at January 1, 2019 (in percentage) 7%-9%
Discounted operating lease commitments as at January 1, 2019 10,068
Less: Commitments relating to leases of low-value assets (3 )
Commitments relating to short-term leases (49 )
Commitments relating to service contracts (304 )
Add: Payments in optional extension periods not recognized as at December 31, 2018 4,994
Prepayment and accrued (PAS 13) 21
Lease liabilities as at January 1, 2019 14,727
Due to the adoption of PFRS 16, our operating profit in 2019 improved, while its interest expense increased.
This is due to the change in the accounting for rent expense related to leases that were classified as operating
leases under PAS 17.
The adoption of PFRS 16 did not have an impact on equity in 2019, since we elected to measure the right-of-
use assets an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease
payments relating to that lease recognized in our consolidated statement of financial position immediately
before the date of initial application.
F-19
Summary of Significant Accounting Policies
The following is the summary of significant accounting policies we applied in preparing our consolidated
financial statements:
Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration transferred, measured at acquisition date fair value, and the
amount of any noncontrolling interest in the acquiree. For each business combination, we elect whether to
measure the components of the noncontrolling interest in the acquiree either at fair value or at the
proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as
incurred and included in selling, general and administrative expenses.
When we acquire a business, we assess the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host
contracts by the acquiree.
If the business combination is achieved in stages, the previously held equity interest is remeasured at its
acquisition date fair value and any resulting gain or loss is recognized in profit or loss. The fair value of
previously held equity interest is then included in the amount of total consideration transferred.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the
acquisition date. Contingent consideration that is classified as equity is not remeasured and subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a
financial instrument within the scope of PFRS 9 is measured at fair value with the changes in fair value
recognized in profit or loss. In accordance with PFRS 9, other contingent consideration that is not within the
scope of PFRS 9 is measured at fair value at each reporting date with changes in fair value recognized in
profit or loss.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and
the amount recognized for noncontrolling interests and any previous interest held, over the net identifiable
assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the
aggregate consideration transferred, we reassess whether we correctly identified all of the assets acquired and
all of the liabilities assumed and review the procedures used to measure the amounts to be recognized at the
acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the
aggregate consideration transferred, then the gain on a bargain purchase is recognized in profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which
the combination occurs, we report in our consolidated financial statements provisional amounts for the items
for which the accounting is incomplete. During the measurement period, which is no longer than one year
from the acquisition date, the provisional amounts recognized at acquisition date are retrospectively adjusted
to reflect new information obtained about facts and circumstances that existed as of the acquisition date and,
if known, would have affected the measurement of the amounts recognized as of that date. During the
measurement period, we also recognize additional assets or liabilities if new information is obtained about
facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the
recognition of those assets and liabilities as of that date.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to each of our cash-generating units, or CGUs, that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill acquired in a business combination has yet to be allocated to identifiable CGUs because the
initial accounting is incomplete, such provisional goodwill is not tested for impairment unless indicators of
impairment exist and we can reliably allocate the carrying amount of goodwill to a CGU or group of CGUs
that are expected to benefit from the synergies of the business combination.
F-20
Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the
goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is
measured based on the relative values of the disposed operation and the portion of the CGU retained.
Investments in Associates
An associate is an entity in which we have significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but has no control nor joint control
over those policies. The existence of significant influence is presumed to exist when we hold 20% or more,
but less than 50% of the voting power of another entity. Significant influence is also exemplified when we
have one or more of the following: (a) a representation on the board of directors or the equivalent governing
body of the investee; (b) participation in policy-making processes, including participation in decisions about
dividends or other distributions; (c) material transactions with the investee; (d) interchange of managerial
personnel with the investee; or (e) provision of essential technical information.
Investments in associates are accounted for using the equity method of accounting and are initially
recognized at cost. The cost of the investments includes directly attributable transaction costs. The details of
our investments in associates are disclosed in Note 11 – Investments in Associates and Joint Ventures –
Investments in Associates.
Under the equity method, an investment in an associate is carried at cost plus post acquisition changes in our
share of net assets of the associate. Goodwill relating to an associate is included in the carrying amount of
the investment and is not amortized nor individually tested for impairment. Our consolidated income
statements reflect our share in the financial performance of our associates. Where there has been a change
recognized directly in the equity of the associate, we recognize our share in such change and disclose this,
when applicable, in our consolidated statement of comprehensive income and consolidated statement of
changes in equity. Unrealized gains and losses resulting from our transactions with and among our
associates are eliminated to the extent of our interests in those associates.
Our share in the profits or losses of our associates is included under “Other income (expenses)” in our
consolidated income statement. This is the profit or loss attributable to equity holders of the associate and
therefore is profit or loss after tax and net of noncontrolling interest in the subsidiaries of the associate.
When our share of losses exceeds our interest in an associate, the carrying amount of the investment,
including any long-term interests that form part thereof, is reduced to zero, and the recognition of further
losses is discontinued except to the extent that we have an obligation or have made payments on behalf of the
investee.
Our reporting dates and that of our associates are identical and our associates’ accounting policies conform to
those used by us for like transactions and events in similar circumstances. When necessary, adjustments are
made to bring such accounting policies in line with our policies.
After application of the equity method, we determine whether it is necessary to recognize an additional
impairment loss on our investments in associates. We determine at the end of each reporting period whether
there is any objective evidence that our investment in associate is impaired. If this is the case, we calculate
the amount of impairment as the difference between the recoverable amount of our investment in the
associate and its carrying value and recognize the amount in our consolidated income statements.
Upon loss of significant influence over the associate, we measure and recognize any retained investment at
its fair value. Any difference between the carrying amounts of our investment in the associate upon loss of
significant influence and the fair value of the remaining investment and proceeds from disposal is recognized
in our consolidated financial statements.
F-21
Joint Arrangements
Joint arrangements are arrangements with respect to which we have joint control, established by contracts
requiring unanimous consent from the parties sharing control for decisions about the activities that
significantly affect the arrangements’ returns. They are classified and accounted for as follows:
 Joint operation – when we have rights to the assets, and obligations for the liabilities, relating to an
arrangement, we account for each of our assets, liabilities and transactions, including our share of those
held or incurred jointly, in relation to the joint operation in accordance with the PFRS applicable to the
particular assets, liabilities and transactions.
 Joint venture – when we have rights only to the net assets of the arrangements, we account for our
interest using the equity method, the same as our accounting for investments in associates.
The financial statements of the joint venture are prepared for the same reporting period as our consolidated
financial statements. Where necessary, adjustments are made to bring the accounting policies of the joint
venture in line with our policies. The details of our investments in joint ventures are disclosed in Note 11 –
Investments in Associates and Joint Ventures – Investments in Joint Ventures.
Adjustments are made in our consolidated financial statements to eliminate our share of unrealized gains and
losses on transactions between us and our joint venture. Our investment in the joint venture is carried at
equity method until the date on which we cease to have joint control over the joint venture.
Upon loss of joint control over the joint venture, we measure and recognize our retained investment at fair
value. Any difference between the carrying amount of the former joint venture upon loss of joint control and
the fair value of the remaining investment and proceeds from disposal is recognized in profit or loss. When
the remaining investment constitutes significant influence, it is accounted for as an investment in an associate
with no remeasurement.
Current Versus Noncurrent Classifications

We present assets and liabilities in our consolidated statements of financial position based on current or
noncurrent classification.
An asset is current when it is:
 Expected to be realized or intended to be sold or consumed in the normal operating cycle;
 Held primarily for the purpose of trading;
 Expected to be realized within twelve months after the reporting period; or
 Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.
All other assets are classified as noncurrent.
A liability is current when:
 It is expected to be settled in the normal operating cycle;
 It is held primarily for the purpose of trading;
 It is due to be settled within twelve months after the reporting period; or
 There is no unconditional right to defer the settlement of the liability for at least twelve months after the
period.
F-22
The terms of the liquidity that could, at the option of the counterparty, result in its settlement by the issue of
equity instruments do not affect its classification.
All other liabilities are classified as noncurrent.
Deferred income tax assets and liabilities are classified as noncurrent assets and liabilities, respectively.
Foreign Currency Transactions and Translations

Our consolidated financial statements are presented in Philippine Peso, which is also the Parent Company’s
functional currency. The Philippine Peso is the currency of the primary economic environment in which we
operate. This is also the currency that mainly influences the revenue from and cost of rendering products and
services. Each entity in our Group determines its own functional currency and items included in the separate
financial statements of each entity are measured using that functional currency.
The functional and presentation currency of the entities under PLDT Group (except for the subsidiaries
discussed below) is the Philippine Peso.
Transactions in foreign currencies are initially recorded by entities under our Group at the respective
functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the functional currency closing rate of exchange
prevailing at the end of the reporting period. All differences arising on settlement or translation of monetary
items are recognized in our consolidated income statement except for foreign exchange differences that
qualify as capitalizable borrowing costs for qualifying assets. Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined. The gain or loss arising from transactions of
non-monetary items measured at fair value is treated in line with the recognition of this gain or loss on the
change in fair value of the items (i.e., translation differences on items whose fair value gain or loss is
recognized in other comprehensive income or profit or loss are also recognized in other comprehensive
income or profit or loss, respectively).
The functional currency of SMHC, FECL Group, PLDT Global and certain of its subsidiaries, PGNL and
certain of its subsidiaries, Chikka and certain of its subsidiaries and PGIC is the U.S. Dollar; the functional
currency of iCommerce Investments Pte. Ltd., or iCommerce, Chikka Pte. Ltd., or CPL, and ABM Global
Solutions Pte. Ltd., or AGSPL, is the Singaporean dollar; and the functional currency of PT Advance
Business Microsystems Global Solutions, or AGS Indonesia, is the Indonesian rupiah. As at the reporting
date, the assets and liabilities of these subsidiaries are translated into Philippine Peso at the rate of exchange
prevailing at the end of the reporting period, and income and expenses of these subsidiaries are translated
monthly using the weighted average exchange rate for the month. The exchange differences arising on
translation are recognized as a separate component of other comprehensive income as cumulative translation
adjustments. Upon disposal of these subsidiaries, the amount of deferred cumulative translation adjustments
recognized in other comprehensive income relating to subsidiaries is recognized in our consolidated income
statement.
When there is a change in an entity’s functional currency, the entity applies the translation procedures
applicable to the new functional currency prospectively from the date of the change. The entity translates all
assets and liabilities into the new functional currency using the exchange rate at the date of the change. The
resulting translated amounts for non-monetary items are treated as the new historical cost. Exchange
differences arising from the translation of a foreign operation previously recognized in other comprehensive
income are not reclassified from equity to profit or loss until the disposal of the operation.
Foreign exchange gains or losses of the Parent Company and our Philippine-based subsidiaries are treated as
taxable income or deductible expenses in the period such exchange gains or losses are realized.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying
amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign
operation and translated at the closing rate as at reporting date.
F-23
Financial Instruments
Financial Instruments – Initial recognition and subsequent measurement

Classification of financial assets
Financial assets are classified in their entirety based on the contractual cash flows characteristics of the
financial assets and our business model for managing the financial assets. We classify our financial assets
into the following measurement categories:
 Financial assets measured at amortized cost;
 Financial assets measured at FVPL;
 Financial assets measured at FVOCI, where cumulative gains or losses previously recognized are
reclassified to profit or loss; and
 Financial assets measured at FVOCI, where cumulative gains or losses previously recognized are not
reclassified to profit or loss.
Contractual cash flows characteristics
In order for us to identify the measurement of our debt financial assets, a solely payments of principal and
interest, or SPPI, test needs to be initially performed in order to determine whether the contractual terms of
the financial asset gives rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. Once a debt financial asset passed the SPPI test, business
model assessment, which identifies our objective of holding the financial assets – hold to collect or hold to
collect and sell, will be performed. Otherwise, if the debt financial asset failed the test, such will be
measured at FVPL.
In making the assessment, we determine whether the contractual cash flows are consistent with a basic
lending arrangement, i.e., interest includes consideration only for the time value of money, credit risk and
other basic lending risks and costs associated with holding the financial asset for a particular period of time.
In addition, interest can include a profit margin that is consistent with a basic lending arrangement. The
assessment as to whether the cash flows meet the SPPI test is made in the currency in which the financial
asset is denominated. Any other contractual terms that introduce exposure to risks or volatility in the
contractual cash flows that is unrelated to a basic lending arrangement, such as exposure to changes in equity
prices or commodity prices, do not give rise to contractual cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Business model
Our business model is determined at a level that reflects how groups of financial assets are managed together
to achieve a particular business objective. Our business model does not depend on management’s intentions
for an individual instrument.
Our business model refers to how we manage our financial assets in order to generate cash flows. Our
business model determines whether cash flows will result from collecting contractual cash flows, collecting
contractual cash flows and selling financial assets or neither.
F-24
Financial assets at amortized cost
A financial asset is measured at amortized cost if: (i) it is held within a business model whose objective is to
hold financial assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding. These financial assets are initially recognized at fair value plus directly
attributable transaction costs and subsequently measured at amortized cost using the effective interest rate, or
EIR, method, less any impairment in value. Amortized cost is calculated by taking into account any discount
or premium on acquisition and fees and costs that are an integral part of the EIR. The amortization is
included in ‘Interest income’ in our consolidated income statements and is calculated by applying the EIR to
the gross carrying amount of the financial asset, except for (i) purchased or originated credit-impaired
financial assets and (ii) financial assets that have subsequently become credit-impaired, where, in both cases,
the EIR is applied to the amortized cost of the financial asset. Losses arising from impairment are
recognized in ‘Asset impairment’ in our consolidated income statements.
Our financial assets at amortized cost include debt instruments at amortized cost, cash and cash equivalents,
short-term investments, trade and other receivables, and portions of other financial assets as at December 31,
2019 and 2018. See Note 13 – Debt Instruments at Amortized Cost, Note 16 – Cash and Cash Equivalents,
Note 17 – Trade and Other Receivables and Note 28 – Financial Assets and Liabilities.
Financial assets at FVOCI (debt instruments)
A financial asset is measured at FVOCI if: (i) it is held within a business model whose objective is achieved
by both collecting contractual cash flows and selling financial assets; and (ii) its contractual terms give rise
on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. These financial assets are initially recognized at fair value plus directly attributable transaction
costs and subsequently measured at fair value. Gains and losses arising from changes in fair value are
included in other comprehensive income within a separate component of equity. Impairment losses or
reversals, interest income and foreign exchange gains and losses are recognized in profit and loss until the
financial asset is derecognized. Upon derecognition, the cumulative gain or loss previously recognized in
other comprehensive income is reclassified from equity to profit or loss. This reflects the gain or loss that
would have been recognized in profit or loss upon derecognition if the financial asset had been measured at
amortized cost. Impairment is measured based on the ECL model.
Our financial assets at FVOCI include receivables from MPIC as at December 31, 2019 and 2018. See Note
25 – Related Party Transactions and Note 28 – Financial Assets and Liabilities.
Financial assets at FVPL
Financial assets at FVPL are measured at fair value. Included in this classification are derivative financial
assets, equity investments held for trading and debt instruments with contractual terms that do not represent
solely payments of principal and interest. Financial assets held at FVPL are initially recognized at fair value,
with transaction costs recognized in our consolidated income statements as incurred. Subsequently, they are
measured at fair value and any gains or losses are recognized in our consolidated income statements.
Additionally, even if the asset meets the amortized cost or the FVOCI criteria, we may choose at initial
recognition to designate the financial asset at FVPL if doing so eliminates or significantly reduces a
measurement or recognition inconsistency (an accounting mismatch) that would otherwise arise from
measuring financial assets on a different basis.
Trading gains or losses are calculated based on the results arising from trading activities of the PLDT Group,
including all gains and losses from changes in fair value for financial assets and financial liabilities at FVPL,
and the gains or losses from disposal of financial investments.
Our financial assets at FVPL include derivative financial assets and equity investments as at December 31,
2019 and 2018. See Note 12 – Financial Assets at FVPL and Note 28 – Financial Assets and Liabilities.
F-25
Classification of financial liabilities
Financial liabilities are measured at amortized cost, except for the following:
 Financial liabilities measured at FVPL;
 Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or
when we retain continuing involvement;
 Financial guarantee contracts;
 Commitments to provide a loan at a below-market interest rate; and
 Contingent consideration recognized by an acquirer in accordance with PFRS 3.
A financial liability may be designated at FVPL if it eliminates or significantly reduces a measurement or

recognition inconsistency (an accounting mismatch) or:
 If a host contract contains one or more embedded derivatives; or
 If a group of financial liabilities or financial assets and liabilities is managed and its performance
evaluated on a fair value basis in accordance with a documented risk management or investment
strategy.
Where a financial liability is designated at FVPL, the movement in fair value attributable to changes in our
own credit quality is calculated by determining the changes in credit spreads above observable market
interest rates and is presented separately in other comprehensive income.
Our financial liabilities at FVPL include forward foreign exchange contracts, long-term principal only-
currency swaps, interest rate swaps and liability from redemption of preferred stock as at December 31, 2019
and 2018. See Note 28 – Financial Assets and Liabilities.
Our other financial liabilities include interest-bearing financial liabilities, lease liabilities, customers’
deposits, dividends payable, certain accounts payable and accrued expenses and deferred credits and other
noncurrent liabilities, (except for statutory payables) as at December 31, 2019 and 2018. See Note 21 –
Interest-bearing Financial Liabilities and Note 28 – Financial Assets and Liabilities.
Reclassifications of financial instruments
We reclassify our financial assets when, and only when, there is a change in the business model for
managing the financial assets. Reclassifications shall be applied prospectively and any previously
recognized gains, losses or interest shall not be restated. We do not reclassify our financial liabilities.
We do not reclassify our financial assets when:
 A financial asset that was previously a designated and effective hedging instrument in a cash flow hedge
or net investment hedge no longer qualifies as such;
 A financial asset becomes a designated and effective hedging instrument in a cash flow hedge or net
investment hedge; and
 There is a change in measurement on credit exposures measured at FVPL.
F-26
Impairment of Financial Assets – Beginning January 1, 2018
We recognize ECL for the following financial assets that are not measured at FVPL.
 Debt instruments that are measured at amortized cost and FVOCI.
No ECL is recognized on equity investments.
ECLs are measured in a way that reflects the following:
 An unbiased and probability-weighted amount that is determined by evaluating a range of possible

outcomes;
 The time value of money; and
 Reasonable and supportable information that is available without undue cost or effort at the reporting
date about past events, current conditions and forecasts of future economic conditions.
Financial assets migrate through the following three stages based on the change in credit quality since initial
recognition:
Stage 1: 12-month ECL – not credit impaired

For credit exposures where there have not been significant increases in credit risk since initial recognition
and that are not credit-impaired upon origination, the portion of lifetime ECLs that represent the ECLs that
result from default events that are possible within the 12-months after the reporting date are recognized.
Stage 2: Lifetime ECL – not credit-impaired

For credit exposures where there have been significant increases in credit risk since initial recognition on an
individual or collective basis but are not credit-impaired, lifetime ECLs representing the ECLs that result
from all possible default events over the expected life of the financial asset are recognized.
Stage 3: Lifetime ECL – credit-impaired

Financial assets are credit-impaired when one or more events that have a detrimental impact on the estimated
future cash flows of those financial assets have occurred. For these credit exposures, lifetime ECLs are
recognized and interest revenue is calculated by applying the credit-adjusted EIR to the amortized cost of the
financial asset.
Loss allowances
Loss allowances are recognized based on 12-month ECL for debt instruments that are assessed to have low
credit risk at the reporting date. A financial asset is considered to have low credit risk if:
 The financial instrument has a low risk of default;
 The counterparty has a strong capacity to meet its contractual cash flow obligations in the near term; and
 Adverse changes in economic and business conditions in the longer term may, but will not necessarily,
reduce the ability of the counterparty to fulfill its contractual cash flow obligations.
We consider a debt instruments to have low credit risk when its credit risk rating is equivalent to the globally
understood definition of ‘investment grade’, or when the exposure is less than 30 days past due.
F-27
The loss allowances recognized in the period is impacted by a variety of factors, as described below:
 Transfers between Stage 1 and Stage 2 and 3 due to the financial instruments experiencing significant
increases (or decreases) of credit risk or becoming credit-impaired in the period, and the consequent
“step up” (or “step down”) between 12-month and lifetime ECL;
 Additional allowances for new financial instruments recognized during the period, as well as releases for
financial instruments derecognized in the period;
 Impact on the measurement of ECL due to changes in probability of defaults, or PDs, loss given
defaults, or LGDs, and exposure at defaults, or EADs, in the period, arising from regular refreshing of
inputs to models;
 Impacts on the measurement of ECL due to changes made to models and assumptions;
 Unwinding of discount within ECL due to passage of time, as ECL is measured on a present value basis;
and
 Financial assets derecognized during the period and write-offs of allowances related to assets that were
written off during the period.
Write-off policy
We write-off a financial asset measured at amortized cost, in whole or in part, when the asset is considered
uncollectible, it has exhausted all practical recovery efforts and has concluded that it has no reasonable
expectations of recovering the financial asset in its entirety or a portion thereof. We write-off an account
when all of the following conditions are met:
 The asset is in past due for over 90 days, or is already an item-in-litigation with any of the following:
a. No properties of the counterparty could be attached
b. The whereabouts of the client cannot be located
c. It would be more expensive for the Group to follow-up and collect the amount, hence we have
ceased enforcement activity, and
d. Collections can no longer be made due to insolvency or bankruptcy of the counterparty;
 Expanded credit arrangement is no longer possible;
 Filing of legal case is not possible; and
 The account has been classified as ‘Loss’.
Simplified approach
The simplified approach, where changes in credit risk are not tracked and loss allowances are measured at
amounts equal to lifetime ECL, is applied to ‘Trade and other receivables’ and ‘Contract assets’. We have
established a provision matrix for billed trade receivables and a vintage analysis for contract assets and
unbilled trade receivables that is based on historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment.
F-28
Derecognition of Financial Assets and Liabilities
Financial assets
A financial asset (or where applicable as part of a financial asset or part of a group of similar financial assets)
is primarily derecognized when: (1) the right to receive cash flows from the asset has expired; or (2) we have
transferred the right to receive cash flows from the asset or have assumed an obligation to pay the received
cash flows in full without material delay to a third party under a “pass-through” arrangement; and either:
(a) we have transferred substantially all the risks and rewards of the asset; or (b) we have neither transferred
nor retained substantially all the risks and rewards of the asset, but have transferred control of the asset.
When we have transferred the right to receive cash flows from an asset or have entered into a “pass-through”
arrangement and have neither transferred nor retained substantially all the risks and rewards of the asset nor
transferred control of the asset, a new asset is recognized to the extent of our continuing involvement in the
asset.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that we could be
required to repay.
When continuing involvement takes the form of a written and/or purchased option (including a cash-settled
option or similar provision) on the transferred asset, the extent of our continuing involvement is the amount
of the transferred asset that we may repurchase, except that in the case of a written put option (including a
cash-settled option or similar provision) on an asset measured at fair value, the extent of our continuing
involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or has
expired.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
treated as a derecognition of the original liability and the recognition of a new liability, and the difference in
the carrying amount of a financial liability extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is recognized in consolidated income
statement.
The financial liability is also derecognized when equity instruments are issued to extinguish all or part of the
financial liability. The equity instruments issued are recognized at fair value if it can be reliably measured,
otherwise, it is recognized at the fair value of the financial liability extinguished. Any difference between the
fair value of the equity instruments issued and the carrying value of the financial liability extinguished is
recognized in consolidated income statement.
Derivative Financial Instruments and Hedge Accounting
Initial recognition and subsequent measurement

We use derivative financial instruments, such as long-term currency swaps, foreign currency options,
forward currency contracts and interest rate swaps to hedge our risks associated with foreign currency
fluctuations and interest rates. Such derivative financial instruments are initially recognized at fair value on
the date on which a derivative contract is entered into and are subsequently remeasured at fair value.
Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the
fair value is negative.
The fair value of forward currency contracts is calculated by reference to current forward exchange rates for
contracts with similar maturity profiles. The fair value of long-term currency swaps, foreign currency
options, forward currency contracts and interest rate swap contracts is determined using applicable valuation
techniques. See Note 28 – Financial Assets and Liabilities.
F-29
Any gains or losses arising from changes in fair value on derivatives during the period that do not qualify for
hedge accounting are taken directly to the “Other income (expense) – Gains (losses) on derivative financial
instruments – net” in our consolidated income statements.
For the purpose of hedge accounting, hedges are classified as: (1) fair value hedges when hedging the
exposure to changes in the fair value of a recognized financial asset or liability or an unrecognized firm
commitment (except for foreign currency risk); or (2) cash flow hedges when hedging exposure to variability
in cash flows that is either attributable to a particular risk associated with a recognized financial asset or
liability, a highly probable forecast transaction or the foreign currency risk in an unrecognized firm
commitment; or (3) hedges of a net investment in a foreign operation.
At the inception of a hedge relationship, we formally designate and document the hedge relationship to
which we wish to apply hedge accounting and the risk management objective and strategy for undertaking
the hedge. The documentation includes identification of the hedging instrument, the hedged item or
transaction, the nature of the risk being hedged and how we will assess the hedging instrument’s
effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable
to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair
value or cash flows and are assessed on an on-going basis to determine that they actually have been highly
effective throughout the financial reporting periods for which they are designated. In a situation when that
hedged item is a forecast transaction, we assess whether the transaction is highly probable and presents an
exposure to variations in cash flows that could ultimately affect our consolidated income statements.
Hedges which meet the criteria for hedge accounting are accounted for as follows:
Fair value hedges

The change in the fair value of a hedging instrument is recognized in our consolidated income statements as
financing cost. The change in the fair value of the hedged item attributable to the risk hedged is recorded as
part of the carrying value of the hedged item and is also recognized in our consolidated income statements.
For fair value hedges relating to items carried at amortized cost, any adjustment to carrying value is
amortized through profit or loss over the remaining term of the hedge using the EIR method. EIR
amortization may begin as soon as adjustment exists and no later than when the hedged item ceases to be
adjusted for changes in its fair value attributable to the risk being hedged.
If the hedged item is derecognized, the unamortized fair value is recognized immediately in our consolidated
income statements.
When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change
in the fair value of the firm commitment attributable to the hedged risk is recognized as an asset or liability
with a corresponding gain or loss recognized in our consolidated income statement.
Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognized in other comprehensive
income, while any ineffective portion is recognized immediately in our consolidated income statements. See
Note 28 – Financial Assets and Liabilities for more details.
Amounts taken to other comprehensive income are transferred to our consolidated income statement when
the hedged transaction affects our consolidated income statement, such as when the hedged financial income
or financial expense is recognized or when a forecast transaction occurs. Where the hedged item is the cost
of a non-financial asset or non-financial liability, the amounts taken to other comprehensive income are
transferred to the initial carrying amount of the non-financial asset or liability.
F-30
If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognized
in other comprehensive income are transferred to our consolidated income statement. If the hedging
instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as
a hedge is revoked, amounts previously recognized in other comprehensive income remain in other
comprehensive income until the forecast transaction or firm commitment occurs.
We use an interest rate swap agreement to hedge our interest rate exposure and a long-term principal only-
currency swap agreement to hedge our foreign exchange exposure on certain outstanding loan balances. See
Note 28 – Financial Assets and Liabilities.
Current versus noncurrent classification

Derivative instruments that are not designated as effective hedging instruments are classified as current or
noncurrent or separated into a current and noncurrent portion based on an assessment of the facts and
circumstances (i.e., the underlying contracted cash flows).
Where we expect to hold a derivative as an economic hedge (and does not apply hedge accounting) for a
period beyond 12 months after the reporting date, the derivative is classified as noncurrent (or separated into
current and noncurrent portions) consistent with the classification of the underlying item.
Embedded derivatives that are not closely related to the host contract are classified consistent with the cash
flows of the host contract.
Derivative instruments that are designated as effective hedging instruments are classified consistently with
the classification of the underlying hedged item. The derivative instrument is separated into a current portion
and a noncurrent portion only if a reliable allocation can be made.
We recognize transfers into and transfers out of fair value hierarchy levels as at the date of the event or
change in circumstances that caused the transfer.
Property and Equipment

Property and equipment, except for land, is stated at cost less accumulated depreciation and amortization and
any accumulated impairment losses. Land is stated at cost less any impairment in value. The initial cost of
property and equipment comprises its purchase price, including import duties and non-refundable purchase
taxes and any directly attributable costs of bringing the property and equipment to its working condition and
location for its intended use. Such cost includes the cost of replacing component parts of the property and
equipment when the cost is incurred, if the recognition criteria are met. When significant parts of property
and equipment are required to be replaced at intervals, we recognize such parts as individual assets with
specific useful lives and depreciate them accordingly. Likewise, when a major inspection is performed, its
cost is recognized in the carrying amount of the property and equipment as a replacement if the recognition
criteria are satisfied. All other repairs and maintenance costs are recognized as expense as incurred. The
present value of the expected cost for the decommissioning of the asset after use is included in the cost of the
asset if the recognition criteria for a provision are met.
Depreciation and amortization commence once the property and equipment are available for their intended
use and are calculated on a straight-line basis over the estimated useful lives of the assets. The estimated
useful lives used in depreciating our property and equipment are disclosed in Note 9 – Property and
Equipment.
The residual values, estimated useful lives, and methods of depreciation and amortization are reviewed at
least at each financial year-end and adjusted prospectively, if appropriate.
An item of property and equipment and any significant part initially recognized are derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in consolidated income statement when the asset is derecognized.
F-31
Property under construction is stated at cost less any impairment in value. This includes cost of construction,
plant and equipment, capitalizable borrowing costs and other direct costs associated to construction.
Property under construction is not depreciated until such time that the relevant assets are completed and
available for its intended use.
Property under construction is transferred to the related property and equipment when the construction or
installation and related activities necessary to prepare the property and equipment for their intended use have
been completed, and the property and equipment are ready for operational use.
Borrowing Costs
Borrowing costs are capitalized if they are directly attributable to the acquisition, construction or production
of a qualifying asset. Qualifying assets are assets that necessarily take a substantial period of time to get
ready for their intended use or sale. Capitalization of borrowing costs commences when the activities to
prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are
incurred. Borrowing costs are capitalized until the assets are substantially completed for their intended use
or sale.
All other borrowing costs are expensed as incurred. Borrowing costs consist of interest and other costs that
an entity incurs in connection with the borrowing of funds.
Asset Retirement Obligations

We are legally required under various lease agreements to dismantle the installation in leased sites and
restore such sites to their original condition at the end of the lease contract term. We recognize the liability
measured at the present value of the estimated costs of these obligations and capitalize such costs as part of
the balance of the related item of property and equipment. The amount of asset retirement obligations is
accreted and such accretion is recognized as interest expense. See Note 9 – Property and Equipment and
Note 22 – Deferred Credits and Other Noncurrent Liabilities.
Investment Properties
Investment properties are initially measured at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at fair value, which reflects market conditions at the reporting
date. Gains or losses arising from changes in the fair values of investment properties are included in our
consolidated income statement in the period in which they arise, including the corresponding tax effect. Fair
values are determined based on an amount evaluation performed by a Philippine SEC accredited external
independent valuer applying a valuation model recommended by the International Valuation Standards
Committee.
Investment properties are derecognized when they are disposed of or when they are permanently withdrawn
from use and no future economic benefit is expected from their disposal. Any gain or loss on the retirement
or disposal of an investment property is recognized in our consolidated income statement in the year of
retirement or disposal.
Transfers are made to or from investment property only when there is a change in use. For a transfer from
investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value
at the date of change in use. If owner-occupied property becomes an investment property, we account for
such property in accordance with the policy stated under property and equipment up to the date of change in
use. The difference between the carrying amount of the owner-occupied property and its fair value at the
date of change is accounted for as revaluation increment recognized in other comprehensive income. On
subsequent disposal of the investment property, the revaluation increment recognized in other comprehensive
income is transferred to retained earnings.
No assets held under operating lease have been classified as investment properties.
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Intangible Assets
Intangible assets acquired separately are measured at cost on initial recognition. The cost of intangible assets
acquired from business combinations is initially recognized at fair value on the date of acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated amortization and
accumulated impairment losses. The useful lives of intangible assets are assessed at the individual asset level
as either finite or indefinite.
Intangible assets with finite lives are amortized over the economic useful life using the straight-line method
and assessed for impairment whenever there is an indication that the intangible assets may be impaired. At
the minimum, the amortization period and the amortization method for an intangible asset with a finite useful
life are reviewed at each financial year-end. Changes in the expected useful life or the expected pattern of
consumption of future economic benefits embodied in the asset are accounted for by changing the
amortization period or method, as appropriate, and treated as changes in accounting estimates. The
amortization expense on intangible assets with finite lives is recognized in our consolidated income
statements.
Intangible assets with indefinite useful lives are not amortized but are tested for impairment annually either
individually or at the CGU level. The useful life of an intangible asset with an indefinite life is reviewed
annually to determine whether the indefinite life assessment continues to be supportable. If not, the change
in the useful life assessment from indefinite to finite is made on a prospective basis.
The estimated useful lives used in amortizing our intangible assets are disclosed in Note 15 – Goodwill and
Intangible Assets.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognized in our consolidated income
statements when the asset is derecognized.
Internally generated intangibles are not capitalized, and the related expenditures are charged against
operations in the period in which the expenditures are incurred.
Inventories and Supplies

Inventories and supplies, which include cellular and landline phone units, materials, spare parts, terminal
units and accessories, are valued at the lower of cost and net realizable value.
Costs incurred in bringing inventories and supplies to its present location and condition are accounted for
using the weighted average cost method. Net realizable value is determined by either estimating the selling
price in the ordinary course of business, less the estimated cost to sell or determining the prevailing
replacement costs.
Impairment of Non-Financial Assets

We assess at each reporting period whether there is an indication that an asset may be impaired. If any
indication exists, or when the annual impairment testing for an asset is required, we make an estimate of the
asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value
less costs of disposal and its value in use, or VIU. The recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent from those of other assets
or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount.
In assessing the VIU, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining the fair value less costs of disposal, recent market transactions are taken into account.
If no such transactions can be identified, an appropriate valuation model is used. Impairment losses are
recognized in our consolidated income statements.
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For assets, excluding goodwill, an assessment is made at each reporting date to determine whether there is an
indication that previously recognized impairment losses no longer exist or have decreased. If such indication
exists, we make an estimate of the recoverable amount. A previously recognized impairment loss is reversed
only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the
last impairment loss was recognized. If this is the case, the carrying amount of the asset is increased to its
recoverable amount. The increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation and amortization, had no impairment loss been recognized for the asset in
prior years. Such reversal is recognized in our consolidated income statements. After such reversal, the
depreciation and amortization charges are adjusted in future years to allocate the asset’s revised carrying
amount, less any residual value, on a systematic basis over its remaining economic useful life.
The following assets have specific characteristics for impairment testing:
Property and equipment, right-of-use assets, and intangible assets with definite useful lives
For property and equipment and right-of-use assets, we assess for impairment on the basis of impairment
indicators such as evidence of internal obsolescence or physical damage. For intangible assets with definite
useful lives, we assess for impairment whenever there is an indication that the intangible assets may be
impaired. See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions –
Impairment of non-financial assets, Note 9 – Property and Equipment, Note 10 – Right-of-Use Assets and
Note 15 – Goodwill and Intangible Assets for further disclosures relating to impairment of non-financial
assets.
Investments in associates and joint ventures

We determine at the end of each reporting period whether there is any objective evidence that our
investments in associates and joint ventures are impaired. If this is the case, the amount of impairment is
calculated as the difference between the recoverable amount of the investments in associates and joint
ventures, and its carrying amount. The amount of impairment loss is recognized in our consolidated income
statements. See Note 11 – Investments in Associates and Joint Ventures for further disclosures relating to
impairment of non-financial assets.
Goodwill
Goodwill is tested for impairment annually as at December 31 and when circumstances indicate that the
carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable
amount of each CGU, or group of CGUs, to which the goodwill relates. When the recoverable amount of the
CGU, or group of CGUs, is less than the carrying amount of the CGU, or group of CGUs, to which goodwill
has been allocated, an impairment loss is recognized. Impairment losses relating to goodwill cannot be
reversed in future periods.
See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Impairment of non-
financial assets and Note 15 – Goodwill and Intangible Assets – Impairment testing of goodwill and
intangible assets with indefinite useful life for further disclosures relating to impairment of non-financial
assets.
Intangible asset with indefinite useful life

Intangible asset with indefinite useful life is not amortized but is tested for impairment annually either
individually or at the CGU level, as appropriate. We calculate the amount of impairment as being the
difference between the recoverable amount of the intangible asset or the CGU, and its carrying amount and
recognize the amount of impairment in our consolidated income statements. Impairment losses relating to
intangible assets can be reversed in future periods.
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financial assets and Note 15 – Goodwill and Intangible Assets – Impairment testing of goodwill and
intangible assets with indefinite useful life for further disclosures relating to impairment of non-financial
assets.
Investment in Debt Securities

Investment in debt securities consists of time deposits and government securities which are carried at
amortized cost using the EIR method. Interest earned from these securities is recognized under “Other
income (expenses) – net – Interest income” in our consolidated income statements.
Cash and Cash Equivalents

Cash includes cash on hand and in banks. Cash equivalents, which include temporary cash investments, are
short-term, highly liquid investments that are readily convertible to known amounts of cash with original
maturities of three months or less from the date of acquisition, and for which there is an insignificant risk of
change in value.
Short-term Investments
Short-term investments are money market placements, which are highly liquid with maturities of more than
three months but less than one year from the date of acquisition.
Fair Value Measurement

We measure financial instruments such as derivatives, financial assets at FVPL, financial assets at FVOCI
and non-financial assets such as investment properties, at fair value at each reporting date. The fair values of
financial instruments measured at amortized cost are disclosed in Note 28 – Financial Assets and Liabilities.
The fair values of investment properties are disclosed in Note 14 – Investment Properties.
Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place either: (i) in
the principal market for the asset or liability; or (ii) in the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to us.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
We use valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in our consolidated financial
statements are categorized within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole: (i) Level 1 - Quoted (unadjusted) market
prices in active markets for identical assets or liabilities; (ii) Level 2 - Valuation techniques for which the
lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
(iii) Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
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For assets and liabilities that are recognized in our consolidated financial statements on a recurring basis, we
determine whether transfers have occurred between levels in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of
each reporting period.
We determine the policies and procedures for both recurring fair value measurement, such as investment
properties and unquoted FVPL financial assets, and for non-recurring measurement, such as assets held for
distribution in discontinued operation.
External valuers are involved for valuation of significant assets, such as certain short-term investments and
investment properties. Involvement of external valuers is decided upon annually. Selection criteria include
market knowledge, reputation, independence and whether professional standards are maintained. At each
reporting date, we analyze the movements in the values of assets and liabilities which are required to be re-
measured or re-assessed as per our accounting policies. For this analysis, we verify the major inputs applied
in the latest valuation by agreeing the information in the valuation computation to contracts and other
relevant documents.
We, in conjunction with our external valuers, also compare the changes in the fair value of each asset and
liability with relevant external sources to determine whether the change is reasonable. This includes a
discussion of the major assumptions used in the valuations. For the purpose of fair value disclosures, we
have determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy as explained above.
Revenue – Beginning January 1, 2018

Revenue from contracts with customers
Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration which we expect to be entitled to in exchange for those goods or services. PFRS
15 prescribes a five-step model to be followed in the recognition of revenue, wherein we take into
consideration the performance obligations which we need to perform in the agreements we have entered into
with our customers. Revenue is measured by allocating the transaction price, which includes variable
considerations, to each performance obligation on a relative stand-alone selling price basis, taking into
account contractually defined terms of payment and excluding value-added tax, or VAT, or overseas
communication tax, or OCT, where applicable. Transaction prices are adjusted for the effects of a significant
component if we expect, at contract inception, that the period between the transfer of the promised goods or
services to the customer and when the customer pays for that good or service will be more than one year.
When allocating the total contract transaction price to identified performance obligations, a portion of the
total transaction price may relate to service performance obligations which were not satisfied or are partially
satisfied as of end of the reporting period. In determining the transaction price allocated, we do not include
nonrecurring charges and estimates for usage, nor do we consider arrangements with an original expected
duration of one year or less.
Remaining performance obligations are associated with our wireless and fixed line subscription contracts.
As at December 31, 2019, excluding the performance obligations for contracts with original expected
duration of less than one year, the aggregate amount of the transaction price allocated to remaining
performance obligations was Php22,864 million, of which we expect to recognize approximately 68% in
2020 and 32% in 2021 and onwards. As at December 31, 2018, excluding the performance obligations for
contracts with original expected duration of less than one year, the aggregate amount of the transaction price
allocated to remaining performance obligations was Php30,753 million, of which we expect to recognize
approximately 63% in 2019 and 37% in 2020 and onwards.
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When determining our performance obligations, we assess our revenue arrangements against specific criteria
to determine if we are acting as principal or agent. We consider both the legal form and the substance of our
agreement, to determine each party’s respective roles in the agreement. We are a principal and record
revenue on a gross basis if we control the promised goods or services before transferring them or rendering
those to the customer. However, if our role is only to arrange for another entity to provide the goods or
services, then we are an agent and will need to record revenue at the net amount that we retain for our agency
services.
The disclosures of significant accounting judgments, estimates and assumptions relating to revenue from
contracts with customers are provided in Note 3 – Management’s Use of Accounting Judgments, Estimates
and Assumptions – Identifying performance obligations.
Our revenues are principally derived from providing the following telecommunications services: cellular
voice and data services in the wireless business; and local exchange, international and national long distance,
data and other network, and information and communications services in the fixed line business.
Services may be rendered separately or bundled with goods or other services. The specific recognition
criteria are as follows:
i. Single Performance Obligation (POB) Contracts
Postpaid service arrangements include fixed monthly charges (including excess of consumable fixed
monthly service fees) generated from cellular voice, short messaging services, or SMS, and data services
through the postpaid plans of Smart, Sun Cellular and Infinity brands, from local exchange services
primarily through landline and related services, and from fixed line and other network services primarily
through broadband and leased line services, which we recognize on a straight-line basis over the
customer’s subscription period. Services provided to postpaid subscribers are billed throughout the
month according to the billing cycles of subscribers. Services availed by subscribers in addition to these
fixed fee arrangements are charged separately at their stand-alone selling prices and recognized as the
additional service is provided or as availed by the subscribers.
Our prepaid service revenues arise from the usage of airtime load from channels and prepaid cards
provided by Smart, Sun Cellular, TNT, SmartBro and Sun Broadband brands. Proceeds from over-the-
air reloading channels and prepaid cards are initially recognized as contract liability and realized upon
actual usage of the airtime value for voice, SMS, mobile data and other VAS, prepaid unlimited and
bucket-priced SMS and call subscriptions, net of bonus credits from load packages purchased, such as
free additional call minutes, SMS, data allocation or airtime load, or upon expiration, whichever comes
earlier.
We also consider recognizing revenue from the expected breakage or expiry of airtime load in
proportion to the pattern of rights exercised by the customer if it expects to be entitled to that breakage
amount. If we do not expect to be entitled to a breakage amount based on historical experience with the
customers, then we recognize the expected breakage amount as revenue when the likelihood of the
prepaid customer exercising its remaining rights becomes remote.
Interconnection fees and charges arising from the actual usage of airtime value or subscriptions are
recorded as incurred.
Revenue from international and national long-distance calls carried via our network is generally based
on rates which vary with distance and type of service (direct dial or operator-assisted, paid or collect,
etc.). Revenue from both wireless and fixed line long distance calls is recognized as the service is
provided. In general, non-refundable upfront fees, such as activation fees, that do not relate to the
transfer of a promised good or service, are deferred and recognized as revenue throughout the estimated
average length of the customer relationship, and the related incremental costs incurred are similarly
deferred and recognized as expense over the same period, if such costs generate or enhance resources of
the entity and are expected to be recovered.
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Installation fees for voice services are considered as a single performance obligation together with
monthly service fees, recognized over the customer subscription period since the subscriber cannot
benefit from the installation services on its own or together with other resources that are readily
available to the subscriber. Installation fees for data services are recognized performance of installation.
The related incremental costs are recognized in the same manner in our consolidated income statements,
if such costs are expected to be recovered.
ii. Bundled Contracts
In revenue arrangements, which involve bundled sales of mobile devices and accessories (non-service
component), and telecommunication services (service component), the total transaction price is allocated
based on the relative stand-alone selling prices of each distinct performance obligation. Stand-alone
selling price is the price at which we sell the good or service separately to a customer. However, if
goods or services are not currently offered separately, we use the adjusted market or cost-plus margin
method to determine the stand-alone selling price to be used in the transaction price allocation. We
adjust the transaction price for the effects of the time value of money if the timing of the payment and
delivery of goods or services do not coincide, effects of which are considered as containing a significant
financing component.
Revenues from the sale of non-service component are recognized at the point in time when the goods are
delivered while revenues from telecommunication services component are recognized over on a straight-
line basis over the contract period when the services are provided to subscribers.
Significant Financing Component

The non-service component included in contracts with customers have significant financing component
considering the period between the time of the transfer of control over the mobile device and the
customer’s payment of the price of the mobile device, which is more than one year.
The transaction price for such contracts is determined by discounting the amount of promised
consideration using the appropriate discount rate. We concluded that there is a significant financing
component for those contracts where the customer elects to pay in arrears considering the length of time
between the transfer of mobile device to the customer and the customer’s payment, as well as the
prevailing interest rates in the market adjusted with customer credit spread.
Customer Loyalty Program

We operate customer engagement and loyalty programs which allows customers to accumulate points
when postpaid customers pay their bills on time and in full, purchase products or services, and load or
top-up for prepaid customers once registered to the program. Customers may avail of the “MVP
Rewards Card” for free, powered by PayMaya, which allows for instant conversion of points into the
PayMaya wallet of the customer that can be used for all purchases transacted using the “MVP Rewards
Card”. The new customer loyalty program is not treated as separate performance obligation but as a
reduction of revenue when earned, which is booked under loyalty expense.
iii. International and Domestic Long Distance Contracts
Interconnection revenues for call termination, call transit and network usages are recognized in the
period in which the traffic occurs. Revenues related to local, long distance, network-to-network,
roaming and international call connection services are recognized when the call is placed, or connection
is provided, and the equivalent amounts charged to us by other carriers are recorded under
interconnection costs in our consolidated income statements. Inbound revenue and outbound charges
are based on agreed transit and termination rates with other foreign and local carriers.
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Variable consideration
We assessed that a variable consideration exists in certain interconnection agreements where there is a
monthly aggregation period and the rates applied for the total monthly traffic will depend on the total
traffic for the month. We also consider whether contracts with carriers contain volume commitment or
tiering arrangement whereby the rate being charged will change upon meeting certain volume of traffic.
We estimate the amount of variable consideration to which we are entitled and include in the transaction
price some or all of an amount of variable consideration estimated arising from these agreements, unless
the impact is not material.
iv. Others
Revenues from VAS include streaming and downloading of games, music, video contents, loan services,
messaging services, applications and other digital services which are only arranged for by us on behalf
of third-party content providers. The amount of revenue recognized is net of content provider’s share in
revenue. Revenue is recognized upon service availment. We act as an agent for certain VAS
arrangements.
Revenue from server hosting, co-location services and customer support services are recognized at point
in time as the services are performed.
Contract balances
Contract assets
A contract asset is initially recognized for revenue earned from installation services because the receipt of
consideration is conditional on successful completion of the installation. Upon completion of the installation
and acceptance by the customer, the amount recognized as contract assets is reclassified to trade receivables
when billed. Contract assets are subject to impairment assessment. Refer to accounting policies on
impairment of financial assets in section Financial instruments – initial recognition and subsequent
measurement.
Trade receivables
A receivable is recognized if an amount of consideration that is unconditional is due from the customer (i.e.,
only the passage of time is required before payment of the consideration is due). Refer to accounting
policies of financial assets in section Financial instruments – initial recognition and subsequent
measurement.
Contract liabilities and unearned revenues

A contract liability is the obligation to transfer goods or services to a customer for which we have received
consideration (or an amount of consideration is due) from the customer. If a customer pays consideration
before we transfer goods or services to the customer, a contract liability is recognized when the payment is
made or the payment is due (whichever is earlier). Contract liabilities and unearned revenues are recognized
as revenue when we perform under the contract.
Incremental costs to obtain contracts

We often give commissions and incentives to sales agent for meeting certain volume of new connections and
corresponding value of plans contracted. These costs are incremental costs to obtain as we would have not
incurred these if the contract had not been obtained. These are capitalized as an asset if these are expected to
be recovered. Any capitalized incremental costs to obtain would be amortized and recognized as expense
over customer subscription period.
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Interest income
Interest income is recognized as it accrues on a time proportion basis taking into account the principal
amount outstanding and the EIR.
Dividend income
Revenue is recognized when our right to receive the payment is identified.
Revenue – Prior to January 1, 2018
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to us and the
revenue can be reliably measured, regardless of when the payment is received. Revenue is measured at the
fair value of the consideration received or receivable, taking into account contractually defined terms of
payment and excluding value-added tax, or VAT, or overseas communication tax, or OCT, where applicable.
When deciding the most appropriate basis for presenting revenue and cost of revenue, we assess our revenue
arrangements against specific criteria to determine if we are acting as principal or agent. We consider both
the legal form and the substance of our agreement, to determine each party’s respective roles in the
agreement. We are acting as a principal when we have the significant risks and rewards associated with the
rendering of telecommunication services. When our role in a transaction is that of principal, revenue is
presented on a gross basis, otherwise, revenue is presented on a net basis.
Service revenues from continuing operations
Our revenues are principally derived from providing the following telecommunications services: cellular
voice and data services in the wireless business; and local exchange, international and national long distance,
data and other network, and information and communications services in the fixed line business. When
determining the amount of revenue to be recognized in any period, the overriding principle followed is to
match the revenue with the provision of service. Services may be rendered separately or bundled with goods
or other services. The specific recognition criteria are as follows:
Subscribers
We provide telephone, cellular and data communication services under prepaid and postpaid payment
arrangements as follows:
Postpaid service arrangements include fixed monthly charges (including excess of consumable fixed monthly
service fees) generated from postpaid cellular voice, short messaging services, or SMS, and data services
through the postpaid plans of Smart and Sun, from cellular and local exchange services primarily through
wireless, landline and related services, and from data and other network services primarily through
broadband and leased line services, which we recognize on a straight-line basis over the customer’s
subscription period. Services provided to postpaid subscribers are billed throughout the month according to
the billing cycles of subscribers. Services availed by subscribers in addition to these fixed fee arrangements
are charged separately and recognized as the additional service is provided or as availed by the subscribers.
Our prepaid service revenues arise from the usage of airtime load from channels and prepaid cards provided
by Smart, TNT, SmartBro and Sun Broadband brands. Proceeds from over-the-air reloading channels and
prepaid cards are initially recognized as unearned revenue and realized upon actual usage of the airtime value
(i.e., the pre-loaded airtime value of subscriber identification module, or SIM, cards and subsequent top-ups)
for voice, SMS, multimedia messaging services, or MMS, content downloading (inclusive of browsing),
infotext services and prepaid unlimited and bucket-priced SMS and call subscriptions, net of free SMS
allocation and bonus credits (load package purchased, i.e., free additional SMS or minute calls or Peso
credits), or upon expiration of the usage period, whichever comes earlier. Interconnection fees and charges
arising from the actual usage of airtime value or subscriptions are recorded as incurred.
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Revenue from international and national long-distance calls carried via our network is generally based on
rates which vary with distance and type of service (direct dial or operator-assisted, paid or collect, etc.).
Revenue from both wireless and fixed line long distance calls is recognized as the service is provided.
Non-recurring upfront fees such as activation fees charged to subscribers for connection to our network are
deferred and are recognized as revenue throughout the estimated average length of customer relationship.
The related incremental costs are similarly deferred and recognized over the same period in our consolidated
income statement.
Connecting carriers
Interconnection revenues for call termination, call transit and network usages are recognized in the period in
which the traffic occurs. Revenues related to local, long distance, network-to-network, roaming and
international call connection services are recognized when the call is placed or connection is provided and
the equivalent amounts charged to us by other carriers are recorded under interconnection costs in our
consolidated income statement. Inbound revenue and outbound charges are based on agreed transit and
termination rates with other foreign and local carriers.
Value-Added Services, or VAS
Revenues from VAS include MMS, downloading and streaming of content, applications and other digital
services and infotext services. The amount of revenue recognized is net of payout to content provider’s share
in revenue. Revenue is recognized upon service availment.
Incentives
We operate customer loyalty programmes in our wireless business which allows customers to accumulate
points when they purchase services or prepaid credits from us. The points can then be redeemed for free
services and discounts, subject to a minimum number of points being obtained. Consideration received is
allocated between the services and prepaid credits sold and the points issued, with the consideration allocated
to the points equal to their value. The fair value of the points issued is deferred and recognized as revenue
when the points are redeemed.
Product-based incentives provided to retailers and customers as part of a transaction are accounted for as
multiple element arrangements and recognized when earned.
Multiple-deliverable arrangements
In revenue arrangements, which involve bundled sales of mobile devices, SIM cards/packs and accessories
(non-service component) and telecommunication services (service component), the total arrangement
consideration is allocated to each component based on their relative fair value to reflect the substance of the
transaction. Revenue from the sale of non-service component are recognized when the goods are delivered
while revenues from telecommunication services component are recognized when the services are provided
to subscribers. When fair value is not directly observable, the total consideration is allocated using residual
method.
Other services
Revenue from server hosting, co-location services and customer support services are recognized as the
service are performed.
Non-service revenues
Revenues from handset and equipment sales are recognized when the significant risks and rewards of
ownership of the goods have passed to the buyer, usually on delivery of the goods. The related cost or net
realizable value of handsets or equipment, sold to customers is presented as “Cost of sales” in our
consolidated income statement.
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Interest income
Interest income is recognized as it accrues on a time proportion basis taking into account the principal
amount outstanding and the EIR.
Dividend income
Revenue is recognized when our right to receive the payment is established.
Expenses
Expenses are recognized as incurred.
Provisions
We recognize a provision when we have a present obligation, legal or constructive, as a result of a past event,
and when it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. When we expect some or
all of a provision to be reimbursed, the reimbursement is recognized as a separate asset, but only when the
reimbursement is virtually certain to be received if the entity settles the obligation. The expense relating to
any provision is presented in our consolidated income statements, net of any reimbursements. If the effect of
the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to
the passage of time is recognized as interest expense in our consolidated income statements.
Retirement Benefits
PLDT and certain of its subsidiaries are covered under R.A. 7641 otherwise known as “The Philippine
Retirement Law”.
Defined benefit pension plans

PLDT has separate and distinct retirement plans for itself and majority of its Philippine-based operating
subsidiaries, administered by the respective Funds’ Trustees, covering permanent employees. Retirement
costs are separately determined using the projected unit credit method. This method reflects services
rendered by employees to the date of valuation and incorporates assumptions concerning employees’
projected salaries.
Retirement costs consist of the following:
 Service cost;
 Net interest on the net defined benefit asset or obligation; and
 Remeasurements of net defined benefit asset or obligation.
Service cost (which includes current service costs, past service costs and gains or losses on curtailments and
non-routine settlements) is recognized as part of “Selling, general and administrative expenses –
Compensation and employee benefits” account in our consolidated income statements. These amounts are
calculated periodically by an independent qualified actuary.
Net interest on the net defined benefit asset or obligation is the change during the period in the net defined
benefit asset or obligation that arises from the passage of time which is determined by applying the discount
rate based on the government bonds to the net defined benefit asset or obligation. Net defined benefit asset is
recognized as part of advances and other noncurrent assets and net defined benefit obligation is recognized as
part of pension and other employee benefits in our consolidated statements of financial position.
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Remeasurements, comprising actuarial gains and losses, return on plan assets and any change in the effect of
the asset ceiling (excluding net interest on defined benefit obligation) are recognized immediately in other
comprehensive income in the period in which they occur. Remeasurements are not classified to profit or loss
in subsequent periods.
The net defined benefit asset or obligation comprises the present value of the defined benefit obligation
(using a discount rate based on government bonds, as explained in Note 3 – Management’s Use of
Accounting Judgments, Estimates and Assumptions – Estimating pension benefit costs and other employee
benefits), net of the fair value of plan assets out of which the obligations are to be settled directly. Plan
assets are assets held by a long-term employee benefit fund or qualifying insurance policies and are not
available to our creditors nor can they be paid directly to us. Fair value is based on market price information
and in the case of quoted securities, the published bid price and in the case of unquoted securities, the
discounted cash flow using the income approach. The value of any defined benefit asset recognized is
restricted to the asset ceiling which is the present value of any economic benefits available in the form of
refunds from the plan or reductions in the future contributions to the plan. See Note 26 – Employee Benefits
– Defined Benefit Pension Plans for more details.
Defined contribution plans

Smart and certain of its subsidiaries maintain a defined contribution plan that covers all regular full-time
employees under which it pays fixed contributions based on the employees’ monthly salaries and provides
for qualified employees to receive a defined benefit minimum guarantee. The defined benefit minimum
guarantee is equivalent to a certain percentage of the monthly salary payable to an employee at normal
retirement age with the required credited years of service based on the provisions of R.A. 7641.
Accordingly, Smart and certain of its subsidiaries account for their retirement obligation under the higher of
the defined benefit obligation related to the minimum guarantee and the obligation arising from the defined
contribution plan.
For the defined benefit minimum guarantee plan, the liability is determined based on the present value of the
excess of the projected defined benefit obligation over the projected defined contribution obligation at the
end of the reporting period. The defined benefit obligation is calculated annually by a qualified independent
actuary using the projected unit credit method. Smart and certain of its subsidiaries determines the net
interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount
rate used to measure the defined benefit obligation at the beginning of the annual period to the then net
defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset)
during the period as a result of contributions and benefit payments. Net interest expense (income) and other
expenses (income) related to the defined benefit plan are recognized in our consolidated income statement.
The defined contribution liability, on the other hand, is measured at the fair value of the defined contribution
assets upon which the defined contribution benefits depend, with an adjustment for margin on asset returns,
if any, where this is reflected in the defined contribution benefits.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on
plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized
immediately in our other comprehensive income.
When the benefits of the plan are changed or when the plan is curtailed, the resulting change in benefit that
relates to past service or the gain or loss on curtailment is recognized immediately in our profit or loss.
Gains or losses on the settlement of the defined benefit plan are recognized when the settlement occurs. See
Note 26 – Employee Benefits – Defined Contribution Plans for more details.
Other Long-term Employee Benefits

Employee benefit costs include current service cost, net interest on the net defined benefit obligation, and
remeasurements of the net defined benefit obligation. Past service costs and actuarial gains and losses are
recognized immediately in our consolidated income statement.
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The long-term employee benefit liability comprises the present value of the defined benefit obligation (using
a discount rate based on government bonds) at the end of the reporting period and is determined using the
projected unit credit method. See Note 26 – Employee Benefits – Other Long-term Employee Benefits for
more details.
Transformation Incentive Plan, or TIP

The PLDT provides incentive compensation to key officers, executives and other eligible participants, in the
PLDT Group in the form of PLDT Inc. common shares of stock, or Performance Shares, over a three-year
vesting period from January 1, 2017 to December 31, 2019. The award of the performance shares is
contingent on the achievement of Performance Targets based on PLDT Group’s cumulative consolidated
core net income.
The starting point of expense recognition is the date of grant, which is the date when the formal invitation
letter was sent to the eligible participants. The fair value of the award (excluding the effect of any service
and non-market performance vesting conditions) is determined at the grant date. At each subsequent
reporting date until vesting, a best estimate of the cumulative charge to profit or loss at that date is
computed. As the share-based payments vests in installments over the service period, the award is treated as
expense over the vesting period.
On December 11, 2018, the Executive Compensation Committee, or ECC, of the Board approved
Management’s recommended modifications to the Plan, and partial equity and cash settled set-up was
implemented for the 2019 TIP Grant. The estimated fair value of remaining unpurchased shares will be
given out as cash award. The fair value of the cash award relating to unpurchased shares is determined using
the estimate of the fair value of the original award approved in 2017. Please see Note 3 – Management’s Use
of Accounting Judgments, Estimates and Assumptions – Estimating pension benefit cost and other employee
benefits.
Leases – Beginning January 1, 2019
We assess at contract inception whether the contract is, or contains, a lease. That is, if the contract conveys
right to control the use of an identified asset for a period of time in exchange for a consideration.
As a Lessee. We apply a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. We recognize lease liabilities to make lease payments and ROU assets
representing the ROU the underlying assets.
 Right-of-use assets
We recognize right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at
or before the commencement date less any lease incentives received. Unless it is reasonably certain that we
obtain ownership of the leased asset at the end of the lease term, the recognized right-of-use assets are
depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-
use assets are subject to impairment. Refer to the accounting policies in impairment of non-financial assets
section.
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 Lease liabilities
At the commencement date of the lease, we recognize lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-
substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to be exercised and payments of penalties
for terminating a lease, if the lease term reflects exercising the option to terminate. The variable lease
payments that do not depend on an index or a rate are recognized as expense in the period on which the event
or condition that triggers the payment occurs.
In calculating the present value of lease payments, we use the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a
change in the assessment to purchase the underlying asset.
 Short-term leases and leases of low-value assets
We apply the short-term lease recognition exemption to our short-term leases of machinery and equipment
(i.e., those leases that have a lease term of 12 months or less from the commencement date and do not
contain a purchase option). We also apply the lease of low-value assets recognition exemption to leases that
are considered of low value (i.e., below Php250 thousand). Lease payments on short-term leases and leases
of low-value assets are recognized as expense in our consolidated income statement on a straight-line basis
over the lease term.
As a Lessor. Leases in which we do not transfer substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases. Rental income is accounted for on a straight-line
basis over the lease term and is included in revenue in our consolidated income statements due to its opeating
nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognized over the lease term on the bases as rental income.
Leases – Prior to January 1, 2019

The determination of whether an arrangement is, or contains, a lease is based on the substance of the
arrangement at inception date. The arrangement is assessed for whether the fulfillment of the arrangement is
dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or
assets, even if that right is not explicitly specified in an arrangement. A reassessment is made after the
inception of the lease only if one of the following applies: (a) there is a change in contractual terms, other
than a renewal or extension of the agreement; (b) a renewal option is exercised or extension granted, unless
the term of the renewal or extension was initially included in the lease term; (c) there is a change in the
determination of whether the fulfillment is dependent on a specified asset; or (d) there is a substantial change
to the asset.
Where a reassessment is made, lease accounting shall commence or cease from the date when the change in
circumstances gave rise to the reassessment for scenarios (a), (c) or (d) and the date of renewal or extension
period for scenario (b).
As a Lessor. Leases where we retain substantially all the risks and benefits of ownership of the asset are
classified as operating leases. Any initial direct costs incurred in negotiating an operating lease are added to
the carrying amount of the leased asset and recognized over the lease term on the same bases as rental
income. Rental income is recognized in our consolidated income statements on a straight-line basis over the
lease term.
All other leases are classified as finance leases. At the inception of the finance lease, the asset subject to
lease agreement is derecognized and lease receivable is recognized. Interest income is accrued over the lease
term using the EIR and lease amortization is accounted for as reduction of lease receivable.
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As a Lessee. Leases where the lessor retains substantially all the risks and benefits of ownership of the assets
are classified as operating leases. Operating lease payments are recognized as expense in our consolidated
income statements on a straight-line basis over the lease term.
All other leases are classified as finance leases. A finance lease gives rise to the recognition of a leased asset
and finance lease liability. Capitalized leased assets are depreciated over the shorter of the estimated useful
life of the asset or the lease term, if there is no reasonable certainty that we will obtain ownership of the
leased asset at the end of the lease term. Interest expense is recognized over the lease term using the EIR.
Income Taxes
Current income tax
Current income tax assets and liabilities for the current and prior years are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted as at the end of the reporting period where we
operate and generate taxable income.
Current income tax relating to items recognized directly in equity is recognized in equity and not in our
consolidated income statement. Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred income tax

Deferred income tax is provided on all temporary differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes at the end of the reporting period.
Deferred income tax liabilities are recognized for all taxable temporary differences except: (1) when the
deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and (2) with respect to taxable temporary differences associated
with investments in subsidiaries, associates and interest in joint ventures, when the timing of the reversal of
the temporary differences can be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
Deferred income tax assets are recognized for all deductible temporary differences, the carryforward benefits
of unused tax credits from excess minimum corporate income tax, or MCIT, over regular corporate income
tax, or RCIT, and unused net operating loss carry over, or NOLCO. Deferred income tax assets are
recognized to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and carryforward benefits of unused tax credits and unused tax losses can be utilized,
except: (1) when the deferred income tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and (2) with respect to
deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred income tax assets are recognized only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the
temporary differences can be utilized.
The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the deferred income tax assets to be utilized. Unrecognized deferred income tax assets are reassessed
at the end of each reporting period and are recognized to the extent that it has become probable that future
taxable profit will allow the deferred income tax assets to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted as at the end of the reporting period.
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Deferred income tax relating to items recognized in “Other comprehensive income” account is included in
our consolidated statements of comprehensive income and not in our consolidated income statements.
Deferred income tax assets and liabilities are offset, if a legally enforceable right exists to offset current
income tax assets against current income tax liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate
recognition at that date, would be recognized subsequently if new information about facts and circumstances
changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed
goodwill) if it is incurred during the measurement period or in our profit or loss.
VAT
Revenues, expenses and assets are recognized net of the amount of VAT, if applicable. When VAT from
sales of goods and/or services (output VAT) exceeds VAT passed on from purchases of goods or services
(input VAT), the excess is recognized as payable in our consolidated statements of financial position. When
VAT passed on from purchases of goods or services (input VAT) exceeds VAT from sales of goods and/or
services (output VAT), the excess is recognized as an asset in our consolidated statements of financial
position to the extent of the recoverable amount.
Contingencies
Contingent liabilities are not recognized in our consolidated financial statements. They are disclosed in the
notes to our consolidated financial statements unless the possibility of an outflow of resources embodying
economic benefits is remote. Contingent assets are not recognized in our consolidated financial statements
but are disclosed in the notes to our consolidated financial statements when an inflow of economic benefits is
probable.
Events After the End of the Reporting Period

Post period-end events up to the date of approval of the Board of Directors that provide additional
information about our financial position at the end of the reporting period (adjusting events) are reflected in
our consolidated financial statements. Post period-end events that are not adjusting events are disclosed in
the notes to our consolidated financial statements when material.
Equity
Preferred and common stocks are measured at par value for all shares issued. Incremental costs incurred
directly attributable to the issuance of new shares are shown in equity as a deduction from proceeds, net of
tax. Proceeds and/or fair value of considerations received in excess of par value are recognized as capital in
excess of par value in our consolidated statement of changes in equity and consolidated statements of
financial position.
Treasury stocks are our own equity instruments which are reacquired and recognized at cost and presented as
reduction in equity. No gain or loss is recognized in our consolidated income statements on the purchase,
sale, reissuance or cancellation of our own equity instruments. Any difference between the carrying amount
and the consideration upon reissuance or cancellation of shares is recognized as capital in excess of par value
in our consolidated statement of changes in equity and consolidated statements of financial position.
Change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity
transaction and any impact is presented as part of capital in excess of par value in our consolidated statement
of changes in equity.
Retained earnings represent our net accumulated earnings less cumulative dividends declared.
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Other comprehensive income comprises of income and expense, including reclassification adjustments that
are not recognized in our consolidated income statement as required or permitted by PFRSs.
Standards Issued But Not Yet Effective
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the
consolidated financial statements are listed below. We will adopt these standards and amendments to
existing standards which are relevant to us when these become effective.
Effective beginning on or after January 1, 2020
 Amendments to PFRS 3, Definition of a Business
The amendments to PFRS 3 clarify the minimum requirements to be a business, remove the assessment of a
market participant’s ability to replace missing elements, and narrow the definition of outputs. The
amendments also add guidance to assess whether an acquired process is substantive and add illustrative
examples. An optional fair value concentration test is introduced which permits a simplified assessment of
whether an acquired set of activities and assets is not a business.
An entity applies those amendments prospectively for annual reporting periods beginning on or after January
1, 2020, with earlier application permitted.
These amendments will apply on our future business combinations.
 Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting Policies, Changes
in Accounting Estimates and Errors, Definition of Material
The amendments refine the definition of material in PAS 1 and align the definition used across PFRSs and
other pronouncements. They are intended to improve the understanding of the existing requirements rather
than to significantly impact an entity’s materiality judgments.
An entity applies those amendments prospectively for annual reporting periods beginning on or after January
1, 2020 with early application permitted.
These amendments have no significant impact on our consolidated financial statements.
Effective beginning on or after January 1, 2021
 PFRS 17, Insurance Contracts
PFRS 17 is a comprehensive new accounting standard for insurance contracts covering recognition and
measurement, presentation and disclosure. Once effective, PFRS 17 will replace PFRS 4, Insurance
Contracts. This new standard on insurance contracts applies to all types of insurance contracts (i.e., life,
non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to
certain guarantees and financial instruments with discretionary participation features. A few scope
exceptions will apply.
The overall objective of PFRS 17 is to provide an accounting model for insurance contracts that is more
useful and consistent for insurers. In contrast to the requirements in PFRS 4, which are largely based on
grandfathering previous local accounting policies, PFRS 17 provides a comprehensive model for insurance
contracts, covering all relevant accounting aspects. The core of PFRS 17 is the general model, supplemented
by:
1. A specific adaptation for contracts with participation features (the variable fee approach); and
2. A simplified approach (the premium allocation approach) mainly for short-duration contracts.
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PFRS 17 is effective for reporting periods beginning on or after January 1, 2021, with comparative figures
required.
The standard has no significant impact on our consolidated financial statements.
Deferred effectivity
 Amendments to PFRS 10, Consolidated Financial Statements and PAS 28, Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture
The amendments address the conflict between the PFRS 10 and PAS 28 in dealing with the loss of control of
a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that a full
gain or loss is recognized when a transfer to an associate or joint venture involves a business as defined in
PFRS 3. Any gain or loss resulting from the sale or contribution of assets that does not constitute a business,
however, is recognized only to the extent of unrelated investors’ interests in the associate or joint venture.
On January 13, 2016, the FRSC deferred the original effective date of January 1, 2016 of the said
amendments until the International Accounting Standards Board completes its broader review of the research
project on equity accounting that may result in the simplification of accounting for such transactions and of
other aspects of accounting for associates and joint ventures. We are currently assessing the impact of this
amendment.
3. Management’s Use of Accounting Judgments, Estimates and Assumptions

The preparation of our consolidated financial statements in conformity with PFRS requires us to make
judgments, estimates and assumptions that affect the reported amounts of our revenues, expenses, assets and
liabilities and disclosure of contingent liabilities at the end of each reporting period. The uncertainties
inherent in these assumptions and estimates could result in outcomes that could require a material adjustment
to the carrying amount of the assets or liabilities affected in the future years.
Judgments and estimates are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Judgments, key assumptions concerning the future, and other key sources of estimation uncertainty at the end
of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next reporting period are consistent with those applied in the most recent
annual financial statements, except for those that relate to the adoption of PFRS 16. Selected critical
judgments and estimates applied in the preparation of the annual consolidated financial statements as
discussed below:
Judgments
In the process of applying our accounting policies, management has made judgments, apart from those
involving estimations which have the most significant effect on the amounts recognized in our financial
statements.
Revenue Recognition – Beginning January 1, 2018

Identifying performance obligations
We identify performance obligations by considering whether the promised goods or services in the contract
are distinct goods or services. A good or service is distinct when the customer can benefit from the good or
service on its own or together with other resources that are readily available to the customer and our promise
to transfer the good or service to the customer is separately identifiable from the other promises in the
contract.
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Revenues earned from multiple element arrangements offered by our fixed line and wireless businesses are
split into separately identifiable performance obligations based on their relative stand-alone selling price in
order to reflect the substance of the transaction. The transaction price represents the best evidence of stand-
alone selling price for the services we offer since this is the observable price we charge if our services are
sold separately. We account for customer contracts in accordance with PFRS 15 and have concluded that the
service (telecommunication service) and non-service components (handset or equipment) may be accounted
for as separate performance obligations. The handset or equipment is delivered first, followed by the
telecommunication service (which is provided over the contract/lock-in period of generally two years).
Revenue attributable to the separate performance obligations are based on the allocation of the transaction
price relative to the stand-alone selling price.
Installation fees for voice services are considered as a single performance obligation together with monthly
service fees, recognized over the customer subscription period since the subscriber cannot benefit from the
installation services on its own or together with other resources that are readily available to the subscriber.
Installation fees for data services are also not capable of being distinct from the sale of modem since the
subscriber obtains benefit from the combined output of the installation services and the device, and is
recognized upon delivery of the modem and performance of modem installation.
Installation fees for voice services are considered as a single performance obligation together with monthly
service fees, recognized over the customer subscription period since the subscriber cannot benefit from the
installation services on its own or together with other resources that are readily available to the subscriber.
Installation fees for data services are also not capable of being distinct from the sale of modem since the
subscriber obtains benefit from the combined output of the installation services and the device, and is
recognized upon delivery of the modem and performance of modem installation.
Principal versus agent consideration

We enter into contracts with our customers involving multiple deliverable arrangements. We determined
that we control the goods before they are transferred to customers, and we have the ability to direct the use of
the inventory. The following factors indicate that we control the goods before they are being transferred to
customers. Therefore, we determined that we are the principal in these contracts.
 We are primarily responsible for fulfilling the promise to provide the specified equipment;
 We bear inventory risk on our inventory before it has been transferred to the customer;
 We have discretion in establishing the prices for the other party’s goods or services and, therefore, the
benefit that we can receive from those goods or services is not limited. It is incumbent upon us to
establish the price of our services to be offered to our subscribers; and
 Our consideration in these contracts is the entire consideration billed to the service provider.
Based on the foregoing, we are considered the principal in our contracts with other service providers except
for certain VAS arrangements. We have the primary obligation to provide the services to the subscriber.
Timing of revenue recognition

We recognize revenue from contracts with customers over time or at a point in time depending on our
evaluation of when the customer obtains control of the promised goods or services and based on the extent of
progress towards completion of the performance obligation. For the telecommunication service which is
provided over the contract period of two years, revenue is recognized monthly as we provide the service
because control is transferred over time. For the device which is provided at the inception of the contract,
revenue is recognized at the time of delivery because control is transferred at a point in time.
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Identifying methods for measuring progress of revenue recognized over time
We determine the appropriate method of measuring progress which is either through the use of input or
output methods. Input method recognizes revenue on the basis of the entity’s efforts or inputs to the
satisfaction of a performance obligation while output method recognizes revenue on the basis of direct
measurements of the value to the customer of the goods or services transferred to date.
Revenue from telecommunication services is recognized through the use of input method wherein
recognition is over time based on the customer subscription period since the customer simultaneously
receives and consumes the benefits as the seller renders the services.
Significant financing component

We concluded that the handset component included in contracts with customers has a significant financing
component considering the period between the time of the transfer of control over the handset and the
customer’s payment of the price of the handset, which is more than one year.
In determining the interest to be applied to the amount of consideration, we concluded that the interest rate is
the market interest rate adjusted with credit spread to reflect the customer credit risk that is commensurate
with the rate that would be reflected in a separate financing transaction between us and our customer at
contract inception.
Estimation of stand-alone selling price

We assessed that the service and non-service components represent separate performance obligations and
thus, the amount of revenues should be recognized based on the allocation of the transaction price to the
different performance obligations based on their stand-alone selling prices. The stand-alone selling price is
the price at which we sell the good or service separately to a customer. However, if goods or services are not
currently offered separately, we use the adjusted market or cost-plus margin method to determine the stand-
alone selling price to be used in the revenue allocation.
In terms of allocation of transaction price between performance obligations, we assessed that allocating the
transaction price using the stand-alone selling prices of the services and handset will result in more revenue
allocated to non-service component. The stand-alone selling price is based on the price in which we
regularly sell the non-service and service component in a separate transaction.
Financial Instruments
Evaluation of business models in managing financial instruments
We determine our business model at the level that best reflects how we manage groups of financial assets to
achieve our business objective. Our business model is not assessed on an instrument-by-instrument basis,
but a higher level of aggregated portfolios and is based on observable factors such as:
a. How the performance of the business model and the financial assets held within that business
model are evaluated and reported to the entity’s key management personnel;
b. The risks that affect the performance of the business model (and the financial assets held within
that business model) and, in particular, the way those risks are managed; and
c. The expected frequency, value and timing of sales are also important aspects of our assessment.
The business model assessment is based on reasonably expected scenarios without taking ‘worst case’ or
‘stress case’ scenarios into account. If cash flows after initial recognition are realized in a way that is
different from our original expectations, we do not change the classification of the remaining financial assets
held in that business model, but incorporates such information when assessing newly originated or newly
purchased financial assets going forward.
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We have determined that for cash and cash equivalents, short-term investments, investment in debt securities
and other long-term investments (Note 13 – Debt Instruments at Amortized Cost), and trade and other
receivables, the business model is to collect the contractual cash flows until maturity. For receivables from
MPIC, we have determined that its business model is to both collect contractual cash flows and sale of
financial assets.
PFRS 9, however, emphasizes that if more than an infrequent number of sales are made out of a portfolio of
financial assets carried at amortized cost, we should assess whether and how such sales are consistent with
the objective of collecting contractual cash flows.
Definition of default and credit-impaired financial assets

We define a financial instrument as in default, which is fully aligned with the definition of credit-impaired,
when it meets one or more of the following criteria:
 Quantitative criteria
For trade receivables and all other financial assets subject to impairment, default occurs when the receivable
becomes 90 days past due, except for trade receivables from Corporate subscribers, which are determined to
be in default when the receivables become 120 days past due.
 Qualitative criteria
The counterparty meets unlikeliness to pay criteria, which indicates the counterparty is in significant
financial difficulty. These are instances where:
a. The counterparty is experiencing financial difficulty or is insolvent;
b. The counterparty is in breach of financial covenant(s);
c. An active market for that financial assets has disappeared because of financial difficulties;
d. Concessions have been granted by us, for economic or contractual reasons relating to the
counterparty’s financial difficulty;
e. It is becoming probable that the counterparty will enter bankruptcy or other financial
reorganization; and
f. Financial assets are purchased or originated at a deep discount that reflects the incurred credit
losses.
The criteria above have been applied to all financial instruments, except FVPL, held by us and are consistent
with the definition of default used for internal credit risk management purposes. The default definition has
been applied consistently to the ECL models throughout our expected loss calculation.
Significant increase in credit risk

At each reporting date, we assess whether there has been a significant increase in credit risk for financial
assets since initial recognition by comparing the risk of default occurring over the expected life between the
reporting date and the date of initial recognition. We consider reasonable and supportable information that is
relevant and available without undue cost or effort for this purpose. This includes quantitative and
qualitative information and forward-looking analysis.
An exposure will migrate through the ECL stages as asset quality deteriorates. If, in a subsequent period,
asset quality improves and also reverses any previously assessed significant increase in credit risk since
origination, then the loss allowance measurement reverts from lifetime ECL to 12-month ECL.
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Using our judgment and, where possible, relevant historical experience, we may determine that an exposure
has undergone a significant increase in credit risk based on particular qualitative indicators that we consider
are indicative of such and whose effect may not otherwise be fully reflected in its quantitative analysis on a
timely basis.
As a backstop, we consider that a significant increase in credit risk occurs no later than when an asset is more
than 30 days past due. Days past due are determined by counting the number of days since the earliest
elapsed due date in respect of which full payment has not been received. Due dates are determined without
considering any grace period that might be available to the counterparty.
Exposures that have not deteriorated significantly since origination, or where the deterioration remains
within our investment grade criteria, or which are less than 30 days past due, are considered to have a low
credit risk. The provision for credit losses for these financial assets is based on a 12-month ECL. The low
credit risk exemption has been applied on debt investments that meet the investment grade criteria of the
PLDT Group.
Impairment of available-for-sale equity investments – Prior to January 1, 2018
For available-for-sale financial investments, we assess at each reporting date whether there is objective
evidence that an investment or a group of investments is impaired.
In the case of equity investments classified as available-for-sale financial investments, objective evidence
would include a significant or prolonged decline in the fair value of the investment below its cost. The
determination of what is “significant” or “prolonged” requires judgment. We treat “significant” generally as
decline of 20% or more below the original cost of investment, and “prolonged” as greater than 12 months
assessed against the period in which the fair value has been below its original cost.
Based on our judgment, the decline in fair value of our investment in Rocket Internet SE, or Rocket Internet,
was considered significant as the cumulative net losses from changes in fair value represented more than
20% decline in value below cost. As a result, total cumulative impairment losses recognized on our
investment in Rocket Internet amounted to Php11,045 million as at December 31, 2017. Impairment losses
charged in our consolidated income statement amounted to Php540 million for the year ended December 31,
2017. See related discussion on Note 12 – Financial Assets at FVPL – Investment of PLDT Online in Rocket
Internet.
Determination of functional currency

The functional currencies of the entities under the PLDT Group are the currency of the primary economic
environment in which each entity operates. It is the currency that mainly influences the revenue from and
cost of rendering products and services.
The presentation currency of the PLDT Group is the Philippine Peso. Based on the economic substance of
the underlying circumstances relevant to the PLDT Group, the functional currency of all entities under PLDT
Group is the Philippine Peso, except for (a) SMHC, FECL Group, PLDT Global and certain of its
subsidiaries, PGNL and certain of its subsidiaries, Chikka and certain of its subsidiaries and PGIC, which
uses the U.S. Dollar; (b) iCommerce, CPL and AGSPL, which uses the Singaporean dollar; and (c) AGS
Indonesia, which uses the Indonesian rupiah.
Reclassification of certain land and building from investment property to property and equipment
In 2018, ePLDT reclassified certain land and building amounting to Php1,236 million from investment
property to property and equipment because of the change in use of the assets. Prior to reclassification, these
land and building were previously held for rental to third party lessees up to the end of the lease arrangement
in 2018. Management decided not to renew the lease contracts but instead use the land and building for
business operations. As such, management believes that the reclassification to property and equipment is
appropriate given the change in use of these assets. See Note 14 – Investment Properties.
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Determining the lease term of contracts with renewal and terminal options – Company as a Lessee –
Beginning January 1, 2019
Upon adoption of PFRS 16, we applied a single recognition and measurement approach for all leases, except
for short-term leases and leases of ‘low-value’ assets. Refer to Section Leases – Right-of-Use Assets for the
accounting policy beginning January 1, 2019.
We determine the lease term as the non-cancellable term of the lease, together with any periods covered by
an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to
terminate the lease, if it is reasonably certain not to be exercised.
We, as the lessee, have the option, under some of our lease agreements to lease the assets for additional
terms. We apply judgment in evaluating whether it is reasonably certain to exercise the option to renew.
That is, we consider all relevant factors that create an economic incentive for us to exercise the renewal.
After the commencement date, we reassess the lease term if there is a significant event or change in
circumstances that is within our control and affects our ability to exercise or not to exercise the option to
renew or to terminate (e.g., a change in business strategy).
We included the renewal period as part of the lease term for leases of cell sites, offices, business centers,
warehouse due to the significance of these assets to our operations. These leases have a non-cancellable
period (i.e., three to ten years) and there will be a significant negative effect on our provision of services if a
replacement is not readily available. Furthermore, the periods covered by termination options are included
as part of these lease term only when they are reasonably certain not to be exercised.
Refer to Note 10 – Right-of-Use Assets for information on potential future payments relating to periods
following the exercise date of extension and termination options that are not included in the lease term.
Total rent expense amounted to Php1,290 million for the year ended December 31, 2019. Total lease
liabilities amounted to Php16,333 million as at December 31, 2019. See Note 2 – Summary of Significant
Accounting Policies, Note 5 – Income and Expenses – Selling, General and Administrative Expenses,
Note 10 – Leases and Note 28 – Financial Assets and Liabilities.
Leases – Prior to January 1, 2019

As a lessee, we have various lease agreements in respect of certain equipment and properties. We evaluate
whether significant risks and rewards of ownership of the leased properties are transferred to us (finance
lease) or retained by the lessor (operating lease) based on PAS 17. Total lease expense amounted to
Php7,321 million and Php7,016 million for the years ended December 31, 2018 and 2017, respectively.
Total finance lease obligations amounted to Php514 thousand as at December 31, 2018. See Note 2 –
Summary of Significant Accounting Policies, Note 5 – Income and Expenses – Selling, General and
Administrative Expenses, Note 21 – Interest-bearing Financial Liabilities – Obligations under Finance
Leases and Note 28 – Financial Assets and Liabilities.
Accounting for investment in Multisys Technologies Corporation, or Multisys

On December 3, 2018, PGIH completed the closing of its investment in Multisys. Out of the Php550 million
total consideration for the acquisition of existing shares, PGIH paid Php523 million to the owners of
Multisys. Further, PGIH invested Php800 million into Multisys as a deposit for future stock subscription
pending the approval by the Philippine SEC of the capital increase of Multisys. On February 1, 2019, the
Philippine SEC approved the capital increase of Multisys.
Based on our judgment, at the PLDT Group level, PGIH’s investment in Multisys gives PGIH a joint control
in Multisys and thus is accounted for as investment in joint venture using the equity method of accounting in
accordance with PAS 38, Intangible Assets – Revauation Method – Proportionate Restatement of
Accumulated Amortization. See Note 11 – Investment in Associates and Joint Ventures – Investment in Joint
Ventures – Investment of PGIH in Multisys.
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Accounting for investments in MediaQuest Holdings, Inc., or MediaQuest, through Philippine
Depositary Receipts, or PDRs
ePLDT made various investments in PDRs issued by MediaQuest in relation to its direct interest in
Satventures, Inc., or Satventures, and Hastings Holdings, Inc., or Hastings, and indirect interest in Cignal
TV, Inc., or Cignal TV.
Based on our judgment, at the PLDT Group level, ePLDT’s investments in PDRs gives ePLDT a significant
influence over Satventures, Hastings and Cignal TV as evidenced by provision of essential technical
information and material transactions among PLDT, Smart, Satventures, Hastings and Cignal TV, and thus
are accounted for as investments in associates using the equity method.
On February 15, 2018, ePLDT ceased to have any economic interest in Hastings as a result of the assignment
of the Hastings PDRs to PLDT Beneficial Trust Fund.
See related discussion on Note 11 – Investments in Associates and Joint Ventures – Investments in Associates
– Investment of ePLDT in MediaQuest PDRs.
Assessment of loss of control over VIH

PLDT assesses the consequences of changes in the ownership interest in a subsidiary that may result in a loss
of control as well as the consequence of losing control of a subsidiary during the reporting period. Whether
or not PLDT retains control over the subsidiary depends on an evaluation of a number of factors that indicate
if there are changes to one or more of the three elements of control. When PLDT has less than majority of
the voting rights or similar rights to an investee, PLDT considers all relevant facts and circumstances in
assessing whether it has power over an investee, including, among others, representation on its board of
directors, voting rights, and other rights of other investors, including their participation in significant
decisions made in the ordinary course of business.
As a result of the subscription of the new investors in VIH, PCEV’s ownership interest was diluted to
48.74% and retained only two out of the five Board of Director seats in the investee. Consequently, as at
November 28, 2018, PLDT lost its control on VIH and accounted for its remaining interest as investment in
an associate. See Note 11 – Investments in Associates and Joint Ventures – Investments in Associates –
Investment of PCEV in VIH.
Accounting for investments in Vega Telecom Inc., or VTI, Bow Arken Holdings Company, or Bow Arken,
and Brightshare Holdings, Inc., or Brightshare
On May 30, 2016, PLDT acquired a 50% equity interest in each of VTI, Bow Arken and Brightshare. See
related discussion on Note 11 – Investments in Associates and Joint Ventures – Investments in Joint
Ventures. Based on the Memorandum of Agreement, PLDT and Globe Telecom, Inc., or Globe, each have
the right to appoint half the members of the Board of Directors of each of VTI, Bow Arken and Brightshare,
as well as the (i) co-Chairman of the Board; (ii) co-Chief Executive Officer and President; and (iii) co-
Controller where any matter requiring their approval shall be deemed passed or approved if the consents of
both co-officers holding the same position are obtained. All decisions of each Board of Directors may only
be approved if at least one director nominated by each of PLDT and Globe votes in favor of it.
Based on these rights, PLDT and Globe have joint control over VTI, Bow Arken and Brightshare, which is
defined in PFRS 11, Joint Arrangements, as a contractually agreed sharing of control of an arrangement and
exists only when decisions about the relevant activities require the unanimous consent of the parties sharing
control. Consequently, PLDT and Globe classified the joint arrangement as a joint venture in accordance
with PFRS 11 given that PLDT and Globe each have the right to 50% of the net assets of VTI, Bow Arken
and Brightshare and their respective subsidiaries.
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Accordingly, PLDT accounted for the investment in VTI, Bow Arken and Brightshare using the equity
method of accounting in accordance with PAS 28. Under the equity method of accounting, the investment is
initially recognized at cost and adjusted thereafter for the post-acquisition change in the investor’s share of
the investee’s net assets. See Note 11 – Investment in Associates and Joint Ventures – Investment in Joint
Ventures – Investments of PLDT in VTI, Bow Arken and Brightshare.
Accounting for investment in Beacon Electric Asset Holdings, Inc., or Beacon, under equity method
PAS 28 provides that where an entity holds 20% or more of the voting power (directly or through
subsidiaries) on an investee, it will be presumed that the investor has significant influence, unless it can be
clearly demonstrated that this is not the case. If the ownership interest is less than 20%, the entity will be
presumed not to have significant influence unless such influence can be clearly demonstrated.
PCEV entered into Share Purchase Agreement with MPIC on May 30, 2016 and June 13, 2017, to sell its
equity interest in Beacon for a total consideration of Php26,200 million and Php21,800 million, respectively.
Upon closing of these sale transactions, MPIC settled portion of the considerations and the balances are
being paid in annual installments until June 2021. MPIC agreed that for as long as: (a) PCEV owns at least
20% of the outstanding capital stock of Beacon; or (b) the purchase price has not been fully paid by MPIC,
PCEV shall retain the right to vote 50% of the outstanding capital stock of Beacon. The unpaid balance from
MPIC is measured at fair value using discounted cash flow valuation method, with interest income to be
accreted over the term of the receivable.
After full divestment, PCEV continues to hold its representation in the Board of Directors and participate in
decision making. PCEV retained 50% proxy voting right and is presumed to still hold joint control over
Beacon. The role of the representative of PCEV in the Board of Directors is not to jointly control the
business but to ensure security of the payment of its outstanding receivables. Thus, PCEV will remain to
hold significant influence over Beacon. See Note 11 – Investments in Associates and Joint Ventures –
Investments in Joint Ventures – Investment of PCEV in Beacon.
Material partly-owned subsidiaries

Our consolidated financial statements include additional information about subsidiaries that have non-
controlling interest, or NCI, that are material to us, see Note 6 – Components of Other Comprehensive Loss.
We determined material partly-owned subsidiaries as those with balance of NCI greater than 5% of the total
equity as at December 31, 2019 and 2018.
Material associates and joint ventures

Our consolidated financial statements include additional information about associates and joint ventures that
are material to us. See Note 11 – Investments in Associates and Joint Ventures. We determined material
associates and joint ventures are those investees where our carrying amount of investments is greater than
5% of the total investments in associates and joint ventures as at December 31, 2019 and 2018.
Estimates and Assumptions

The key estimates and assumptions concerning the future and other key sources of estimation uncertainty at
the end of the reporting period that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities recognized in our consolidated financial statements within the next financial
year are discussed below. We based our estimates and assumptions on parameters available when our
consolidated financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising beyond our control.
Such changes are reflected in the assumptions when they occur.
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Leases – Estimating the incremental borrowing rate, or IBR – Beginning January 1, 2019
In calculating the present value of lease payments, we use the IBR at the lease commencement date if the
interest rate implicit in the lease is not readily determinable. IBR is the rate of interest that a lessee would
have to pay to borrow over a similar term, similar security, the funds necessary to obtain an asset of a similar
value to the right-of-use asset in a similar economic environment.
We use benchmark rates from partner banks based on the tenor of our loan borrowings plus a spread
adjustment based on our credit worthiness.
Our lease liabilities amounted to Php16,333 million as at December 31, 2019. See Note 10 – Leases – Lease
Liabilities.
Loss of control over VIH – Fair value measurement of interest retained
A deemed disposal occurs where the proportionate interest of PLDT in a subsidiary is reduced other than by
an actual disposal, for example, by the issuance of shares to a third party investor by the subsidiary. When
PLDT no longer has control, the remaining interest is measured at fair value as at the date the control was
lost. When determining the fair value, PLDT takes into account recent transactions and all the facts and
circumstances surrounding the transactions such as timing, transaction size, transaction frequency, and
motivations of the investors. When valuing the shares in associates and joint ventures, PLDT carefully
assesses the accounting implications of the stipulation in the shareholders’ agreements. PLDT considers
whether such a transaction has been made at arm’s length.
Impairment of non-financial assets

PFRS requires that an impairment review be performed when certain impairment indicators are present. In
the case of goodwill and intangible assets with indefinite useful life, at a minimum, such assets are subject to
an impairment test annually and whenever there is an indication that such assets may be impaired. This
requires an estimation of the VIU of the CGUs to which these assets are allocated. The VIU calculation
requires us to make an estimate of the expected future cash flows from the CGU and to choose a suitable
discount rate in order to calculate the present value of those cash flows. See Note 15 – Goodwill and
Intangible Assets – Impairment Testing of Goodwill and Intangible Assets with Indefinite Useful Life for the
key assumptions used to determine the VIU of the relevant CGUs.
Determining the recoverable amount of property and equipment, right-of-use assets, investments in
associates and joint ventures, intangible assets, prepayments and other noncurrent assets, requires us to make
estimates and assumptions in the determination of future cash flows expected to be generated from the
continued use and ultimate disposition of such assets. Future events could cause us to conclude that property
and equipment, investments in associates and joint ventures, intangible assets and other noncurrent assets
associated with an acquired business are impaired. Any resulting impairment loss could have a material
adverse impact on our financial position and financial performance.
The preparation of estimated future cash flows involves significant estimations and assumptions. While we
believe that our assumptions are appropriate and reasonable, significant changes in our assumptions may
materially affect our assessment of recoverable values and may lead to future impairment charges under
PFRS.
Total asset impairment recognized on noncurrent assets amounted to nil, Php2,122 million and Php3,913
million for the years ended December 31, 2019, 2018 and 2017, respectively. See Note 4 – Operating
Segment Information, Note 5 – Income and Expenses – Asset Impairment, Note 9 – Property and Equipment
– Impairment of Certain Wireless Network Equipment and Facilities and Note 11 – Investments in Associates
and Joint Ventures.
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The carrying values of our property and equipment, right-of-use assets, investments in associates and joint
ventures, investment properties, goodwill and intangible assets, and prepayments are separately disclosed in
Note 9 – Property and Equipment, Note 10 – Leases, Note 11 – Investments in Associates and Joint Ventures,
Note 14 – Investment Properties, Note 15 – Goodwill and Intangible Assets and Note 19 – Prepayments,
respectively.
Estimating useful lives of property and equipment

We estimate the useful lives of each item of our property and equipment based on the periods over which our
assets are expected to be available for use. Our estimation of the useful lives of our property and equipment
is also based on our collective assessment of industry practice, internal technical evaluation and experience
with similar assets. The estimated useful lives of each assets are reviewed every year-end and updated if
expectations differ from previous estimates due to physical wear and tear, technical or commercial
obsolescence and legal or other limitations on the use of our assets. It is possible, however, that future
results of operations could be materially affected by changes in our estimates brought about by changes in
the factors mentioned above. The amounts and timing of recorded expenses for any period would be affected
by changes in these factors and circumstances. A reduction in the estimated useful lives of our property and
equipment would increase our recorded depreciation and decrease the carrying amount of our property and
equipment.
In 2018, we shortened the estimated useful lives of certain data network platform and other technology
equipment resulting from the transformation projects to improve and simplify the network and systems
applications. As a result, we recognized additional depreciation amounting to Php540 million and
Php12,434 million for the years ended December 31, 2019 and 2018, respectively.
In 2019, we increased the estimated useful life of information origination and termination equipment due to
technology advancement allowing longer economic life of the subscriber equipment. As a result, we
recognized a decrease in depreciation amounting to Php1,719 million for the year ended December 31, 2019.
The total depreciation and amortization of property and equipment amounted to Php35,352 million,
Php47,240 million and Php51,915 million for the years ended December 31, 2019, 2018 and 2017,
respectively. Total carrying values of property and equipment, net of accumulated depreciation and
amortization, amounted to Php232,460 million and Php195,964 million as at December 31, 2019 and 2018,
respectively. See Note 2 – Summary of Significant Accounting Policies, Note 4 – Operating Segment
Information and Note 9 – Property and Equipment.
Estimating useful lives of intangible assets with finite lives

Intangible assets with finite lives are amortized over their expected useful lives using the straight-line
method of amortization. At a minimum, the amortization period and the amortization method for an
intangible asset with a finite useful life are reviewed at least at each financial year-end. Changes in the
expected useful life or the expected pattern of consumption of future economic benefits embodied in the
asset are accounted for by changing the amortization period or method, as appropriate, and treated as changes
in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in our
consolidated income statements.
The total amortization of intangible assets with finite lives amounted to Php758 million, Php892 million and
Php835 million for the years ended December 31, 2019, 2018 and 2017, respectively. Total carrying values
of intangible assets with finite lives amounted to Php1,941 million and Php2,699 million as at December 31,
2019 and 2018, respectively. See Note 2 – Summary of Significant Accounting Policies, Note 4 – Operating
Segment Information, Note 5 – Income and Expenses – Selling, General and Administrative Expenses and
Note 15 – Goodwill and Intangible Assets.
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Recognition of deferred income tax assets
We review the carrying amounts of deferred income tax assets at the end of each reporting period and reduce
these to the extent that these are no longer probable that sufficient taxable income will be available to allow
all or part of the deferred income tax assets to be utilized. Our assessment on the recognition of deferred
income tax assets on deductible temporary differences is based on the level and timing of forecasted taxable
income of the subsequent reporting periods. This forecast is based on our past results and future expectations
on revenues and expenses as well as future tax planning strategies. Based on this, management expects that
we will generate sufficient taxable income to allow all or part of our deferred income tax assets to be utilized.
Based on the above assessment, our consolidated unrecognized deferred income tax assets amounted to
Php2,294 million and Php3,227 million as at December 31, 2019 and 2018, respectively. Total consolidated
provision from deferred income tax amounted to Php6,267 million and Php1,375 million for the years ended
December 31, 2019 and 2018, respectively, while total consolidated benefit from deferred income tax
amounted to Php2,738 million for the year ended December 31, 2017. Total consolidated recognized net
deferred income tax assets amounted to Php23,623 million and Php27,697 million as at December 31, 2019
and 2018, respectively. See Note 2 – Summary of Significant Accounting Policies, Note 4 – Operating
Segment Information and Note 7 – Income Taxes.
Estimating allowance for expected credit losses – Beginning January 1, 2018

a. Measurement of ECLs
ECLs are derived from unbiased and probability-weighted estimates of expected loss, and are measured as
follows:
 Financial assets that are not credit-impaired at the reporting date: as the present value of all cash
shortfalls over the expected life of the financial asset discounted by the EIR. The cash shortfall is
the difference between the cash flows due to us in accordance with the contract and the cash flows
that we expect to receive; and
 Financial assets that are credit-impaired at the reporting date: as the difference between the gross
carrying amount and the present value of estimated future cash flows discounted by the EIR.
We leverage existing risk management indicators (e.g. internal credit risk classification and restructuring
triggers), credit risk rating changes and reasonable and supportable information which allow us to identify
whether the credit risk of financial assets has significantly increased.
b. Inputs, assumptions and estimation techniques

 General approach for cash in bank, short-term investments, debt securities and other long-term
investments and advances and other noncurrent assets
The ECL is measured on either a 12-month or lifetime basis depending on whether a significant increase in
credit risk has occurred since initial recognition or whether an asset is considered to be credit-impaired. We
consider the probability of our counterparty to default its obligation and the expected loss at default after
considering the effects of collateral, any potential value when realized and time value of money.
The assumptions underlying the ECL calculation are monitored and reviewed on a quarterly basis.
 Simplified approach for trade and other receivables and contract assets
We use a simplified approach for calculating ECL on trade and other receivables and contract assets. We
consider historical days past due for groupings of various customer segments that have similar loss patterns
and remaining time to maturities.
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We use historical observed default rates and adjust these historical credit loss experience with forward-
looking information. At every reporting date, the historical observed default rates are updated and changes
in the forward-looking estimates are analyzed.
There have been no significant changes in estimation techniques or significant assumptions made during the
reporting period.
 Incorporation of forward-looking information

We incorporate forward-looking information into both our assessment of whether the credit risk of an
instrument has increased significantly since its initial recognition and our measurement of ECL.
To do this, management considered a range of relevant forward-looking macro-economic assumptions for the
determination of unbiased general industry adjustments and any related specific industry adjustments that
support the calculation of ECLs.
The macro-economic factors are aligned with information used by us for other purposes such as strategic
planning and budgeting.
We have identified and documented key drivers of credit risk and credit losses of each portfolio of financial
instruments and, using an analysis of historical data, has estimated relationships between macro-economic
variables and credit risk and credit losses.
Predicted relationship between the key indicators and default and loss rates on various portfolios of financial
assets have been developed based on analyzing historical data over the past 3 to 8 years. The methodologies
and assumptions including any forecasts of future economic conditions are reviewed regularly.
We have not identified any uncertain event that it has assessed to be relevant to the risk of default occurring
but where we are not able to estimate the impact on ECL due to lack of reasonable and supportable
information.
Total provision for expected credit losses for trade and other receivables amounted to Php4,071 million,
respectively. Trade and other receivables, net of allowance for expected credit losses, amounted to
Php22,436 million and Php24,056 million as at December 31, 2019 and 2018, respectively.
Total provision for expected credit losses for contract assets amounted to Php291 million and Php223 million
for the years ended December 31, 2019 and 2018, respectively. Contract assets, net of allowance for
expected credit losses, amounted to Php2,747 million and Php3,268 million as at December 31, 2019 and
2018, respectively. See Note 5 – Income and Expenses and Note 17 – Trade and Other Receivables.
 Grouping of instruments for losses measured on collective basis
A broad range of forward-looking information were considered as economic inputs such as the gross
domestic product, inflation rate, unemployment rates and other economic indicators. For expected credit loss
provisions modelled on a collective basis, a grouping of exposures is performed on the basis of shared risk
characteristics, such that risk exposures within a group are homogeneous. In performing this grouping, there
must be sufficient information for the PLDT Group to be statistically credible. Where sufficient information
is not available internally, then we have considered benchmarking internal/external supplementary data to
use for modelling purposes. The characteristics and any supplementary data used to determine groupings are
outlined below.
Trade receivables – Groupings for collective measurement
a. Retail subscribers;
b. Corporate subscribers;
c. Foreign administrations and domestic carriers; and
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d. Dealers, agents and others.
The following credit exposures are assessed individually:
 All stage 3 assets, regardless of the class of financial assets; and
 The cash and cash equivalents, investment in debt securities and other long-term investments, and
other financial assets.
Estimating allowance for doubtful accounts – Prior to January 1, 2018
If we assessed that there was objective evidence that an impairment loss was incurred in our trade and other
receivables, we estimate the allowance for doubtful accounts related to our trade and other receivables that
are specifically identified as doubtful of collection. The amount of allowance is evaluated by management
on the basis of factors that affect the collectability of the accounts. In these cases, we use judgment based on
all available facts and circumstances, including, but not limited to, the length of our relationship with the
customer and the customer’s credit status based on third party credit reports and known market factors, to
record specific reserves for customers against amounts due in order to reduce our receivables to amounts that
we expect to collect. These specific reserves are re-evaluated and adjusted as additional information
received affects the amounts estimated.
In addition to specific allowance against individually significant receivables, we also assess a collective
impairment allowance against credit exposures of our customer which were grouped based on common credit
characteristics, which, although not specifically identified as requiring a specific allowance, have a greater
risk of default than when the receivables were originally granted to customers. This collective allowance is
based on historical loss experience using various factors, such as historical performance of the customers
within the collective group, deterioration in the markets in which the customers operate, and identified
structural weaknesses or deterioration in the cash flows of customers.
Total provision for doubtful accounts for trade and other receivables amounted to Php3,438 million for the
year ended December 31, 2017. Trade and other receivables, net of allowance for doubtful accounts,
amounted to Php33,761 million as at December 31, 2017. See Note 4 – Operating Segment Information and
Note 5 – Income and Expenses.
Estimating pension benefit costs and other employee benefits

The cost of defined benefit and present value of the pension obligation are determined using the projected
unit credit method. An actuarial valuation includes making various assumptions which consists, among other
things, discount rates, rates of compensation increases and mortality rates. Further, our accrued benefit cost
is affected by the fair value of the plan assets. Key assumptions used to estimate fair value of the unlisted
equity investments included in the plan assets consist of revenue growth rate, direct costs, capital
expenditures, discount rates and terminal growth rates. See Note 26 – Employee Benefits. Due to complexity
of valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly
sensitive to changes in assumptions. While we believe that our assumptions are reasonable and appropriate,
significant differences in our actual experience or significant changes in our assumptions may materially
affect our cost for pension and other retirement obligations. All assumptions are reviewed every year-end.
Net consolidated pension benefit costs amounted to Php1,018 million, Php1,855 million and Php1,610
million for the years ended December 31, 2019, 2018 and 2017, respectively. The prepaid benefit costs
amounted to Php342 million and Php393 million as at December 31, 2019 and 2018, respectively. The
accrued benefit costs amounted to Php8,985 million and Php7,182 million as at December 31, 2019 and
2018, respectively. See Note 5 – Income and Expenses – Compensation and Employee Benefits, Note 19 –
Prepayments and Note 26 – Employee Benefits.
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On September 26, 2017, the Board of Directors of PLDT approved the TIP which intends to provide
incentive compensation to key officers, executives and other eligible participants who are consistent
performers and contributors to the Company’s strategic and financial goals. The incentive compensation will
be in the form of Performance Shares, PLDT common shares of stock, which will be released in three annual
grants on the condition, among others, that pre-determined consolidated core net income targets are
successfully achieved over three annual performance periods from January 1, 2017 to December 31, 2019.
On September 26, 2017, the Board of Directors approved the acquisition of 860 thousand Performance
Shares to be awarded under the TIP. On March 7, 2018, the ECC of the Board approved the acquisition of
additional 54 thousand shares, increasing the total Performance Shares to 914 thousand. Metropolitan Bank
and Trust Company, or Metrobank, through its Trust Banking Group, is the appointed Trustee of the trust
established for purposes of the TIP. The Trustee is designated to acquire the PLDT common shares in the
open market through the facilities of the PSE, and administer their distribution to the eligible participants
subject to the terms and conditions of the TIP.
Management’s recommended modifications to the Plan, and partial equity and cash settled set-up will be
the estimate of the fair value of the original award approved in 2017.
As at March 5, 2020, a total of 757 thousand PLDT common shares have been acquired by the Trustee, of
which 302 thousand and 204 thousand PLDT common shares have been released to the eligible participants
on March 28, 2019 for the 2018 annual grant and on April 5, 2018 for the 2017 annual grant, respectively.
The TIP is administered by the ECC of the Board. The expense accrued for the TIP amounted to Php638
million, Php208 million and Php827 million for the years ended December 31, 2019, 2018 and 2017,
respectively. The accrued incentive payable, representing the cash settled set-up amounted to Php795
million as at December 31, 2019. See Note 5 – Income and Expenses – Compensation and Employee
Benefits and Note 26 – Employee Benefits – Other Long-term Employee Benefits.
Provision for asset retirement obligations

Provision for asset retirement obligations are recognized in the period in which these are incurred if a
reasonable estimate can be made. This requires an estimation of the cost to restore or dismantle on a per
square meter basis, depending on the location, and is based on the best estimate of the expenditure required
to settle the obligation at the future restoration or dismantlement date, discounted using a pre-tax rate that
reflects the current market assessment of the time value of money and, where appropriate, the risk specific to
the liability. Total provision for asset retirement obligations amounted to Php1,767 million and Php1,656
million as at December 31, 2019 and 2018, respectively. See Note 22 – Deferred Credits and Other
Noncurrent Liabilities.
Provision for legal contingencies and tax assessments

We are currently involved in various legal proceedings and tax assessments. Our estimates of the probable
costs for the resolution of these claims have been developed in consultation with our counsel handling the
defense in these matters and are based upon our analysis of potential results. We currently do not believe
these proceedings could materially reduce our revenues and profitability. It is possible, however, that future
financial position and performance could be materially affected by changes in our estimates or effectiveness
of our strategies relating to these proceedings and assessments. See Note 27 – Provisions and Contingencies.
Based on management’s assessment, appropriate provisions were made; however, management has decided
not to disclose further details of these provisions as they may prejudice our position in certain legal
proceedings.
Revenue recognition – Prior to January 1, 2018

Our revenue recognition policies require us to make use of estimates and assumptions that may affect the
reported amounts of our revenues and receivables.
F-62
Our agreements with domestic and foreign carriers for inbound and outbound traffic subject to settlements
require traffic reconciliations before actual settlement is done, which may not be the actual volume of traffic
as measured by us. Initial recognition of revenues is based on our observed traffic adjusted by our normal
experience adjustments, which historically are not material to our consolidated financial statements.
Differences between the amounts initially recognized and the actual settlements are taken up in the accounts
upon reconciliation.
Under certain arrangements with our knowledge processing solutions services, if there is uncertainty
regarding the outcome of the transaction for which service was rendered, revenue is recognized only to the
extent of expenses incurred for rendering the service and only to such amount as determined to be
recoverable.
We recognize our revenues from installation and activation related fees and the corresponding costs over the
expected average periods of customer relationship for fixed line and cellular services. We estimate the
expected average period of customer relationship based on our most recent churn rate analysis.
Determination of fair values of financial assets and financial liabilities

When the fair value of financial assets and financial liabilities recorded in our consolidated statements of
financial position cannot be measured based on quoted prices in active markets, their fair value is measured
using valuation techniques including the discounted cash flows model. The inputs to these models are taken
from observable markets where possible, but where this is not feasible, a degree of judgment is required in
establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and
volatility. Changes in assumptions about these factors could affect the reported fair value of financial
instruments.
Other than those whose carrying amounts are reasonable approximations of fair values, total fair values of
noncurrent financial assets and noncurrent financial liabilities as at December 31, 2019 amounted to
Php1,657 million and Php173,457 million, respectively, while the total fair values of noncurrent financial
assets and noncurrent financial liabilities as at December 31, 2018 amounted to Php2,168 million and
Php143,392 million, respectively. See Note 28 – Financial Assets and Liabilities.
4. Operating Segment Information
Operating segments are components of the PLDT Group that engage in business activities from which they
may earn revenues and incur expenses (including revenues and expenses relating to transactions with other
components of PLDT Group). The operating results of these operating segments are regularly reviewed by
the Management Committee to make decisions about how resources are to be allocated to each of the
segments and to assess their performances, and for which discrete financial information is available.
For management purposes, we are organized into business units based on our products and services. We
have three reportable operating segments as follows:
 Wireless – mobile telecommunications services provided by Smart and DMPI, our mobile service
providers; SBI and PDSI, our wireless broadband service providers; and certain subsidiaries of
PLDT Global, our mobile virtual network operations, or MVNO, provider;
 Fixed Line – fixed line telecommunications services primarily provided by PLDT. We also provide
fixed line services through PLDT’s subsidiaries, namely, ClarkTel, SubicTel, Philcom Group,
Maratel, BCC, PLDT Global and certain subsidiaries, and Digitel, all of which together account for
approximately 1% of our consolidated fixed line subscribers; data center, cloud, cyber security
services, managed information technology services and resellership through ePLDT, IPCDSI
Group, AGS Group, Curo and ePDS; full service customer rewards and loyalty programs provided
by MRSI; and distribution of Filipino channels and content through PGNL and its subsidiaries; and
 Others – PCEV, PGIH, PLDT Digital and its subsidiaries, and PGIC, our investment companies.
F-63
See Note 2 – Summary of Significant Accounting Policies for further discussion.
The Management Committee monitors the operating results of each business unit separately for purposes of
making decisions about resource allocation and performance assessment. Segment performance is evaluated
based on net income for the period; earnings before interest, taxes, and depreciation and amortization, or
EBITDA; EBITDA margin; and core income. Net income for the period is measured consistent with net
income in our consolidated financial statements.
EBITDA for the period is measured as net income excluding depreciation and amortization, amortization of
intangible assets, asset impairment on noncurrent assets, financing costs, interest income, equity share in net
earnings (losses) of associates and joint ventures, foreign exchange gains (losses) – net, gains (losses) on
derivative financial instruments – net, provision for (benefit from) income tax and other income (expenses) –
net.
EBITDA margin for the period is measured as EBITDA divided by service revenues.
Core income for the period is measured as net income attributable to equity holders of PLDT (net income
less net income attributable to noncontrolling interests), excluding foreign exchange gains (losses) – net,
gains (losses) on derivative financial instruments – net (excluding hedge costs), asset impairment on
noncurrent assets, other non-recurring gains (losses), net of tax effect of aforementioned adjustments, as
applicable, and similar adjustments to equity share in net earnings (losses) of associates and joint ventures.
Segment revenues, segment expenses and segment results include transfers between business segments.
These transfers are eliminated in full upon consolidation.
Core earnings per common share, or core EPS, for the period is measured as core income divided by the
weighted average number of outstanding common shares. See Note 8 – Earnings Per Common Share for the
weighted average number of common shares.
EBITDA, EBITDA margin, core income and core EPS are non-PFRS measures.
The amounts of segment assets and liabilities and segment profit or loss are based on measurement principles
that are similar to those used in measuring the assets and liabilities and profit or loss in our consolidated
financial statements, which is in accordance with PFRS.
The segment revenues, net income, and other segment information of our reportable operating segments for
the years ended December 31, 2019, 2018 and 2017, and as at December 31, 2019 and 2018 are as follows:
Inter-
segment
Wireless Fixed Line Others Transactions Consolidated
(in million pesos, except for EBITDA margin)
December 31, 2019
Revenues
External customers 94,488 74,699 — — 169,187
Service revenues 88,243 73,112 — — 161,355
Non-service revenues 6,245 1,587 — — 7,832
Inter-segment transactions 2,418 14,707 — (17,125 ) —
Service revenues 2,418 14,707 — (17,125 ) —
Non-service revenues — — — — —
Total revenues 96,906 89,406 — (17,125 ) 169,187
Results
Depreciation and amortization 29,484 16,141 — (5,969 ) 39,656
Asset impairment 1,133 3,699 1 — 4,833
Interest income 703 680 362 — 1,745
Equity share in net earnings (losses) of associates and
joint ventures — 568 (2,103 ) — (1,535 )
Financing costs 6,422 5,078 — (2,947 ) 8,553
Provision for (benefit from) income tax 4,423 5,341 (444 ) 230 9,550
Net income (loss) / Segment profit (loss) 13,101 11,421 (1,769 ) 33 22,786
EBITDA 52,789 33,162 (101 ) (6,035 ) 79,815
EBITDA margin 58 % 38 % — — 49 %
Core income (loss) 13,685 12,531 (1,151 ) 46 25,111
F-64
Inter-
segment
Wireless Fixed Line Others Transactions Consolidated
Assets and liabilities
Operating assets 287,059 198,477 7,943 (45,929 ) 447,550
Investments in associates and joint ventures 10 73,386 9,897 (29,430 ) 53,863
Deferred income tax assets – net 13,102 11,791 (711 ) (559 ) 23,623
Total assets 300,171 283,654 17,129 (75,918 ) 525,036
Operating liabilities 221,755 229,855 833 (46,289 ) 406,154
Deferred income tax liabilities 1,986 384 252 (39 ) 2,583
Total liabilities 223,741 230,239 1,085 (46,328 ) 408,737
Other segment information

Capital expenditures, including capitalized interest (Note 9) 30,718 42,153 — — 72,871
December 31, 2018

Revenues
External customers 87,193 74,593 1,128 — 162,914
Service revenues 80,265 71,020 1,084 — 152,369
Non-service revenues 6,928 3,573 44 — 10,545
Inter-segment transactions 2,736 10,629 10 (13,375 ) —
Service revenues 2,736 10,628 10 (13,374 ) —
Non-service revenues — 1 — (1 ) —
Total revenues 89,929 85,222 1,138 (13,375 ) 162,914
Results
Depreciation and amortization 24,778 22,303 159 — 47,240
Asset impairment 3,319 4,746 — — 8,065
joint ventures 62 171 (320 ) — (87 )
Interest income 719 812 536 (124 ) 1,943
Financing costs 1,865 5,195 131 (124 ) 7,067
Provision for income tax 1,333 1,336 1,173 — 3,842
Net income (loss) / Segment profit (loss) 5,725 6,059 7,971 (782 ) 18,973
EBITDA 34,235 30,875 (2,688 ) 1,605 64,027
EBITDA margin 41 % 38 % — — 42 %
Core income (loss) 9,760 6,925 9,952 (782 ) 25,855

Investments in associates and joint ventures — 43,426 12,001 — 55,427
Deferred income tax assets – net 16,879 12,479 (1,119 ) (542 ) 27,697
Total assets 247,061 255,462 41,844 (61,617 ) 482,750
Operating liabilities 168,837 206,812 16,773 (29,319 ) 363,103
Deferred income tax liabilities 2,321 482 367 (189 ) 2,981

December 31, 2017

Revenues
External customers 91,311 66,396 1,226 — 158,933
Service revenues 86,128 62,818 1,226 — 150,172
Non-service revenues 5,183 3,578 — — 8,761
Inter-segment transactions 1,301 11,945 13 (13,259 ) —
Service revenues 1,301 11,939 13 (13,253 ) —
Non-service revenues — 6 — (6 ) —
Total revenues 92,612 78,341 1,239 (13,259 ) 158,933
Results
Depreciation and amortization 36,776 15,001 138 — 51,915
Asset impairment 6,104 2,098 56 — 8,258
joint ventures (129 ) 44 2,991 — 2,906
Interest income 305 695 655 (243 ) 1,412
Financing costs 2,247 5,106 214 (197 ) 7,370
Provision for (benefit from) income tax (2,787 ) 3,680 210 — 1,103
Net income (loss) / Segment profit (loss) (2,215 ) 7,474 8,825 (618 ) 13,466
EBITDA 36,395 29,478 (1,307 ) 1,608 66,174
EBITDA margin 42 % 39 % — — 44 %
Core income (loss) 9,812 8,846 9,628 (618 ) 27,668

Investments in associates and joint ventures — 44,867 1,263 — 46,130
Deferred income tax assets – net 18,826 11,994 — (354 ) 30,466
Total assets 230,809 231,078 35,767 (38,210 ) 459,444
Operating liabilities 153,622 196,451 13,624 (18,802 ) 344,895
Deferred income tax liabilities 2,656 286 424 — 3,366

F-65
The following table shows the reconciliation of our consolidated net income to our consolidated EBITDA for
the years ended December 31, 2019, 2018 and 2017:
2019 2018 2017

(in million pesos)
Consolidated net income 22,786 18,973 13,466
Add (deduct) adjustments:
Depreciation and amortization 39,656 47,240 51,915
Provision for income tax (Note 7) 9,550 3,842 1,103
Financing costs (Note 5) 8,553 7,067 7,370
Equity share in net losses (earnings) of associates and joint ventures
(Note 11) 1,535 87 (2,906 )
Amortization of intangible assets (Note 15) 758 892 835
Losses (gains) on derivative financial instruments – net (Note 29) 284 (1,086 ) (533 )
Foreign exchange losses (gains) – net (Note 5) (424 ) 771 411
Interest income (Note 5) (1,745 ) (1,943 ) (1,412 )
Noncurrent asset impairment — 2,122 3,913
Other income – net (1,172 ) (14,110 ) (10,550 )
Total adjustments 57,029 45,054 52,708
Consolidated EBITDA 79,815 64,027 66,174
The following table shows the reconciliation of our consolidated net income to our consolidated core income
for the years ended December 31, 2019, 2018 and 2017:
2019 2018 2017

(in million pesos)
Consolidated net income 22,786 18,973 13,466
Manpower rightsizing program, or MRP (Note 5) 3,296 1,703 —
Unrealized losses in fair value of investments 675 1,154 —
Losses (gains) on derivative financial instruments –
net, excluding hedge costs (Note 28) 233 (1,135 ) (724 )
Core income adjustment on equity share in net losses of associates
and joint ventures (226 ) 23 60
Net income attributable to noncontrolling interests (265 ) (57 ) (95 )
Foreign exchange losses (gains) – net (Note 5) (424 ) 771 411
Depreciation due to shortened life of property and equipment — 4,564 12,816
Noncurrent asset impairment — 2,122 3,913
Investment written-off — 362 —
Nonrecurring income — (1,018 ) —
Net tax effect of aforementioned adjustments (998 ) (1,779 ) (4,741 )
Total adjustments 2,325 6,882 14,202
Consolidated core income 25,111 25,855 27,668
F-66
The following table shows the reconciliation of our consolidated basic and diluted core EPS to our
consolidated basic and diluted EPS attributable to common equity holder of PLDT for the years ended
December 31, 2019, 2018 and 2017:
2019 2018 2017

Basic Diluted Basic Diluted Basic Diluted
Consolidated core EPS 115.95 115.95 119.39 119.39 127.79 127.79
Foreign exchange gains (losses) – net 1.73 1.73 (3.57 ) (3.57 ) (1.74 ) (1.74 )
Core income adjustment on equity share in net
earnings (losses) of associates and joint ventures 1.05 1.05 (0.11 ) (0.11 ) (0.28 ) (0.28 )
Impairment of investments (0.16 ) (0.16 ) (0.80 ) (0.80 ) (11.86 ) (11.86 )
Gains (losses) on derivative financial instruments –
net, excluding hedge costs (0.75 ) (0.75 ) 4.08 4.08 2.34 2.34
Unrealized losses in fair value of investments (3.12 ) (3.12 ) (5.34 ) (5.34 ) — —
MRP (10.73 ) (10.73 ) (5.52 ) (5.52 ) — —
Investment written-off — — (1.68 ) (1.68 ) — —
Noncurrent asset impairment — — (9.82 ) (9.82 ) (13.12 ) (13.12 )
Depreciation due to shortened life of property
and equipment — — (14.06 ) (14.06 ) (41.52 ) (41.52 )
Others — — 4.71 4.71 — —
Total adjustments (11.98 ) (11.98 ) (32.11 ) (32.11 ) (66.18 ) (66.18 )
Consolidated EPS attributable to common equity
holders of PLDT (Note 8) 103.97 103.97 87.28 87.28 61.61 61.61
The following table presents our revenues from external customers by category of products and services for
the years ended December 31, 2019, 2018 and 2017:
2019 2018 2017

(in million pesos)
Wireless services
Service revenues:
Mobile 87,823 79,904 83,166
Home broadband 85 155 2,547
MVNO and others 335 206 415
88,243 80,265 86,128
Non-service revenues:
Sale of mobile handsets and broadband data modems 6,245 6,928 5,183
Total wireless revenues 94,488 87,193 91,311
Fixed line services
Service revenues:
Voice 19,890 21,148 24,303
Data 52,787 49,504 37,445
Miscellaneous 435 368 1,070
73,112 71,020 62,818
Non-service revenues:
Sale of computers, phone units and SIM cards 1,193 3,056 2,706
Point-product-sales 394 517 872
1,587 3,573 3,578
Total fixed line revenues 74,699 74,593 66,396
Other services — 1,128 1,226
Total revenues 169,187 162,914 158,933
Disclosure of the geographical distribution of our revenues from external customers and the geographical
location of our total assets are not provided since the majority of our consolidated revenues are derived from
our operations within the Philippines.
There is no revenue transaction with a single external customer that accounted for 10% or more of our
consolidated revenues from external customers for the years ended December 31, 2019, 2018 and 2017.
F-67
5. Income and Expenses
Revenue from Contracts with Customers
Disaggregation of Revenue
We derived our revenue from the transfer of goods and services over time and at a point in time in the
following major product lines. This is consistent with the revenue information that is disclosed for each
reportable segments under PFRS 8, Operating Segments. See Note 4 – Operating Segment Information.
Set out is the disaggregation of PLDT Group’s revenue from contracts with customers for the years ended
December 31, 2019 and 2018:
Inter-
segment
Revenue Streams Wireless Fixed Line Others Transactions Consolidated
(in million pesos)
December 31, 2019
Type of good or service
Service revenue 90,661 87,819 — (17,125 ) 161,355
Non-service revenue 6,245 1,587 — — 7,832
Total revenue from contracts with customers 96,906 89,406 — (17,125 ) 169,187

Transferred over time 90,661 87,819 — (17,125 ) 161,355
Transferred at a point time 6,245 1,587 — — 7,832
Total revenue from contracts with customers 96,906 89,406 — (17,125 ) 169,187
December 31, 2018

Type of good or service
Service revenue 83,001 81,648 1,094 (13,374 ) 152,369
Non-service revenue 6,928 3,574 44 (1 ) 10,545
Total revenue from contracts with customers 89,929 85,222 1,138 (13,375 ) 162,914

Transferred over time 83,001 81,648 1,094 (13,374 ) 152,369
Transferred at a point time 6,928 3,574 44 (1 ) 10,545
Total revenue from contracts with customers 89,929 85,222 1,138 (13,375 ) 162,914
Contract Balances
Contract balances as at December 31, 2019 and 2018 consists of the following:
2019 2018
(in million pesos)
Trade and other receivables (Note 17) 39,340 40,559
Contract assets 2,817 3,399
Contract liabilities and unearned revenues (Notes 22 and 24) 8,483 7,182
The decrease in trade and other receivables of Php1,219 million as at December 31, 2019 was primarily due
to decline in wireless postpaid subscriber base.
The decrease of Php582 million in contract assets as at December 31, 2019 is the result of fewer postpaid
new connections during the year.
The increase of Php1,301 million in contract liabilities and unearned revenues as at December 31, 2019 is
due to lower realized revenues.
F-68
Set out below is the movement in the allowance for expected credit losses of contracts assets for the years
ended December 31, 2019 and 2018.
2019 2018
(in million pesos)
Balances at beginning of the year 131 114
Reclassification (61 ) —
Provisions — 17
Balances at end of the year 70 131
Changes in the contract liabilities and unearned revenues accounts for the years ended December 31, 2019
and 2018 are as follows:
2019 2018
(in million pesos)
Balances at beginning of the year 7,182 8,541
Deferred during the year 111,084 102,288
Recognized as revenue during the year (109,783 ) (103,647 )
Balances at end of the year 8,483 7,182
The contract liabilities and unearned revenues accounts as at December 31, 2019 and 2018 are as follows:
2019 2018
(in million pesos)
Unearned revenues from prepaid contracts 5,454 4,059
Advance monthly service fees 1,777 2,386
Short-term advances for installation services 726 558
Leased facilities 469 34
Long-term advances from equipment 57 145
Total contract liabilities and unearned revenues 8,483 7,182
Contract liabilities:
Noncurrent (Note 22) 13 58
Current (Note 24) 44 87
Unearned revenues:
Noncurrent (Note 22) 591 474
Current (Note 24) 7,835 6,563
Contract liabilities and unearned revenues account pertains to long-term advances for equipment included in
certain postpaid bundled plans. As at December 31, 2019, the noncurrent and current portion of contract
liabilities and unearned revenues amounted to Php604 million and Php7,879 million, respectively, while as at
December 31, 2018, the noncurrent and current portion of contract liabilities and unearned revenues
amounted to Php532 million and Php6,650 million, respectively.
Selling, General and Administrative Expenses

Selling, general and administrative expenses for the years ended December 31, 2019, 2018 and 2017 consist
of the following:
2019 2018 2017

(in million pesos)
Compensation and employee benefits 24,883 23,543 22,782
Repairs and maintenance (Notes 14, 18 and 25) 15,337 14,331 12,744
Professional and other contracted services (Note 25) 12,078 12,809 12,168
Selling and promotions (Note 25) 5,395 6,340 5,908
Taxes and licenses 4,570 4,974 3,970
Insurance and security services (Note 25) 1,671 1,499 1,519
Rent (Note 25) 1,290 7,321 7,016
Communication, training and travel (Note 25) 1,203 1,069 1,166
Amortization of intangible assets (Note 15) 758 892 835
Other expenses 1,045 1,138 882
Total selling, general and administrative expenses 68,230 73,916 68,990
F-69
Compensation and Employee Benefits
Compensation and employee benefits for the years ended December 31, 2019, 2018 and 2017 consist of the
following:
2019 2018 2017

(in million pesos)
Salaries and other employee benefits 19,931 19,777 18,598
MRP 3,296 1,703 1,747
Pension benefit costs (Note 26) 1,018 1,855 1,610
Incentive plan (Note 26) 638 208 827
Total compensation and employee benefits 24,883 23,543 22,782
Over the past several years, we have been implementing the MRP in line with our continuing efforts to
reduce the cost base of our businesses. The decision to implement the MRP was a result of challenges faced
by our businesses as significant changes in technology, increasing competition, and shifting market
preferences have reshaped the future of our businesses. The MRP is being implemented in compliance with
the Labor Code of the Philippines and all other relevant labor laws and regulations in the Philippines.
Cost of Sales and Services

Cost of sales and services for the years ended December 31, 2019, 2018 and 2017 consist of the following:
2019 2018 2017

(in million pesos)
Cost of computers, mobile handsets and broadband data modems (Note 18) 9,402 10,513 10,277
Cost of services (Note 18) 3,680 3,429 2,572
Cost of point-product-sales (Note 18) 347 485 784
Total cost of sales and services 13,429 14,427 13,633
Asset Impairment
Asset impairment for the years ended December 31, 2019, 2018 and 2017 consist of the following:
2019 2018 2017

(in million pesos)
Trade and other receivables (Note 17) 4,071 4,192 3,438
Inventories and supplies (Note 18) 471 1,528 907
Contract assets 291 223 —
Property and equipment (Note 9) — 1,958 3,913
Other assets — 164 —
Total asset impairment 4,833 8,065 8,258
Other Income (Expenses) – Net

Other income (expenses) – net for the years ended December 31, 2019, 2018 and 2017 consist of the
following:
2019 2018 2017

(in million pesos)
Interest income 1,745 1,943 1,412
Foreign exchange gains (losses) – net (Note 9) 424 (771 ) (411 )
Gain on deconsolidation of VIH (Note 2) — 12,054 —
Gains (losses) on derivative financial instruments – net (Note 28) (284 ) 1,086 533
Equity share in net earnings (losses) of associates and joint ventures
(Note 11) (1,535 ) (87 ) 2,906
Financing costs – net (8,553 ) (7,067 ) (7,370 )
Others – net (Notes 11, 12 and 14) 1,138 1,884 7,988
Total other income (expenses) – net (7,065 ) 9,042 5,058
F-70
Interest Income
Interest income for the years ended December 31, 2019, 2018 and 2017 consist of the following:
2019 2018 2017

(in million pesos)
Interest income on cash and cash equivalents (Note 16) 1,022 957 612
Interest income arising from revenue contracts with customers 430 340 —
Interest income on financial instruments at FVOCI 239 — —
Interest income on financial instruments at amortized cost (Note 13) 6 6 8
Interest income – others 48 640 792
Total interest income 1,745 1,943 1,412
Financing Costs – Net

Financing costs for the years ended December 31, 2019, 2018 and 2017 consist of the following:
2019 2018 2017

(in million pesos)
Interest on loans and other related items (Notes 21 and 28) 8,730 8,307 7,830
Accretion on lease liabilities (Note 10) 1,061 — —
Accretion on financial liabilities (Note 21) 122 145 219
Financing charges 95 139 137
Capitalized interest (Note 9) (1,455 ) (1,524 ) (816 )
Total financing costs – net 8,553 7,067 7,370
Adjustments
The 2018 and 2017 comparative information were restated to reflect the adjustments on transactions between
our wholly-owned subsidiaries resulting to a decrease in service revenue and interconnection costs
amounting to Php1,838 million in 2018 and Php993 million in 2017. The adjustments had no impact on our
net income, EBITDA, EPS and the consolidated statements of financial position as at December 31, 2018
and 2017 and consolidated statements of cash flows for the years then ended.
6. Components of Other Comprehensive Loss

Changes in other comprehensive loss under equity of our consolidated statements of financial position for the
years ended December 31, 2019, 2018 and 2017 are as follows:
Share in the
other
Actuarial comprehensive Total other
Net loss on losses income (loss) of comprehensive
Foreign available Net Revaluation on defined associates and Fair value loss
currency -for-sale transactions increment on benefit joint ventures changes of attributable Total other
translation financial on cash flow investment plans accounted for financial to equity Share of comprehensive
differences of investments hedges properties – net using the equity instrument holders noncontrolling loss – net
subsidiaries – net of tax – net of tax – net of tax of tax method at FVOCI of PLDT interests of tax
(in million pesos)
Balances as at January 1, 2019 695 (9 ) (640 ) 618 (25,689 ) — (165 ) (25,190 ) 19 (25,171 )
Other comprehensive income (loss) 27 — (256 ) (2 ) (6,074 ) — 127 (6,178 ) (4 ) (6,182 )
Balances as at December 31, 2019 722 (9 ) (896 ) 616 (31,763 ) — (38 ) (31,368 ) 15 (31,353 )
Balances as at January 1, 2018 583 4,300 (369 ) 620 (24,467 ) 182 — (19,151 ) 14 (19,137 )
Effect of adoption of PFRS 9
(Note 2) — (4,309 ) — — — (182 ) (136 ) (4,627 ) — (4,627 )
Balances as at January 1, 2018 (as restated) 583 (9 ) (369 ) 620 (24,467 ) — (136 ) (23,778 ) 14 (23,764 )
Other comprehensive income (loss) 112 — (271 ) (2 ) (1,222 ) — (29 ) (1,412 ) 5 (1,407 )
Balances as at December 31, 2018 695 (9 ) (640 ) 618 (25,689 ) — (165 ) (25,190 ) 19 (25,171 )
Balances as at January 1, 2017 608 936 7 619 (23,376 ) 312 — (20,894 ) 7 (20,887 )
Other comprehensive income (loss) (25 ) 3,364 (376 ) 1 (1,091 ) 306 — 2,179 7 2,186
Recycled to retained earnings — — — — — (436 ) — (436 ) — (436 )
Balances as at December 31, 2017 583 4,300 (369 ) 620 (24,467 ) 182 — (19,151 ) 14 (19,137 )
Revaluation increment on investment properties pertains to the difference between the carrying value and fair
value of property and equipment transferred to investment property at the time of change in classification.
F-71
7. Income Taxes
Corporate Income Tax
The major components of consolidated net deferred income tax assets and liabilities recognized in our
consolidated statements of financial position as at December 31, 2019 and 2018 are as follows:
2019 2018
(in million pesos)
Net deferred income tax assets 23,623 27,697
Net deferred income tax liabilities 2,583 2,981
The components of our consolidated net deferred income tax assets and liabilities as at December 31, 2019
2019 2018
(in million pesos)
Net deferred income tax assets:
Unamortized past service pension costs 5,846 5,252
Pension and other employee benefits 4,886 4,296
Lease liabilities 4,474 —
Customer list and trademark 3,890 4,670
Accumulated provision for expected credit losses 3,806 3,709
Unearned revenues 2,108 1,776
Provision for other assets 1,661 1,595
MCIT 1,408 905
Accumulated provision for inventory obsolescence and write-down 701 916
Unrealized foreign exchange losses 580 1,092
NOLCO 432 3,231
Fixed asset impairment/depreciation due to shortened life of property and
equipment 138 1,870
Derivative financial instruments — (58 )
ROU (4,081 ) —
Others (2,225 ) (1,557 )
Total deferred income tax assets – net 23,623 27,697
Net deferred income tax liabilities:
Intangible assets and fair value adjustment on assets acquired – net of amortization 1,964 2,175
Investment property 278 277
Unrealized foreign exchange gains 254 366
Undepreciated capitalized interest charges — 7
Others 87 156
Total deferred income tax liabilities 2,583 2,981
Changes in our consolidated net deferred income tax assets (liabilities) as at December 31, 2019 and 2018
are as follows:
2019 2018
(in million pesos)
Net deferred income tax assets – balances at beginning of the year 27,697 30,466
Net deferred income tax liabilities – balances at beginning of the year (2,981 ) (3,366 )
Net balances at beginning of the year 24,716 27,100
Movement charged directly to other comprehensive income 2,673 591
Adjustments due to adoption of PFRS 16 (83 ) —
Provision for deferred income tax (6,267 ) (1,375 )
Excess MCIT deducted against RCIT due — (370 )
Adjustments due to adoption of PFRS 15 — (1,166 )
Others 1 (64 )
Net balances at end of the year 21,040 24,716
Net deferred income tax assets – balances at end of the year 23,623 27,697
Net deferred income tax liabilities – balances at end of the year (2,583 ) (2,981 )
F-72
The analysis of our consolidated net deferred income tax assets as at December 31, 2019 and 2018 are as
follows:
2019 2018
(in million pesos)
Deferred income tax assets:
Deferred income tax assets to be recovered after 12 months 18,111 25,163
Deferred income tax assets to be recovered within 12 months 7,759 4,872
25,870 30,035
Deferred income tax liabilities:
Deferred income tax liabilities to be settled after 12 months (2,078 ) (1,992 )
Deferred income tax liabilities to be settled within 12 months (169 ) (346 )
(2,247 ) (2,338 )
Net deferred income tax assets 23,623 27,697
The analysis of our consolidated net deferred income tax liabilities as at December 31, 2019 and 2018 are as
follows:
2019 2018
(in million pesos)
Deferred income tax liabilities:
Deferred income tax liabilities to be settled after 12 months (2,376 ) (2,743 )
Deferred income tax liabilities to be settled within 12 months (207 ) (238 )
Net deferred income tax liabilities (2,583 ) (2,981 )
Provision for income tax for the years ended December 31, 2019, 2018 and 2017 consist of:
2019 2018 2017

(in million pesos)
Current 3,283 2,467 3,841
Deferred (Note 3) 6,267 1,375 (2,738 )
9,550 3,842 1,103
The reconciliation between the provision for income tax at the applicable statutory tax rate and the actual
provision for corporate income tax for the years ended December 31, 2019, 2018 and 2017 are as follows:
2019 2018 2017

(in million pesos)
Provision for income tax at the applicable statutory tax rate 9,701 6,845 4,371
Tax effects of:
Nondeductible expenses 907 1,235 784
Equity share in net losses (earnings) of associates and joint ventures 460 26 (872 )
Difference between Optional Standard Deduction, or OSD,
and itemized deductions (23 ) (22 ) (22 )
Income not subject to income tax (74 ) (1,827 ) (301 )
Income subject to final tax (599 ) (297 ) (2,545 )
Income subject to lower tax rate (1,323 ) (750 ) (520 )
Net movement in unrecognized deferred income tax assets and
other adjustments 501 (1,368 ) 208
Actual provision for income tax 9,550 3,842 1,103
F-73
The breakdown of our consolidated deductible temporary differences, carryforward benefits of unused tax
credits from excess of MCIT over RCIT, and NOLCO (excluding those not recognized due to the adoption of
the OSD method) for which no deferred income tax assets were recognized and the equivalent amount of
unrecognized deferred income tax assets as at December 31, 2019 and 2018 are as follows:
2019 2018
(in million pesos)
NOLCO 3,322 4,289
Accumulated provision for expected credit losses 2,947 3,144
Fixed asset impairment 1,146 1,148
Gain on disposal of asset 105 106
Unearned revenues 95 25
Unrealized foreign exchange losses 45 49
MCIT 27 27
Accumulated write-down of inventories to net realizable values 11 11
Operating lease 1 —
Pension and other employee benefits — 13
Provisions for other assets (116 ) 1,881
7,583 10,693
Unrecognized deferred income tax assets 2,294 3,227
DMPI recognized deferred income tax assets to the extent that it is probable that sufficient taxable income
will be available to allow all or part of the deferred income tax assets to be utilized. Digitel’s unrecognized
deferred income tax assets amounted to Php1,362 million and Php1,421 million as at December 31, 2019 and
2018, respectively.
Our consolidated deferred income tax assets have been recorded to the extent that such consolidated deferred
income tax assets are expected to be utilized against sufficient future taxable profit. Deferred income tax
assets shown in the preceding table were not recognized as we believe that future taxable profit will not be
sufficient to realize these deductible temporary differences and carryforward benefits of unused tax credits
from excess of MCIT over RCIT, and NOLCO in the future.
The breakdown of our consolidated excess MCIT and NOLCO as at December 31, 2019 are as follows:
Date Incurred Expiry Date MCIT NOLCO

(in million pesos)
December 31, 2017 December 31, 2020 6 2,161
December 31, 2018 December 31, 2021 725 2,396
December 31, 2019 December 31, 2022 704 205
1,435 4,762
Consolidated tax benefits 1,435 1,429
Consolidated unrecognized deferred income tax assets (27 ) (997 )
Consolidated recognized deferred income tax assets 1,408 432
The excess MCIT totaling Php1,435 million as at December 31, 2019 can be deducted against future RCIT
liability. The excess MCIT that was deducted against RCIT amounted to Php206 million, Php488 million
and Php15 million for the years ended December 31, 2019, 2018 and 2017, respectively. The amount of
expired portion of excess MCIT amounted to Php10 million, Php1 million and Php72 million for the years
ended December 31, 2019, 2018 and 2017, respectively.
NOLCO totaling Php4,762 million as at December 31, 2019 can be claimed as deduction against future
taxable income. The NOLCO claimed as deduction against taxable income amounted to Php9,530 million,
respectively. The amount of expired NOLCO amounted to Php973 million, Php1,272 million and Php354
million for the years ended December 31, 2019, 2018 and 2017, respectively.
F-74
Registration with Subic Bay Freeport Enterprise and Clark Special Economic Zone Enterprise
SubicTel and ClarkTel are registered with Subic Bay Freeport Enterprise and Clark Special Economic Zone
Enterprise, or Economic Zones, respectively, under R.A. 7227 otherwise known as the Bases Conversion and
Development Act of 1992. As registrants, SubicTel and ClarkTel are entitled to all the rights, privileges and
benefits established thereunder including tax and duty-free importation of capital equipment and a special
income tax rate of 5% of gross income, as defined in R.A. 7227.
Our consolidated income derived from non-registered activities within the Economic Zones is subject to the
RCIT rate at the end of the reporting period.
8. Earnings Per Common Share

The following table presents information necessary to calculate the EPS for the years ended December 31,
2019, 2018 and 2017:
2019 2018 2017

Basic Diluted Basic Diluted Basic Diluted
(in million pesos)
Consolidated net income attributable to equity
holders of PLDT 22,521 22,521 18,916 18,916 13,371 13,371
Dividends on preferred shares (Note 20) (59 ) (59 ) (59 ) (59 ) (59 ) (59 )
Consolidated net income attributable to common
equity holders of PLDT 22,462 22,462 18,857 18,857 13,312 13,312
(in thousands, except per share amounts which are in pesos)

Weighted average number of common shares 216,056 216,056 216,056 216,056 216,056 216,056
EPS attributable to common equity holders of PLDT
(Note 5) 103.97 103.97 87.28 87.28 61.61 61.61
Basic EPS amounts are calculated by dividing our consolidated net income for the period attributable to
common equity holders of PLDT (consolidated net income adjusted for dividends on all series of preferred
shares, except for dividends on preferred stock subject to mandatory redemption) by the weighted average
number of common shares issued and outstanding during the year.
Diluted EPS amounts are calculated in the same manner assuming that, at the beginning of the year or at the
time of issuance during the year, all outstanding options are exercised and convertible preferred shares are
converted to common shares, and appropriate adjustments to our consolidated net income are effected for the
related income and expenses on preferred shares. Outstanding stock options will have a dilutive effect only
when the average market price of the underlying common share during the period exceeds the exercise price
of the stock option.
Convertible preferred shares are deemed dilutive when required dividends declared on each series of
convertible preferred shares divided by the number of equivalent common shares, assuming such convertible
preferred shares are converted to common shares, decreases the basic EPS. As such, the diluted EPS is
calculated by dividing our consolidated net income attributable to common shareholders (consolidated net
income, adding back any dividends and/or other charges recognized for the period related to the dilutive
convertible preferred shares classified as liability, less dividends on non-dilutive preferred shares except for
dividends on preferred stock subject to mandatory redemption) by the weighted average number of common
shares excluding the weighted average number of common shares held as treasury shares, and including the
common shares equivalent arising from the conversion of the dilutive convertible preferred shares and from
the mandatory tender offer for all remaining Digitel shares.
Where the effect of the assumed conversion of the preferred shares and the exercise of all outstanding
options have an anti-dilutive effect, basic and diluted EPS are stated at the same amount.
F-75
9. Property and Equipment
Changes in property and equipment account for the years ended December 31, 2019 and 2018 are as follows:
Vehicles,
aircraft, Information
Cable furniture origination
and Central Buildings and other and Land and Property
wire office Cellular and network termination land under
facilities equipment facilities improvements equipment equipment improvements construction Total
(in million pesos)
As at December 31, 2017
Cost 207,220 119,642 209,504 27,076 58,964 17,595 3,458 50,585 694,044
Accumulated depreciation,
impairment and
amortization (159,765 ) (101,680 ) (159,323 ) (18,022 ) (51,083 ) (13,473 ) (267 ) (3,524 ) (507,137 )
Net book value 47,455 17,962 50,181 9,054 7,881 4,122 3,191 47,061 186,907
Year ended December 31, 2018
Net book value at beginning of the year 47,455 17,962 50,181 9,054 7,881 4,122 3,191 47,061 186,907
Additions (Note 4) 1,278 565 758 120 1,158 2,107 — 52,504 58,490
Disposals/Retirements (10 ) (27 ) (60 ) (140 ) (95 ) — — (9 ) (341 )
Reclassifications (Note 14) 19 (1 ) — 127 (23 ) — 1,117 — 1,239
Transfers and others 10,409 8,237 37,881 265 1,465 1,176 — (59,433 ) —
Translation differences charged directly
to cumulative translation adjustments — 3 — 1 (3 ) — — — 1
Deconsolidation of a subsidiary — — (65 ) (794 ) (273 ) — — — (1,132 )
Impairment losses recognized during
the year (Note 5) (299 ) (292 ) (858 ) (480 ) (29 ) — — — (1,958 )
Depreciation of revaluation increment
on investment properties transferred
to property and equipment charged
to other comprehensive income — — — (2 ) — — — — (2 )
Depreciation and amortization (11,381 ) (10,480 ) (17,499 ) (2,162 ) (3,382 ) (2,334 ) (2 ) — (47,240 )
Net book value at end of the year 47,471 15,967 70,338 5,989 6,699 5,071 4,306 40,123 195,964
Cost 217,773 128,321 217,164 26,546 58,711 20,823 4,576 40,123 714,037
Accumulated depreciation, impairment
and amortization (170,302 ) (112,354 ) (146,826 ) (20,557 ) (52,012 ) (15,752 ) (270 ) — (518,073 )
Net book value 47,471 15,967 70,338 5,989 6,699 5,071 4,306 40,123 195,964
Year ended December 31, 2019
Net book value at beginning of the year 47,471 15,967 70,338 5,989 6,699 5,071 4,306 40,123 195,964
Additions (Note 4) 1,315 989 557 176 3,804 2,987 3 63,040 72,871
Disposals/Retirements (24 ) — (99 ) (4 ) (109 ) — — (77 ) (313 )
Reclassifications (Note 14) 12 (8 ) 499 (848 ) 15 1 — (10 ) (339 )
Transfers and others 10,507 7,587 31,378 1,343 1,247 4,696 21 (56,779 ) —
Translation differences charged
directly to cumulative translation
adjustments (1 ) (1 ) — (3 ) 2 — — — (3 )
Adjustments — — — (20 ) — — — — (20 )
Depreciation of revaluation increment
on investment properties transferred
to property and equipment charged
to other comprehensive income — — — (2 ) — — — — (2 )
Depreciation and amortization (Note 3) (8,084 ) (3,857 ) (17,025 ) (1,102 ) (3,410 ) (1,782 ) (3 ) — (35,263 )
Net book value at end of the year 51,196 20,677 85,055 5,491 8,248 10,973 4,327 46,167 232,134
Cost 192,535 135,340 220,238 26,762 62,097 28,224 4,597 46,167 715,960
Accumulated depreciation, impairment
and amortization (141,339 ) (114,663 ) (135,183 ) (21,271 ) (53,849 ) (17,251 ) (270 ) — (483,826 )
Net book value 51,196 20,677 85,055 5,491 8,248 10,973 4,327 46,167 232,134
Interest capitalized to property and equipment that qualified as borrowing costs amounted to Php1,455
million, Php1,524 million and Php816 million for the years ended December 31, 2019, 2018 and 2017,
respectively. See Note 5 – Income and Expenses – Financing Costs – Net. The average interest
capitalization rate used was approximately 5% for each of the years ended December 31, 2019, 2018 and
2017, respectively.
Our net foreign exchange differences, which qualified as borrowing costs, amounted to nil, Php411 million
and Php106 million for the years ended December 31, 2019, 2018 and 2017, respectively.
The cost of fully depreciated property and equipment that are still being used in the Group’s operations
amounted to Php149,119 million and Php171,867 million as at December 31, 2019 and 2018, respectively.
F-76
As at December 31, 2019 and 2018, the estimated useful lives of our property and equipment are estimated
as follows:
Cable and wire facilities 10 – 15 years

Central office equipment 2 – 15 years
Cellular facilities 3 – 10 years
Buildings 25 – 50 years
Vehicles, aircraft, furniture and other network equipment 3 – 15 years
Information origination and termination equipment 3 – 7 years
Leasehold improvements 3 – 10 years or the term of the lease, whichever is shorter
Land improvements 10 years
Impairment of Certain Wireless Network Equipment and Facilities
In December 2017, Smart and DMPI recognized an impairment loss of Php3,913 million pertaining to
network improvement project involving spectrum refarm and long-term evolution rollout. These assets
include Radio Access Network, or RAN, equipment such as base transceiver sets, base station controllers,
access radios, antennas, radio network controllers, power and related support facilities, among others,
including software licenses and implementation services affecting the Quezon City and Marikina areas.
In 2018, Digitel and DMPI recognized an impairment loss amounting to Php1,096 million and Php862
million, respectively, as a result of the full migration of fixed line subscribers to PLDT network for Digitel
and continued network convergence strategy for DMPI.
financial assets and Estimating useful lives of Property and equipment.
On January 28, 2020, the Board of Directors authorized the President and Chief Executive Officer, the Chief
Financial Officer, the Property and Facilities Management Head, and any other Officer who may be
designated by the President and Chief Executive Officer, for and on behalf of Smart to: (a) negotiate and
agree the terms and conditions of any contract or agreement for the sale of the Smart Towers Property;
(b) execute, sign and deliver the agreements; and (c) do or cause to be done all other acts and deeds which
are necessary and proper for the implementation of the sale and of the Smart Towers Property.
10. Leases
Group as a Lessee
We have lease contracts for various items of sites, buildings, leased circuits and other equipment used in our
operations. We considered in the lease term the non-cancellable period of the lease together with the periods
covered by an option to extend and option to terminate the lease.
As at December 31, 2019, the estimated useful life of our ROU assets are estimated as follows:
Sites 1 – 30 years
International leased circuits 5 – 7 years
Poles 1 – 10 years
Domestic leased circuits 5 – 10 years
Office buildings 1 – 15 years
Co-located sites 7 years
F-77
The consolidated rollforward analysis of this account follows:
2019
International Domestic
Leased Leased Office Co-located
Site Circuits Poles Circuits Buildings Sites Total
(in million pesos)
Costs:
Balances at beginning
of the year (as previously
stated) — — — — — — —
(Note 2) 8,580 3,779 607 551 296 11 13,824
of the year (as restated) 8,580 3,779 607 551 296 11 13,824
Additions 3,906 562 100 489 415 2 5,474
Asset retirement obligation 1,679 — — — 124 — 1,803
Modifications 319 — 19 174 91 (2 ) 601
Terminals (72 ) — — — (20 ) — (92 )
Disposals — — — — — — —
Balances at end of the year 14,412 4,341 726 1,214 906 11 21,610
Accumulated depreciation and

amortization
of the year (as previously
reported) — — — — — — —
(Note 2) — — — — — — —
of the year (as restated) — — — — — — —
Termination 44 — — — 14 — 58
Modifications — — — 3 — 1 4
Charges from asset retirement
obligation (1,297 ) — — — (92 ) — (1,389 )
Depreciation (2,673 ) (834 ) (340 ) (186 ) (358 ) (2 ) (4,393 )
Disposals — — — — (0 ) — —
Balances at end of the year (3,926 ) (834 ) (340 ) (183 ) (436 ) (1 ) (5,720 )
Net book value at end
of the year 10,486 3,507 386 1,031 470 10 15,890
The following amounts are recognized in our consolidated income statement for the year ended December
31, 2019:
(in million pesos)

Depreciation expense of right-of-use assets 4,393
Interest expense on lease liabilities 1,061
Variable lease payments (included in cost of sales) 708
Expenses relating to short-term leases
(included in cost of sales) 354
Expenses relating to leases of low-value assets
(included in selling, general and administrative expenses) 228
Total amount recognized in consolidated income statement 6,744
Our consolidated rollforward analysis of lease liabilities follows:
(in million pesos)

Balances at beginning of the year (as previously stated) —
Effect of adoption of PFRS 16 (Note 2) 14,727
Balances at beginning of the year (as restated) 14,727
Additions 5,577
Accretion expenses 1,061
Lease modifications 456
Foreign exchange loss – net (11 )
Termination (96 )
Settlement of obligations (5,399 )
Balances at end of the year 16,315
F-78
We had total cash outflows for leases of Php5,399 million for the year ended December 31, 2019. We also
had non-cash additions to ROU assets and lease liabilities of Php5,413 million and Php5,577 million,
respectively, as at December 31, 2019. The future cash outflows relating to leases that have not yet
commenced are disclosed in Note 27 – Provisions and Contingencies.
We have several lease contracts that include extension and termination options. These options are negotiated
by us to provide flexibility in managing the leased-asset portfolio and align with our business needs. We
exercise significant judgement in determining whether these extension and termination options are
reasonably certain to be exercised, see Note 3 Managements Use of Accounting Judgments, Estimates and
Assumptions – Determining the lease term of contracts with renewal and terminal options – Company as a
Lessee – Beginning January 1, 2019.
11. Investments in Associates and Joint Ventures

As at December 31, 2019 and 2018, this account consists of:
2019 2018
(in million pesos)
Carrying value of investments in associates:
MediaQuest PDRs 9,747 9,262
VIH 8,219 10,487
Digitel Crossing, Inc., or DCI 674 591
Appcard, Inc. 102 122
Asia Outsourcing Beta Limited, or Beta 35 36
AF Payments, Inc., or AFPI — —
ACeS International Limited, or AIL — —
Asia Netcom Philippines Corp., or ANPC — —
18,777 20,498
Carrying value of investments in joint ventures:
VTI, Bow Arken and Brightshare 32,538 32,541
Multisys 2,538 2,388
Telecommunications Connectivity, Inc., or TCI 10 —
35,086 34,929
Total carrying value of investments in associates and joint ventures 53,863 55,427
Changes in the cost of investments for the years ended December 31, 2019 and 2018 are as follows:
2019 2018
(in million pesos)
Additions during the year 44 13,247
Disposals — (5,230 )
Translation and other adjustments (47 ) 15
Changes in the accumulated impairment losses for the years ended December 31, 2019 and 2018 are as
follows:
2019 2018
(in million pesos)
Additional impairment (Note 4) 34 172
Translation and other adjustments — (1,781 )
F-79
Changes in the accumulated equity share in net earnings (losses) of associates and joint ventures for the years
ended December 31, 2019 and 2018 are as follows:
2019 2018
(in million pesos)
Balances at beginning of the year (1,583 ) (1,239 )
Equity share in net earnings (losses) of associates and joint ventures: (1,535 ) (87 )
MediaQuest PDRs 485 90
Multisys 150 —
DCI 83 81
VTI, Bow Arken and Brightshare 35 (60 )
Appcard, Inc. (20 ) —
VIH (2,268 ) (260 )
AFPI — 62
Share in the other comprehensive loss of associates and joint
ventures accounted for using the equity method — (1 )
Disposals — (187 )
Translation and other adjustments 8 (69 )
Balances at end of the year (3,110 ) (1,583 )
Investments in Associates
Investment of ePLDT in MediaQuest PDRs
In 2012, ePLDT made deposits totaling Php6 billion to MediaQuest, an entity wholly-owned by the PLDT
Beneficial Trust Fund, for the issuance of PDRs by MediaQuest in relation to its indirect interest in Cignal
TV. Cignal TV is a wholly-owned subsidiary of Satventures, which is a wholly-owned subsidiary of
MediaQuest incorporated in the Philippines. The Cignal TV PDRs confer an economic interest in common
shares of Cignal TV indirectly owned by MediaQuest, and when issued, will provide ePLDT with a 40%
economic interest in Cignal TV. Cignal TV operates a direct-to-home, or DTH, Pay-TV business under the
brand name “Cignal TV”, which is the largest DTH Pay-TV operator in the Philippines.
In June 2013, ePLDT’s Board of Directors approved additional investments in PDRs of MediaQuest:
 a Php3.6 billion investment by ePLDT in PDRs to be issued by MediaQuest in relation to its interest in
Satventures. The Satventures PDRs confer an economic interest in common shares of Satventures
owned by MediaQuest and provide ePLDT with a 40% economic interest in Satventures; and
 a Php1.95 billion investment by ePLDT in PDRs to be issued by MediaQuest in relation to its interest in
Hastings, a wholly-owned subsidiary of MediaQuest incorporated in the Philippines. The Hastings
PDRs confer an economic interest in common shares of Hastings owned by MediaQuest. Hastings is a
wholly-owned subsidiary of MediaQuest and holds all the print-related investments of MediaQuest,
including equity interests in the three leading newspapers: The Philippine Star, Philippine Daily
Inquirer, and Business World. See Note 26 – Employee Benefits – Unlisted Equity Investments –
Investment in MediaQuest.
The Php6 billion Cignal TV PDRs and Php3.6 billion Satventures PDRs were issued on September 27, 2013.
These PDRs provided ePLDT an aggregate of 64% economic interest in Cignal TV.
F-80
On February 19, 2014, ePLDT’s Board of Directors approved an additional investment of up to Php500
million in Hastings PDRs to be issued by MediaQuest. On March 11, 2014, MediaQuest received from
ePLDT an amount aggregating to Php300 million representing additional deposits for future PDRs
subscription. As at December 31, 2014, total deposit for PDRs subscription amounted to Php2,250 million.
On May 21, 2015, ePLDT’s Board of Directors approved an additional Php800 million investment in
Hastings PDRs and settlement of the Php200 million balance of the Php500 million Hastings PDR
investment in 2014. Subsequently, on June 1, 2015, the Board of Trustees of the PLDT Beneficial Trust
Fund and the Board of Directors of MediaQuest approved the issuance of Php3,250 million Hastings PDRs.
This provided ePLDT with 70% economic interest in Hastings. See Note 26 – Employee Benefits – Unlisted
Equity Investments – Investment in MediaQuest.
In 2017, an impairment test was carried out for ePLDT’s investment in MediaQuest PDRs where it showed
that an impairment provision must be recognized. In determining the provision, the recoverable amount of
the Print business and Pay TV were determined based on VIU calculations. The VIU calculations were
derived from cash flow projections over a period of three to five years based on the 2018 financial budgets
approved by the Board of Directors and calculated terminal value.
Using the detailed projections of Print business for five years and applying a terminal value thereafter,
ePLDT calculated a recoverable amount of Php1,664 million. Consequently, ePLDT recognized a provision
for impairment of its investment in MediaQuest PDRs in relation to its Print business amounting to Php1,784
million for the year ended December 31, 2017, representing the difference between the recoverable amount
and the carrying value of the Print business as at December 31, 2017. No impairment provision was
recognized for the Pay TV business.
Transfer of Hastings PDRs to PLDT Beneficial Trust Fund

On January 22, 2018, ePLDT’s Board of Directors approved the assignment of the Hastings PDRs,
representing a 70% economic interest in Hastings to the PLDT Beneficial Trust Fund for a total
consideration of Php1,664 million. The assignment was completed on February 15, 2018 and subsequently
ePLDT ceased to have any economic interest in Hastings. See Note 26 – Employee Benefits – Unlisted
Equity Investments – Investment in MediaQuest.
The PLDT Group’s financial investment in PDRs of MediaQuest is part of the PLDT Group’s overall
strategy of broadening its distribution platforms and increasing the PLDT Group’s ability to deliver
multimedia content to its customers across the PLDT Group’s broadband and mobile networks.
ePLDT’s aggregate value of investment in MediaQuest PDRs amounted to Php9,747 million and Php9,262
million as at December 31, 2019 and 2018, respectively. See Note 3 – Management’s Use of Accounting
Judgments, Estimates and Assumptions – Accounting for investment in MediaQuest through PDRs.
The table below presents the summarized financial information of Satventures as at December 31, 2019 and
2018, and for the years ended December 31, 2019, 2018 and 2017:
2019 2018
(in million pesos)
Statements of Financial Position:
Noncurrent assets 21,396 20,712
Current assets 3,662 2,606
Noncurrent liabilities 1,969 3,297
Current liabilities 7,859 5,549
Equity 15,230 14,472
Carrying amount of interest in Satventures 9,747 9,262
Additional Information:
Cash and cash equivalents 1,534 611
Current financial liabilities* 7,859 487
Noncurrent financial liabilities* 1,969 2,239
* Excluding trade, other payables and provisions.
F-81
2019 2018 2017
(in million pesos)
Income Statements:
Revenues 7,367 7,339 6,650
Depreciation and amortization 920 936 772
Interest income 4 8 3
Interest expense 235 274 249
Provision for income tax 165 112 71
Net income 308 142 4
Other comprehensive income — — —
Total comprehensive income 308 142 4
Equity share in net income of Satventures 485 90 3
Investment of PCEV in VIH

Consolidation of the Digital Investments of Smart under PCEV
On February 27, 2018, the Board of Directors of PCEV approved the consolidation of the various Digital
Investments under PCEV, which was carried out through the following transactions:
(i) PCEV entered into a Share Purchase Agreement with Voyager Innovations, Inc., or Voyager, to
purchase 53 million ordinary shares of Voyager Innovations Holdings Pte. Ltd., or VIH, representing
100% of the issued and outstanding ordinary shares of VIH, for a total consideration of Php465 million.
The total consideration was settled on March 15, 2018, while the transfer of shares to PCEV was
completed on April 6, 2018;
(ii) VIH entered into a Share Purchase Agreement with Smart to purchase all of its 170 million common
shares of Voyager for a total consideration of Php3,527 million. The total consideration was settled on
April 16, 2018; and
(iii) PCEV entered into a Subscription Agreement with VIH to subscribe to additional 96 million ordinary
shares of VIH, with a par value of SG$1.00 per ordinary share, for a total subscription price of SG$96
million, or Php3,806 million, which was settled on April 13, 2018.
Loss of Control of PCEV over VIH

On October 4, 2018, PLDT, as the ultimate Parent Company of PCEV, VIH, Vision Investment Holdings
Pte. Ltd., or Vision, an entity indirectly controlled by KKR and Cerulean Investment Limited, or Cerulean,
an entity indirectly owned and controlled by Tencent, entered into subscription agreements under which
Vision and Cerulean, or the Lead Investors, will separately subscribe to and VIH will allot and issue to the
Lead Investors a total of up to US$175 million Convertible Class A Preferred Shares of VIH, with an option
for VIH to allot and issue up to US$50 million Convertible Class A Preferred Shares to such follower
investors as may be agreed among VIH, PLDT and the Lead Investors, or the upsize option.
On November 26, 2018, PLDT, IFC and IFC EAF, a fund managed by IFC Asset Management Company,
entered into subscription agreements under which IFC and IFC EAF, the follower investors, will separately
subscribe to and VIH will allot and issue to the follower investors a total of up to US$40 million Convertible
Class A Preferred Shares of VIH pursuant to the upsize option.
The foregoing investment in VIH is not subject to the compulsory merger notification regime under the
Philippine Competition Act and its implementing Rules and Regulations. In addition, the Bangko Sentral ng
Pilipinas has confirmed that it interposes no objection to the investment.
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On November 28, 2018, VIH received the US$175 million funding from KRR and Tencent. Subsequently,
VIH received the US$40 million funding from IFC and IFC EAF. As a result of the foregoing, PCEV’s
ownership was reduced to 48.74% and retained only two out of the five Board seats in VIH, which resulted
in the loss of control over VIH. Consequently, VIH was deconsolidated and the fair market value of the
investment amounting to Php10,748 million was recorded as an investment in associate and PCEV
recognized gain on deconsolidation amounting to Php12,054 million, which was presented as part of “Other
income (expenses) – net” account in our consolidated income statement.
The summarized financial information of VIH as at and for the years ended December 31, 2019 and 2018 is
shown below:
2019 2018
(in million pesos)
Noncurrent liabilities 35 42
Equity 4,982 9,502
Income Statement:(1)
Revenues 1,291 136
Depreciation and amortization 254 (19 )
Interest income 146 14
Benefit from income tax (4 ) (1 )
Net loss (4,576 ) (535 )
Other comprehensive loss (124 ) (2 )
Total comprehensive loss (4,700 ) (537 )
Equity share in net loss of VIH (2,268 ) (262 )
(1)
Income Statement figures in 2018 pertains to the month of December.
The carrying value of PCEV’s investment in VIH amounted to Php8,219 million and Php10,487 million as at
December 31, 2019 and 2018, respectively.
Investment of Digitel in DCI and ANPC

Digitel has 60% and 40% interest in ANPC and DCI, respectively. DCI is involved in the business of cable
system linking the Philippines, United States and other neighboring countries in Asia. ANPC is an
investment holding company owning 20% of DCI.
In December 2000, Digitel, Pacnet Network (Philippines), Inc., or PNPI, (formerly Asia Global Crossing
Ltd.) and BT Group O/B Broadband Infrastructure Group Ltd., or BIG, entered into a joint venture
agreement, or JVA, under which the parties agreed to form DCI with each party owning 40%, 40% and 20%,
respectively. DCI was incorporated to develop, provide and market backhaul network services, among
others.
On April 19, 2001, after BIG withdrew from the proposed joint venture, Digitel and PNPI formed ANPC to
replace BIG. Digitel contributed US$2 million, or Php69 million, for a 60% equity interest in ANPC while
PNPI owned the remaining 40% equity interest.
Digitel provided full impairment loss on its investment in DCI and ANPC in prior years on the basis that
DCI and ANPC have incurred significant recurring losses in the past. In 2011 and 2017, Digitel recorded a
reversal of impairment loss amounting to Php92 million and Php201 million, respectively, following
improvement in DCI’s operations.
Though Digitel owns more than half of the voting interest in ANPC, management has assessed that Digitel
only has significant influence, and not control, due to certain governance matters.
Digitel’s investment in DCI does not qualify as investment in joint venture as there is no provision for joint
control in the JVA among Digitel, PNPI and ANPC.
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Following PLDT’s acquisition of a controlling stake in Digitel, PNPI, on November 4, 2011, sent a notice to
exercise its Call Right under Section 6.3 of the JVA, which provides for a Call Right exercisable by PNPI
following the occurrence of a Digitel change in control. As at March 5, 2020, Digitel is ready to conclude
the transfer of its investment in DCI and ANPC, subject to PNPI’s ability to meet certain regulatory and
valuation requirements. This investment is not classified as noncurrent asset held-for-sale at report date as
the transfer is assessed as not highly probable because certain conditions have not yet been met by both
Digitel and PNPI.
Investment of PGIC in Beta

On February 5, 2013, PLDT entered into a Subscription and Shareholders’ Agreement with Asia Outsourcing
Alpha Limited, or Alpha, wherein PLDT, through its indirect subsidiary PGIC, acquired from Alpha
approximately 20% equity interest in Beta for a total cost of approximately US$40 million, which consists of
preferred shares of US$39.8 million and ordinary shares of US$0.2 million. On various dates in 2013 and
2014, PGIC has bought and transferred-in a net in total of 27 ordinary shares and 9,643 preferred shares to
certain employees of Beta for a total net payment of US$51 thousand. In 2014, Beta has divested its
healthcare BPO business. PGIC received a total cash distribution of US$41.8 million from Beta through
redemption of 35.3 million preferred shares and repayment of loan from PGIC. The equity interest of PGIC
in Beta remained at 20% after the transfer with economic interest of 18.32%.
Alpha and Beta are both exempted limited liability companies incorporated under the laws of Cayman
Islands and are both controlled by CVC Capital Partners. Beta has been designated to be the ultimate
holding company of the SPi Technologies, Inc. and Subsidiaries.
On July 22, 2016, Asia Outsourcing Gamma Limited, or AOGL, entered into a SPA with Relia, Inc., one of
the largest BPO companies in Japan, relating to the acquisition of AOGL’s Customer Relationship
Management, or CRM, business under the legal entity SPi CRM, Inc. and Infocom Technologies, Inc.,
wholly-owned subsidiaries of SPi Technologies, Inc., for a total purchase consideration of US$190.9 million.
AOGL is a wholly-owned subsidiary of Beta and the direct holding company of SPi Technologies, Inc. and
Subsidiaries. The transaction was completed on September 30, 2016. As a result of the sale, PGIC received
a cash distribution of US$11.2 million from Beta through redemption of its preferred shares and portion of its
ordinary shares.
On May 19, 2017, AOGL entered into a SPA with Partners Group, a global private markets investment
manager, relating to the acquisition of SPi Global, a wholly-owned subsidiary of AOGL, for an enterprise
value of US$330 million. The transaction was completed on August 25, 2017. As a result of the sale, PGIC
received a total cash distribution of US$57.05 million from Beta on various dates in 2017 and 2018 through
redemption of a portion of its ordinary shares. The remaining balance of US$2.29 million is held in escrow
and will be released in 2020 subject to indemnity claims of the buyer.
The carrying value of investment in common shares in Beta amounted to Php35 million and Php36 million as
at December 31, 2019 and 2018, respectively. The economic interests of PGIC in Beta remained at 18.32%
as at December 31, 2019 and 2018.
PGIC is a wholly-owned subsidiary of PLDT Global, which was incorporated under the laws of British
Virgin Islands.
Investment of Smart in AFPI

In 2013, Smart, along with other conglomerates MPIC and Ayala Corporation, or Ayala, embarked on a
venture to bid for the Automated Fare Collection System, or AFCS, a project of the Department of
Transportation and Communications, or DOTC, and Light Rail Transit Authority, to upgrade the Light Rail
Transit 1 and 2, and Metro Rail Transit ticketing systems.
In 2014, AFPI, the joint venture company, was incorporated in the Philippines and registered with the
Philippine SEC. Smart subscribed to Php503 million equivalent to 503 million shares at a subscription price
of Php1.00 per share representing 20% equity interest. MPIC and Ayala Group signed a ten-year concession
agreement with the DOTC to build and implement the AFCS project.
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In March 2019, Smart infused additional capital of Php70 million as additional subscription of preferred
shares.
The summary of investments in AFPI made by Smart as at December 31, 2019 and 2018 is shown below:
2019 2018
(in millions)
Common shares 625.7 625.7
Preferred shares 194.3 124.3
Smart’s investment in AFPI has been fully impaired as at December 31, 2019. Share in net cumulative
losses were not recognized as it does not have any legal or constructive obligation to pay for such losses and
have not made any payments on behalf of AFPI.
Investment of ACeS Philippines in AIL

As at December 31, 2019, ACeS Philippines held a 36.99% equity interest in AIL, a company incorporated
under the laws of Bermuda. AIL owns the Garuda I Satellite and the related system control equipment in
Batam, Indonesia. In December 2014, AIL suffered a failure of the propulsion system on board the Garuda I
Satellite, thus, AIL decided to decommission the operation of Garuda I Satellite in January 2015.
AIL has incurred significant operating losses, negative operating cash flows, and significant levels of debt.
The financial condition of AIL was partly due to the National Service Providers’, or NSPs, inability to
generate the amount of revenues originally expected as the growth in subscriber numbers has been
significantly lower than budgeted. These factors raised substantial doubt about AIL’s ability to continue as a
going concern. On this basis, we recognized a full impairment provision of Php1,896 million in respect of
our investment in AIL in 2003.
Share in net cumulative losses were not recognized as we do not have any legal or constructive obligation to
pay for such losses and have not made any payments on behalf of AIL.
Summarized financial information of individually immaterial associates

The following tables present the summarized financial information of our individually immaterial
investments in associates for the years ended December 31, 2019, 2018 and 2017:
2019 2018 2017

(in million pesos)
Income Statements:
Revenues 107 87 87
Net income (loss) 2 (33 ) (33 )
Other comprehensive income 18 — —
Total comprehensive income (loss) 20 (33 ) (33 )
We did not receive any dividends from our associates for the years ended December 31, 2019 and 2018,
while dividends received from our associates amounted to Php833 million for the year ended December 31,
2017.
We have no outstanding contingent liabilities or capital commitments with our associates as at December 31,
2019 and 2018.
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Investments in Joint Ventures
Investments of PLDT in VTI, Bow Arken and Brightshare
On May 30, 2016, the PLDT Board approved the Company’s acquisition of 50% equity interest, including
outstanding advances and assumed liabilities, in the telecommunications business of San Miguel
Corporation, or SMC, with Globe acquiring the other 50% interest. On the same date, PLDT and Globe
executed: (i) a Share Purchase Agreement, or SPA, with SMC to acquire the entire outstanding capital,
including outstanding advances and assumed liabilities, in VTI (and the other subsidiaries of VTI), which
holds SMC’s telecommunications assets through its subsidiaries, or the VTI Transaction; and (ii) separate
SPAs with the owners of two other entities, Bow Arken (the parent company of New Century Telecoms,
Inc.) and Brightshare (the parent company of eTelco, Inc.), which separately hold additional spectrum
frequencies through their respective subsidiaries, or the Bow Arken Transaction and Brightshare Transaction,
respectively. We refer to the VTI Transaction, Bow Arken Transaction and Brightshare Transaction
collectively as the SMC Transactions.
The consideration in the amount of Php52.8 billion representing the purchase price for the equity interest and
assigned advances of previous owners to VTI, Bow Arken and Brightshare was paid in three tranches: 50%
upon signing of the SPAs on May 30, 2016, 25% on December 1, 2016 and the final 25% on May 30, 2017.
The SPAs also provide that PLDT and Globe, through VTI, Bow Arken and Brightshare, would assume
liabilities amounting to Php17.2 billion from May 30, 2016. In addition, the SPAs contain a price adjustment
mechanism based on the variance in these assumed liabilities to be agreed among PLDT, Globe and previous
owners on the results of the confirmatory due diligence procedures jointly performed by PLDT and Globe.
On May 29, 2017, PLDT and Globe paid the previous owners the net amount of Php2.6 billion in relation to
the aforementioned price adjustment based on the result of the confirmatory due diligence. See Note 28 –
Financial Assets and Liabilities – Commercial Commitments.
As part of the SMC Transactions, PLDT and Globe acquired certain outstanding advances made by the
former owners of VTI, Bow Arken and Brightshare to VTI, Bow Arken and Brightshare or their respective
subsidiaries. The amounts of the advances outstanding to PLDT since the date of assignment to PLDT
amounted to Php11,359 million: (i) Php11,038 million from VTI and its subsidiaries; (ii) Php238 million
from Bow Arken and its subsidiaries; and (iii) Php83 million from Brightshare and its subsidiaries.
On February 28, 2017, PLDT and Globe each subscribed to 2.8 million new preferred shares to be issued out
of the unissued portion of the existing authorized capital stock of VTI, at a subscription price of Php4
thousand per subscribed share (inclusive of a premium over par of Php3 thousand per subscribed share) or a
total subscription price for each of Php11,040 million (inclusive of a premium over par of Php8,280
million). PLDT and Globe’s assigned advances from SMC which were subsequently reclassified to deposit
for future subscription of each amounting to Php11,040 million were applied as full subscription payment for
the subscribed shares.
Also, on the same date, PLDT and Globe each subscribed to 800 thousand new preferred shares of the
authorized capital stock of VTI, at a subscription price of Php4 thousand per subscribed share (inclusive of a
premium over par of Php3 thousand per subscribed share), or a total subscription price for each Php3,200
million (inclusive of a premium over par of Php2,400 million). PLDT and Globe each paid Php148 million
in cash for the subscribed shares. The remaining balance of the subscription price of PLDT and Globe were
fully paid as at December 29, 2017.
On December 15, 2017, PLDT and Globe each subscribed to 600 thousand new preferred shares of the
authorized capital stock of VTI, at a subscription price of Php5 thousand per subscribed share (inclusive of a
premium over par of Php4 thousand per subscribed share), for a total subscription price of Php3,000 million
(inclusive of a premium over par of Php2,400 million). PLDT and Globe each paid Php10 million in cash
for the subscribed shares upon execution of the agreement. The remaining balance of the subscription price
was paid via conversion of advances amounting to Php2,990 million as at December 31, 2017.
The amount of the advances outstanding to PLDT, to cover for the assumed liabilities and working capital
requirements of the acquired companies, amounted to Php13 million and Php51 million as at December 31,
2019 and 2018, respectively.
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Purchase Price Allocation
PLDT has engaged an independent valuer to determine the fair value adjustments relating to the acquisition.
As at May 30, 2016, our share in the fair value of the intangible assets, which includes spectrum, amounted
to Php18,885 million and goodwill of Php17,824 million has been determined based on the final results of an
independent valuation. Goodwill arising from this acquisition and carrying amount of the identifiable assets
and liabilities, including deferred tax liability, and the related amortization through equity in net earnings
were retrospectively adjusted accordingly.
The table below presents the summarized financial information of VTI, Bow Arken and Brightshare as at
December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017:
2019 2018
(in million pesos)
Noncurrent liabilities 11,200 11,193
Equity 67,487 66,460
Carrying amount of interest in VTI, Bow Arken and Brightshare 32,538 32,541
Additional Information:
Cash and cash equivalents 2,590 2,191
Current financial liabilities* 587 607
Noncurrent financial liabilities* — —
* Excluding trade, other payables and provisions.
2019 2018 2017

(in million pesos)
Income Statements:
Revenues 3,339 2,505 2,532
Depreciation and amortization 1,337 1,171 1,168
Interest income 64 43 28
Provision for (benefit from) income tax 216 113 (42 )
Net income (loss) 70 (120 ) 110
Other comprehensive income — — —
Total comprehensive income (loss) 70 (120 ) 110
Equity share in net income (loss) of VTI, Bow Arken and Brightshare 35 (60 ) 55
Notice of Transaction filed with the Philippine Competition Commission, or PCC

On May 30, 2016, prior to closing the transaction, each of PLDT, Globe and SMC submitted notices of the
VTI, Bow Arken and Brightshare Transaction (respectively, the VTI Notice, the Bow Arken Notice and the
Brightshare Notice and collectively, the Notices) to the PCC pursuant to the Philippine Competition Act, or
PCA, and Circular No. 16-001 and Circular No. 16-002 issued by the PCC, or the Circulars. As stated in the
Circulars, upon receipt by the PCC of the requisite notices, each of the said transactions shall be deemed
approved in accordance with the Circulars.
Subsequently, on June 7, 2016, PLDT and the other parties to the said transactions received separate letters
dated June 6 and 7, 2016 from the PCC which essentially stated, that: (a) with respect to VTI Transaction,
the VTI Notice is deficient and defective in form and substance, therefore, the VTI Transaction is not
“deemed approved” by the PCC, and that the missing key terms of the transaction are critical since the PCC
considers certain agreements as prohibited and illegal; and (b) with respect to the Bow Arken and
Brightshare Transactions, the compulsory notification under the Circulars does not apply and that even
assuming the Circulars apply, the Bow Arken Notice and the Brightshare Notice are deficient and defective
in form and substance.
F-87
On June 10, 2016, PLDT submitted its response to the PCC’s letter articulating its position that the VTI
Notice is adequate, complete and sufficient and compliant with the requirement under the Circulars, and does
not contain false material information; as such, the VTI Transaction enjoys the benefit of Section 23 of the
PCA. Therefore, the VTI Transaction is deemed approved and cannot be subject to retroactive review by the
PCC. Moreover, the parties have taken all necessary steps, including the relinquishment/return of certain
frequencies and co-use of the remaining frequencies by Smart and Belltel and Globe and Belltel as discussed
above, to ensure that the VTI Transaction will not substantially prevent, restrict or lessen competition to
violate the PCA. Nevertheless, in the spirit of cooperation and for transparency, the parties voluntarily
submitted to the PCC, among others, copies of the SPAs for the PCC’s information and reference.
In a letter dated June 17, 2016, the PCC required the parties to further submit additional documents relevant
to the co-use arrangement and the frequencies subject thereto, as well as other definitive agreements relating
to the VTI Transaction. It also disregarded the deemed approved status of the VTI Transaction in violation
of the Circulars which the PCC itself issued, and insisted that it will conduct a full review, if not
investigation of the said transaction under the different operative provisions of the PCA.
In the Matter of the Petition against the PCC

On July 12, 2016, PLDT filed before the Court of Appeals, or CA, a Petition for Certiorari and Prohibition
(With Urgent Application for the Issuance of a Temporary Restraining Order, or TRO, and/or Writ of
Preliminary Injunction), or the Petition, against the PCC. The Petition seeks to enjoin the PCC from
proceeding with the review of the acquisition by PLDT and Globe of equity interest, including outstanding
advances and assumed liabilities, in the telecommunications business of SMC, or the SMC Transactions, and
performing any act which challenges or assails the “deemed approved” status of the SMC Transactions. On
July 19, 2016, the 12th Division of the CA, issued a Resolution directing the PCC through the Office of the
Solicitor General, or the OSG, to file its Comment within a non-extendible period of 10 days from notice and
show cause why the Petition should not be granted. On August 11, 2016, the PCC through the OSG, filed its
Comment to the Petition (With Opposition to Petitioner’s Application for a Writ of Preliminary Injunction).
On August 19, 2016, PLDT filed its Reply to Respondent PCC’s Comment.
On August 26, 2016, the CA issued a Writ of Preliminary Injunction enjoining and directing the respondent
PCC, their officials and agents, or persons acting for and in their behalf, to cease and desist from conducting
further proceedings for the pre-acquisition review and/or investigation of the SMC Transactions based on its
Letters dated June 7, 2016 and June 17, 2016 during the pendency of the case and until further orders are
issued by the CA. On September 14, 2016, the PCC filed a Motion for Reconsideration of the CA’s
Resolution. During this time, Globe moved to have its Petition consolidated with the PLDT Petition. In a
Resolution promulgated on October 19, 2016, the CA: (i) accepted the consolidation of Globe’s petition
versus the PCC (CA G.R. SP No. 146538) into PLDT’s petition versus the PCC (CA G.R. SP No. 146528)
with the right of replacement; (ii) admitted the Comment dated October 4, 2016 filed by the PCC; (iii)
referred to the PCC for Comment (within 10 days from receipt of notice) PLDT’s Urgent Motion for the
Issuance of a Gag Order dated September 30, 2016 and to cite the PCC for indirect contempt; and (iv)
ordered all parties to submit simultaneous memoranda within a non-extendible period of 15 days from notice.
On November 11, 2016, PLDT filed its Memorandum in compliance with the CA’s Resolution.
On February 17, 2017, the CA issued a Resolution denying PCC’s Motion for Reconsideration dated
September 14, 2016, for lack of merit. The CA denied PLDT’s Motion to Cite the PCC for indirect
Contempt for being premature. In the same Resolution, as well as in a separate Gag Order attached to the
Resolution, the CA granted PLDT’s Urgent Motion for the Issuance of a Gag Order and directed PCC to
remove immediately from its website its preliminary statement of concern and submit its compliance within
five days from receipt thereof. All the parties were ordered to refrain, cease and desist from issuing public
comments and statements that would violate the sub judice rule and subject them to indirect contempt of
court. The parties were also required to comment within ten days from receipt of the Resolution, on the
Motion for Leave to Intervene and to Admit the Petition-in-Intervention dated February 7, 2017 filed by
Citizenwatch, a non-stock and non-profit association.
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On April 18, 2017, the PCC filed before the Supreme Court a Petition to Annul the Writ of Preliminary
Injunction issued by the CA’s 12th Division on August 26, 2016 restraining PCC’s review of the SMC
Transactions. In compliance with the Supreme Court’s Resolution issued on April 25, 2017, PLDT on July
3, 2017 filed its Comment dated July 1, 2017 to the PCC’s Petition. The Supreme Court issued a Resolution
dated July 18, 2017 noting PLDT’s Comment and requiring the PCC to file its Consolidated Reply. The
PCC filed a Motion for Extension of Time and prayed that it be granted until October 23, 2017 to file its
Consolidated Reply. The PCC filed its Consolidated Reply to the: (1) Comment filed by PLDT; and
(2) Motion to Dismiss filed by Globe on November 7, 2017. The same was noted by Supreme Court in a
Resolution dated November 28, 2017.
During the intervening period, the CA rendered its Decision in October 18, 2017, granting the Petitions filed
by PLDT and Globe. In its Decision, the CA: (i) permanently enjoined the PCC from conducting further
proceedings for the pre-acquisition review and/or investigation of the SMC Transactions based on its Letters
dated June 7, 2016 and June 17, 2016; (ii) annulled and set aside the Letters dated June 7, 2016 and June 17,
2016; (iii) precluded the PCC from conducting a full review and/or investigation of the SMC Transactions;
(iv) compelled the PCC to recognize the SMC Transactions as deemed approved by operation of law; and
(v) denied the PCC’s Motion for Partial Reconsideration dated March 6, 2017, and directed the PCC to
permanently comply with the CA’s Resolution dated February 17, 2017 requiring PCC to remove its
preliminary statement of concern from its website. The CA clarified that the deemed approved status of the
SMC Transactions does not, however, remove the power of PCC to conduct post-acquisition review to
ensure that no anti-competitive conduct is committed by the parties.
On November 7, 2017, PCC filed a Motion for Additional Time to file a Petition for Review on Certiorari
before the Supreme Court. The Supreme Court granted PCC’s motion in its Resolution dated November 28,
2017.
On December 13, 2017, PLDT, through counsel, received the PCC’s Petition for Review on Certiorari filed
before the Supreme Court assailing the CA’s Decision dated October 18, 2017. In this Petition, the PCC
raised procedural and substantive issues for resolution. Particularly, the PCC assailed the issuance of the
writs of certiorari, prohibition, and mandamus considering that the determination of the sufficiency of the
Notice pursuant to the Transitory Rules involves the exercise of administrative and discretionary
prerogatives of the PCC. On the substantive aspect, the PCC argued that the CA committed grave abuse of
discretion in ruling that the SMC Transactions should be accorded the deemed approved status under the
Transitory Rules. The PCC maintained that the Notice of the SMC Transaction was defective because it
failed to provide the key terms thereof.
In the Supreme Court Resolution dated November 28, 2017, which was received by PLDT on December 27,
2017, the Supreme Court decided to consolidate the PCC’s Petition to Annul the Writ of Preliminary
Injunction issued by the CA’s 12th Division with that of its Petition for Review on Certiorari assailing the
decision of the CA on the merits.
On February 13, 2018, PLDT received Globe’s Motion for Leave to File and Admit the Attached Rejoinder,
which was denied by the Supreme Court in a Resolution dated March 13, 2018.
On February 27, 2018, PLDT received notice of the Supreme Court’s Resolution dated January 30, 2018
directing PLDT and Globe to file their respective Comments to the Petition for Review on Certiorari without
giving due course to the same.
On April 5, 2018, PLDT filed its Comment on the Petition for Review on Certiorari. On April 11, 2018,
PLDT received Globe’s Comment/Opposition [Re: Petition for Review on Certiorari dated December 11,
2017] dated March 4, 2018.
On April 24, 2018, PCC’s Motion to Expunge [Respondent PLDT’s Comment on the Petition for Review on
Certiorari] dated April 18, 2018 was received. On May 9, 2018, PLDT filed a Motion for Leave to File and
Admit the Attached Comment on the Petition for Review on Certiorari dated May 9, 2018.
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On June 5, 2018, PLDT received the Supreme Court’s Resolution dated April 24, 2018 granting the motion
for extension of PLDT and noting its Comment on the Petition for Review on Certiorari filed in compliance
with the Supreme Court’s Resolution dated January 30, 2018 and requiring the PCC to file a Consolidated
Reply to the comments within ten days from notice. On June 20, 2018, PLDT, through counsel, received
PCC’s Urgent Omnibus Motion for: (1) Partial Reconsideration of the Resolution dated April 24, 2018; and
(2) Additional Time dated June 11, 2018.
PCC filed its Consolidated Reply Ad Cautelam dated July 16, 2018, which was received on July 19, 2018.
On July 26, 2018, PLDT received a Resolution dated June 19, 2018 where the Supreme Court resolved to
grant PLDT’s Motion for Leave to File and Admit the Attached Comment, and PCC’s Motion for Extension
to file a Comment/Opposition on/to PLDT’s Motion for Leave to File and Admit the Attached Comment.
On August 14, 2018, PLDT received a Resolution dated July 3, 2018 where the Supreme Court resolved to
deny the PCC’s motion to reconsider the Resolution dated April 24, 2018 and grant its motion for extension
of time to file its reply to PLDT’s and Globe’s Comments, with a warning that no further extension will be
given.
On August 16, 2018, PLDT received a Resolution dated June 5, 2018 where the Supreme Court noted
without action the Motion to Expunge by PCC in view of the Resolution dated April 24, 2018 granting the
motion for extension of time to file a comment on the petition in G.R. No. 234969.
On October 4, 2018, PLDT received a Resolution dated August 7, 2018 where the Supreme Court noted the
PCC’s Consolidated Reply Ad Cautelam.
The consolidated petitions remain pending as of the date of this report.
VTI’s Tender Offer for the Minority Stockholders’ Shares in Liberty Telecom Holdings, Inc., or LIB
On August 18, 2016, the Board of Directors of VTI approved the voluntary tender offer to acquire the
common shares of LIB, a subsidiary of VTI, which are held by the remaining minority shareholders, and the
intention to delist the shares of LIB from the PSE.
On August 24, 2016, VTI, owner of 87.12% of the outstanding common shares of LIB, undertook the tender
offer to purchase up to 165.88 million common shares owned by the remaining minority shareholders,
representing 12.82% of LIB’s common stock, at a price of Php2.20 per share. The tender offer period ended
on October 20, 2016, the extended expiration date, with over 107 million shares tendered, representing
approximately 8.3% of LIB’s issued and outstanding common shares. The tendered shares were crossed at
the PSE on November 4, 2016, with the settlement on November 9, 2016.
The tender offer was undertaken in compliance with the PSE’s requirements for the voluntary delisting of
LIB common shares from the PSE. The voluntary delisting of LIB was approved by the PSE effective
November 21, 2016.
Following the conclusion of the tender offer, VTI now owns more than 95% of the issued and outstanding
common shares, and 99.1% of the total issued and outstanding capital stock, of LIB.
Investment of PGIH in Multisys

On November 8, 2018, the PLDT Board of Directors approved the investment of Php2,150 million in
Multisys for a 45.73% equity interest through its wholly-owned subsidiary, PGIH. Multisys is a Philippine
software development and IT solutions provider engaged in designing, developing, implementing business
system solutions and services covering courseware, webpage development and designing user-defined
system programming. PGIH’s investment involves the acquisition of new and existing shares.
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On December 3, 2018, PGIH completed the closing of its investment in Multisys. Out of the Php550 million
total consideration for the acquisition of existing shares, PGIH paid Php523 million to the owners of
Multisys. On June 3, 2019, the balance of the acquisition consideration amounting to Php27 million was
fully paid. Further, PGIH invested Php800 million into Multisys as a deposit for future stock subscription
pending the approval by the Philippine SEC of the capital increase of Multisys. On February 1, 2019, the
Philippine SEC approved the capital increase of Multisys. The balance of Php800 million stock subscription
payable is outstanding as at March 5, 2020.
The carrying value of the investment in Multisys amounted to Php2,538 million and Php2,388 million,
including subscription payable of Php800 million and contingent consideration of Php230 million as at
Investment of iCommerce in PHIH

On January 20, 2015, PLDT and Rocket Internet entered into a JVA designed to foster the development of
internet-based businesses in the Philippines. PLDT, through its subsidiary, Voyager, and Asia Internet
Holding S.à r.l., or AIH, which is 50%-owned by Rocket Internet, were the initial shareholders of the joint
venture company PHIH. iCommerce, former subsidiary of VIH, replaced Voyager in agreement as
shareholder of PHIH on October 14, 2015 and held a 33.33% equity interest in PHIH.
The objective of PHIH was the creation and development of online businesses in the Philippines, the
leveraging of local market and business model insights, the facilitation of commercial, strategic and
investment partnerships, and the acceleration of the rollout of online startups in the Philippines. In
accordance with the underlying agreements, iCommerce paid approximately €7.4 million to PHIH as
contribution to capital. Payment of another contribution by iCommerce to the PHIH capital of approximately
€2.6 million was requested in 2016 and remained outstanding.
On September 15, 2017, AIH initiated arbitral proceedings via the German Arbitration Institute (DIS), or
DIS, against iCommerce for not settling the €2.6 million contribution. AIH required the payment of €2.6
million plus interest and all costs of the arbitral proceedings.
On December 14, 2017, VIH and PLDT Online entered into a Sale and Purchase Agreement whereby VIH
sold all of its 10 thousand shares in iCommerce to PLDT Online for a total purchase price of SG$1.00. On
the same date, VIH assigned its loans receivables from iCommerce to PLDT Online amounting to US$8.6
million. In consideration, a total of US$8.9 million, inclusive of interest, was fully paid by PLDT Online to
VIH on November 30, 2017.
On April 19, 2018, iCommerce, together with PLDT and Voyager, executed a Settlement Agreement with
AIH to terminate the arbitral proceedings and to settle disputes over rights and obligations in connection with
the PHIH agreements. On the same date, iCommerce executed a Share Transfer Agreement with AIH to
transfer its PHIH shares to AIH. As a result, iCommerce gave up its 33.33% equity interest for zero value
and its claims over the remaining cash of PHIH. iCommerce, AIH and PHIH waived all other claims in
connection with PHIH, including any claims against iCommerce.
On separate letters dated April 26, 2018, iCommerce and AIH informed the DIS that both parties have
concluded an out-of-court settlement with AIH requesting for the termination of the arbitral proceedings.
On May 7, 2018, iCommerce received the order of the DIS for the termination of the arbitral proceedings and
the administrative fees to be paid in relation to the arbitral proceedings. With the foregoing, iCommerce has
completed the exit from the joint venture.
As a result, iCommerce recognized a loss on investment written-off amounting to Php362 million for the
difference between the book value of investment in PHIH and the subscription payable. Such loss is
recorded as part of “Other income (expenses) – Others – net” in our consolidated income statement.
F-91
Investment of PCEV in Beacon
On March 1, 2010, PCEV, MPIC and Beacon, entered into an Omnibus Agreement, or OA, where PCEV and
MPIC have agreed to set out their mutual agreement in respect of, among other matters, the capitalization,
organization, conduct of business and the extent of their participation in the management of the affairs of
Beacon. Beacon is merely a special purpose vehicle created for the main purpose of holding and investing in
Meralco using the same Meralco shares as collateral for funding such additional investment.
PCEV accounted for its investment in Beacon as investment in joint venture since the OA established joint
control over Beacon until its full divestment on June 27, 2017.
PCEV’s Investment in Beacon Shares

PCEV made the following investments in Beacon:
Total
Consideration
Date Transaction Number of Shares (Php)
March 30, 2010 PCEV subscription to Beacon Common Shares(1) 1,157 Beacon Common Shares 23,130
October 25, 2011 PCEV transfer of remaining Meralco Common Shares to Beacon(2) 69 Meralco Common Shares 15,136
PCEV subscription to Beacon Preferred Shares 1,199 Beacon Class “A” Preferred Shares 15,136
January 20, 2012 PCEV subscription to Beacon Common Shares 135 Beacon Common Shares 2,700
May 30, 2016 PCEV subscription to Beacon Class “B” Preferred Shares 277 Beacon Class “B” Preferred Shares 3,500
September 9, 2016 Beacon redemption of Class “B” Preferred Shares held by PCEV 198 Beacon Class “B” Preferred Shares 2,500
April 20, 2017 Beacon redemption of Class “B” Preferred Shares held by PCEV 79 Beacon Class “B” Preferred Shares 1,000
(1)
PCEV transferred 154 million Meralco shares at a price of Php150.00 per share or an aggregate amount of Php23,130 million on
May 12, 2010.
(2)
The transfer of the Meralco shares were implemented through a special block sale/cross sale in the PSE.
Sale of Beacon’s Meralco Shares to MPIC

Beacon has entered into the following Share Purchase Agreements with MPIC:
Deferred Gain
Number of % of Meralco Price Per Total Price Realized(1)
Date Shares Sold Shareholdings Sold Share (Php) (Php) (Php)
(in millions) (in million pesos)
June 24, 2014 56.35 5% 235.00 13,243 1,418
April 14, 2015 112.71 10 % 235.00 26,487 2,838
(1)
Since Beacon sold the shares to an entity not included in the PLDT Group, PCEV realized portion of the deferred gain which was
recognized when the Meralco shares were transferred to Beacon.
Sale of PCEV’s Beacon Common and Preferred Shares to MPIC

PCEV has entered into the following Share Purchase Agreements with MPIC:
Deferred Gain
Selling Price Realized
Date Number of Shares Sold (Php) (Php)
(in millions)
June 6, 2012 282 Preferred Shares 3,563 2,012
May 30, 2016 646 Common shares and 458 Preferred Shares 26, 200 4,962
June 13, 2017 646 Common shares and 458 Preferred Shares 21,800 4,962
On May 30, 2016, MPIC settled a portion of the consideration amounting to Php17,000 million immediately
upon signing of the Share Purchase Agreement dated May 30, 2016 and the balance of Php9,200 million will
be paid in annual installments until June 2020.
On June 27, 2017, MPIC settled a portion of the consideration amounting to Php12,000 million upon closing
of the sale under the Share Purchase Agreement dated June 13, 2017 and the balance of Php9,800 million
will be paid in annual installments from June 2018 to June 2021.
F-92
Subsequent to its full divestment in June 2017, PCEV continued to hold its representation in the Board of
Directors of Beacon and participate in the decision making. As set forth in the Share Purchase Agreement
dated June 30, 2017: (i) PCEV shall be entitled to nominate one director to the Board of Directors of Beacon
(“Seller’s Director”) and MPIC agrees to vote its shares in Beacon in favor of such Seller’s Director; and
(ii) MPIC shall cede to PCEV the right to vote all of the shares. The parties agreed that with respect to
decisions or policies affecting dividend payouts to be made by Beacon, PCEV shall exercise its voting rights,
and shall vote, in accordance with the recommendation of MPIC on such matter. Based on the foregoing,
PCEV’s previously joint control over Beacon has become a significant influence.
Beginning January 1, 2018, the unpaid balance from MPIC is measured at FVOCI using discounted cash
flow valuation method in accordance with the new classification under PFRS 9 with interest income to be
accreted over the term of the receivable.
Sale of PCEV’s Receivables from MPIC

On December 5, 2017, the Board of Directors of PCEV approved the proposed sale of 50% of PCEV’s
receivable from MPIC, with an option on the part of PCEV to upsize to 75%, consisting of the proceeds from
the sale of its shares in Beacon, which are due in 2019 to 2021.
On March 2, 2018, PCEV entered into a Receivables Purchase Agreement, or RPA, with various financial
institutions, or the Purchasers, to sell a portion of its receivables from MPIC due in 2019 to 2021 amounting
to Php5,550 million for a total consideration of Php4,852 million, which was settled on March 5, 2018.
Under the terms of the RPA, the Purchasers will have exclusive ownership of the purchased receivables and
all of its rights, title, and interest.
On March 23, 2018, PCEV entered into another RPA with a financial institution to sell a portion of its
receivables from MPIC due in 2019 amounting to Php2,230 million for a total consideration of Php2,124
million, which was settled on April 2, 2018.
PCEV’s remaining receivables from MPIC amounted to Php2,919 million, net of Php2 million allowance for
ECL, and Php4,353 million, net of Php2 million allowance for ECL as at December 31, 2019 and 2018,
respectively.
The following table explains the changes in the allowance for ECLs between the beginning and the end of
the year.
2019
Stage 1 Stage 2 Stage 3
12-Month Lifetime Lifetime
ECL ECL ECL Total
(in million pesos)
Balances as at beginning of the year 2 — — 2
Provisions 1 — — 1
Financial assets derecognized during the year (1 ) — — (1 )
Balances at end of the year 2 — — 2
2018
12-Month Lifetime Lifetime
ECL ECL ECL Total
(in million pesos)
Balances as at beginning of the year 4 — — 4
Financial assets derecognized during the year (2 ) — — (2 )
Balances at end of the year 2 — — 2
F-93
Summarized financial information of individually immaterial joint ventures
The following tables present the summarized financial information of our individually immaterial
investments in associates for the years ended December 31, 2019, 2018 and 2017:
2019 2018 2017

(in million pesos)
Income Statements:
Revenues 367 104 107
Net income (loss) (200 ) (80 ) 59
Other comprehensive income — — (1 )
Total comprehensive income (loss) (200 ) (80 ) 58
We have no outstanding contingent liabilities or capital commitments with our joint ventures as at December
31, 2019 and 2018.
Investment of Smart in TCI
In 2019, Smart along with Globe and Dito Telecommunity, Inc. entered into an agreement to form a joint
venture that will address the requirements of Republic Act No. 11202, or the Mobile Number Portability, or
MNP, Act. The newly enacted law allows mobile phone users to switch networks or change their
subscription from prepaid to postpaid or vice versa, without changing their mobile numbers.
In the same year, TCI was incorporated in the Philippines on December 26, 2019 and registered with the
Philippine SEC on January 17, 2020. The primary purpose of the joint venture is to serve as a clearing house
for MNP. TCI will ensure smooth implementation of mobile number porting services. Smart subscribed
Php10 million representing 33.3% equity interest in TCI, which is equivalent to 10 million shares at a
subscription price of Php1.00 per share.
12. Financial Assets at FVPL

2019 2018
(in million pesos)
Rocket Internet 2,381 3,128
iflix Limited, or iflix 599 844
Club shares and others 328 294
Phunware, Inc., or Phunware 61 497
Matrixx Software, Inc., or Matrixx — —
3,369 4,763
Investment of PLDT Online in Rocket Internet

On August 7, 2014, PLDT and Rocket Internet entered into a global strategic partnership to drive the
development of online and mobile payment solutions in emerging markets. Rocket Internet provides a
platform for the rapid creation and scaling of consumer internet businesses outside the U.S. and China.
Rocket Internet’s prominent brands include the leading Southeast Asian e-Commerce businesses Zalora and
Lazada, as well as fast growing brands with strong positions in their markets such as Dafiti, Linio, Jumia,
Namshi, Lamoda, Jabong, Westwing, Home24 and HelloFresh in Latin America, Africa, Middle East,
Russia, India and Europe. Financial technology and payments comprise Rocket Internet’s third sector where
it anticipates numerous and significant growth opportunities.
Pursuant to the terms of the investment agreement, PLDT invested €333 million, or Php19,577 million, in
cash, for new shares equivalent to a 10% stake in Rocket Internet as at August 2014. These new shares are
of the same class and bear the same rights as the Rocket Internet shares held by the investors as at the date of
the agreement namely, Investment AB Kinnevik and Access Industries, in addition to Global Founders
GmbH (formerly European Founders Fund GmbH). PLDT made the €333 million investment in two
payments (on September 8 and September 15, 2014), which it funded from available cash and new debt.
F-94
On August 21, 2014, PLDT assigned all its rights, title and interests as well as all of its obligations related to
its investment in Rocket Internet, to PLDT Online, an indirectly wholly-owned subsidiary of PLDT.
On October 1, 2014, Rocket Internet announced the pricing of its initial public offering, or IPO, at €42.50 per
share. On October 2, 2014, Rocket Internet listed its shares on Entry Standard of the Frankfurt Stock
Exchange under the ticker symbol “RKET.” Our ownership stake in Rocket Internet after the IPO was
reduced to 6.6%. In February 2015, due to additional issuances of shares by Rocket Internet, our ownership
percentage in Rocket Internet was further reduced to 6.1%, and remained as such as at December 31, 2017.
On September 26, 2016, Rocket Internet applied for admission to trading under the regulated market (Prime
Standard) of the Frankfurt Stock Exchange. RKET has been admitted to the Prime Standard and is part of
the Frankfurt Stock Exchange’s SDAX.
On April 16, 2018, Rocket Internet announced the buyback of up to 15 million shares through a public share
purchase offer, or the Offer, against payment of an offer price in the amount of €24 per share. PLDT Online
committed to accept the Offer of Rocket Internet for at least 7 million shares, or approximately 67.4% of the
total number of shares directly held by PLDT Online.
On May 4, 2018, Rocket Internet accepted the tender of PLDT Online of 7 million shares and paid the total
consideration of €163 million, or Php10,059 million, which was settled on May 9, 2018, reducing the equity
ownership in Rocket Internet from 6.1% to 2.0%.
On May 23, 2018, Rocket Internet redeemed 10.8 million shares reducing its share capital to €154 million.
As a result of the redemption of shares, PLDT Online’s equity ownership in Rocket Internet increased from
2.0% to 2.1%.
On various dates in the third quarter of 2018, PLDT Online sold 0.7 million Rocket Internet shares for an
aggregate amount of €22 million, or Php1,346 million, reducing equity ownership in Rocket Internet from
2.1% to 1.7%.
On December 6, 2018, Rocket Internet redeemed 1.9 million shares reducing its share capital to €153
million. PLDT Online’s equity ownership in Rocket Internet remained at 1.7%
On various dates in 2019, PLDT Online sold 0.7 million Rocket internet shares for an aggregate amount of
€18 million, or Php1,021 million, reducing equity ownership in Rocket Internet from 1.7% to 1.3%.
On October 9, 2019, Rocket Internet redeemed 1.7 million shares reducing its share capital to €151 million.
PLDT Online’s equity ownership in Rocket Internet remained at 1.3%
On January 30, 2020, Rocket Internet redeemed 13.5 million shares reducing its share capital to €137
million. As a result of the redemption of shares, PLDT Online’s equity ownership in Rocket Internet
increased from 1.3% to 1.4%.
Further details on investment in Rocket Internet for the years ended December 31, 2019, 2018 and 2017, and
as at December 31, 2019 and 2018 are as follows:
2019 2018 2017

Total market value as at beginning of the year (in million pesos) 3,128 12,848 10,058
Closing price per share at end of the year (in Euros) 22.10 20.18 20.13
Total market value as at end of the year (in million Euros) 42 52 213
Total market value as at end of the year (in million pesos) 2,381 3,128 12,848
Net gains (losses) recognized during the year (in million pesos) 89 (157 ) 2,790
2019 2018
(in million pesos)
Fair value adjustment in profit or loss 89 (157 )
Disposal of investments (836 ) (9,563 )
F-95
As at March 4, 2020, closing price of Rocket Internet is €20.04.
Investment of PLDT Online in iflix

On April 23, 2015, PLDT Online subscribed to a convertible note of iflix, an internet TV service provider in
Southeast Asia, for US$15 million, or Php686 million. The convertible note was issued and paid on August
11, 2015. iflix will use the funds to continue roll out of the iflix subscription video-on-demand services
across the Southeast Asian region, acquire rights to new content, and produce original programming to
market to potential customers.
This investment is in line with our strategy to develop new revenue streams and to complement our present
business by participating in the digital world beyond providing access and connectivity.
On March 10, 2016, the US$15 million convertible note held by PLDT Online was converted into 20.7
million ordinary shares of iflix in connection with a new funding round led by Sky Plc, Europe’s leading
entertainment company, and the Indonesian company, Emtek Group. The conversion resulted on a valuation
gain amounting to U$19 million, or Php898 million, increasing the fair value of PLDT Online’s investment
amounting to US$34 million, or Php1,584 million.
On August 4, 2017, PLDT Online subscribed to a convertible note of iflix for US$1.5 million, or Php75
million, in a new funding round led by Hearst Entertainment. The convertible note was paid on August 8,
2017. The note is zero coupon, senior and unsubordinated, non-redeemable, transferable and convertible into
Series B Preferred Shares subject to occurrence of a conversion event. iflix will use the funds to invest in its
local content strategy and for its regional and international expansion.
On December 15, 2018, the US$1.5 million convertible note held by PLDT Online was converted into 1.0
million Series B Preferred Shares of iflix upon the occurrence of the cut-off date. After the conversion of all
outstanding convertible notes, PLDT Online’s equity ownership in iflix was reduced from 7.3% to 5.3%.
In 2019, due to additional issuances of shares by iflix, PLDT Online’s equity ownership in iflix was reduced
from 5.3% to 4.9%.
The fair value of PLDT Online’s investment amounted to Php599 million and Php844 million as at
Investment of PLDT Capital in Phunware

On September 3, 2015, PLDT Capital subscribed to an 8% US$5 million Convertible Promissory Note, or
Note, issued by Phunware, a Delaware corporation. Phunware provides an expansive mobile delivery
platform that creates, markets, and monetizes mobile application experiences across multiple screens. The
US$5 million Note was issued to and paid for by PLDT Capital on September 4, 2015.
On December 18, 2015, PLDT Capital subscribed to Series F Preferred Shares of Phunware for a total
consideration of US$3 million. On the same date, the Note and its related interest were converted to
additional Phunware Series F Preferred Shares.
On February 27, 2018, Phunware entered into a definitive Agreement and Plan of Merger, or Merger
Agreement, with Stellar Acquisition III, Inc., or Stellar, relating to a business combination transaction for an
enterprise value of US$301 million, on a cash-free, debt-free basis. Pursuant to the Merger Agreement, the
holders of Phunware common stock will be entitled to the right to receive the applicable portion of the
merger consideration in the form of Stellar common shares, which are listed on the Nasdaq Stock Market.
As a result, the holders of Phunware preferred stock have requested the automatic conversion of all
outstanding preferred shares into common shares effective as of immediately prior to the closing of the
transaction on a conversion ratio of one common share per one preferred share. In addition to the right to
receive Stellar common shares, each holder of Phunware Stock is entitled to elect to receive its pro rata share
of warrants to purchase Stellar common shares that are held by the affiliate companies of Stellar’s co-Chief
Executive Officers, or Stellar’s Sponsors.
F-96
On November 28, 2018, PLDT Capital elected to receive its full pro rata share of the warrants to purchase
Stellar common shares held by Stellar’s Sponsors.
On December 26, 2018, Phunware announced the consummation of its business combination with Stellar.
Stellar, the new Phunware holding company, changed its corporate name to “Phunware, Inc.,” or PHUN, and
Phunware changed its corporate name to “Phunware OpCo, Inc.” Upon closing, PLDT Capital received the
PHUN common shares equivalent to its portion of the merger consideration and its full pro rata share of
warrants to purchase PHUN common shares.
On March 15, 2019, PLDT Capital exercised its warrants to purchase PHUN common shares for a total
consideration of US$1.6 million.
The fair value amount of PLDT Capital’s investment amounted to Php61 million and Php497 million as at
Investment of PLDT Capital in Matrixx

On December 18, 2015, PLDT Capital entered into a Stock and Warrant Purchase Agreement with Matrixx,
a Delaware corporation. Matrixx provides the IT foundation to move to an all-digital service environment
with a new real-time technology platform designed to handle the surge in interactions without forcing the
compromises of conventional technology. Under the terms of the agreement, PLDT Capital subscribed to
convertible Series B Preferred Stock of Matrixx for a total consideration of US$5 million, or Php237 million,
and was entitled to purchase additional Series B Preferred Stock upon occurrence of certain conditions on or
before March 15, 2016. PLDT Capital did not exercise its right to purchase additional Series B Preferred
Stock of Matrixx.
On December 20, 2018, Matrixx entered into a Repurchase Agreement with PLDT Capital to repurchase all
of its capital stock held by PLDT Capital including a warrant to purchase capital stock for US$5 million.
The transaction closed on the same day.
13. Debt Instruments at Amortized Cost

2019 2018
(in million pesos)
GT Capital Bond 150 150
150 150
Less current portion (Note 28) 150 —
Noncurrent portion (Note 28) — 150
GT Capital Bond
In February 2013, Smart purchased at par a seven-year GT Capital Bond with face value of Php150 million,
which matured on February 27, 2020. The bond has a gross coupon rate of 4.84% payable on a quarterly
basis, and was recognized as HTM investment. Starting January 1, 2018, the bond was classified as debt
instrument at amortized cost under PFRS 9. Interest income, net of withholding tax, recognized on this
investment amounted to Php5.8 million for each of the years ended December 31, 2019, 2018 and 2017. The
carrying value of this investment amounted to Php150 million as at December 31, 2019 and 2018.
Security Bank Time Deposits
In May 2013, PLDT invested US$2.0 million in a five-year time deposit with Security Bank at a gross
coupon rate of 3.5%, which matured on May 31, 2018. Interest income, net of withholding tax, recognized
on this investment amounted to US$25 thousand, or Php1.3 million, for the year ended December 31, 2018.
F-97
14. Investment Properties
Changes in investment properties account for the years ended December 31, 2019 and 2018 are as follows:
Land
Land Improvements Building Total
(in million pesos)
December 31, 2019
Balances at beginning of the year 596 7 174 777
Net gains (losses) from fair value adjustments charged to profit or loss 23 (6 ) (5 ) 12
Disposals during the year (11 ) — — (11 )
Balances at end of the year 608 1 169 778
December 31, 2018
Balances at beginning of the year 1,322 8 305 1,635
Net gains (losses) from fair value adjustments charged to profit or loss 389 (1 ) (10 ) 378
Transfers to property and equipment (1,115 ) — (121 ) (1,236 )
Balances at end of the year 596 7 174 777
Investment properties, which consist of land, land improvements and building, are stated at fair values,
which have been determined based on appraisal performed by an independent firm of appraisers, an industry
specialist in valuing these types of investment properties.
The valuation for land was based on a market approach valuation technique using price per square meter
ranging from Php30 to Php32 thousand. The valuation for building and land improvements was based on a
cost approach valuation technique using current material and labor costs for improvements based on external
and independent reviewers.
We have determined that the highest and best use of some of the idle or vacant land properties at the
measurement date would be to convert the properties for residential or commercial development. The
properties are not being used for strategic reasons.
We have no restrictions on the realizability of our investment properties and no contractual obligations to
either purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
Repairs and maintenance expenses related to investment properties that do not generate rental income
amounted to Php65 million, Php38 million and Php27 million for the years ended December 31, 2019, 2018
and 2017, respectively.
Rental income relating to investment properties that are being leased and included as part of revenues
amounted to Php235 million, Php234 million and Php174 million for the years ended December 31, 2019,
The above investment properties were categorized under Level 3 of the fair value hierarchy. There were no
transfers in and out of Level 3 of the fair value hierarchy.
Significant increases (decreases) in price per square meter for land, current material and labor costs of
improvements would result in a significantly higher (lower) fair value measurement.
F-98
15. Goodwill and Intangible Assets
Changes in goodwill and intangible assets account for the years ended December 31, 2019 and 2018 are as
follows:
Intangible
Assets with Total
Indefinite Intangible Total
Life Intangible Assets with Finite Life Assets Goodwill
with Total and
Customer Finite Intangible Intangible
Trademark Franchise List Licenses Spectrum Others Life Assets Goodwill Assets
(in million pesos)
December 31, 2019
Costs:
Balances at beginning and
end of the year 4,505 3,016 4,726 1,079 1,205 775 10,801 15,306 62,033 77,339
Additions — — — — — — — — 9 9
Balances at end of the year 4,505 3,016 4,726 1,079 1,205 775 10,801 15,306 62,042 77,348
Accumulated amortization
and impairment:
Balance at beginning of
the year — 1,334 3,790 1,051 1,152 775 8,102 8,102 654 8,756
Amortization during the
year (Notes 4 and 5) — 186 511 8 53 — 758 758 — 758
Balances at end of the year — 1,520 4,301 1,059 1,205 775 8,860 8,860 654 9,514
Net balances at end of the
year 4,505 1,496 425 20 — — 1,941 6,446 61,388 67,834
Estimated useful lives (in years) — 16 2–9 18 15 1 – 10 — — — —
Remaining useful lives
(in years) — 8 1 3 — — — — — —
December 31, 2018
Costs:
Balances at beginning of
the year 4,505 3,016 4,726 1,079 1,205 1,562 11,588 16,093 63,058 79,151
Additions — — — — — 21 21 21 — 21
Disposals — — — — — (372 ) (372 ) (372 ) — (372 )
Deconsolidation — — — — — (460 ) (460 ) (460 ) (1,025 ) (1,485 )
Translation and other
adjustments — — — — — 24 24 24 — 24
Balances at end of the year 4,505 3,016 4,726 1,079 1,205 775 10,801 15,306 62,033 77,339
Accumulated amortization
and impairment:
Balances at beginning of
the year — 1,147 3,280 1,044 1,071 1,347 7,889 7,889 1,679 9,568
Disposals — — — — — (372 ) (372 ) (372 ) — (372 )
Amortization during the
year (Notes 4 and 5) — 187 510 7 81 107 892 892 — 892
Deconsolidation — — — — — (331 ) (331 ) (331 ) (1,025 ) (1,356 )
Translation and other
adjustments — — — — — 24 24 24 — 24
Balances at end of the year — 1,334 3,790 1,051 1,152 775 8,102 8,102 654 8,756
Net balances at end of the year 4,505 1,682 936 28 53 — 2,699 7,204 61,379 68,583
Estimated useful lives (in years) — 16 2–9 18 15 1 – 10 — — — —
Remaining useful lives
(in years) — 9 1–2 4 1 — — — — —
The consolidated goodwill and intangible assets of our reportable segments as at December 31, 2019 and
2018 are as follows:
2019 2018
Fixed Fixed
Wireless Line Total Wireless Line Total
(in million pesos)
Trademark 4,505 — 4,505 4,505 — 4,505
Franchise 1,496 — 1,496 1,682 — 1,682
Customer list 425 — 425 936 — 936
Licenses 20 — 20 28 — 28
Spectrum — — — 53 — 53
Total intangible assets 6,446 — 6,446 7,204 — 7,204
Goodwill 56,571 4,817 61,388 56,571 4,808 61,379
Total goodwill and intangible assets 63,017 4,817 67,834 63,775 4,808 68,583
F-99
Intangible Assets
Intangible asset with indefinite life pertains to the “Sun Cellular” trademark of DMPI, resulting from
PLDT’s acquisition of Digitel in 2011. PLDT intends to continue using the “Sun Cellular” brand to cater to
a specific market segment. As such, the “Sun Cellular” trademark is viewed to have an indefinite useful life.
VIH’s subsidiary, PayMaya, continuously improves its existing products and services through regular
technological development and upgrades of their platforms. Accumulated costs related to such technical
activities are capitalized as intangible assets. VIH were deconsolidated in PCEV Group as at November 30,
2018. Thus, the related intangible assets of VIH were also deconsolidated.
The consolidated future amortization of intangible assets as at December 31, 2019 is as follows:
Year (in million pesos)

2020 619
2021 194
2022 191
2023 186
2024 and onwards 751
1,941
Impairment Testing of Goodwill and Intangible Asset with Indefinite Useful Life
The organizational structure of PLDT and its subsidiaries is designed to monitor financial operations based
on fixed line and wireless segmentation. Management provides guidelines and decisions on resource
allocation, such as continuing or disposing of asset and operations by evaluating the performance of each
segment through review and analysis of available financial information on the fixed line and wireless
segments. As at December 31, 2019, the PLDT Group’s goodwill comprised of goodwill resulting from
acquisition of PLDT’s additional investment in PG1 in 2014, ePLDT’s acquisition of IPCDSI in 2012,
PLDT’s acquisition of Digitel in 2011, ePLDT’s acquisition of ePDS in 2011, Smart’s acquisition of PDSI
and Chikka in 2009, SBI’s acquisition of Airborne Access Corporation in 2008, and Smart’s acquisition of
SBI in 2004.
Although revenue streams may be segregated among the companies within the PLDT Group, the cost items
and cash flows are difficult to carve out due largely to the significant portion of shared and common used
network/platform. The same is true for Sun, wherein Smart 2G/3G network, cellular base stations and fiber
optic backbone are shared for areas where Sun has limited connectivity and facilities. On the other hand,
PLDT has the largest fixed line network in the Philippines. PLDT’s transport facilities are installed
nationwide to cover both domestic and international IP backbone to route and transmit IP traffic generated by
the customers. In the same manner, PLDT has the most Internet Gateway facilities which are composed of
high capacity IP routers and switches that serve as the main gateway of the Philippines to the Internet
connecting to the World Wide Web. With PLDT’s network coverage, other fixed line subsidiaries share the
same facilities to leverage on a Group perspective.
Because of the significant common use of network facilities among fixed line and wireless companies within
the Group, management deems that the Wireless and Fixed Line units are considered the lowest CGUs for
impairment test of goodwill until 2014.
In 2015, subsequent to the decision of Management to consolidate the various digital businesses under
Voyager and assign a separate management from wireless business, the Voyager unit has been considered as
a CGU separate from the Wireless unit. As a result, additional goodwill amounting to Php980 million was
allocated to Voyager CGU.
In December 2016, based on the assessment of the Voyager CGU’s recoverable amount compared with the
carrying amount of the Voyager CGU’s net assets, we have recognized total impairment loss amounting to
Php980 million and, consequently, any adverse change in a key assumption would result in a further
impairment loss.
F-100
In 2018, the Wireless and Fixed Line units are the lowest CGUs to which goodwill is to be allocated given
that the Fixed Line and Wireless operations generate cash inflows that are largely independent of the cash
inflows from other assets or groups of assets.
The recoverable amount of the Wireless and Fixed Line CGUs have been determined using the value-in-use
approach calculated using cash flow projections based on the financial budgets approved by the Board of
Directors. The post-tax discount rates applied to cash flow projections are 8.22% for the Wireless and Fixed
Line CGUs. Cash flows beyond the projection period are determined using a 2.00% growth rate for the
Wireless and Fixed Line CGUs, which is the same as the long-term average growth rate for the
telecommunications industry. Other key assumptions used in the cash flow projections include revenue
growth and capital expenditures.
Based on the assessment of the VIU of the Wireless and Fixed Line CGUs, the recoverable amount of the
Wireless and Fixed Line CGUs exceeded their carrying amounts, hence, no impairment was recognized in
relation to goodwill and intangible assets with indefinite useful life as at December 31, 2019 and 2018.
With regard to the assessment of VIU for Wireless and Fixed Line CGUs, management believes that no
reasonable changes in any of the above key assumptions would cause the carrying value of the unit to
materially exceed its recoverable amount.
16. Cash and Cash Equivalents

2019 2018
(in million pesos)
Cash on hand and in banks (Note 28) 6,706 5,982
Temporary cash investments (Note 28) 17,663 45,672
24,369 51,654
Cash in banks earn interest at prevailing bank deposit rates. Temporary cash investments are made for
varying periods of up to three months depending on our immediate cash requirements, and earn interest at the
prevailing temporary cash investment rates. Due to the short-term nature of such transactions, the carrying
value approximates the fair value of our temporary cash investments. See Note 28 – Financial Assets and
Liabilities.
Interest income earned from cash in banks and temporary cash investments amounted to Php1,022 million,
Php957 million and Php612 million for the years ended December 31, 2019, 2018 and 2017, respectively.
17. Trade and Other Receivables

As at December 31, 2019 and 2018, this account consists of receivables from:
2019 2018
(in million pesos)
Retail subscribers (Note 28) 17,178 19,444
Corporate subscribers (Note 28) 13,005 11,073
Foreign administrations (Note 28) 1,896 4,225
Domestic carriers (Note 28) 889 270
Dealers, agents and others (Note 28) 6,372 5,547
39,340 40,559
Less allowance for expected credit losses 16,904 16,503
22,436 24,056
Receivables from foreign administrations and domestic carriers represent receivables based on
interconnection agreements with other telecommunications carriers. The aforementioned amounts of
receivables are shown net of related payables to the same telecommunications carriers where a legal right of
offset exists and settlement is facilitated on a net basis.
F-101
Receivables from dealers, agents and others consist mainly of receivables from credit card companies,
dealers and distributors having collection arrangements with the PLDT Group, dividend receivables and
advances to affiliates.
Trade and other receivables are non-interest-bearing and generally have settlement terms of 30 to 180 days.
For terms and conditions relating to related party receivables, see Note 25 – Related Party Transactions.
See Note 28 – Financial Assets and Liabilities on credit risk of trade receivables to understand how we
manage and measure credit quality of trade receivables that are neither past due nor impaired.
The following table explains the changes in the allowance for expected credit losses as at December 31, 2019
and 2018:
2019
Retail Corporate Foreign Domestic Dealers, Agents
Subscribers Subscribers Administrations Carriers and Others Total
Stage 2 Stage 3 Stage 2 Stage 3 Stage 2 Stage 3 Stage 2 Stage 3 Stage 2 Stage 3 Stage 2 Stage 3
Lifetime ECL Lifetime ECL Lifetime ECL Lifetime ECL Lifetime ECL Lifetime ECL Total
(in million pesos)
Balances at beginning of the year 893 8,931 603 3,906 5 914 3 74 91 1,083 1,595 14,908 16,503
Provisions (Note 5) 418 2,725 211 661 (2 ) 64 1 12 10 (29 ) 638 3,433 4,071
Reclassifications and reversals (366 ) 793 (80 ) 201 — (604 ) — — (3 ) 4 (449 ) 394 (55 )
Write-offs (12 ) (2,683 ) (1 ) (895 ) — — — — — (13 ) (13 ) (3,591 ) (3,604 )
Translation adjustments (7 ) — (1 ) (3 ) — — — — — — (8 ) (3 ) (11 )
Balances at end of the year 926 9,766 732 3,870 3 374 4 86 98 1,045 1,763 15,141 16,904
2018
Retail Corporate Foreign Domestic Dealers, Agents
Subscribers Subscribers Administrations Carriers and Others Total
Stage 2 Stage 3 Stage 2 Stage 3 Stage 2 Stage 3 Stage 2 Stage 3 Stage 2 Stage 3 Stage 2 Stage 3
Lifetime ECL Lifetime ECL Lifetime ECL Lifetime ECL Lifetime ECL Lifetime ECL Total
(in million pesos)
Balances at beginning of the year (as restated) 787 7,925 474 3,212 7 925 1 75 147 1,206 1,416 13,343 14,759
Provisions (Note 5) 20 3,109 172 820 44 (13 ) 2 2 9 27 247 3,945 4,192
Reclassifications and reversals 86 6 (48 ) 201 (46 ) 2 — (3 ) (5 ) (146 ) (13 ) 60 47
Business combination/dissolution — — — — — — — — (57 ) — (57 ) — (57 )
Write-offs — (2,109 ) — (328 ) — — — — (3 ) (4 ) (3 ) (2,441 ) (2,444 )
Translation adjustments — — 5 1 — — — — — — 5 1 6
Balances at end of the year 893 8,931 603 3,906 5 914 3 74 91 1,083 1,595 14,908 16,503
The significant changes in the balances of trade and other receivables and contract assets are disclosed in
Note 5 – Income and Expenses, while the information about the credit exposures are disclosed in Note 28 –
Financial Assets and Liabilities.
18. Inventories and Supplies

2019 2018
(in million pesos)
Terminal and cellular phone units:
At net realizable value(1) 2,358 2,093
At cost 3,140 3,423
Spare parts and supplies:
At net realizable value(1) 462 173
At cost 1,621 1,673
Others:
At net realizable value(1) 592 612
At cost 954 994
Total inventories and supplies at the lower of cost or net realizable value 3,412 2,878
(1)
Amounts are net of allowance for inventory obsolescence and write-downs.
F-102
The cost of inventories and supplies recognized as expense for the years ended December 31, 2019, 2018 and
2019 2018 2017

(in million pesos)
Cost of sales and services 9,667 10,632 10,951
Repairs and maintenance 827 692 721
Provisions (Note 5) 471 1,528 907
10,965 12,852 12,579
Changes in the allowance for inventory obsolescence and write-down for the years ended December 31, 2019
2019 2018
(in million pesos)
Provisions (Note 5) 471 1,528
Write-off (136 ) (121 )
Reclassification (220 ) (100 )
Cost of sales (495 ) (587 )
Reversals (529 ) —
19. Prepayments
2019 2018
(in million pesos)
Advances to suppliers and contractors 41,798 17,703
Prepaid taxes 13,905 11,466
Prepaid fees and licenses 1,335 915
Prepaid repairs and maintenance 458 204
Prepaid rent 417 672
Prepaid benefit costs (Note 26) 342 393
Prepaid insurance (Note 25) 142 63
Prepaid selling and promotions 24 6
Other prepayments 1,810 296
60,231 31,718
Less current portion of prepayments 11,298 8,380
Noncurrent portion of prepayments 48,933 23,338
Prepaid taxes include creditable withholding taxes and input VAT.
Prepaid benefit costs represent excess of fair value of plan assets over present value of defined benefit
obligations recognized in our consolidated statements of financial position. See Note 26 – Employee
Benefits.
F-103
20. Equity
PLDT’s number of shares of subscribed and outstanding capital stock as at December 31, 2019 and 2018 are
as follows:
2019 2018
(in millions)
Authorized
Non-Voting Serial Preferred Stock 388 388
Voting Preferred Stock 150 150
Common Stock 234 234
Subscribed
Non-Voting Serial Preferred Stock(1) 300 300
Outstanding
Non-Voting Serial Preferred Stock(1) 300 300
Treasury Stock
Common Stock 3 3
(1)
Includes 300 million shares of Series IV Cumulative Non-Convertible Redeemable Preferred Stock subscribed for Php3 billion, of
which Php360 million has been paid.
There were no changes in PLDT’s capital account for the years ended December 31, 2019 and 2018.
Preferred Stock
Non-Voting Serial Preferred Stock
On November 5, 2013, the Board of Directors designated 50,000 shares of Non-Voting Serial Preferred
Stock as Series JJ 10% Cumulative Convertible Preferred Stock to be issued from January 1, 2013 to
December 31, 2015, pursuant to the PLDT Subscriber Investment Plan, or SIP. On June 8, 2015, PLDT
issued 870 shares of Series JJ 10% Cumulative Convertible Preferred Stock.
On January 26, 2016, the Board of Directors designated 20,000 shares of Non-Voting Serial Preferred Stock
as Series KK 10% Cumulative Convertible Preferred Stock to be issued from January 1, 2016 to December
31, 2020, pursuant to the SIP.
The Series JJ and KK 10% Cumulative Convertible Preferred Stock, or SIP shares, earns cumulative
dividends at an annual rate of 10%. After the lapse of one year from the last day of the year of issuance of a
particular Series of 10% Cumulative Convertible Preferred Stock, any holder of such series may convert all
or any of the shares of 10% Cumulative Convertible Preferred Stock held by him into fully paid and non-
assessable shares of Common Stock of PLDT, at a conversion price equivalent to 10% below the average of
the high and low daily sales price of a share of Common Stock of PLDT on the PSE, or if there have been no
such sales on the PSE on any day, the average of the bid and the ask prices of a share of Common Stock of
PLDT at the end of such day on such Exchange, in each case averaged over a period of 30 consecutive
trading days prior to the conversion date, but in no case shall the conversion price be less than the par value
per share of Common Stock. The number of shares of Common Stock issuable at any time upon conversion
of 10% Cumulative Convertible Preferred Stock is determined by dividing Php10.00 by the then applicable
conversion price.
In case the shares of Common Stock outstanding are at anytime subdivided into a greater or consolidated into
a lesser number of shares, then the minimum conversion price per share of Common Stock will be
proportionately decreased or increased, as the case may be, and in the case of a stock dividend, such price
will be proportionately decreased, provided, however, that in every case the minimum conversion price shall
not be less than the par value per share of Common Stock. In the event the relevant effective date for any
such subdivision or consolidation of shares of stock dividend occurs during the period of 30 trading days
preceding the presentation of any shares of 10% Cumulative Convertible Preferred Stock for conversion, a
similar adjustment will be made in the sales prices applicable to the trading days prior to such effective date
utilized in calculating the conversion price of the shares presented for conversion.
F-104
In case of any other reclassification or change of outstanding shares of Common Stock, or in case of any
consolidation or merger of PLDT with or into another corporation, the Board of Directors shall make such
provisions, if any, for adjustment of the minimum conversion price and the sale price utilized in calculating
the conversion price as the Board of Directors, in its sole discretion, shall deem appropriate.
At PLDT’s option, the Series JJ and KK 10% Cumulative Convertible Preferred Stock are redeemable at par
value plus accrued dividends five years after the year of issuance.
The Series IV Cumulative Non-Convertible Redeemable Preferred Stock earns cumulative dividends at an
annual rate of 13.5% based on the paid-up subscription price. It is redeemable at the option of PLDT at any
time one year after subscription and at the actual amount paid for such stock, plus accrued dividends.
The Non-Voting Serial Preferred Stocks are non-voting, except as specifically provided by law, and are
preferred as to liquidation.
All preferred stocks limit the ability of PLDT to pay cash dividends unless all dividends on such preferred
stock for all past dividend payment periods have been paid and or declared and set apart and provision has
been made for the currently payable dividends.
Voting Preferred Stock

On June 5, 2012, the Philippine SEC approved the amendments to the Seventh Article of PLDT’s Articles of
Incorporation consisting of the sub-classification of its authorized Preferred Capital Stock into: 150 million
shares of Voting Preferred Stock with a par value of Php1.00 each, and 807.5 million shares of Non-Voting
Serial Preferred Stock with a par value of Php10.00 each, and other conforming amendments, or the
Amendments. The shares of Voting Preferred Stock may be issued, owned, or transferred only to or by: (a) a
citizen of the Philippines or a domestic partnership or association wholly-owned by citizens of the
Philippines; (b) a corporation organized under the laws of the Philippines of which at least 60% of the capital
stock entitled to vote is owned and held by citizens of the Philippines and at least 60% of the board of
directors of such corporation are citizens of the Philippines; and (c) a trustee of funds for pension or other
employee retirement or separation benefits, where the trustee qualifies under paragraphs (a) and (b) above
and at least 60% of the funds accrue to the benefit of citizens of the Philippines, or Qualified Owners. The
holders of Voting Preferred Stock will have voting rights at any meeting of the stockholders of PLDT for the
election of directors and for all other purposes, with one vote in respect of each share of Voting Preferred
Stock. The Amendments were approved by the Board of Directors and stockholders of PLDT on July 5,
2011 and March 22, 2012, respectively.
On October 12, 2012, the Board of Directors, pursuant to the authority granted to it in the Seventh Article of
PLDT’s Articles of Incorporation, determined the following specific rights, terms and features of the Voting
Preferred Stock: (a) entitled to receive cash dividends at the rate of 6.5% per annum, payable before any
dividends are paid to the holders of Common Stock; (b) in the event of dissolution or liquidation or winding
up of PLDT, holders will be entitled to be paid in full, or pro-rata insofar as the assets of PLDT will permit,
the par value of such shares of Voting Preferred Stock and any accrued or unpaid dividends thereon before
any distribution shall be made to the holders of shares of Common Stock; (c) redeemable at the option of
PLDT; (d) not convertible to Common Stock or to any shares of stock of PLDT of any class; (e) voting rights
at any meeting of the stockholders of PLDT for the election of directors and all other matters to be voted
upon by the stockholders in any such meetings, with one vote in respect of each Voting Preferred Share; and
(f) holders will have no pre-emptive right to subscribe for or purchase any shares of stock of any class,
securities or warrants issued, sold or disposed by PLDT.
On October 16, 2012, BTFHI subscribed to 150 million newly issued shares of Voting Preferred Stock of
PLDT, at a subscription price of Php1.00 per share for a total subscription price of Php150 million pursuant
to a subscription agreement between BTFHI and PLDT dated October 15, 2012. As a result of the issuance
of Voting Preferred Shares, the voting power of the NTT Group (NTT DOCOMO and NTT
Communications), First Pacific Group and its Philippine affiliates, and JG Summit Group was reduced to
12%, 15% and 5%, respectively, as at December 31, 2019. See Note 1 – Corporate Information and Note 27
– Provisions and Contingencies – In the Matter of the Wilson Gamboa Case and Jose M. Roy III Petition.
F-105
Redemption of Preferred Stock
On September 23, 2011, the Board of Directors approved the redemption, or the Redemption, of all
outstanding shares of PLDT’s Series A to FF 10% Cumulative Convertible Preferred Stock, or the Series A
to FF Shares, from holders of record as of October 10, 2011, and all such shares were redeemed and retired
effective on January 19, 2012. In accordance with the terms and conditions of the Series A to FF Shares, the
holders of Series A to FF Shares as at January 19, 2012 are entitled to payment of the redemption price in an
amount equal to the par value of such shares, plus accrued and unpaid dividends thereon up to January 19,
2012, or the Redemption Price of Series A to FF Shares.
PLDT has set aside Php4,029 million (the amount required to fund the redemption price for the Series A to
FF Shares) in addition to Php4,143 million for unclaimed dividends on Series A to FF Shares, or a total
amount of Php8,172 million, to fund the redemption of the Series A to FF Shares, or the Redemption Trust
Fund, in a trust account, or the Trust Account, in the name of RCBC, as Trustee. Pursuant to the terms of the
Trust Account, the Trustee will continue to hold the Redemption Trust Fund or any balance thereof, in trust,
for the benefit of holders of Series A to FF Shares, for a period of ten years from January 19, 2012 until
January 19, 2022. After the said date, any and all remaining balance in the Trust Account shall be returned
to PLDT and revert to its general funds. Any interests on the Redemption Trust Fund shall accrue for the
benefit of, and be paid from time to time, to PLDT.
On May 8, 2012, the Board of Directors approved the redemption of all outstanding shares of PLDT’s Series
GG 10% Cumulative Convertible Preferred Stock, or the Series GG Shares, from the holders of record as of
May 22, 2012, and all such shares were redeemed and retired effective August 30, 2012. In accordance with
the terms and conditions of the Series GG Shares, the holders of the Series GG Shares as at May 22, 2012 are
entitled to the payment of the redemption price in an amount equal to the par value of such shares, plus
accrued and unpaid dividends thereon up to August 30, 2012, or the Redemption Price of Series GG Shares.
PLDT has set aside Php236 thousand (the amount required to fund the redemption price for the Series GG
Shares) in addition to Php74 thousand for unclaimed dividends on Series GG Shares, or a total amount of
Php310 thousand, to fund the redemption price for the Series GG Shares, or the Redemption Trust Fund for
Series GG Shares, which forms an integral part of the Redemption Trust Fund previously set aside in the
trust account with RCBC, as Trustee, for the purpose of funding the payment of the Redemption Price of
Series GG Shares. Pursuant to the terms of the Trust Account, the Trustee will continue to hold the
Redemption Trust Fund for Series GG Shares or any balance thereof, in trust, for the benefit of holders of
Series GG Shares, for a period of ten years from August 30, 2012, or until August 30, 2022. After the said
date, any and all remaining balance in the Redemption Trust Fund for Series GG Shares shall be returned to
PLDT and revert to its general funds. Any interests on the Redemption Trust Fund for Series GG Shares
shall accrue for the benefit of, and be paid from time to time, to PLDT.
On January 29, 2013, the Board of Directors approved the redemption of all outstanding shares of PLDT’s
Series HH 10% Cumulative Convertible Preferred Stock which were issued in 2007, or Series HH Shares
issued in 2007, from the holders of record as of February 14, 2013 and all such shares were redeemed and
retired effective May 16, 2013. In accordance with the terms and conditions of Series HH Shares issued in
2007, the holders of Series HH Shares issued in 2007 as at February 14, 2013 are entitled to the payment of
the redemption price in an amount equal to the par value of such shares, plus accrued and unpaid dividends
thereon up to May 16, 2013, or the Redemption Price of Series HH Shares issued in 2007.
F-106
PLDT has set aside Php24 thousand (the amount required to fund the redemption price for the Series HH
Shares issued in 2007) in addition to Php6 thousand for unclaimed dividends on Series HH Shares issued in
2007, or a total amount of Php30 thousand, to fund the redemption price of Series HH Shares issued in 2007,
or the Redemption Trust Fund for Series HH Shares issued in 2007, which forms an integral part of the
Redemption Trust Funds previously set aside in the trust account with RCBC, as Trustee, for the purpose of
funding the payment of the Redemption Price of Series HH Shares issued in 2007. Pursuant to the terms of
the Trust Account, the Trustee will continue to hold the Redemption Trust Fund for Series HH Shares issued
in 2007 or any balance thereof, in trust, for the benefit of holders of Series HH Shares issued in 2007, for a
period of ten years from May 16, 2013, or until May 16, 2023. After the said date, any and all remaining
balance in the Redemption Trust Fund for Series HH Shares issued in 2007 shall be returned to PLDT and
revert to its general funds. Any interests on the Redemption Trust Fund for Series HH Shares issued in 2007
shall accrue for the benefit of, and be paid from time to time, to PLDT.
Series HH 10% Cumulative Convertible Preferred Stock which were issued in 2008, or the Series HH Shares
issued in 2008, from the holders of record as of February 14, 2014 and all such shares were redeemed and
retired effective May 16, 2014. In accordance with the terms and conditions of Series HH Shares issued in
2008, the holders of Series HH Shares issued in 2008 as at February 14, 2014 are entitled to the payment of
the redemption price in an amount equal to the par value of such shares, plus accrued and unpaid dividends
thereon up to May 16, 2014, or the Redemption Price of Series HH Shares issued in 2008.
PLDT has set aside Php2 thousand (the amount required to fund the redemption price of Series HH Shares
issued in 2008) in addition to Php1 thousand for unclaimed dividends on Series HH Shares issued in 2008, or
a total amount of Php3 thousand, to fund the redemption price of Series HH Shares issued in 2008, or the
Redemption Trust Fund for Series HH Shares issued in 2008, which forms an integral part of the Redemption
Trust Funds previously set aside in the trust account with RCBC, as Trustee, for the purpose of funding the
payment of the Redemption Price of Series HH Shares issued in 2008. Pursuant to the terms of the Trust
Account, the Trustee will continue to hold the Redemption Trust Fund for Series HH Shares issued in 2008
or any balance thereof, in trust, for the benefit of holders of Series HH Shares issued in 2008, for a period of
ten years from May 16, 2014, or until May 16, 2024. After the said date, any and all remaining balance in
the Redemption Trust Fund for Series HH Shares issued in 2008 shall be returned to PLDT and revert to its
general funds. Any interests on the Redemption Trust Fund for Series HH Shares issued in 2008 shall accrue
for the benefit of, and be paid from time to time, to PLDT.
Series II 10% Cumulative Convertible Preferred Stock, or the Series II Shares, from the holder of record as
of February 10, 2016, and all such shares were redeemed and retired effective on May 11, 2016. In
accordance with the terms and conditions of Series II Shares, the holders of Series II Shares as at February
10, 2016 is entitled to the payment of the redemption price in an amount equal to the par value of such
shares, plus accrued and unpaid dividends thereon up to May 11, 2016, or the Redemption Price of Series II
Shares.
PLDT has set aside Php4 thousand to fund the redemption price of Series II Shares, or the Redemption Trust
Fund for Series II Shares, which forms an integral part of the Redemption Trust Funds previously set aside in
the trust account with RCBC, as Trustee, for the purpose of funding the payment of the Redemption Price of
Series II Shares. Pursuant to the terms of the Trust Account, the Trustee will continue to hold the
Redemption Trust Fund for Series II Shares or any balance thereof, in trust, for the benefit of holder of Series
II Shares, for a period of ten years from May 11, 2016, or until May 11, 2026. After the said date, any and
all remaining balance in the Redemption Trust Fund for Series II Shares shall be returned to PLDT and revert
to its general funds. Any interests on the Redemption Trust Fund for Series II Shares shall accrue for the
benefit of, and be paid from time to time, to PLDT.
As at January 19, 2012, August 30, 2012, May 16, 2013, May 16, 2014 and May 11, 2016, notwithstanding
that any stock certificate representing the Series A to FF Shares, Series GG Shares, Series HH Shares issued
in 2007, Series HH Shares issued in 2008 and Series II Shares, respectively, were not surrendered for
cancellation, the Series A to II Shares were no longer deemed outstanding and the right of the holders of such
shares to receive dividends thereon ceased to accrue and all rights with respect to such shares ceased and
terminated, except only the right to receive the Redemption Price of such shares, but without interest thereon.
F-107
Total amounts of Php11 million, Php8 million and Php13 million were withdrawn from the Trust Account,
representing total payments on redemption for the years ended December 31, 2019, 2018 and 2017,
respectively. The balance of the Trust Account of Php7,851 million and Php7,862 million were presented as
part of “Current portion of other financial assets” as at December 31, 2019 and 2018, respectively, and the
related redemption liability were presented as part of “Accrued expenses and other current liabilities” in our
consolidated statements of financial position. See related disclosures below under Perpetual Notes, Note 24
– Accrued Expenses and Other Current Liabilities and Note 28 – Financial Assets and Liabilities.
PLDT expects to similarly redeem and retire the outstanding shares of Series JJ and KK 10% Cumulative
Convertible Preferred Stock as and when they become eligible for redemption.
Common Stock/Treasury Stock

The Board of Directors approved a share buyback program of up to five million shares of PLDT’s common
stock, representing approximately 3% of PLDT’s then total outstanding shares of common stock in 2008.
Under the share buyback program, PLDT reacquired shares on an opportunistic basis, directly from the open
market through the trading facilities of the PSE and NYSE.
As at November 2010, we had acquired a total of approximately 2.72 million shares of PLDT’s common
stock at a weighted average price of Php2,388 per share for a total consideration of Php6,505 million in
accordance with the share buyback program. There were no further buyback transactions subsequent to
November 2010.
Dividends Declared
Our dividends declared for the years ended December 31, 2019, 2018 and 2017 are detailed as follows:
December 31, 2019

Date Amount
Class Approved Record Payable Per Share Total
(in million pesos, except per share amounts)
Cumulative Convertible
Preferred Stock
Series JJ* May 9, 2019 May 31, 2019 June 28, 2019 1.00 —
Cumulative Non-Convertible
Redeemable Preferred Stock
Series IV* January 29, 2019 February 22, 2019 March 15, 2019 — 12
May 9, 2019 May 24, 2019 June 15, 2019 — 12
August 8, 2019 August 27, 2019 September 15, 2019 — 13
November 7, 2019 November 22, 2019 December 15, 2019 — 12
49
Voting Preferred Stock March 7, 2019 March 27, 2019 April 15, 2019 — 3
June 11, 2019 June 28, 2019 July 15, 2019 — 2
September 24, 2019 October 8, 2019 October 15, 2019 — 2
December 3, 2019 December 18, 2019 January 15, 2020 — 3
10
Common Stock
Regular Dividend March 21, 2019 April 4, 2019 April 23, 2019 36.00 7,778
August 8, 2019 August 27, 2019 September 10, 2019 36.00 7,778
15,556
Charged to retained earnings 15,615
* Dividends were declared based on total amount paid up.
F-108
December 31, 2018
Date Amount
Cumulative Convertible
Preferred Stock
Series JJ June 13, 2018 June 28, 2018 June 29, 2018 1.00 —
May 10, 2018 May 25, 2018 June 15, 2018 — 12
49
June 13, 2018 June 29, 2018 July 15, 2018 — 2
10
Common Stock
Regular Dividend March 27, 2018 April 13, 2018 April 27, 2018 28.00 6,050
13,828
December 31, 2017
Date Amount
Cumulative Convertible Preferred Stock
Series JJ May 12, 2017 June 1, 2017 June 30, 2017 1.00 —
—
Series IV* February 7, 2017 February 24, 2017 March 15, 2017 — 12
May 12, 2017 May 26, 2017 June 15, 2017 — 12
49
June 13, 2017 June 27, 2017 July 15, 2017 — 2
10
Common Stock
Regular Dividend March 7, 2017 March 21, 2017 April 6, 2017 28.00 6,049
16,420
Our dividends declared after December 31, 2019 are detailed as follows:
Date Amount
15
Common Stock
Regular Dividend March 5, 2020 March 19, 2020 April 3, 2020 39 8,426
F-109
Perpetual Notes
Smart issued Php2,610 million and Php1,590 million perpetual notes on March 3, 2017 and March 6, 2017,
respectively, under two Notes Facility Agreements dated March 1, 2017 and March 2, 2017, respectively.
The transaction costs amounting to Php35 million were accounted as a deduction from the perpetual notes.
Smart paid distributions amounting to Php236 million each as at December 31, 2019 and 2018 and Php177
million as at December 31, 2018 and Php177 million as at December 31, 2017.
On July 18, 2017, Smart issued Php1,100 million perpetual notes to RCBC, Trustee of PLDT’s Redemption
Trust Fund, under the Notes Facility Agreement dated July 18, 2017. The transaction costs amounting to
Php5 million were accounted as a deduction from the perpetual notes. Smart paid distributions amounting to
Php57 million each as at December 31, 2019 and 2018. This transaction was eliminated in our consolidated
financial statements.
On September 19, 2019, Smart issued Php4,700 million perpetual notes to DMPI under the Notes Facility
Agreement dated September 16, 2019. The transaction cost amounting to Php35 million was accounted as a
deduction from the perpetual notes. Smart paid distributions amounting to Php70 million as at December 31,
2019. This transaction was eliminated in our consolidated financial statements.
Proceeds from the issuance of these notes are intended to finance capital expenditures. The notes have no
fixed redemption dates. However, Smart may, at its sole option, redeem the notes. In accordance with PAS
32, Financial Instruments: Presentation, the notes are classified as part of equity in the financial statements.
The notes are subordinated to and rank junior to all senior loans of Smart.
Retained Earnings Available for Dividend Declaration
The following table shows the reconciliation of our consolidated retained earnings available for dividend
declaration as at December 31, 2019:
(in million pesos)

Consolidated unappropriated retained earnings as at December 31, 2018 6,861
Effect of PAS 27, Consolidated and Separate Financial Statements, adjustments 25,692
Effect of adoption of PFRS 16 (136 )
Parent Company’s unappropriated retained earnings at beginning of the year 32,417
Less: Cumulative unrealized income – net of tax:
Unrealized foreign exchange gains – net (except those attributable to cash and cash equivalents) (524 )
Fair value adjustments of investment property resulting to gain (888 )
Fair value adjustments (mark-to-market gains) (3,439 )
Parent Company’s unappropriated retained earnings available for dividends as at January 1, 2019 27,566
Parent Company’s net income for the year 18,381
Less: Fair value adjustment of investment property resulting to gain (229 )
Unrealized foreign exchange gains – net (except those attributable to cash and cash equivalents) (473 )
17,679
Less: Cash dividends declared during the year
Preferred stock (59 )
Common stock (15,556 )
(15,615 )
Parent Company’s unappropriated retained earnings available for dividends as at December 31, 2019 29,630
As at December 31, 2019, our consolidated unappropriated retained earnings amounted to Php18,063 million
while the Parent Company’s unappropriated retained earnings amounted to Php35,182 million. The
difference of Php17,119 million pertains to the effect of PAS 27 in our investments in subsidiaries, associates
and joint ventures accounted for under equity method.
As at December 31, 2018, our consolidated unappropriated retained earnings amounted to Php12,081 million
while the Parent Company’s unappropriated retained earnings amounted to Php32,553 million. The
difference of Php20,472 million pertains to the effect of PAS 27 in our investments in subsidiaries, associates
and joint ventures accounted for under equity method.
F-110
21. Interest-bearing Financial Liabilities
As at December 31, 2019 and 2018, this account consists of the following:
2019 2018
(in million pesos)
Long-term portion of interest-bearing financial liabilities:
Long-term debt (Notes 28 and 29) 172,834 155,835
Current portion of interest-bearing financial liabilities:

Long-term debt maturing within one year (Notes 28 and 29) 19,722 20,441
192,556 176,276
Unamortized debt discount, representing debt issuance costs and any difference between the fair value of
consideration given or received at initial recognition, included in our financial liabilities amounted to Php491
million and Php418 million as at December 31, 2019 and 2018, respectively. See Note 28 – Financial Assets
and Liabilities.
The following table describes all changes to unamortized debt discount for the years ended December 31,
2019 and 2018:
2019 2018
(in million pesos)
Unamortized debt discount at beginning of the year 418 525
Additions during the year 195 38
Accretion during the year included as part of Financing costs (Note 5) (122 ) (145 )
Unamortized debt discount at end of the year 491 418
Long-term Debt
As at December 31, 2019 and 2018, long-term debt consists of:
2019 2018
U.S. U.S.
Description Interest Rates Dollar Php Dollar Php
(in millions)
U.S. Dollar Debts:
Export Credit Agencies-Supported Loans:
Exportkreditnamnden, or EKN 1.4100% in 2019 and 2018 — — 2 103
Term Loans:
Others 2.8850% and US$ LIBOR + 335 17,029 442 23,249
0.7900% to 1.4500% in 2019
and 2.8850% and US$ LIBOR
+ 0.7900% to 1.6000% in 2018
335 17,029 444 23,352
Philippine Peso Debts:
Fixed Rate Corporate Notes 5.3938% to 5.9058% in 2019 and 2018 6,152 15,511
Fixed Rate Retail Bonds 5.2250% to 5.2813% in 2019 and 2018 14,965 14,943
Term Loans:
Unsecured Term Loans 3.9000% to 6.7339%; PHP BVAL 154,410 122,470
+ 0.6000% to 1.0000% and
PDST-R2 + 0.5000% to 0.6000% in
2019 and 3.9000% to 6.7339%;
PDST-R2/(1) PHP BVAL + 0.5000%
to 1.0000% in 2018
175,527 152,924
Total long-term debt (Notes 28 and 29) 192,556 176,276
Less portion maturing within one year
(Note 28) 19,722 20,441
Noncurrent portion of long-term debt
(Note 28) 172,834 155,835
(1)
Effective October 29, 2018, PHP BVAL Reference Rates replaced PDST Reference Rates (PDST-R1 and PDST-R2).
F-111
The scheduled maturities of our consolidated outstanding long-term debt at nominal values as at December
31, 2019 are as follows:
U.S. Dollar Debt Php Debt Total

Year U.S. Dollar Php Php Php
(in millions)
2020 210 10,687 9,148 19,835
2021 46 2,306 20,303 22,609
2022 30 1,543 15,487 17,030
2023 25 1,270 25,193 26,463
2024 25 1,270 12,555 13,825
2025 and onwards — — 93,285 93,285
(Note 28) 336 17,076 175,971 193,047
In order to acquire imported components for our network infrastructure in connection with our expansion and
service improvement programs, we obtained loans extended and/or guaranteed by various export credit
agencies as at December 31, 2019 and 2018:
Cancelled
Drawn Undrawn Outstanding Amounts
Date of Terms Amount Amount 2019 2018
Loan Final Paid in U.S. U.S.
Loan Amount Agreement Lender(s) Installments Installment Dates Drawn U.S. Dollar full on Dollar Php Dollar Php
U.S. Dollar Debts
EKN, the Export-Credit Agency of Sweden
Smart
US$45.6M(1) February Nordea 10 equal Tranche A1 Various dates 45.6 — July 16, — — 2 (*) 103 (*)
Tranche A1: 22, Bank, semi-annual, and B1: in 2018 and
US$25M; 2013 subsequently commencing July 16, 2013-2014 April 15,
Tranche A2: assigned to 6 months 2018; 2019
US$19M; SEK on after the Tranche A2
Tranche B1: July 3, 2013 applicable and B2:
US$0.9M; mean April 15,
Tranche B2: delivery date 2019
US$0.7M
— — 2 103
(*)
Amounts are net of unamortized discount and/or debt issuance cost.
(1)
The purpose of this loan is to finance the supply and services contracts for the modernization and expansion project.
F-112
Cancelled
Date of Amount Amount 2019 2018
Loan Loan Dates Paid in U.S. U.S.
Amount Agreement Lender(s) Terms Drawn U.S. Dollar full on Dollar Php Dollar Php
U.S. Dollar Debts
Other Term Loans(1)
PLDT
US$300M January 16, Syndicate of 9 equal semi-annual Various dates 300 — January 16, — — — —
2013 Banks with installment, in 2018
MUFG commencing on the 2013
Bank, Ltd. as date which falls 12
Facility months after the date
Agent of the loan agreement,
with final installment
on January 16, 2018
Smart
US$50M March 25, FEC 9 equal semi-annual Various dates 32 18 March 23, — — — —
2013 installment, in 2018
commencing six 2013 and
months after 2014
drawdown date, with
final installment on
March 23, 2018
Smart
US$80M May 31, China 10 equal semi-annual September 80 — May 31, — — — —
2013 Banking installment, 25, 2018
Corporation, commencing six 2013
or CBC months after
drawdown date, with
May 31, 2018
Smart
US$120M June 20, Mizuho Bank 8 equal semi-annual September 120 — June 20, — — — —
2013 Ltd. and installment, 25, 2018
Sumitomo commencing six 2013
Mitsui months after
Banking drawdown date, with
Corporation, final installment on
or June 20, 2018
Sumitomo,
with
Sumitomo as
Facility
Agent
Smart
US$100M March 7, MUFG 9 equal semi-annual Various dates 90 March 7, 11 (*) 583 (*)
— — —
2014 Bank, Ltd. installment, in 2014 2019
commencing 12
months after
drawdown date, with March 2,
2015 10
March 7, 2019
Smart
US$50M May 14, Mizuho Bank 9 equal semi-annual July 1, 2014 50 May 14, 6 (*) 291 (*)
— — —
2014 Ltd. installment, 2019
commencing 11
months after
drawdown date, with
May 14, 2019
PLDT
US$100M August 5, Philippine Annual amortization Various dates 100 — — 95 4,826 96 5,046
2014 National rate of 1% of the issue in 2014
Bank, price on the first-year
or PNB up to the fifth-year
from the initial
drawdown date, with
August 11, 2020
PLDT
US$50M August 29, Metrobank Annual amortization September 2, 50 — — 48 2,426 48 2,536
2014 rate of 1% of the issue 2014
price payable semi-
annually starting on
the first-year up to
the fifth-year from the
initial drawdown date
and the balance
payable upon maturity
on September 2, 2020
143 7,252 161 8,457
(1)
The purpose of this loan is to finance capital expenditures and/or to refinance existing loan obligations which were utilized for network
expansion and improvement programs.
F-113
Cancelled
Date of Amount Amount 2019 2018
Loan Loan Dates Paid in U.S. U.S.
Amount Agreement Lender(s) Terms Drawn U.S. Dollar full on Dollar Php Dollar Php
PLDT
US$200M February 26, MUFG Commencing 36 Various 200 74 (*) 3,797 (*) 104 (*) 5,492 (*)
— —
Tranche A: 2015 Bank, Ltd. months after loan dates
US$150M; date, with semi- in 2015
Tranche B: annual amortization
US$50M of 23.75% of the
loan amount on the
first and second
repayment dates and
seven semi-annual
amortizations of
7.5% starting on the
third repayment date,
with final installment
on February 25, 2022
Smart
US$200M March 4, Mizuho Bank 9 equal semi-annual Various 200 March 4, 22 (*) 1,128 (*) 66 (*) 3,490 (*)
—
2015 Ltd. installments dates 2020
commencing on the in 2015
date which falls 12
months after the loan
date, with final
installment on
March 4, 2020
Smart
US$100M December 7, Mizuho Bank 13 equal semi-annual Various 100 46 (*) 2,324 (*) 61 (*) 3,198 (*)
— —
2015 Ltd. installments dates
commencing on the in 2016
date which falls 12
months after the loan
date, with final
installment on
December 7, 2022
PLDT
US$25M March 22, NTT Finance Non-amortizing, March 30, 25 25 (*) 1,265 (*) 25 (*) 1,307 (*)
— —
2016 Corporation payable upon maturity 2016
on March 30, 2023
PLDT
US$25M January 31, NTT Finance Non-amortizing, March 30, 25 25 (*) 1,263 (*) 25 (*) 1,306 (*)
— —
2017 Corporation payable upon maturity 2017
on March 27, 2024
Smart
US$140M March 4, PNB Quarterly — — — — — — — —
2020 amortization rates
equivalent to:
(a) 2.5% of the total
amount drawn
payable
on the first interest
payment date up to
the 28th interest
payment date; (b) 5%
of the total amount
drawn payable on the
29th interest payment
date up to the 32nd
interest payment date;
and (3) 2.5% of the
total amount drawn
payable on the 37th
interest payment date
up to maturity.
192 9,777 281 14,792
(*)
Amounts are net of unamortized debt discount and/or debt issuance cost.
F-114
Payments Outstanding Amounts
Date of Date of
Loan Issuance/ Amount 2019 2018
Loan Amount Agreement Facility Agent Installments Drawdown Php Date Php Php
Philippine Peso Debts
Fixed Rate Corporate Notes(1)
PLDT
Php1,500M July 25, 2012 Metrobank Annual amortization rate July 27, 2012 1,188 July 29, 2013 — 282
of 1% of the issue price 282 April 29, 2019
on the first-year up to the
sixth-year from issue
date and the balance
payable upon maturity
on July 27, 2019
PLDT
Php8,800M September 19, Metrobank Series A: 1% annual September 21, 2,055 June 21, 2013 3,599 6,340
Series A: 2012 amortization on the first 2012 2,741 September 23,
Php4,610M; up to sixth-year, with the 2019
balance payable on
September 21, 2019;
Series B: Series B: 1% annual
Php4,190M amortization on the first
up to ninth-year, with the
balance payable on
September 21, 2022
PLDT
Php6,200M November 20, BDO Unibank, Series A: Annual November 22, 3,549 February 22, 2,255 5,828
Series A: 2012 Inc., amortization rate of 1% 2012 2019
7-year notes or BDO of the issue price on the
Php3,775M; first-year up to the sixth-
year from issue date and
the balance payable upon
maturity on November
22, 2019;
Series B: Series B: Annual
10-year notes amortization
Php2,425M rate of 1% of the issue price
ninth-year from issue date
and the balance payable
upon maturity on November
22, 2022
PLDT
Php2,055M June 14, 2013 Metrobank Series A: Annual June 21, 2013 1,644 September 23, 298 1,932
Series A: amortization rate of 1% 2019
Php1,735M; of the issue price up to
the fifth-year and the
balance payable upon
maturity on September
21, 2019;
Series B: Series B: Annual
Php320M amortization rate of 1%
of the issue price up to
the eighth-year and the
maturity on September
21, 2022
PLDT
Php1,188M July 19, 2013 Metrobank Annual amortization rate July 29, 2013 1,129 April 29, 2019 — 1,129
of 1% of the issue on the
first-year up to the fifth-
year from the issue date
upon maturity on July
27, 2019
6,152 15,511
(1)
The purpose of this loan is to finance capital expenditures and/or refinance existing loan obligations which were utilized for network
F-115
Date of Payments Outstanding Amounts
Date of Loan Issuance/ Amount 2019 2018
Loan Amount Agreement Paying Agent Terms Drawdown Php Date Php Php
(1)
Fixed Rate Retail Bonds
PLDT
(*) (*)
Php15,000M January 22, Philippine Php12.4B – non- February 6, — — 14,965 14,943
2014 Depositary amortizing, payable in 2014
Trust Corp. full upon maturity on
February 6, 2021;
Php2.6B – non-
amortizing payable in
full on February 6, 2024
(*)
(1)
The purpose of this loan is to finance capital expenditures and/or refinance existing loan obligations which were utilized for network
Cancelled
Date of Loan Amount Amount Paid in 2019 2018
Loan Amount Agreement Lender(s) Terms Dates Drawn Php Php full on Php Php
Term Loans
Unsecured Term Loans(1)
PLDT
Php2,000M March 20, RCBC Annual amortization rate of April 12, 2012 2,000 — — 1,940 1,960
2012 1% on the fifth-year up to the
ninth-year from the initial
drawdown date and the
maturity on April 12, 2022
PLDT
Php200M August 31, Manufacturers Payable in full upon maturity October 9, 200 — April 10, 2019 — 200
2012 Life on October 9, 2019 2012
Insurance Co.
(Phils.), Inc.
PLDT
Php1,000M September 3, Union Bank Annual amortization rate of January 11, 1,000 — January 13, 940 950
2012 of the 1% on the first-year up to the 2013 2020
Philippines, sixth-year from the initial
or Union drawdown date and the
Bank balance payable upon
maturity on January 13, 2020
PLDT
Php1,000M October 11, Philippine Payable in full upon maturity December 3, 1,000 — — 1,000 1,000
2012 American on December 5, 2022 2012
Life and
General
Insurance
Company,
or Philam Life
Smart
Php3,000M December 17, LBP Annual amortization rate of Various dates 3,000 — December 20, — 2,820
2012 1% of the principal amount in 2019
on the first-year up to the 2012-2013
sixth-year commencing on
the first-year anniversary of
the initial drawdown and the
maturity on December 20,
2019
PLDT
Php2,000M November 13, Bank of the Annual amortization rate of Various dates 2,000 — — 1,880 1,900
2013 Philippine 1% on the first-year up to the in
Islands, sixth-year from the initial 2013-2014
or BPI drawdown and the balance
payable upon maturity on
November 22, 2020
Smart
Php3,000M November Metrobank Annual amortization rate November 3,000 — — 1,199 (*) 1,497 (*)
25, 2013 of 10% of the total amount 29,

drawn for six-years and the 2013
final installment is payable
upon maturity on
November 27, 2020
6,959 10,327
(*)
(1)
The purpose of this loan is to finance the capital expenditures and/or refinance existing loan obligations, which were utilized for service
improvements and expansion programs.
F-116
Cancelled
Smart
(*) (*)
Php3,000M December 3, BPI Annual amortization rate of December 10, 3,000 — — 2,818 2,846
2013 1% of the total amount drawn 2013
for the first six-years and the
final installment is payable
upon maturity on December
10, 2020
Smart
(*) (*)
Php3,000M January 29, LBP Annual amortization rate of February 5, 3,000 — — 2,847 2,875
2014 1% of the principal amount 2014
maturity on February 5, 2021
Smart
Php500M February 3, LBP Annual amortization rate of February 7, 500 — — 475 480
Smart
Php2,000M March 26, Union Bank Annual amortization rate of March 28, 2,000 — — 1,900 1,920
maturity on March 29, 2021
PLDT
Php1,500M April 2, 2014 Philam Life Payable in full upon maturity April 4, 2014 1,500 — — 1,500 1,500
on April 4, 2024
Smart
Php500M April 2, 2014 BDO Annual amortization rate of April 4, 2014 500 — — 475 480
1% of the principal amount
maturity on April 2, 2021
PLDT
Php1,000M May 23, Philam Life Payable in full upon maturity May 28, 2014 1,000 — — 1,000 1,000
2014 on May 28, 2024
PLDT
Php1,000M June 9, LBP Annual amortization rate of June 13, 2014 1,000 — — 950 960
2014 1% on the first-year up to the
ninth-year from initial
maturity on June 13, 2024
PLDT
Php1,500M July 28, Union Bank Annual amortization rate of July 31, 2014 1,500 — — 1,425 1,440
maturity on July 31, 2024
PLDT
Php2,000M February 25, BPI Annual amortization rate of March 24, 2,000 — — 1,920 1,940
2015 1% on the first-year up to the 2015
maturity on March 24, 2025
PLDT
Php3,000M June 26, BPI Annual amortization rate of June 30, 2015 3,000 — — 2,880 2,910
maturity on June 30, 2025
18,190 18,351
(*)
F-117
Cancelled
PLDT
Php5,000M August 3, Metrobank Annual amortization rate of Various dates 5,000 — — 4,800 4,850
2015 1% on the first-year up to the in
ninth-year from initial 2015
maturity on September 23,
2025
Smart
(*) (*)
Php5,000M August 11, Metrobank Annual amortization rate of September 1, 5,000 — — 4,785 4,833
ninth-year commencing on
the initial drawdown date and
maturity on September 1,
2025
Smart
(*) (*)
Php5,000M December 11, BPI Annual amortization rate of December 21, 5,000 — — 4,784 4,832
ninth-year commencing on
2025
Smart
(*) (*)
Php5,000M December 16, Metrobank Annual amortization rate of December 28, 5,000 — — 4,784 4,831
up to the tenth-year
commencing on the first-year
anniversary of the initial
drawdown and the balance
June 29, 2026
Smart
(*) (*)
Php7,000M December 18, CBC Annual amortization rate of December 28, 7,000 — — 5,593 6,289
2015 1% of the principal amount 2015 and
on the third-year up to the February 24,
sixth-year from the initial 2016
drawdown date, with balance
December 28, 2022
PLDT
(*) (*)
Php3,000M July 1, 2016 Metrobank Annual amortization rate of February 20, 3,000 — — 2,929 2,957
1% on the first-year up to the 2017
maturity on February 22,
2027
PLDT
(*) (*)
Php6,000M July 1, 2016 Metrobank Annual amortization rate of August 30, 6,000 — — 5,804 5,859
1% on the first-year up to the 2016 and
sixth-year from initial November 10,
drawdown date and the 2016
maturity on August 30, 2023
PLDT
(*) (*)
Php8,000M July 14, 2016 Security Bank Annual amortization rate of February 27, 8,000 — — 7,651 7,807
1% of the total amount drawn 2017
payable semi-annually
starting from the end of the
first-year after the initial
drawdown date until the
ninth-year and the balance
payable on maturity on
March 1, 2027
PLDT
(*) (*)
Php6,500M September 20, BPI Annual amortization rate of November 2, 6,500 — — 6,286 6,346
2016 1% on the first- year up to the 2016 and
sixth-year from initial December 19,
drawdown date and the 2016
maturity on November 2,
2023
47,416 48,604
(*)
F-118
Cancelled
Smart
Php3,000M September 28, BDO Annual amortization rate of 1% October 5, 3,000 — — 2,910 2,940
2016 of the principal amount on the 2016
first-year up to the ninth-year
commencing on the first-year
drawdown date and the balance
October 5, 2026
Smart
(*) (*)
Php5,400M September 28, Union Bank Annual amortization rate of 1% October 24, 5,400 — — 5,229 5,281
2016 of the principal amount on the 2016 and
first-year up to the sixth-year November 21,
commencing on the first-year 2016
October 24, 2023
PLDT
(*) (*)
Php5,300M October 14, BPI Annual amortization rate of 1% December 19, 5,300 — — 5,125 5,175
2016 on the first-year up to the sixth- 2016
year from initial drawdown
date and the balance payable
upon maturity on December 19,
2023
Smart
Php2,500M October 27, CBC Annual amortization rate of December 8, 2,500 — — 2,250 2,500
2016 10% of the amount drawn 2016
starting on the third-year up to
the sixth-year, with balance
December 8, 2023
Smart
(*) (*)
Php4,000M October 28, Security Semi-annual amortization rate April 5, 2017 4,000 — — 1,935 1,953
2016 Bank of 1% of the total amount
drawn from first-year up to the
ninth-year and the balance
payable upon maturity on April
5, 2027
Smart
Php1,000M December 16, PNB Annual amortization rate of 1% December 7, 1,000 — — 980 990
2016 of the amount drawn starting on 2017
the first anniversary of the
advance up to the ninth
anniversary of the advance and
maturity on December 7, 2027
Smart
Php2,000M December 22, LBP Annual amortization rate of 1% January 22, 2,000 — — 1,980 2,000
advance up to the ninth
PLDT
(*) (*)
Php3,500M December 23, LBP Annual amortization rate of 1% April 5, 2017 3,500 — — 3,417 3,450
2016 on the first- year up to the
ninth-year after the drawdown
upon maturity on April 5, 2027
Smart
Php1,500M April 18, PNB Annual amortization rate of 1% January 3, 1,500 — — 1,485 1,500
advance up to the sixth- year
25,311 25,789
(*)
F-119
Cancelled
PLDT
Php2,000M May 24, 2017 Security Semi-annual amortization rate May 29, 2017 2,000 — — 1,950 1,970
Bank of Php10 million starting on
October 5, 2017 and every six
months thereafter with the
balance payable upon maturity
on April 5, 2027
PLDT
Php3,500 M July 5, 2017 LBP Annual amortization rate of 1% July 10, 2017 3,500 — — 3,430 3,465
on the first- year up to the
ninth-year after the drawdown
upon maturity on July 12, 2027
PLDT
Php1,500M August 29, LBP Annual amortization rate April 2, 2018 1,500 — — 1,485 1,500
2017 equivalent to 1% of the total
loan payable on the first-year
up to the ninth-year after the
3, 2028
Smart
Php1,000M September 28, Union Bank Annual amortization rate of 1% February 19, 1,000 — — 990 1,000
2017 of the amount drawn starting 2018
on the first-year anniversary of
the advance up to the ninth-
year anniversary of the advance
and the balance payable upon
PLDT
Php2,000M April 19, 2018 LBP Annual amortization rate April 25, 2018 2,000 — — 1,980 2,000
equivalent to 1% of the total
25, 2028
PLDT
Php1,000M April 20, 2018 LBP Annual amortization rate May 3, 2018 1,000 — — 990 1,000
equivalent to 1% of the total
payable upon maturity on May
3, 2028
PLDT
Php2,000M May 9, 2018 BPI Annual amortization rate May 10, 2018 2,000 — — 1,980 2,000
equivalent to 1% of the amount
drawn starting on the first- year
anniversary of the advance up
to the ninth-year anniversary of
the advance and the balance
10, 2028
PLDT
Php3,000M May 9, 2018 BPI Annual amortization rate May 10, 2018 3,000 — August 10, — —
equivalent to 1% of the amount 2018
10, 2028
12,805 12,935
(*)
F-120
Cancelled
Smart
(*) (*)
Php2,000M May 25, 2018 BPI Annual amortization rate May 28, 2018 2,000 — — 1,969 1,986
to the fifth-year anniversary of
28, 2024
Smart
Php1,500M June 27, 2018 Development Annual amortization rate June 28, 2018 1,500 — — 1,500 1,500
Bank of the equivalent to 1% of the amount
Philippines, drawn starting on the third-
or DBP year anniversary of the advance
up to the fifth-year anniversary
of the advance and the balance
payable upon maturity on June
28, 2024
Smart
(*) (*)
Php3,000M July 31, 2018 BPI Annual amortization rate August 10, 2018 3,000 — — 2,950 2,978
drawn starting on the first-year
May 10, 2028
Smart
(*)
Php5,000M January 11, DBP Annual amortization rate May 6, 2019 2,000 — — 4,978 —
2019 equivalent to 1% of the amount September 2, 3,000
drawn starting on the third-year 2019
May 7, 2029
PLDT
(*)
Php8,000M February 18, Union Bank Annual amortization rate July 11, 2019 3,000 — — 7,978 —
2019 equivalent to 1% of the amount September 6, 2,000
drawn starting on the first-year 2019
anniversary up to the ninth- October 1,
year anniversary of the initial 2019 1,000
drawdown date and the balance November 5, 2,000
payable upon maturity on July 2019
11, 2029
Smart
(*)
Php4,000M February 21, PNB Annual amortization rate March 11, 2019 4,000 — — 3,972 —
2019 equivalent to 1% of the amount
drawn starting on the first-year
anniversary up to the seventh-
year anniversary of the initial
March 11, 2027
PLDT
(*)
Php2,000M April 11, 2019 Bank of Annual amortization rate September 6, 2,000 — — 1,985 —
China equivalent to 1% of the amount 2019
Limited, of loan payable on the first-
Manila year anniversary up to the
Branch sixth-year anniversary of the
initial drawdown date and the
on September 7, 2026
PLDT
(*)
Php2,000M July 1, 2019 PNB Annual amortization rate September 6, 2,000 — — 1,985 —
equivalent to 1% of the total 2019
amount drawn from the facility
on the first-year anniversary up
to the sixth-year anniversary of
maturity on September 7, 2026
Smart
(*)
Php8,000M September 25, CBC Annual amortization rate October 2, 2019 8,000 — — 7,942 —
2019 equivalent to 10% of the total
amount drawn starting on the
third-year anniversary up to the
ninth-year anniversary of the
initial drawdown date and the
on October 2, 2029
35,260 6,465
(*)
F-121
Cancelled
Smart
(*)
Php4,000M December 9, DBP Annual amortization rate December 12, 4,000 — — 3,970 —
2019 equivalent to 1% of the total 2019
amount drawn starting on
the third-year anniversary up
to the ninth-year anniversary
of the initital drawdown date
upon maturity on December
12, 2029
PLDT
Php4,500M December 12, BPI Annual amortization rate December 15, 4,500 — — 4,500 —
2019 equivalent to 1% of the 2019
advance on the first year up
of the drawdown date and
2029
Smart
Php3,000M January 20, BDO Annual amortization rate January 24, 3,000 — — — —
2020 equivalent to 1% of the total 2020
the first-year anniversary up
maturity on January 24,
2030
PLDT
Php5,000M January 29, BDO Annual amortization rate January 31, 5,000 — — — —
2020 equivalent to 1% of the toal 2020
the first-year anniversary up
maturity on January 31,
2030
8,470 —
154,410 122,470
(*)
Compliance with Debt Covenants

PLDT’s debt instruments contain restrictive covenants, including covenants that require us to comply with
specified financial ratios tests, such as total debt to EBITDA and interest cover ratio, at relevant
measurement dates, principally at the end of each quarterly period. We have complied with all of our
maintenance financial ratios as required under our loan covenants and other debt instruments.
The principal factors that could negatively affect our ability to comply with these financial ratio covenants
and other financial tests are depreciation of the Philippine Peso relative to the U.S. Dollar, poor operating
performance of PLDT and its subsidiaries, impairment or similar charges in respect of investments or other
long-lived assets that may be recognized by PLDT and its subsidiaries, and increases in our interest expense.
Interest expense may increase as a result of various factors including issuance of new debt, the refinancing of
lower cost indebtedness by higher cost indebtedness, depreciation of the Philippine Peso relative to the U.S.
Dollar, the lowering of PLDT’s credit ratings or the credit ratings of the Philippines, increase in reference
interest rates, and general market conditions. Of our total consolidated debts, approximately 9% and 13%
were denominated in U.S. Dollars as at December 31, 2019 and 2018, respectively. Therefore, the financial
ratio and other tests are expected to be negatively affected by any weakening of the Philippine Peso relative
to the U.S. Dollar. See Note 28 – Financial Assets and Liabilities – Foreign Currency Exchange Risk.
PLDT’s debt instruments contain a number of other negative covenants that, subject to certain exceptions
and qualifications, restrict PLDT’s ability to take certain actions without lenders’ approval, including:
(a) making or permitting any material change in the character of its business; (b) selling, leasing, transferring
or disposing of all or substantially all of its assets or any significant portion thereof other than in the
ordinary course of business; (c) creating any lien or security interest; (d) permitting set-off against amounts
owed to PLDT; and (e) merging or consolidating with any other company.
F-122
PLDT’s debt instruments also contain customary and other default provisions that permit the lender to
accelerate amounts due or terminate their commitments to extend additional funds under the debt
instruments. These default provisions include: (a) cross-defaults that will be triggered only if the principal
amount of the defaulted indebtedness exceeds a threshold amount specified in these debt instruments;
(b) failure by PLDT to meet certain financial ratio covenants referred to above; (c) the occurrence of any
material adverse change in circumstances that a lender reasonably believes materially impairs PLDT’s ability
to perform its obligations under its debt instrument with the lender; (d) the revocation, termination or
amendment of any of the permits or franchises of PLDT in any manner unacceptable to the lender; (e) the
nationalization or sustained discontinuance of all or a substantial portion of PLDT’s business; and (f) other
typical events of default, including the commencement of bankruptcy, insolvency, liquidation or winding up
proceedings by PLDT.
Smart’s debt instruments contain certain restrictive covenants that require Smart to comply with specified
financial ratios and other financial tests at semi-annual measurement dates. Smart’s loan agreements include
compliance with financial tests such as Smart’s consolidated debt to consolidated EBITDA, debt service
coverage ratio and interest coverage ratio. The agreements also contain customary and other default
provisions that permit the lender to accelerate amounts due under the loans or terminate their commitments
to extend additional funds under the loans. These default provisions include: (a) cross-defaults and cross-
accelerations that permit a lender to declare a default if Smart is in default under another loan agreement.
These cross-default provisions are triggered upon a payment or other default permitting the acceleration of
Smart debt, whether or not the defaulted debt is accelerated; (b) failure by Smart to comply with certain
financial ratio covenants; and (c) the occurrence of any material adverse change in circumstances that the
lender reasonably believes materially impairs Smart’s ability to perform its obligations or impair the
guarantors’ ability to perform their obligations under its loan agreements.
The loan agreements with banks (foreign and local alike) and other financial institutions provide for certain
restrictions and requirements with respect to, among others, maintenance of percentage of ownership of
specific shareholders, incurrence of additional long-term indebtedness or guarantees and creation of property
encumbrances.
As at December 31, 2019 and 2018, we were in compliance with all of our debt covenants.
Consent Solicitation Exercise of PLDT

On October 11, 2019, PLDT announced its undertaking of a consent solicitation exercise relating to the
5.2250% 7-Year Fixed Rate Bonds due 2021 and 5.2813% 10-Year Fixed Rate Bonds due 2024, to amend
PLDT’s maximum stand-alone Total Debt to EBITDA Ratio stipulated in the Trust Indenture from 3.0:1 to
4.0:1. The proposed amendment seeks to provide PLDT with greater flexibility to support, if necessary,
higher levels of capital expenditures and general corporate requirements. Moreover, it will align the
covenant ratio of PLDT’s outstanding debt capital market issuances with that of the existing bilateral
facilities of both PLDT and Smart.
On October 30, 2019, PLDT announced the early closing of the consent solicitation exercise from its original
schedule of November 15, 2019 when the Company received the required consents to effect the proposed
amendment.
Obligations under Finance Leases

The consolidated future minimum payments for finance leases and the long-term portion of obligations under
finance leases (which covers leasehold improvements and various office equipment and vehicles) amounted
to nil and Php514 thousand as at December 31, 2019 and 2018, respectively. See Note 2 – Summary of
Significant Accounting Policies, Note 3 – Management’s Use of Accounting Judgments, Estimates and
Assumptions – Leases and Note 9 – Property and Equipment.
F-123
Under the terms of certain loan agreements and other debt instruments, PLDT may not create, incur, assume,
permit or suffer to exist any mortgage, pledge, lien or other encumbrance or security interest over the whole
or any part of its assets or revenues or suffer to exist any obligation as lessee for the rental or hire of real or
personal property in connection with any sale and leaseback transaction.
22. Deferred Credits and Other Noncurrent Liabilities

2019 2018
(in million pesos)
Accrual of capital expenditures under long-term financing 2,118 2,965
Provision for asset retirement obligations 1,767 1,656
Contract liabilities and unearned revenues (Note 5) 604 532
Others 68 131
4,557 5,284
Accrual of capital expenditures under long-term financing represents expenditures related to the expansion
and upgrade of our network facilities which are not due to be settled within one year. Such accruals are
settled through refinancing from long-term loans obtained from the banks. See Note 21 – Interest-bearing
Financial Liabilities.
The following table summarizes the changes to provision for asset retirement obligations for the years ended
2019 2018
(in million pesos)
Provision for asset retirement obligations at beginning of the year 1,656 1,630
Additional liability 154 161
Accretion expenses 82 47
Settlement of obligations and others (125 ) (182 )
Provision for asset retirement obligations at end of the year 1,767 1,656
23. Accounts Payable

2019 2018
(in million pesos)
Suppliers and contractors (Note 28) 68,051 69,099
Taxes (Note 27) 1,457 1,789
Carriers and other customers (Note 28) 1,387 1,815
Related parties (Notes 25 and 28) 602 684
Others 6,348 1,223
77,845 74,610
Accounts payable are non-interest-bearing and are normally settled within 180 days.
In 2019, one of our major suppliers entered into Trade Financing Arrangements, or TFA, to sell a portion of
its Philippine Peso receivables from the Parent Company amounting to Php1,799 million and from Smart
amounting to Php3,200 million. Under the terms of the TFA, the Purchaser will have exclusive ownership of
the purchased receivables and all of its rights, title and interest. The amount was reclassified from
“Accounts Payable – Suppliers and contractors” to “Accounts Payable – Others” amounted to
Php4,999 million for the year ended December 31, 2019.
Advances to suppliers and contractors are non-interest-bearing and are to be applied to contractors’
subsequent progress billings for our projects.
F-124
For terms and conditions pertaining to the payables to related parties, see Note 25 – Related Party
Transactions.
For detailed discussion on the PLDT Group’s liquidity risk management processes, see Note 28 – Financial
Assets and Liabilities – Liquidity Risk.
24. Accrued Expenses and Other Current Liabilities

2019 2018
(in million pesos)
Accrued utilities and related expenses (Notes 25 and 28) 60,966 57,748
Accrued taxes and related expenses (Note 27) 11,380 11,885
Accrued employee benefits and other provisions (Notes 26 and 28) 8,700 7,980
Contract liabilities and unearned revenues (Note 5) 7,879 6,650
Liability from redemption of preferred shares (Notes 19 and 28) 7,851 7,862
Accrued interests and other related costs (Note 29) 1,531 1,347
Others 2,508 2,252
100,815 95,724
Accrued utilities and related expenses pertain to costs incurred for electricity and water consumption, repairs
and maintenance, selling and promotions, professional and other contracted services, rent, insurance and
security services. These liabilities are non-interest bearing and are normally settled within a year.
Accrued taxes and related expenses pertain to licenses, permits and other related business taxes, which are
normally settled within a year.
Contract liabilities and unearned revenues represent advance payments for leased lines, installation fees,
monthly service fees and unused and/or unexpired portion of prepaid loads.
Other accrued expenses and other current liabilities are non-interest-bearing and are normally settled within a
year. This pertains to other costs incurred for operations-related expenses pending receipt of invoice and
statement of accounts from suppliers.
25. Related Party Transactions

Parties are considered to be related if one party has the ability, directly and indirectly, to control the other
party or exercise significant influence over the other party in making financial and operating decisions.
Parties are also considered to be related if they are subject to common control. Related parties may be
individuals or corporate entities. Transactions with related parties are on an arm’s length basis, similar to
transactions with third parties.
Settlement of outstanding balances of related party transactions at year-end are expected to be settled with
cash.
F-125
The following table provides the summary of outstanding balances as at December 31, 2019 and 2018
transactions that have been entered into with related parties:
Classifications Terms Conditions 2019 2018

(in million pesos)
Indirect investment in joint
ventures through PCEV:
Meralco Accounts payable and accrued Electricity charges – immediately Unsecured 415 518
expenses and other current upon receipt of invoice
liabilities (Notes 23 and 24)
Accrued expenses and other Pole rental – 45 days upon receipt of Unsecured — 209
current liabilities (Note 24) billing
Meralco Industrial Engineering Accrued expenses and other 30 days upon receipt of invoice Unsecured 3 3
Services Corporation, or current liabilities (Note 24)
MIESCOR
MPIC Financial assets at FVOCI – Due on or before December 2020 for Unsecured 162 2,749
net of current portion (Note 11) 2019 and due on December 2019
for 2018;
non-interest-bearing
Current portion of financial assets Due after December 2020 for 2019 and Unsecured 2,757 1,604
at FVOCI (Note 11) due after December 2019 for 2018
Transactions with major
stockholders, directors
and officers:
NTT Finance Corporation Interest-bearing financial liabilities Non-amortizing, payable upon Unsecured 2,540 2,628
(Note 21) maturity on March 30, 2023 and
March 27, 2024
NTT World Engineering Accrued expenses and other 1st month of each quarter; Unsecured 147 84
Marine Corporation current liabilities (Note 24) non-interest-bearing
NTT Communications Accounts payable and accrued 30 days upon receipt of invoice; Unsecured 10 20
expenses and other current non-interest-bearing
NTT Worldwide Accrued expenses and other 30 days upon receipt of invoice; Unsecured 3 3
Telecommunications current liabilities (Note 24) non-interest-bearing
Corporation
NTT DOCOMO Accrued expenses and other 30 days upon receipt of invoice; Unsecured 6 12
current liabilities (Note 24) non-interest-bearing
JGSHI and Subsidiaries Accounts payable and accrued Immediately upon receipt of invoice Unsecured 39 13
expenses and other current
Lease liabilities – net of current Due after December 31, 2020 Unsecured 154 —
portion (Note 10)
Current portion of lease Due on or before December 31, 2020 Unsecured 20 —
liabilities (Note 10)
Malayan Insurance Co., Inc. Prepayments (Note 19) Immediately upon receipt of invoice Unsecured 19 19
or Malayan
Accounts payable and accrued Immediately upon receipt of invoice Unsecured 5 6
expenses and other current
Gotuaco del Rosario and Accounts payable and accrued Immediately upon receipt of invoice Unsecured 1 5
Associates, or Gotuaco expenses and other current
Prepayments (Note 19) Immediately upon receipt of invoice Unsecured 6 —
Others:
Cignal Cable Corporation, Prepayments (Note 19) Immediately upon receipt of invoice Unsecured — 169
or Cignal Cable
(formerly Dakila Cable
TV Corp.)
Various Trade and other receivables 30 days upon receipt of invoice Unsecured 2,082 2,094
(Note 17)
Accounts payable (Note 23) Immediately upon receipt of billing Unsecured 571 684
Accrued expenses and other Immediately upon receipt of billing Unsecured 65 9
current liabilities (Note 24)
Lease liabilities – net of current Due after December 31, 2020 Unsecured 218 —
portion (Note 10)
Current portion of lease Due on or before December 31, 2020 Unsecured 92 —
liabilities (Note 10)
F-126
The following table provides the summary of transactions that have been entered into with related parties for
the years ended December 31, 2019, 2018 and 2017 in relation with the table above.
Classifications 2019 2018 2017

(in million pesos)
Indirect investment in joint ventures through PCEV:
Meralco Repairs and maintenance 2,689 2,771 2,397
Depreciation and amortization 218 — —
Rent 29 583 298
MIESCOR Repairs and maintenance — 33 117
Construction-in-progress — 33 81
Transactions with major stockholders, directors and
officers:
NTT Finance Corporation Financing costs 103 100 56
NTT World Engineering Marine Corporation Repairs and maintenance 169 17 47
NTT Communications Professional and other contracted 95 95 88
services
Rent — 5 4
NTT Worldwide Telecommunications Selling and promotions 5 5 8
Corporation
NTT DOCOMO Professional and other contracted 70 96 94
services
JGSHI and Subsidiaries Rent 429 236 118
Repairs and maintenance 38 111 69
Communication, training and travel 10 20 2
Miscellaneous expenses 101 7 —
Malayan Insurance and security services 295 182 179
Gotuaco Insurance and security services 165 163 126
Asia Link B.V., or ALBV Professional and other contracted — 34 190
services
First Pacific Investment Management Professional and other contracted 156 135 —
Limited, or FPIML services
Others:
TV5 Selling and promotions 33 409 149
Cignal Cable Cost of services 224 372 514
Various Revenues 2,401 2,355 2,059
Expenses 2,015 1,935 1,223
a. Agreements between PLDT and certain subsidiaries with Meralco

In the ordinary course of business, Meralco provides electricity to PLDT and certain subsidiaries’ offices
within its franchise area. Total electricity costs, which were presented as part of repairs and
maintenance in our consolidated income statements, amounted to Php2,689 million, Php2,771 million
and Php2,397 million for the years ended December 31, 2019, 2018 and 2017, respectively. Under these
agreements, the outstanding obligations, which were presented as part of accounts payable and accrued
expenses and other current liabilities in our consolidated statements of financial position, amounted to
Php415 million and Php518 million as at December 31, 2019 and 2018, respectively.
PLDT and Smart have Pole Attachment Contracts with Meralco, wherein Meralco leases its pole spaces
to accommodate PLDT’s and Smart’s cable network facilities. Total fees under these contracts, which
were presented as part of depreciation and amortization in our consolidated income statements,
amounted to Php218 million for the year ended December 31, 2019 and nil for the years ended
December 31, 2018 and 2017. Total fees under these contracts, which were presented as part of rent in
our consolidated income statements, amounted to Php29 million, Php583 million and Php298 million for
the years ended December 31, 2019, 2018 and 2017, respectively. Under these agreements, the
outstanding obligations, which were presented as part of accrued expenses and other current liabilities in
our consolidated statements of financial position, amounted to Php66 thousand and Php209 million as at
b. Agreements between PLDT and MIESCOR

PLDT has an existing Outside and Inside Plant Contracted Services Agreement with MIESCOR, a
subsidiary of Meralco, which expired on December 31, 2018. Under the agreement, MIESCOR assumes
full and overall responsibility for the implementation and completion of any assigned project such as
cable and civil works that are required for the provisioning and restoration of lines and recovery of
existing plant.
F-127
Total fees under this agreement, which were presented as part of repairs and maintenance in our
consolidated income statements, amounted to nil, Php96 thousand and Php3 million for the years ended
December 31, 2019, 2018 and 2017, respectively. Total amounts capitalized to property and equipment
amounted to nil, Php14 million and Php5 million for the years ended December 31, 2019, 2018 and
2017, respectively. Under these agreements, the outstanding obligations, which were presented as part
of accrued expenses and other current liabilities in our consolidated statements of financial position,
amounted to Php185 thousand each as at December 31, 2019 and 2018.
PLDT also has an existing Customer Line Installation, Repair, Rehabilitation and Maintenance
Activities agreement with MIESCOR, which expired on December 31, 2018. Under the agreement,
MIESCOR is responsible for the subscriber main station installation, repairs and maintenance of outside
and inside plant network facilities in the areas awarded to them.
Total fees under this agreement, which were presented as part of repairs and maintenance in our
consolidated income statements, amounted to nil, Php33 million and Php114 million for the years ended
December 31, 2019, 2018 and 2017, respectively. Total amounts capitalized to property and equipment
amounted to nil, Php19 million and Php76 million for the years ended December 31, 2019, 2018 and
2017, respectively. Under these agreements, the outstanding obligations, which were presented as part
of accrued expenses and other current liabilities in our consolidated statements of financial position,
amounted to Php3 million each as at December 31, 2019 and 2018.
c. Transactions with Major Stockholders, Directors and Officers

Material transactions to which PLDT or any of its subsidiaries is a party, in which a director, key officer
or owner of more than 10% of the outstanding common stock of PLDT, or any member of the immediate
family of a director, key officer or owner of more than 10% of the outstanding common stock of PLDT,
had a direct or indirect material interest as at December 31, 2019 and 2018, and for the years ended
December 31, 2019, 2018 and 2017 are as follows:
1. Term Loan Facility Agreements with NTT Finance Corporation

On March 22, 2016, PLDT signed a US$25 million term loan facility agreement with NTT Finance
Corporation to finance its capital expenditure requirements for network expansion and service
improvement and/or refinancing existing indebtedness. The loan is payable upon maturity on
March 30, 2023. The loan was fully drawn on March 30, 2016. Total interest under this agreement,
which were presented as part of financing costs in our consolidated income statements, amounted to
Php51.5 million, Php50 million and Php28 million for the years ended December 31, 2019, 2018
and 2017, respectively. The amounts of US$25 million, or Php1,270 million, and US$25 million, or
Php1,314 million, remained outstanding as at December 31, 2019 and 2018, respectively.
Another US$25 million term loan facility was signed with NTT Finance Corporation on January 31,
2017 to finance its capital expenditure requirements for network expansion and service
improvement and/or refinancing existing indebtedness. The loan is payable upon maturity on
March 27, 2024. The loan was fully drawn on March 30, 2017. Total interest under this agreement,
which were presented as part of financing costs in our consolidated income statements, amounted to
Php51.5 million, Php50 million and Php28 million for the years ended December 31, 2019, 2018
and 2017, respectively. The amount of US$25 million, or Php1,270 million, and US$25 million, or
Php1,314 million, remained outstanding as at December 31, 2019 and 2018, respectively.
F-128
2. Various Agreements with NTT Communications and/or its Affiliates
PLDT is a party to the following agreements with NTT Communications and/or its affiliates:
 Service Agreement. On February 1, 2008, PLDT entered into an agreement with NTT World
Engineering Marine Corporation wherein the latter provides offshore submarine cable repair
and other allied services for the maintenance of PLDT’s domestic fiber optic network
submerged plant. The fees under this agreement, which were presented as part of repairs and
maintenance in our consolidated income statements, amounted to Php169 million, Php17
million and Php47 million for the years ended December 31, 2019, 2018 and 2017,
respectively. Under this agreement, the outstanding obligations of PLDT, which were
presented as part of accrued expenses and other current liabilities in our consolidated
statements of financial position, amounted to Php147 million and Php84 million as at
December 31, 2019 and 2018, respectively;
 Advisory Services Agreement. On March 24, 2000, PLDT entered into an agreement with NTT
Communications, as amended on March 31, 2003, March 31, 2005 and June 16, 2006, under
which NTT Communications provides PLDT with technical, marketing and other consulting
services for various business areas of PLDT starting April 1, 2000. The fees under this
agreement, which were presented as part of professional and other contracted services in our
consolidated income statements, amounted to Php95 million for each of the years ended
December 31, 2019 and 2018, while Php88 million for the year ended December 31, 2017.
Under this agreement, the outstanding obligations of PLDT, which were presented as part of
accounts payable and accrued expenses and other current liabilities in our consolidated
statements of financial position, amounted to Php8 million and Php16 million as at December
31, 2019 and 2018, respectively;
 Conventional International Telecommunications Services Agreement. On March 24, 2000,

PLDT entered into an agreement with NTT Communications under which PLDT and NTT
Communications agreed to cooperative arrangements for conventional international
telecommunications services to enhance their respective international businesses. The fees
under this agreement, which were presented as part of rent in our consolidated income
statements, amounted to nil, Php5 million and Php4 million for the years ended December 31,
2019, 2018 and 2017, respectively. Under this agreement, the outstanding obligations of
PLDT, which were presented as part of accounts payable and accrued expenses and other
current liabilities in our consolidated statements of financial position, amounted to Php2 million
and Php4 million as at December 31, 2019 and 2018, respectively; and
 Arcstar Licensing Agreement and Arcstar Service Provider Agreement. On March 24, 2000,
PLDT entered into an agreement with NTT Worldwide Telecommunications Corporation under
which PLDT markets, and manages data and other services under NTT Communications’
“Arcstar” brand to its corporate customers in the Philippines. PLDT also entered into a Trade
Name and Trademark Agreement with NTT Communications under which PLDT has been
given the right to use the trade name “Arcstar” and its related trademark, logo and symbols,
solely for the purpose of PLDT’s marketing, promotional and sales activities for the Arcstar
services within the Philippines. The fees under this agreement, which were presented as part of
selling and promotions in our consolidated income statements, amounted to Php5 million for
each of the years ended December 31, 2019 and 2018, while Php8 million for the year ended
December 31, 2017. Under this agreement, the outstanding obligations of PLDT, which were
presented as part of accrued expenses and other current liabilities in our consolidated
statements of financial position, amounted to Php3 million each as at December 31, 2019 and
2018.
F-129
3. Advisory Services Agreement between NTT DOCOMO and PLDT
On June 5, 2006, in accordance with the Cooperation Agreement dated January 31, 2006, an
Advisory Services Agreement was entered into by NTT DOCOMO and PLDT. Pursuant to the
Advisory Services Agreement, NTT DOCOMO will provide the services of certain key personnel in
connection with certain aspects of the business of PLDT and Smart. Also, this agreement governs
the terms and conditions of the appointments of such key personnel and the corresponding fees
related thereto. Total fees under this agreement, which were presented as part of professional and
other contracted services in our consolidated income statements, amounted to Php70 million, Php96
million and Php94 million for the years ended December 31, 2019, 2018 and 2017, respectively.
Under this agreement, the outstanding obligations of PLDT, which were presented as part of
accrued expenses and other current liabilities in our consolidated statements of financial position,
amounted to Php6 million and Php12 million as at December 31, 2019 and 2018, respectively.
4. Transactions with JGSHI and Subsidiaries

PLDT and certain of its subsidiaries have existing agreements with Universal Robina Corporation
and Robinsons Land Corporation for office and business office rental. Total fees under these
contracts, which were presented as part of rent in our consolidated income statements, amounted to
Php429 million, Php236 million and Php118 million for the years ended December 31, 2019, 2018
and 2017, respectively. Under these agreements, the outstanding obligations, which were presented
as part of accounts payable and accrued expenses and other current liabilities in our consolidated
statements of financial position, amounted to Php37 million and Php10 million as at December 31,
2019 and 2018, respectively. Under these agreements, the outstanding obligations, which were
presented as part of lease liabilities in our consolidated statements of financial position, amounted to
Php174 million and nil as at December 31, 2019 and 2018, respectively.
There were also other transactions such as communication, training and travel, repairs and
maintenance and miscellaneous expenses in our consolidated income statements, amounting to
Php149 million, Php138 million and Php71 million for the years ended December 31, 2019, 2018
and 2017, respectively. Under these agreements, the outstanding obligations for these transactions,
which were presented as part of accrued expenses and other current liabilities in our consolidated
statements of financial position, amounted to Php2 million and Php3 million as at December 31,
5. Transactions with Malayan

PLDT and certain of its subsidiaries have insurance policies with Malayan covering directors,
officers, liability to employees and material damages for buildings, building improvements,
equipment and motor vehicles. The premiums are directly paid to Malayan. Total fees under these
contracts, which were presented as part of insurance and security services in our consolidated
income statements, amounted to Php295 million, Php182 million and Php179 million for the years
ended December 31, 2019, 2018 and 2017, respectively. Under this agreement, outstanding
prepayments, which were presented as part of prepayments in our consolidated statements of
financial position, amounted to Php19 million each as at December 31, 2019 and 2018, while the
outstanding obligations, which were presented as part of accounts payable and accrued expenses
and other current liabilities in our consolidated statements of financial position, amounted to Php5
million and Php6 million as at December 31, 2019 and 2018, respectively.
6. Transactions with Gotuaco

Gotuaco acts as the broker for certain insurance companies to cover certain insurable properties of
the PLDT Group. Insurance premiums are remitted to Gotuaco and the broker’s fees are settled
between Gotuaco and the insurance companies. Total fees under these contracts, which were
presented as part of insurance and security services in our consolidated income statement, amounted
to Php165 million, Php163 million and Php126 million for the years ended December 31, 2019,
2018 and 2017, respectively. Under this agreement, the outstanding prepayments, which were
presented as part of prepayments in our consolidated statements of financial position, amounted to
Php6 million and nil as at December 31, 2019 and 2018, respectively, while the outstanding
obligations, which were presented as part of accounts payable and accrued expenses and other
current liabilities in our consolidated statements of financial position, amounted to Php1 million and
Php5 million as at December 31, 2019 and 2018, respectively.
F-130
7. Agreement between Smart and ALBV
Smart had a Technical Assistance Agreement with ALBV, a subsidiary of the First Pacific Group
and its Philippine affiliates. ALBV provides technical support services and assistance in the
operations and maintenance of Smart’s cellular business which provides for payment of technical
service fees equivalent to a rate of 0.5% of the consolidated net revenues of Smart. Effective
February 1, 2014, the parties agreed to reduce the technical service fee rate from 0.5% to 0.4% of
the consolidated net revenues of Smart. The agreement expired on February 23, 2018. Total
service fees charged to operations under this agreement, which were presented as part of
professional and other contracted services in our consolidated income statements, amounted to nil,
Php34 million and Php190 million for the years ended December 31, 2019, 2018 and 2017,
respectively. There were no outstanding obligations under this agreement as at December 31, 2019
and 2018.
8. Agreement between Smart and FPIML

On March 1, 2018, Smart entered into an Advisory Services Agreement with FPIML, a subsidiary
of the First Pacific Group and its Philippine affiliates. The agreement shall be effective for a period
of one-year subject to a 12-month automatic renewal unless either party notifies the other party of
its intent not to renew the agreement. FPIML provides advisory and related services in connection
with the operation of Smart’s business of providing mobile communications services, high-speed
internet connectivity, and access to digital services and content. The agreement provides that Smart
shall pay monthly service fee of $250 thousand and any additional fee shall be mutually agreed
upon by both parties on a monthly basis. Total professional fees under this agreement, which were
presented as part of professional and other contracted services in our consolidated income
statements, amounted to Php156 million and Php135 million for the years ended December 31,
2019 and 2018, respectively. There were no outstanding payable under this agreement as at
December 31, 2019 and 2018.
9. Cooperation Agreement with First Pacific and certain affiliates, or the FP Parties, NTT
Communications and NTT DOCOMO
In connection with the transfer by NTT Communications of approximately 12.6 million shares of
PLDT’s common stock to NTT DOCOMO pursuant to the SPA dated January 31, 2006 between
NTT Communications and NTT DOCOMO, the FP Parties, NTT Communications and NTT
DOCOMO entered into a Cooperation Agreement, dated January 31, 2006. Under the Cooperation
Agreement, the relevant parties extended certain rights of NTT Communications under the Stock
Purchase and Strategic Investment Agreement dated September 28, 1999, as amended, and the
Shareholders Agreement dated March 24, 2000, to NTT DOCOMO, including:
 certain contractual veto rights over a number of major decisions or transactions; and
 rights relating to the representation on the Board of Directors of PLDT and Smart, respectively,
and any committees thereof.
Moreover, key provisions of the Cooperation Agreement pertain to, among other things:
 Restriction on Ownership of Shares of PLDT by NTT Communications and NTT DOCOMO.

Each of NTT Communications and NTT DOCOMO has agreed not to beneficially own,
directly or indirectly, in the aggregate with their respective subsidiaries and affiliates, more
than 21% of the issued and outstanding shares of PLDT’s common stock. If such event does
occur, the FP Parties, as long as they own in the aggregate not less than 21% of the issued and
outstanding shares of PLDT’s common stock, have the right to terminate their respective rights
and obligations under the Cooperation Agreement, the Shareholders Agreement and the Stock
Purchase and Strategic Investment Agreement.
F-131
 Limitation on Competition. NTT Communications, NTT DOCOMO and their respective
subsidiaries are prohibited from investing in excess of certain thresholds in businesses
competing with PLDT in respect of customers principally located in the Philippines and from
using their assets in the Philippines in such businesses. Moreover, if PLDT, Smart or any of
Smart’s subsidiaries intend to enter into any contractual arrangement relating to certain
competing businesses, PLDT is required to provide, or to use reasonable efforts to procure that
Smart or any of Smart’s subsidiaries provide, NTT Communications and NTT DOCOMO with
the same opportunity to enter into such agreement with PLDT or Smart or any of Smart’s
subsidiaries, as the case may be.
 Business Cooperation. PLDT and NTT DOCOMO agreed in principle to collaborate with each
other on the business development, roll-out and use of a Wireless-Code Division Multiple
Access mobile communication network. In addition, PLDT agreed, to the extent of the power
conferred by its direct or indirect shareholding in Smart, to procure that Smart will: (i) become
a member of a strategic alliance group for international roaming and corporate sales and
services; and (ii) enter into a business relationship concerning preferred roaming and inter-
operator tariff discounts with NTT DOCOMO.
 Additional Rights of NTT DOCOMO. Pursuant to amendments effected by the Cooperation

Agreement to the Stock Purchase and Strategic Investment Agreement and the Shareholders
Agreement, upon NTT Communications and NTT DOCOMO and their respective subsidiaries
owning in the aggregate 20% or more of PLDT’s shares of common stock and for as long as
they continue to own in the aggregate at least 17.5% of PLDT’s shares of common stock then
outstanding, NTT DOCOMO has additional rights under the Stock Purchase and Strategic
Investment Agreement and Shareholders Agreement, including that:
1. NTT DOCOMO is entitled to nominate one additional NTT DOCOMO nominee to the
Board of Directors of each PLDT and Smart;
2. PLDT must consult NTT DOCOMO no later than 30 days prior to the first submission
to the board of PLDT or certain of its committees of any proposal of investment in an
entity that would primarily engage in a business that would be in direct competition or
substantially the same business opportunities, customer base, products or services with
business carried on by NTT DOCOMO, or which NTT DOCOMO has announced
publicly an intention to carry on;
3. PLDT must procure that Smart does not cease to carry on its business, dispose of all of
its assets, issue common shares, merge or consolidate, or effect winding up or
liquidation without PLDT first consulting with NTT DOCOMO no later than 30 days
prior to the first submission to the board of PLDT or Smart, or certain of its
committees; and
4. PLDT must first consult with NTT DOCOMO no later than 30 days prior to the first
submission to the board of PLDT or certain of its committees for the approval of any
transfer by any member of the PLDT Group of Smart common capital stock to any
person who is not a member of the PLDT Group.
F-132
NTT Communications and NTT DOCOMO together beneficially owned approximately 20% of
PLDT’s outstanding common stock as at December 31, 2019 and 2018.
 Change in Control. Each of NTT Communications, NTT DOCOMO and the FP Parties agreed
that to the extent permissible under applicable laws and regulations of the Philippines and other
jurisdictions, subject to certain conditions, to cast its vote as a shareholder in support of any
resolution proposed by the Board of Directors of PLDT for the purpose of safeguarding PLDT
from any Hostile Transferee. A “Hostile Transferee” is defined under the Cooperation
Agreement to mean any person (other than NTT Communications, NTT DOCOMO, First
Pacific or any of their respective affiliates) determined to be so by the PLDT Board of Directors
and includes, without limitation, a person who announces an intention to acquire, seeking to
acquire or acquires 30% or more of PLDT common shares then issued and outstanding from
time to time or having (by itself or together with itself) acquired 30% or more of the PLDT
common shares who announces an intention to acquire, seeking to acquire or acquires a further
2% of such PLDT common shares: (a) at a price per share which is less than the fair market
value as determined by the Board of Directors of PLDT, as advised by a professional financial
advisor; (b) which is subject to conditions which are subjective or which could not be
reasonably satisfied; (c) without making an offer for all PLDT common shares not held by it
and/or its affiliates and/or persons who, pursuant to an agreement or understanding (whether
formal or informal), actively cooperate to obtain or consolidate control over PLDT; (d) whose
offer for the PLDT common shares is unlikely to succeed; or (e) whose intention is otherwise
not bona fide; provided that, no person will be deemed a Hostile Transferee unless prior to
making such determination, the Board of Directors of PLDT has used reasonable efforts to
discuss with NTT Communications and NTT DOCOMO in good faith whether such person
should be considered a Hostile Transferee.
 Termination. If NTT Communications, NTT DOCOMO or their respective subsidiaries cease

to own, in the aggregate, full legal and beneficial title to at least 10% of the shares of PLDT’s
common stock then issued and outstanding, their respective rights and obligations under the
Cooperation Agreement and the Shareholders Agreement will terminate and the Strategic
Arrangements (as defined in the Stock Purchase and Strategic Investment Agreement) will
terminate. If the FP Parties and their respective subsidiaries cease to have, directly or
indirectly, effective voting power in respect of shares of PLDT’s common stock representing at
least 18.5% of the shares of PLDT’s common stock then issued and outstanding, their
respective rights and obligations under the Cooperation Agreement, the Stock Purchase and
Strategic Investment Agreement, and the Shareholders Agreement will terminate.
d. Others
1. Agreement of PLDT and Smart with TV5
In 2010, PLDT and Smart entered into advertising placement agreements with TV5, a subsidiary of
MediaQuest, which is a wholly-owned investee company of PLDT Beneficial Trust Fund for the
airing and telecast of advertisements and commercials of PLDT and Smart on TV5’s television
network for a period of five years. The costs of telecast of each advertisement shall be applied and
deducted from the placement amount only after the relevant advertisement or commercial is actually
aired on TV5’s television network. In June 2014, Smart and TV5 agreed to amend the liquidation
schedule under the original advertising placement agreement by extending the term of expiry from
2015 to 2018. Total selling and promotions under the advertising placement agreements amounted
to Php33 million, Php409 million and Php149 million for the years ended December 31, 2019, 2018
and 2017, respectively. There were no prepayments under this advertising placement agreements as
at December 31, 2019 and 2018.
F-133
2. Agreement of PLDT, Smart and DMPI with Cignal Cable
In May 2015, PLDT, Smart and DMPI entered into a four-year agreement with Cignal Cable
commencing with the launch of the OTT video-on-demand service, or iflix service, in the
Philippines on June 18, 2015. iflix service is provided by iFlix Sdn Bhd and Cignal Cable is the
authorized reseller of the iflix service in the Philippines. Under the agreement, PLDT, Smart and
DMPI were appointed by Cignal Cable to act as its internet service providers with an authority to
resell and distribute the iflix service to their respective subscribers on a monthly and annual basis.
Content cost recognized for the years ended December 31, 2019, 2018 and 2017 amounted to
Php224 million, Php372 million and Php514 million, respectively. Under this agreement,
outstanding prepayments, which were presented as part of prepayments in our consolidated
statements of financial position, amounted to nil and Php169 million as at December 31, 2019 and
2018, respectively. There were no outstanding obligations under this agreement as at December 31,
2019 and 2018.
3. Telecommunications services provided by PLDT and certain of its subsidiaries and other
transactions with various related parties
PLDT and certain of its subsidiaries provide telephone, data communication and other services to
various related parties. The revenues under these services amounted to Php2,401 million, Php2,355
million and Php2,059 million for the years ended December 31, 2019, 2018 and 2017, respectively.
The expenses under these services amounted to Php2,015 million, Php1,935 million and Php1,223
The outstanding receivables of PLDT and certain of its subsidiaries, which were presented as part of
trade and other receivables in our consolidated statements of financial position amounted to
Php2,082 million and Php2,094 million as at December 31, 2019 and 2018, respectively. Under
these agreements, the outstanding obligations, which were presented as part of accounts payable in
our consolidated statements of financial position amounted to Php571 million and Php684 million
as at December 31, 2019 and 2018, respectively, accrued expenses and other current liabilities
amounted to Php65 million and Php9 million as at December 31, 2019 and 2018, respectively, and
lease liabilities amounted to Php310 million and nil as at December 31, 2019 and 2018,
respectively.
See Note 11 – Investments in Associates and Joint Ventures – Investment of ePLDT in MediaQuest
PDRs and Sale of PCEV’s Receivables from MPIC for other related party transactions.
e. Material Related Party Transitions, or MRPT, Policy
On September 24, 2019, the Board of Directors approved and adopted the MRPT Policy in
compliance with the Philippine SEC Memorandum Circular No. 10, Series of 2019, or the Rules on
MRPT for Publicly-Listed Companies.
This MRPT Policy applies to the PLDT Group and covers related party transactions that meet the
Materiality Threshold of 10% of PLDT’s total consolidated assets. It defines the processes, controls
and safeguards for the proper handling, including review, approval and disclosure, of such related
party transactions in accordance with applicable laws and regulations.
Related party transactions involving an amount below the Materiality Threshold shall be covered by
our Guidelines on the Proper Handling of Related Party Transactions.
F-134
Compensation of Key Officers of the PLDT Group
The compensation of key officers of the PLDT Group by benefit type for the years ended December 31,
2019, 2018 and 2017 are as follows:
2019 2018 2017

(in million pesos)
Short-term employee benefits 311 401 325
Share-based payments (Note 27) 138 83 —
Post-employment benefits (Note 27) 58 30 27
Total compensation paid to key officers of the PLDT Group 507 514 352
The amounts disclosed in the table above are the amounts recognized as expenses during the period related to
key management personnel.
Effective January 2014, each of the directors, including the members of the advisory board of PLDT, was
entitled to a director’s fee in the amount of Php250 thousand for each board meeting attended. Each of the
members or advisors of the audit, executive compensation, governance and nomination, and technology
strategy committees was entitled to a fee in the amount of Php125 thousand for each committee meeting
attended.
Total fees paid for board meetings and board committee meetings amounted to Php123 million, Php63
million and Php72 million for the years ended December 31, 2019, 2018 and 2017, respectively.
Except for the fees mentioned above, the directors are not compensated, directly or indirectly, for their
services as such.
There are no agreements between PLDT Group and any of its key management personnel providing for
benefits upon termination of employment, except for such benefits to which they may be entitled under
PLDT Group’s retirement and incentive plans.
26. Pension and Employee Benefits

Pension
Defined Benefit Pension Plans
PLDT has defined benefit pension plans, operating under the legal name “The Board of Trustees for the
account of the Beneficial Trust Fund created pursuant to the Benefit Plan of PLDT Co.” and covering all of
our permanent and regular employees. Certain subsidiaries of PLDT have not yet drawn up a specific
retirement plan for its permanent or regular employees. For the purpose of complying with Revised PAS 19,
pension benefit expense has been actuarially computed based on defined benefit plan.
F-135
PLDT’s actuarial valuation is performed every year-end. Based on the latest actuarial valuation, the actual
present value of accrued (prepaid) benefit costs, net periodic benefit costs and average assumptions used in
developing the valuation as at and for the years ended December 31, 2019, 2018 and 2017:
2019 2018 2017

(in million pesos)
Changes in the present value of defined benefit obligations:
Present value of defined benefit obligations at beginning of the year 20,683 21,503 23,142
Actuarial gains – economic assumptions 3,833 (2,611 ) (1,277 )
Interest costs on benefit obligation 1,338 1,227 1,180
Service costs 1,043 1,063 1,158
Actuarial losses – experience 570 419 423
Actual benefits paid/settlements (4,558 ) (887 ) (2,723 )
Curtailments and others (Note 5) (271 ) (31 ) (400 )
Present value of defined benefit obligations at end of the year 22,638 20,683 21,503
Changes in fair value of plan assets:
Fair value of plan assets at beginning of the year 13,539 12,534 11,960
Actual contributions 7,598 5,110 5,122
Interest income on plan assets 1,360 770 641
Return on plan assets (excluding amount included in net interest) (4,215 ) (3,988 ) (2,466 )
Actual benefits paid/settlements (4,558 ) (887 ) (2,723 )
Fair value of plan assets at end of the year 13,724 13,539 12,534
Unfunded status – net (8,914 ) (7,144 ) (8,969 )
Accrued benefit costs 8,985 7,159 8,984
Prepaid benefit costs (Note 19) 71 15 15
Components of net periodic benefit costs:

Service costs 1,043 1,063 1,158
Interest costs – net (22 ) 457 539
Curtailment/settlement losses and other adjustments (181 ) 21 (341 )
Net periodic benefit costs (Note 5) 840 1,541 1,356
Actual net losses on plan assets amounted to Php2,855 million, Php3,218 million and Php1,825 million for
the years ended December 31, 2019, 2018 and 2017, respectively.
Based on the latest actuarial valuation, our expected contribution to the defined benefit plan in 2020 will
amount to Php1,589 million.
The following table sets forth the expected future settlements by the Plan of maturing defined benefit
obligation as at December 31, 2019:
(in million pesos)

2020 644
2021 362
2022 377
2023 620
2024 1,011
2025 to 2064 126,032
The average duration of the defined benefit obligation at the end of the reporting period is 6 to 19 years.
The weighted average assumptions used to determine pension benefits for the years ended December 31,
2019 2018 2017

Rate of increase in compensation 6.0 % 6.0 % 6.0 %
Discount rate 4.8 % 7.3 % 5.8 %
F-136
We have adopted mortality rates in accordance with the 2017 Philippine Intercompany Mortality Table
developed by the U.S. Society of Actuaries, which provides separate rates for males and females and the
disability rates based on the 1952 Disability Study of the U.S. Society of Actuaries for Period 2, Benefit 5
adjusted to suit local experience.
The sensitivity analysis below has been determined based on reasonably possible changes of each significant
assumption on the defined benefit obligation as at December 31, 2019, assuming if all other assumptions
were held constant:
Increase (Decrease)
(in million pesos)
Discount rate 1% (2,216 )
(1%) 2,809
Future salary increases 1% 2,747

(1%) (2,216 )
PLDT’s Retirement Plan

The Board of Trustees, which manages the beneficial trust fund, is composed of: (i) a member of the Board
of Directors of PLDT, who is not a beneficiary of the Plan; (ii) a member of the Board of Directors or a
senior officer of PLDT, who is a beneficiary of the Plan; (iii) a senior member of the executive staff of
PLDT; and (iv) two persons who are not executives nor employees of PLDT.
Benefits are payable in the event of termination of employment due to: (i) compulsory, optional, or deferred
retirement; (ii) death while in active service; (iii) physical disability; (iv) voluntary resignation; or
(v) involuntary separation from service. For a plan member with less than 15 years of credited services,
retirement benefit is equal to 100% of final compensation for every year of service. For those with at least
15 years of service, retirement benefit is equal to 125% of final compensation for every year of service, with
such percentage to be increased by an additional 5% for each completed year of service in excess of 15 years,
but not to exceed a maximum of 200%. In case of voluntary resignation after attainment of age 40 and
completion of at least 15 years of credited service, benefit is equal to a percentage of his vested retirement
benefit, in accordance with percentages prescribed in the retirement plan.
The Board of Trustees of the beneficial trust fund uses an investment approach with the objective of
maximizing the long-term expected return of plan assets.
The majority of the Plan’s investment portfolio consists of listed and unlisted equity securities while the
remaining portion consists of passive investments like temporary cash investments and fixed income
investments.
The plan assets are primarily exposed to financial risks such as liquidity risk and price risk.
Liquidity risk pertains to the plan’s ability to meet its obligation to the employees upon retirement. To
effectively manage liquidity risk, the Board of Trustees invests at least the equivalent amount of actuarially
computed expected compulsory retirement benefit payments for the period to liquid/semi-liquid assets such
as treasury notes, treasury bills, savings and time deposits with commercial banks.
Price risk pertains mainly to fluctuations in market prices of equity securities listed in the PSE. In order to
effectively manage price risk, the Board of Trustees continuously assesses these risks by closely monitoring
the market value of the securities and implementing prudent investment strategies.
F-137
The following table sets forth the fair values, which are equal to the carrying values, of PLDT’s plan assets
recognized as at December 31, 2019 and 2018:
2019 2018
(in million pesos)
Noncurrent Financial Assets
Investments in:
Unlisted equity investments 10,815 10,707
Shares of stock 2,077 2,066
Corporate bonds 145 133
Government securities 22 31
Mutual funds 9 4
Total noncurrent financial assets 13,068 12,941
Current Financial Assets
Cash and cash equivalents 441 499
Receivables 8 8
Total current financial assets 449 507
Total PLDT’s Plan Assets 13,517 13,448
Subsidiaries Plan Assets 207 91
Total Plan Assets of Defined Benefit Pension Plans 13,724 13,539
Investment in shares of stocks is valued using the latest bid price at the reporting date. Investments in
corporate bonds, mutual funds and government securities are valued using the market values at reporting
date.
Unlisted Equity Investments

2019 2018 2019 2018

% of Ownership (in million pesos)
MediaQuest 100 % 100 % 10,050 10,022
Tahanan Mutual Building and Loan Association, Inc.,
or TMBLA, (net of subscriptions payable of
Php32 million) 100 % 100 % 544 474
BTFHI 100 % 100 % 221 211
Superior Multi Parañaque Homes, Inc., or SMPHI — — — —
Bancholders, Inc., or Bancholders — — — —
10,815 10,707
Investments in MediaQuest
MediaQuest was registered with the Philippine SEC on June 29, 1999 primarily to purchase, subscribe for or
otherwise acquire and own, hold, use, manage, sell, assign, transfer, mortgage, pledge, exchange, or
otherwise dispose of real and personal property or every kind and description, and to pay thereof in whole or
in part, in cash or by exchanging, stocks, bonds and other evidences of indebtedness or securities of this any
other corporation. Its investments include common shares of stocks of various communication, broadcasting
and media entities.
Investments in MediaQuest are carried at fair value. The VIU calculations were derived from cash flow
projections over a period of three to five years based on the 2019 financial budgets approved by the
MediaQuest’s Board of Directors and calculated terminal value. Other key assumptions used in the cash
flow projections include revenue growth rate, direct costs and capital expenditures. The pre-tax discount
rates applied to cash flow projections range from 11.27% to 11. 93%. Cash flows beyond the five-year
period are determined using 0% to 4.1% growth rates.
F-138
On May 8, 2012, the Board of Trustees of the PLDT Beneficial Trust Fund approved the issuance by
MediaQuest of PDRs amounting to Php6 billion. The underlying shares of these PDRs are the shares of
stocks of Cignal TV held by MediaQuest through Satventures (Cignal TV PDRs). On the same date,
MediaQuest Board of Directors approved the investment in Cignal TV PDRs by ePLDT, which gave ePLDT
a 40% economic interest in Cignal TV. In June 2012, MediaQuest received a deposit for future PDRs
subscription of Php4 billion from ePLDT. Additional deposits of Php1 billion each were received on July 6,
2012 and August 9, 2012.
On January 25, 2013, the Board of Trustees of the PLDT Beneficial Trust Fund and the MediaQuest Board
of Directors approved the issuance of additional MediaQuest PDRs amounting to Php3.6 billion. The
underlying shares of these additional PDRs are the shares of Satventures held by MediaQuest (Satventures
PDRs), the holder of which will have a 40% economic interest in Satventures. Satventures is a wholly-
owned subsidiary of MediaQuest and the investment vehicle for Cignal TV. From March to August 2013,
MediaQuest received from ePLDT an amount aggregating to Php3.6 billion representing deposits for future
PDRs subscription. The Satventures PDRs and Cignal TV PDRs were subsequently issued on September 27,
2013, providing ePLDT an effective 64% economic interest in Cignal TV.
Also, on January 25, 2013, the Board of Trustees of the PLDT Beneficial Trust Fund and the MediaQuest
Board of Directors approved the issuance of additional MediaQuest PDRs amounting to Php1.95 billion.
The underlying shares of these additional PDRs are the shares of stocks of Hastings held by MediaQuest
(Hastings PDRs). Hastings is a wholly-owned subsidiary of MediaQuest, which holds all the print-related
investments of MediaQuest, including equity interests in the three leading newspapers: The Philippine Star,
Philippine Daily Inquirer, and Business World. From June 2013 to October 2013, MediaQuest received from
ePLDT an amount aggregating to Php1.95 billion representing deposits for future PDRs subscription.
On February 19, 2014, ePLDT’s Board of Directors approved an additional Php500 million investment in
Hastings PDRs. On March 11, 2014, MediaQuest received from ePLDT an amount aggregating to Php300
million representing deposits for future PDRs subscription. As at December 31, 2014, total deposit for PDRs
subscription amounted to Php2,250 million.
On May 21, 2015, ePLDT’s Board of Directors approved an additional Php800 million investment in
Hastings PDRs and settlement of the Php200 million balance of the Php500 million Hastings PDR
investment in 2014. Subsequently, on May 30, 2015, the Board of Trustees of the PLDT Beneficial Trust
Fund and the Board of Directors of MediaQuest approved the issuance of Php3,250 million Hastings PDRs.
This provided ePLDT with 70% economic interest in Hastings. In February 2018, ePLDT entered into a
Deed of Assignment with the Board of Trustees of the PLDT Beneficial Trust Fund transferring the Hastings
PDRs for Php1,664 million. See Note 11 – Investments in Associates and Joint Ventures – Investment of
ePLDT in MediaQuest PDRs.
In 2016 and 2017, the Board of Trustees of the PLDT Beneficial Trust Fund approved additional investment
in MediaQuest amounting to Php5,500 million and Php2,500 million, respectively, to fund MediaQuest’s
investment requirements. The full amount was fully drawn by MediaQuest during 2016 and 2017.
In 2018, the Board of Trustees of the PLDT Beneficial Trust Fund approved the additional investment in
MediaQuest amounting to Php2,700 million to fund MediaQuest’s investment requirements. The full
amount was fully drawn by MediaQuest during 2018. Loss on changes in fair value of the investments for
the year ended December 31, 2018 amounting to Php3,038 million was recognized in the statements of
changes in net assets available for plan benefits under “Net fair value gain (loss) on investments.”
In 2019, the Board of Trustees of the PLDT Beneficial Trust Fund approved the additional investment in
MediaQuest amounting to Php3,100 million to fund MediaQuest’s investment requirements. As at
December 31, 2019, MediaQuest has fully drawn the total amount of Php3,100 million. Loss on changes in
fair value of the investment for the year ended December 31, 2019 amounting to Php3,072 million was
recognized in the statements of changes in net assets available for plan benefits under “Net fair value gain
(loss) on investments.”
F-139
Investment in TMBLA
TMBLA was incorporated for the primary purpose of accumulating the savings of its stockholders and
lending funds to them for housing programs. The beneficial trust fund has a direct subscription in shares of
stocks of TMBLA in the amount of Php112 million. The related unpaid subscription of Php32 million is
included in unlisted equity investments. The cumulative change in the fair market values of this investment
Investment in BTFHI
BTFHI was incorporated for the primary purpose of acquiring voting preferred shares in PLDT and while the
owner, holder of possessor thereof, to exercise all the rights, powers, and privileges of ownership or any
other interest therein.
On October 26, 2012, BTFHI subscribed to a total of 150 million shares of Voting Preferred Stock of PLDT
at a subscription price of Php1.00 per share for a total subscription price of Php150 million. Total cash
dividend income amounted to Php10 million for each of the year ended December 31, 2019, 2018 and 2017.
Dividend receivables amounted to Php2 million each as at December 31, 2019 and 2018.
Investment in SMPHI
SMPHI was incorporated primarily to engage in the real estate business. As at December 31, 2017, its assets
consist mainly of investment in land. SMPHI received short-term, non-interest-bearing advances from the
beneficial trust fund mainly to finance expenses to maintain its investment property. On May 25, 2018, the
shares of stocks of SMPHI was sold to a third party for Php142 million.
Investment in Bancholders
Bancholders was incorporated primarily to purchase, own, invest in or acquire shares of stock, bonds, bills,
warrants and other negotiable instruments, securities or evidences of indebtedness of any other corporation
and to own, hold and dispose the same, without engaging in the business of or acting as an investment
company or as securities broker or dealer. The cumulative change in the fair market value of this investment
amounted to losses of Php93 million as at December 31, 2017. On April 21, 2017, the Board of Directors of
Bancholders approved the amendment of its Articles of Incorporation, shortening its corporate term, to end
on June 30, 2018. This amendment was subsequently approved by the Philippine SEC on July 11, 2017. As
at December 31, 2018, the investment account has been closed to receivables pending the completion of
Bancholders’s liquidation procedure.
Shares of Stocks
2019 2018
(in million pesos)
Common shares
PSE 1,161 1,185
PLDT 26 30
Others 530 491
Preferred shares 360 360
2,077 2,066
Dividends earned on PLDT common shares amounted to Php2 million for each of the years ended December
31, 2019, 2018 and 2017.
Preferred shares represent 300 million unlisted preferred shares of PLDT at Php10 par value, net of
subscription payable of Php2,640 million as at December 31, 2019 and 2018. These shares, which bear
dividend of 13.5% per annum based on the paid-up subscription price, are cumulative, non-convertible and
redeemable at par value at the option of PLDT. Dividends earned on this investment amounted to Php49
million for each of the years ended December 31, 2019, 2018 and 2017.
F-140
Corporate Bonds
Investment in corporate bonds includes various long-term peso and dollar denominated bonds with maturities
ranging from February 2020 to May 2027 and fixed interest rates from 3.95% to 7.06% per annum. Total
investment in corporate bonds amounted to Php145 million and Php133 million as at December 31, 2019 and
2018, respectively.
Government Securities
Investment in government securities includes Fixed Rate Treasury Notes bearing interest rate of 5.88% per
annum and zero-rated U.S. Treasury Bills. These securities are fully guaranteed by the governments of the
Republic of the Philippines and United States of America. Total investment in government securities
Mutual Funds
Investment in mutual funds includes a local equity fund, which aims to out-perform benchmarks in various
indices as part of its investment strategy. Total investment in mutual funds amounted to Php9 million and
Php4 million as at December 31, 2019 and 2018, respectively.
The allocation of the fair value of the assets for the PLDT pension plan as at December 31, 2019 and 2018
are as follows:
2019 2018
Investments in listed and unlisted equity securities 96 % 95 %
Temporary cash investments 3% 4%
Debt and fixed income securities 1% 1%
100 % 100 %
Defined Contribution Plans

Smart’s and certain of its subsidiaries’ contributions to the plan are made based on the employees’ years of
tenure and range from 5% to 10% of the employee’s monthly salary. Additionally, an employee has an
option to make a personal contribution to the fund, at an amount not exceeding 10% of his monthly salary.
The employer then provides an additional contribution to the fund ranging from 10% to 50% of the
employee’s contribution based on the employee’s years of tenure. Although the plan has a defined
contribution format, Smart and certain of its subsidiaries regularly monitor their compliance with R.A. 7641.
As at December 31, 2019 and 2018, Smart and certain of its subsidiaries were in compliance with the
requirements of R.A. 7641.
F-141
Smart’s and certain of its subsidiaries’ actuarial valuation is performed every year-end. Based on the latest
actuarial valuation, the actual present value of prepaid benefit costs, net periodic benefit costs and average
assumptions used in developing the valuation as at and for the years ended December 31, 2019, 2018 and
2019 2018 2017

(in million pesos)
Changes in the present value of defined benefit obligations:
Present value of defined benefit obligations at beginning of the year 2,804 2,490 2,177
Service costs 239 314 269
Interest costs on benefit obligation 174 — 113
Actuarial gains – experience 100 — (6 )
Actuarial losses – economic assumptions 13 — 29
Actual benefits paid/settlements (37 ) — (92 )
Curtailment and others (480 ) — —
Present value of defined benefit obligations at end of the year 2,813 2,804 2,490
Changes in fair value of plan assets:
Fair value of plan assets at beginning of the year 3,159 2,862 2,414
Actual contributions 281 297 335
Interest income on plan assets 190 — 131
Return on plan assets (excluding amount included in net interest) 100 — 74
Actual benefits paid/settlements (37 ) — (92 )
Others (609 ) — —
Fair value of plan assets at end of the year 3,084 3,159 2,862
Funded status – net 271 355 372
Accrued benefit costs — 23 13
Prepaid benefit costs (Note 19) 271 378 385
Components of net periodic benefit costs:

Service costs 239 314 269
Interest costs – net (6 ) — (18 )
Curtailment/settlement gain (55 ) — —
Net periodic benefit costs (Note 5) 178 314 251
Smart’s net consolidated pension benefit costs amounted to Php178 million, Php314 million and Php251
Actual net gains on plan assets amounted to Php290 million, nil and and Php205 million for the years ended
December 31, 2019, 2018 and 2017, respectively.
Based on the latest actuarial valuation, Smart and certain of its subsidiaries expect to contribute the amount
of approximately Php337 million to the plan in 2020.
The following table sets forth the expected future settlements by the Plan of maturing defined benefit
obligation as at December 31, 2019:
(in million pesos)

2020 523
2021 101
2022 100
2023 113
2024 153
2025 to 2060 1,295
The average duration of the defined benefit obligation at the end of the reporting period is 12 to 20 years.
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The weighted average assumptions used to determine pension benefits for the years ended December 31,
2019 2018 2017

Rate of increase in compensation 5.0 % 7.3 % 5.0 %
Discount rate 7.3 % 6.0 % 5.8 %
The sensitivity analysis below has been determined based on reasonably possible changes of each significant
assumption on the defined benefit obligation as at December 31, 2019, assuming if all other assumptions
were held constant:
Increase (Decrease)
(in million pesos)
Discount rate (0.27%) (8 )
0.74% 21
Future salary increases 0.72% 20

(0.27%) (8 )
Smart’s Retirement Plan

The fund is being managed and invested by BPI Asset Management and Trust Corporation, as Trustee,
pursuant to an amended trust agreement dated February 21, 2012.
The plan’s investment portfolio seeks to achieve regular income, long-term capital growth and consistent
performance over its own portfolio benchmark. In order to attain this objective, the Trustee’s mandate is to
invest in a diversified portfolio of bonds and equities, both domestic and international. The portfolio mix is
kept at 60% to 90% for debt and fixed income securities, while 10% to 40% is allotted to equity securities.
The following table sets forth the fair values, which are equal to the carrying values, of Smart’s plan assets
recognized as at December 31, 2019 and 2018:
2019 2018
(in million pesos)
Investments in:
Domestic fixed income 1,993 1,854
International equities 1,114 550
Domestic equities 649 333
Philippine foreign currency bonds 516 165
International fixed income 142 —
Total noncurrent financial assets 4,414 2,902
Cash and cash equivalents 32 891
Receivables 2 1
Total current financial assets 34 892
Total plan assets 4,448 3,794
Employee’s share, forfeitures and mandatory reserve account 1,364 635
Total Plan Assets of Defined Contribution Plans 3,084 3,159
F-143
Domestic Fixed Income
Investments in domestic fixed income include Philippine Peso denominated bonds, such as government
securities and corporate debt securities, with fixed interest rates from 2.8% to 12.0% per annum. Total
investments in domestic fixed income amounted to Php1,993 million and Php1,854 million as at December
31, 2019 and 2018, respectively.
International Equities
Investments in international equities include exchange traded funds, mutual funds and, unit investment trust
funds managed by BlackRock Fund Advisors, State Street Global Advisors, WisdomTree Investments
Advisors, Wellington Management Company, and BPI Asset Management and Trust Corporation. Total
investments in international equities amounted to Php1,114 million and Php550 million as at December 31,
Domestic Equities
Investments in domestic equities include direct equity investments in common shares listed in the PSE.
These investments earn on stock price appreciation and dividend payments. Total investment in domestic
equities amounted to Php649 million and Php333 million as at December 31, 2019 and 2018, respectively.
This includes investment in PLDT shares with fair value of Php13 million and Php15 million as at December
31, 2019 and 2018, respectively.
Philippine Foreign Currency Bonds

Investments in Philippine foreign currency bonds include U.S. Dollar denominated fixed income instruments
issued by the Philippine government and local corporations with fixed interest rates from 3.70% to 10.63%
per annum. Total investment in Philippine foreign currency bonds amounted to Php516 million and Php165
million as at December 31, 2019 and 2018, respectively.
International Fixed Income

Investments in international fixed income include mutual fund invested in PIMCO GIS Global Bond Fund.
Total investments in international fixed income amounted to Php142 million and nil as at December 31, 2019
and 2018, respectively.
Cash and Cash Equivalents

This pertains to the fund’s excess liquidity in Philippine Peso and U.S. Dollars including investments in time
deposits, money market funds and other deposit products of banks with duration or tenor less than a year.
The asset allocation of the Plan is set and reviewed from time to time by the Plan Trustees taking into
account the membership profile, the liquidity requirements of the Plan and risk appetite of the Plan sponsor.
This considers the expected benefit cash flows to be matched with asset durations.
The plan assets are primarily exposed to financial risks such as liquidity risk and price risk.
Liquidity risk pertains to the plan’s ability to meet its obligation to the employees upon retirement. To
effectively manage liquidity risk, the Plan Trustees invest a portion of the fund in readily tradeable and liquid
investments which can be sold at any given time to fund liquidity requirements.
Price risk pertains mainly to fluctuations in market prices of equity securities listed in the PSE. In order to
effectively manage price risk, the Plan Trustees continuously assess these risks by closely monitoring the
market value of the securities and implementing prudent investment strategies.
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The allocation of the fair value of Smart and certain of its subsidiaries pension plan assets as at December 31,
2019 and 2018 is as follows:
2019 2018
Investments in debt and fixed income securities and others 60 % 77 %
Investments in listed and unlisted equity securities 40 % 23 %
100 % 100 %
Other Long-term Employee Benefits

On September 26, 2017, the Board of Directors of PLDT approved the TIP, which intends to provide
incentive compensation to key officers, executives and other eligible participants who are consistent
performers and contributors to the Company’s strategic and financial goals. The incentive compensation will
be in the form of Performance Shares, PLDT common shares of stock, which will be released in three annual
grants on the condition, among others, that pre-determined consolidated core net income targets are
successfully achieved over three annual performance periods from January 1, 2017 to December 31, 2019.
On September 26, 2017, the Board of Directors approved the acquisition of 860 thousand Performance
Shares to be awarded under the TIP. On March 7, 2018, the ECC of the Board approved the acquisition of
additional 54 thousand shares, increasing the total Performance Shares to 914 thousand. Metrobank, through
its Trust Banking Group, is the appointed Trustee of the trust established for purposes of the TIP. The
Trustee is designated to acquire the PLDT common shares in the open market through the facilities of the
PSE, and administer their distribution to the eligible participants subject to the terms and conditions of the
TIP.
Management’s recommended modifications to the Plan, and partial equity and cash settled set-up will be
the estimate of the fair value of the original award approved in 2017.
As at March 5, 2020, a total of 757 thousand PLDT common shares have been acquired by the Trustee, of
which 302 thousand and 204 thousand PLDT common shares have been released to the eligible participants
on March 28, 2019 for the 2018 annual grant and on April 5, 2018 for the 2017 annual grant, respectively.
The TIP is administered by the ECC of the Board. The expense accrued for the TIP amounted to Php638
million, Php208 million and Php827 million for the years ended December 31, 2019, 2018 and 2017,
respectively. The accrued incentive payable, representing the cash settled set-up amounted to Php795
million as at December 31, 2019. See Note 3 – Management’s Use of Accounting Judgments, Estimates and
Assumptions – Estimating Pension Benefit Costs and Other Employee Benefits and Note 5 – Income and
Expenses – Compensation and Employee Benefits.
27. Provisions and Contingencies

PLDT’s Local Business and Franchise Tax Assessments
Pursuant to a decision of the Supreme Court on March 25, 2003 in the case of PLDT vs. City of Davao
declaring PLDT not exempt from the local franchise tax, PLDT started paying local franchise tax to various
Local Government Units, or LGUs. As at December 31, 2019, PLDT has no contested LGU assessments for
franchise taxes based on gross receipts received or collected for services within their respective territorial
jurisdiction.
F-145
Smart’s Local Business and Franchise Tax Assessments
The Province of Cagayan issued a tax assessment against Smart for alleged local franchise tax. In 2011,
Smart appealed the assessment to the Regional Trial Court, or RTC, of Makati on the ground that Smart
cannot be held liable for local franchise tax mainly because it has no sales office within the Province of
Cagayan pursuant to Section 137 of the Local Government Code (Republic Act No. 7160). The RTC issued
a TRO and a writ of preliminary injunction. On April 30, 2012, the RTC rendered a decision nullifying the
tax assessment. The Province of Cagayan was also directed to cease and desist from imposing local
franchise taxes on Smart’s gross receipts. The Province of Cagayan then appealed to the Court of Tax
Appeals, or CTA. In a Decision promulgated on July 25, 2013, the CTA ruled that the franchise tax
assessment is null and void for lack of legal and factual justifications. Cagayan’s Motion for
Reconsideration was denied. Cagayan then appealed before the CTA En Banc. The CTA En Banc issued a
Decision dated December 8, 2015 affirming the nullity of the tax assessment. On January 26, 2016, the
Province of Cagayan filed a Partial Motion for Reconsideration, praying among others, that the Court enter a
new decision declaring as valid and legal the tax assessment issued by Province of Cagayan to Smart. The
CTA En Banc then issued a Resolution dated June 22, 2016 denying the Partial Motion for Reconsideration
filed by the Province of Cagayan for lack of merit. On July 31, 2016, the Decision dated December 8, 2015
became final and executory and recorded in the book of entries of judgement of the CTA.
In 2016, Cagayan issued another local franchise tax assessment against Smart covering years 2011-2015.
Using the same grounds in the first case, Smart appealed the assessment with the RTC of Tuguegarao where
the case is pending. The RTC then directed the parties to file their respective Memorandum within 30 days
from date of receipt. Smart filed its Memorandum on November 7, 2018.
In 2015, the City of Manila issued assessments for alleged business tax deficiencies and cell sites regulatory
fees and charges. Smart protested the assessments. After Manila denied the protest, Smart appealed to the
RTC of the City of Manila, arguing that it is not liable for local business taxes on income realized from its
telecommunications operations and that the assessments were a clear circumvention of Manila City
Ordinance No. 8299 exempting Smart from the payment of local franchise tax. The assessment for
regulatory fees was contested for being void, as they were made without a valid and legal basis. In the
Decision promulgated on March 9, 2016, the RTC declared the local business tax and cell site regulatory fee
assessments as invalid and void. The City of Manila filed a Petition for Review with the CTA seeking to
reverse the Decision. Through a Decision dated December 18, 2017, the Court dismissed the Petition for
lack of jurisdiction. On January 2018, Smart received a copy of the City of Manila’s Motion for
Reconsideration, which was denied by the CTA in a Resolution dated May 17, 2018. The City of Manila
filed a Petition for Review dated June 1, 2018 before the CTA En Banc. Smart filed its Comment on
October 23, 2018. Petition for review is submitted for decision pursuant to Resolution dated November 15,
2018. The Petition for Review filed by the City of Manila was denied by the Court of Tax Appeals En Banc
in a Decision dated November 6, 2019. The CTA En Banc affirmed the: (1) Decision of CTA Division dated
December 18, 2017, dismissing the petition of the City of Manila for lack of jurisdiction; and (2) Resolution
of CTA Division dated May 17, 2018, dismissing the Motion for Reconsideration of the City of Manila for
lack of merit.
Digitel’s Franchise Tax Assessment and Real Property Tax Assessment

Digitel is discussing with various local government units as to settlement of its franchise tax and real
property tax liabilities.
F-146
DMPI’s Local Business and Real Property Taxes Assessments
In DMPI vs. City of Cotabato, DMPI filed a Petition in 2010 for Prohibition and Mandamus against the City
of Cotabato due to their threats to close its cell sites brought about by the alleged real property tax
delinquencies. The RTC denied the petition. DMPI appealed with the CTA. On December 29, 2017, the
CTA dismissed DMPI’s Petition for Review on the ground of lack of jurisdiction. On January 12, 2018,
DMPI filed its Motion for Reconsideration. The CTA issued a resolution directing respondent City of
Cotabato to file comment/opposition within 10 days and thereafter, the incident will be submitted for
resolution. A Withdrawal of Counsel and Entry of Appearance were filed on May 7, 2018 and May 24,
2018, respectively. On May 7, 2018, the CTA promulgated a resolution denying DMPI’s Motion for
Reconsideration for lack of merit. A notice for Entry of Judgment was issued by the CTA on August 23,
2018. A dialogue between DMPI and the City of Cotabato was conducted for possible amicable settlement.
On January 30, 2019, DMPI filed its Compliance, informing the CTA that it paid the real property tax
amounting to Php3 million on December 20, 2018. The CTA noted DMPI’s compliance in a Resolution
dated February 12, 2019.
In the DMPI vs. City Government of Malabon, DMPI filed a Petition for Prohibition and Mandamus against
the City of Malabon to prevent the auction sale of DMPI sites in its jurisdiction due to the alleged real
property tax liabilities. DMPI was able to secure a TRO to defer the sale. Through a Compromise Judgment
dated October 6, 2017, the RTC of Malabon approved the compromise agreement executed by the parties.
DMPI vs. City of Trece Martires

In 2010, DMPI petitioned to declare void the City of Trece Martires ordinance of imposing tower fee of
Php150 thousand for each cell site every year. Application for the issuance of a preliminary injunction by
DMPI is pending resolution as of date.
ACeS Philippines’ Local Business and Franchise Tax Assessments

ACeS Philippines has a pending case with the Supreme Court (ACeS Philippines Satellite Corporation vs.
Commissioner of Internal Revenue Supreme Court G.R. No. 226680) for alleged 2006 deficiency
withholding tax. On July 23, 2014, the CTA Second Division affirmed the assessment of the Commissioner
of Internal Revenue for deficiency basic withholding tax, surcharge plus deficiency interest and delinquency
interest amounting to Php87 million. On November 18, 2014, ACeS Philippines filed a Petition for Review
with the CTA En Banc. On August 16, 2016, the CTA En Banc also affirmed the assessment with finality.
Hence, on October 19, 2016, ACeS Philippines filed a petition before the Supreme Court assailing the
decision of the CTA. ACeS Philippines intends to file a formal request for compromise of tax liabilities
before the BIR while the case is pending before the Supreme Court. On February 23, 2017 and March 15,
2017, respectively, the Company paid and filed a formal request for compromise of tax liabilities amounting
to Php27 million before the BIR while the case is pending before the Supreme Court. No outstanding Letter
of Authority for other years.
Arbitration with Eastern Telecommunications Philippines, Inc., or ETPI

Since 1990 up to the present, PLDT and ETPI have been engaged in legal proceedings involving a number of
issues in connection with their business relationship. Among PLDT’s claims against ETPI are ETPI’s
alleged uncompensated bypass of PLDT’s systems from July 1, 1998 to November 28, 2003; unpaid access
charges from July 1, 1999 to November 28, 2003; and non-payment of applicable rates for Off-Net and On-
Net traffic from January 1, 1999 to November 28, 2003 arising from ETPI’s unilateral reduction of its rates
for the Philippines-Hong Kong traffic stream through Hong Kong REACH-ETPI circuits. ETPI’s claims
against PLDT, on the other hand, involve an alleged Philippines-Hong Kong traffic shortfall for the period
July 1, 1998 to November 28, 2003; unpaid share of revenues generated from PLDT’s activation of
additional growth circuits in the Philippines-Singapore traffic stream for the period July 1, 1999 to
November 28, 2003; under reporting of ETPI share of revenues under the terms of a Compromise Agreement
for the period January 1, 1999 to November 28, 2003 (which ETPI is seeking to retroact to February 6,
1990); lost revenues arising from PLDT’s blocking of incoming traffic from Hong Kong from November 1,
2001 up to November 2003; and lost revenues arising from PLDT’s circuit migration from January 1, 2001
up to December 31, 2001.
F-147
While the parties have entered into Compromise Agreements in the past (one in February 1990 and another
in March 1999), said agreements have not put to rest the issues between them. To avoid protracted litigation
and to preserve their business relationship, PLDT and ETPI agreed to submit their differences and issues to
voluntary arbitration. On April 16, 2008, PLDT and ETPI signed an Arbitration Settlement Agreement and
submitted their respective Statement of Claims and Answers. Subsequent to such submissions, PLDT and
ETPI agreed to suspend the arbitration proceedings. ETPI’s total claim against PLDT is about Php2.9 billion
while PLDT’s total claim against ETPI is about Php2.8 billion.
In an agreement, PLDT and Globe have agreed that they shall cause ETPI, within a reasonable time after
May 30, 2016, to dismiss Civil Case No. 17694 entitled Eastern Telecommunications Philippines, Inc. vs.
Philippine Long Distance Telephone Company, and all related or incidental proceedings (including the
voluntary arbitration between ETPI and PLDT), and PLDT, in turn, simultaneously, shall withdraw its
counterclaims against ETPI in the same entitled case, all with prejudice.
In the Matter of the Wilson Gamboa Case and Jose M. Roy III Petition
In Wilson P. Gamboa vs. Finance Secretary Margarito B. Teves, et. al. (G.R. No. 176579) (the “Gamboa
Case”), the Supreme Court held that the term ‘capital’ in Section 11, Article XII of the 1987 Constitution
refers only to “shares of stock entitled to vote in the election of directors” and thus only to voting common
shares, and not to the “total outstanding capital stock (common and non-voting preferred shares).” It directed
the Philippine SEC “to apply this definition of the term ‘capital’ in determining the extent of allowable
foreign ownership in PLDT, and if there is a violation of Section 11, Article XII of the Constitution, to
impose the appropriate sanctions under the law.” On October 9, 2012, the Supreme Court issued a
Resolution denying with finality all Motions for Reconsideration of the respondents. The Supreme Court
decision became final and executory on October 18, 2012.
On May 20, 2013, the Philippine SEC issued SEC Memorandum Circular No. 8, Series of 2013 - Guidelines
on Compliance with the Filipino-Foreign Ownership Requirements Prescribed in the Constitution and/or
Existing Laws by Corporations Engaged in Nationalized and Partly-Nationalized Activities, or MC No. 8,
which provides that the required percentage of Filipino ownership shall be applied to BOTH (a) the total
number of outstanding shares of stock entitled to vote in the election of directors; AND (b) the total number
of outstanding shares of stock, whether or not entitled to vote in the election of directors.
On June 10, 2013, Jose M. Roy III filed before the Supreme Court a Petition for Certiorari against the
Philippine SEC, Philippine SEC Chairman and PLDT, or the Petition, claiming: (1) that MC No. 8 violates
the decision of the Supreme Court in the Gamboa Case, which according to the Petitioner required that (a)
the 60-40 ownership requirement be imposed on “each class of shares” and (b) Filipinos must have full
beneficial ownership of 60% of the outstanding capital stock of those corporations subject to that 60-40
Filipino-foreign ownership requirement; and (2) that the PLDT Beneficial Trust Fund is not a Filipino-owned
entity and consequently, the corporations owned by PLDT Beneficial Trust Fund, including BTFHI, which
owns 150 million voting preferred shares in PLDT, cannot be considered a Filipino-owned corporation.
PLDT and Philippine SEC sought the dismissal of the Petition.
In July 16, 2013, Wilson C. Gamboa, Jr. et. al. filed a Motion for Leave to file a Petition-in-Intervention
dated July 16, 2013, which the Supreme Court granted on August 6, 2013. The Petition-in-Intervention
raised identical arguments and issues as those in the Petition.
The Supreme Court, in its November 22, 2016 decision, dismissed the Petition and Petition-In-Intervention
and upheld the validity of MC No. 8. In the course of discussing the Petition, the Supreme Court expressly
rejected petitioners’ argument that the 60% Filipino ownership requirement for public utilities must be
applied to each class of shares. According to the Court, the position is “simply beyond the literal text and
contemplation of Section 11, Article XII of the 1987 Constitution” and that the petitioners’ suggestion would
“effectively and unwarrantedly amend or change” the Court’s ruling in the Gamboa Case. In categorically
rejecting the petitioners’ claim, the Court declared and stressed that its ruling in the Gamboa Case “did NOT
make any definitive ruling that the 60% Filipino ownership requirement was intended to apply to each class
of shares.” On the contrary, according to the Court, “nowhere in the discussion of the term “capital” in
Section 11, Article XII of the 1987 Constitution in the Gamboa Decision did the Court mention the 60%
Filipino equity requirement to be applied to each class of shares.”
F-148
In respect of ensuring Filipino ownership and control of public utilities, the Court noted that this is already
achieved by the requirements under MC No. 8. According to the Court, “since Filipinos own at least 60% of
the outstanding shares of stock entitled to vote directors, which is what the Constitution precisely requires,
then the Filipino stockholders control the corporation – i.e., they dictate corporate actions and decisions…”
The Court further noted that the application of the Filipino ownership requirement as proposed by petitioners
“fails to understand and appreciate the nature and features of stocks and financial instruments” and would
“greatly erode” a corporation’s “access to capital – which a stock corporation may need for expansion, debt
relief/repayment, working capital requirement and other corporate pursuits.” The Court reaffirmed that
“stock corporations are allowed to create shares of different classes with varying features” and that this “is a
flexibility that is granted, among others, for the corporation to attract and generate capital (funds) from both
local and foreign capital markets” and that “this access to capital – which a stock corporation may need for
expansion, debt relief/repayment, working capital requirement and other corporate pursuits – will be greatly
eroded with further unwarranted limitations that are not articulated in the Constitution.” The Court added
that “the intricacies and delicate balance between debt instruments (liabilities) and equity (capital) that stock
corporations need to calibrate to fund their business requirements and achieve their financial targets are
better left to the judgment of their boards and officers, whose bounden duty is to steer their companies to
financial stability and profitability and who are ultimately answerable to their shareholders.”
The Court went on to say that “a too restrictive definition of ‘capital’, one that was never contemplated in the
Gamboa Decision, will surely have a dampening effect on the business milieu by eroding the flexibility
inherent in the issuance of preferred shares with varying terms and conditions. Consequently, the rights and
prerogatives of the owners of the corporation will be unwarrantedly stymied.” Accordingly, the Court said
that the petitioners’ “restrictive interpretation of the term “capital” would have a tremendous adverse impact
on the country as a whole – and to all Filipinos.”
Petitioner Jose M. Roy III filed a Motion for Reconsideration of the Supreme Court Decision dated
November 22, 2016. On April 18, 2017, the Supreme Court denied with finality Petitioner’s Motion for
Reconsideration. On August 5, 2017, PLDT received a copy of the Entry of Judgment.
Department of Labor and Employment, or DOLE, Compliance Order, or Order, to PLDT

The CA issued a Decision in this case on July 31, 2018.
In a series of orders including a Compliance Order issued by the DOLE Regional Office on July 3, 2017,
which was partly affirmed by DOLE Secretary Silvestre Bello, III, or DOLE Secretary, in his resolutions
dated January 10, 2018 and April 24, 2018, the DOLE had previously ordered PLDT to regularize 7,344
workers from 38 of PLDT’s third party service contractors. PLDT questioned these “regularization orders”
before the CA, which led to the July 31, 2018 Decision.
In sum, the CA: (i) granted PLDT’s prayer for an injunction against the regularization orders; (ii) set aside
the regularization orders insofar as they declared that there was labor-only contracting of the following
functions: (a) janitorial services, messengerial and clerical services; (b) information technology, or IT, firms
and services; (c) IT support services, both hardware and software, and applications development; (d) back
office support and office operations; (e) business process outsourcing or call centers; (f) sales; and (g)
medical, dental engineering and other professional services; and (iii) remanded to the DOLE for further
proceedings, the matters of: (a) determining which contractors, and which individuals deployed by these
contractors, are performing installation, repair and maintenance of PLDT lines; and (b) properly computing
monetary awards for benefits such as unpaid overtime or 13th month pay, which in the regularization orders
amounted to Php51.8 million.
The CA agreed with PLDT’s contention that the DOLE Secretary’s regularization order was “tainted with
grave abuse of discretion” because it did not meet the “substantial evidence” standards set out by the
Supreme Court in landmark jurisprudence. The Court also said that the DOLE’s appreciation of evidence
leaned in favor of the contractor workers, and that the DOLE Secretary had “lost sight” of distinctions
involving the labor law concepts of “control over means and methods,” and “control over results.”
F-149
On August 20, 2018, PLDT filed a motion seeking a partial reconsideration of that part of the CA decision,
which ordered a remand to the Office of the Regional Director of the DOLE-National Capital Region of the
matter of the regularization of individuals performing installation, repair and maintenance, or IRM, services.
In its motion, PLDT argued that the fact-finding process contemplated by the Court’s remand order is
actually not part of the visitorial power of the DOLE (i.e., the evidence that will need to be assessed cannot
be gleaned by in the ‘normal course’ of a labor inspection) and is therefore, outside the jurisdiction of the
DOLE Secretary.
PLDT also questioned that part of the CA ruling which seems to conclude that all IRM jobs are “regular.” It
argued that the law recognizes that some work of this nature can be project-based or seasonal in nature.
Instead of the DOLE, PLDT suggested that the National Labor Relations Commission – a tribunal with better
fact-finding powers – take over from the DOLE to determine whether the jobs are in fact IRM, and if so,
whether they are “regular” or can be considered project-based or seasonal.
Both adverse parties, the PLDT rank-and-file labor union Manggagawa sa Komunikasyon ng Pilipinas, or
MKP, and the DOLE filed Motions for Reconsideration.
On February 14, 2019, the CA issued a Resolution denying all Motions for Reconsideration and upheld its
July 31, 2018 Decision. After filing a Motion for Extension of Time on March 7, 2019, PLDT filed on April
5, 2019 a Petition for Review with the Supreme Court, questioning only one aspect of the CA decision i.e. its
order remanding to the DOLE the determination of which jobs fall within the scope of “installation, repair
and maintenance,” without however a qualification as to the “project” or “seasonal” nature of those
engagements. The Supreme Court has consolidated PLDT’s Petition with the separate Petitions for Review
filed by the DOLE and MKP. The consolidated case remains pending with the Supreme Court as of the date
of the report.
Attys. Baquiran and Tecson vs. NTC, et al.
This is a Petition for Mandamus filed on October 23, 2018 by Attys. Joseph Lemuel Baligod Baquiran and
Ferdinand C. Tecson against the Respondents NTC, the PCC, Liberty, BellTel, Globe, PLDT and Smart.
Briefly, the case involves the 700 MHz frequency, among others, or Subject Frequencies, that was originally
assigned to Liberty and which eventually became subject of the Co-Use Agreement between Globe, on the
one hand, and PLDT and Smart, on the other.
The Petition prayed that: (a) a Temporary Restraining Order, or TRO, /Writ of Preliminary Injunction, or
WPI, be issued to enjoin and restrain Globe, PLDT and Smart from utilizing and monopolizing the Subject
Frequencies and the NTC from bidding out or awarding the frequencies returned by PLDT, Smart and Globe;
(b) the NTC’s conditional assignment of the Subject Frequencies be declared unconstitutional, illegal and
void; (c) alternatively, Liberty and its successors-in-interest be divested of the Subject Frequencies and the
same be reverted to the State; (d) Liberty be declared to have transgressed Section 11 (1), Article XVI of the
Constitution; (e) Liberty and its parent company be declared to have contravened paragraph 2 of Section 10,
Article XII of the 1987 Constitution; (f) Liberty’s assignment of the Subject Frequencies to BellTel be
declared illegal and void; (g) the Co-Use Agreement be declared invalid; (h) the NTC be found to have
unlawfully neglected the performance of its positive duties; (i) the PCC be found to have unlawfully
neglected the performance of its positive duties; (j) a Writ of Mandamus be issued commanding the NTC to
revoke the Co-Use Agreement, recall the Subject Frequencies in favor of the State, and make the same
available to the best qualified telecommunication players; (k) a Writ of Mandamus be issued commanding
the PCC to conduct a full review of PLDT’s and Globe’s acquisition of all issued and outstanding shares of
Vega Telecom; (l) an Investigation of NTC be ordered for possible violation of Section 3 (e) of R.A. 3019
and other applicable laws; and (m) the said TRO/WPI be made permanent.
F-150
Essentially, petitioners contend that the NTC’s assignments of the Subject Frequencies of Liberty were void
for failing to comply with Section 4 (c) of R.A. 7925 which essentially states that “the radio frequency
spectrum is a scarce public resource xxx.” Even assuming the assignments were valid, Liberty should be
deemed divested of the same by operation of law (with the Subject Frequencies reverted to the State),
considering that it underutilized or never utilized the Subject Frequencies in violation of the terms and
conditions of the assignment. Assuming further that the NTC’s assignments of the Subject Frequencies were
valid and that Liberty was not divested of the same by operation of law, still, Liberty did not validly assign
the Subject Frequencies to BellTel because of the absence of Congressional approval. Petitioners conclude
that since the assignments of the Subject Frequencies from the NTC to Liberty, and from Liberty to BellTel,
were all illegal and void, it follows that the Subject Frequencies could not serve as the object of the Co-Use
Agreement between PLDT, Smart and Globe.
On November 23, 2018, PLDT filed an Entry of Appearance on behalf of PLDT and Smart. On January 17,
2019, PLDT and Smart filed their Comment. Essentially, the Comment raised the following arguments: first,
that the requisites for judicial review and for a mandamus petition are lacking; second, that there was no need
for Liberty to obtain prior Congressional approval before it assigned the Subject Frequencies to BellTel; and
third, that the Co-Use Agreement is valid and approved by the NTC, and did not violate the Constitution or
any laws.
On January 15, 2019, PLDT received a copy of BellTel’s Comment/Opposition dated January 10, 2019. On
February 12, 2019, PLDT received a copy of Globe Telecom, Inc.’s, or Globe’s Comment/Opposition dated
January 21, 2019. In a Resolution dated March 19, 2019, the Supreme Court noted the aforesaid filings. As
at the date of the report, however, PLDT has not received any pleadings from the OSG on behalf of the
public respondents.
On June 18, 2019, the Supreme Court issued a Resolution consolidating this case with G.R. No. 230798
(Philippine Competition Commission vs. CA [Twelfth Division] and PLDT; Globe, intervenor) and G.R. No.
234969 (Philippine Competition Commission vs. PLDT and Globe). The consolidated cases were assigned
to the Court in charge of G.R. No. 230798, the case with the lowest docket number.
Other disclosures required by PAS 37, Provisions, Contingent Liabilities and Contingent Assets, were not
provided as it may prejudice our position in on-going claims, litigations and assessments. See Note 3 –
Management’s Use of Accounting Judgments, Estimates and Assumptions – Provision for legal
contingencies and tax assessments.
28. Financial Assets and Liabilities

We have various financial assets such as trade and non-trade receivables, cash and short-term deposits. Our
principal financial liabilities, other than derivatives, comprise of bank loans, finance leases, trade and non-
trade payables. The main purpose of these financial liabilities is to finance our operations. We also enter
into derivative transactions, primarily principal only-currency swap agreements, interest rate swaps and
forward foreign exchange contracts and options to manage the currency and interest rate risks arising from
our operations and sources of financing. Our accounting policies in relation to derivatives are set out in Note
2 – Summary of Significant Accounting Policies – Financial Instruments.
F-151
The following table sets forth our consolidated financial assets and financial liabilities as at December 31,
2019 and 2018:
Financial
instruments
at Financial Financial Total
amortized instruments instruments financial
cost at FVPL at FVOCI instruments
(in million pesos)
Assets as at December 31, 2019
Noncurrent:
Financial assets at fair value through profit or loss — 3,369 — 3,369
Derivative financial assets – net of current portion — 1 — 1
Financial assets at fair value through other
comprehensive income – net of current portion — — 162 162
Other financial assets – net of current portion 1,986 — — 1,986
Current:
Cash and cash equivalents 24,369 — — 24,369
Short-term investments 314 — — 314
Trade and other receivables 22,436 — — 22,436
Current portion of derivative financial assets — 41 — 41
Current portion of debt instruments at amortized cost 150 — — 150
Current portion of financial assets at fair value
through other comprehensive income — — 2,757 2,757
Current portion of other financial assets 1,220 6,866 — 8,086
Total assets 50,475 10,277 2,919 63,671
Liabilities as at December 31, 2019

Noncurrent:
Interest-bearing financial liabilities –
net of current portion 172,834 — — 172,834
Lease liabilities – net of current portion 13,118 — — 13,118
Derivative financial liabilities – net of current portion — 25 — 25
Customers' deposits 2,205 — — 2,205
Deferred credits and other noncurrent liabilities 2,179 — — 2,179
Current:
Accounts payable 76,384 — — 76,384
Accrued expenses and other current liabilities 73,299 7,851 — 81,150
Current portion of interest-bearing financial liabilities 19,722 — — 19,722
Current portion of lease liabilities 3,215 — — 3,215
Dividends payable 1,584 — — 1,584
Current portion of derivative financial liabilities — 88 — 88
Total liabilities 364,540 7,964 — 372,504
Net assets (liabilities) (314,065 ) 2,313 2,919 (308,833 )
F-152
Financial
instruments
at Financial Financial Total
amortized instruments instruments financial
cost at FVPL at FVOCI instruments
(in million pesos)
Assets as at December 31, 2018
Noncurrent:
Financial assets at fair value through profit or loss — 4,763 — 4,763
Debt instruments at amortized cost 150 — — 150
Derivative financial assets – net of current portion — 140 — 140
comprehensive income – net of current portion — — 2,749 2,749
Other financial assets – net of current portion 2,275 — — 2,275
Current:
Cash and cash equivalents 51,654 — — 51,654
Short-term investments 1,165 — — 1,165
Trade and other receivables 24,056 — — 24,056
Current portion of derivative financial assets — 183 — 183
Current portion of financial assets at fair value
through other comprehensive income — — 1,604 1,604
Current portion of other financial assets 175 6,833 — 7,008
Total assets 79,475 11,919 4,353 95,747
Liabilities as at December 31, 2018

Noncurrent:
Interest-bearing financial liabilities –
net of current portion 155,835 — — 155,835
Customers' deposits 2,194 — — 2,194
Deferred credits and other noncurrent liabilities 3,088 — — 3,088
Current:
Accounts payable 72,818 — — 72,818
Accrued expenses and other current liabilities 68,920 7,862 — 76,782
Current portion of interest-bearing financial liabilities 20,441 — — 20,441
Dividends payable 1,533 — — 1,533
Current portion of derivative financial liabilities — 80 — 80
Total liabilities 324,829 7,942 — 332,771
Net assets (liabilities) (245,354 ) 3,977 4,353 (237,024 )
F-153
The following table sets forth our consolidated offsetting of financial assets and liabilities recognized as at
Gross amounts of
recognized
financial
assets and liabilities Net amount
Gross amounts set-off in the presented in the
of recognized consolidated consolidated
financial assets statements of statements of
and liabilities financial position financial position
(in million pesos)
December 31, 2019
Trade and other receivables
Foreign administrations 5,857 4,338 1,519
Domestic carriers 1,018 219 799
Total 6,875 4,557 2,318
Current Financial Liabilities
Accounts payable
Suppliers and contractors 68,121 70 68,051
Carriers and other customers 11,437 3,706 7,731
Total 79,558 3,776 75,782
December 31, 2018
Trade and other receivables
Foreign administrations 6,882 3,576 3,306
Domestic carriers 8,245 8,052 193
Total 15,127 11,628 3,499
Accounts payable
Suppliers and contractors 69,144 45 69,099
Carriers and other customers 5,602 2,567 3,035
Total 74,746 2,612 72,134
There are no financial instruments subject to an enforceable master netting arrangement as at December 31,
2019 and 2018.
The following table sets forth our consolidated carrying values and estimated fair values of our financial
assets and liabilities recognized as at December 31, 2019 and 2018 other than those whose carrying amounts
are reasonable approximations of fair values:
Carrying Value Fair Value

2019 2018 2019 2018
(in million pesos)
Debt instruments at amortized cost – net of current portion — 150 — 148
Other financial assets – net of current portion 1,986 2,275 1,657 2,020
Total 1,986 2,425 1,657 2,168
Noncurrent Financial Liabilities
Interest-bearing financial liabilities:
Long-term debt – net of current portion 172,834 155,835 169,965 139,504
Customers' deposits 2,205 2,194 1,539 1,305
Deferred credits and other noncurrent liabilities 2,179 3,088 1,953 2,583
Total 177,218 161,117 173,457 143,392
F-154
Below is the list of our consolidated financial assets and liabilities carried at fair value that are classified
using a fair value hierarchy as required for our complete sets of consolidated financial statements as at
December 31, 2019 and 2018. This classification provides a reasonable basis to illustrate the nature and
extent of risks associated with those financial statements.
2019 2018
Level 1(1) Level 2(2) Level 3(3) Total Level 1(1) Level 2(2) Level 3(3) Total
(in million pesos)
Listed equity securities
Financial assets at FVPL 2,442 304 623 3,369 3,625 154 984 4,763
Derivative financial assets
– net of current portion — 1 — 1 — 140 — 140
Financial assets at FVOCI
– net of current portion — 162 — 162 — 2,749 — 2,749
Current portion of derivative
financial assets — 41 — 41 — 183 — 183
Current portion of FVOCI — 2,757 — 2,757 — 1,604 — 1,604
Current portion of other
financial assets — 6,866 — 6,866 — 6,833 — 6,833
Total 2,442 10,131 623 13,196 3,625 11,663 984 16,272

Derivative financial liabilities
– net of current portion — 25 — 25 — — — —
Accrued expenses and other
current liabilities — 7,851 — 7,851 — 7,862 — 7,862
Current portion of derivative financial
liabilities — 88 — 88 — 80 — 80
Total — 7,964 — 7,964 — 7,942 — 7,942
(1)
Fair values determined using observable market inputs that reflect quoted prices in active markets for identical assets or liabilities.
(2)
Fair values determined using inputs other than quoted market prices that are either directly or indirectly observable for the assets
or liabilities.
(3)
Fair values determined using discounted values of future cash flows for the assets or liabilities.
As at December 31, 2019 and 2018, there were no transfers into and out of Level 3 fair value measurements.
As at December 31, 2019 and 2018, there were no transfers between Level 1 and Level 2 fair value
measurements.
The following methods and assumptions were used to estimate the fair value of each class of financial
instrument for which it is practicable to estimate such value:
Long-term financial assets and liabilities:

Fair value is based on the following:
Type Fair Value Assumptions Fair Value Hierarchy

Estimated fair value is based on the discounted
Noncurrent portion of advances and
values of future cash flows using the applicable Level 3
other noncurrent assets
zero-coupon rates plus counterparties’ credit spread.
Fixed Rate Loans: U.S. Dollar notes Quoted market price. Level 1
Fair values were determined using quoted prices.
For non-quoted securities, fair values were Level 1
Investment in debt securities
determined using discounted cash flow based on Level 3
market observable rates.
Estimated fair value is based on the discounted
value of future cash flows using the applicable
Other loans in all other currencies Commercial Interest Reference Rate and BVAL Level 3
rates for similar types of loans plus PLDT’s credit
spread.(1)
The carrying value approximates fair value because
Variable Rate Loans of recent and regular repricing based on market Level 2
conditions.
(1)
Effective October 29, 2018, PHP BVAL Reference Rates replaced PDST Reference Rates (PDST-RI and PDST-R2).
F-155
Derivative Financial Instruments
Forward foreign exchange contracts, foreign currency swaps and interest rate swaps: The fair values were
computed as the present value of estimated future cash flows using market U.S. Dollar and Philippine Peso
interest rates as at valuation date.
The valuation techniques considered various inputs including the credit quality of counterparties.
Due to the short-term nature of the transactions, the fair value of cash and cash equivalents, short-term
investments, trade and other receivables, accounts payable, accrued expenses and other current liabilities and
dividends payable approximate their carrying values as at the end of the reporting period.
Our derivative financial instruments are accounted for as either cash flow hedges or transactions not
designated as hedges. Cash flow hedges refer to those transactions that hedge our exposure to variability in
cash flows attributable to a particular risk associated with a recognized financial asset or liability and
exposures arising from forecast transactions. Changes in the fair value of these instruments representing
effective hedges are recognized directly in other comprehensive income until the hedged item is recognized
in our consolidated income statement. For transactions that are not designated as hedges, any gains or losses
arising from the changes in fair value are recognized directly to income for the period.
As at December 31, 2019 and 2018, we have taken into account the counterparties’ credit risks (for
derivative assets) and our own non-performance risk (for derivative liabilities) and have included a credit or
debit valuation adjustment, as appropriate, by assessing the maximum credit exposure and taking into
account market-based inputs which considers the risk of default occurring and corresponding losses once the
default event occurs. The changes in counterparty credit risk had no material effect on the hedge
effectiveness assessment for derivatives designated in hedge relationships and other financial instruments
recognized at fair value.
The table below sets out the information about our consolidated derivative financial instruments as at
2019 2018
Net Net
Mark- Mark-
Weighted to- to-
Weighted Average market market
Original Underlying Average Foreign Gains Gains
Notional Transaction in Termination Hedge Exchange Notional (Losses) Notional (Losses)
Amount Trade Date U.S. Dollar Date Cost Rate Amount in Php Amount in Php
(in millions) (in millions) (in millions)
Transactions not designated
as hedges:
PLDT
Forward foreign Various dates
exchange contracts in 2017 U.S. Dollar Various dates
US$114 and 2018 Liabilities in 2018 — Php51.68 — — — —
Various dates in Various dates
2019 in
and January and U.S. Dollar January 2020
US$18 February 2020 Liabilities to June 2020 — Php51.04 US$22 (12 ) US$34 (22 )
Various dates in December 14,
EUR9 August 2018 EUR Assets 2018 — US$1.17 — — — —
Various dates December 14,
EUR11 in 2018 EUR Assets 2018 — Php62.95 — — — —
Various dates in
July and August
EUR5 2019 EUR Assets January 2020 — Php58.65 EUR5 8 — —
(4 ) (22 )
F-156
2019 2018
Net Net
Mark- Mark-
Weighted to- to-
Foreign Various dates
exchange options in
November and
Various dates December
EUR36 (a) in 2018 EUR Assets 2018 — EUR1.161 — — — —
EUR1.185
Smart
Forward foreign Various dates in U.S. Dollar Various dates
exchange contracts US$120 2017 and 2018 Liabilities in 2018 — Php52.13 — — — —
Various dates in U.S. Dollar Various dates
US$144 2018 and 2019 Liabilities in 2019 — Php52.73 — — US$54 (38 )
Various dates in U.S. Dollar Various dates
US$41 2019 Liabilities in 2020 — Php51.44 US$41 (22 ) — —
Various dates
Various dates in in
January and U.S. Dollar March and
US$16 March 2020 Liabilities May 2020 — Php50.79 — — — —
Foreign exchange Various dates in U.S. Dollar Various dates
options(b) US$4 2017 and 2018 Liabilities in 2018 — Php50.64 — — — —
Php51.58
Php52.48
PCEV
Forward foreign U.S. Dollar
exchange contracts Various dates in Cash Various dates
US$22 2019 Conversion in 2019 — Php52.24 — — —
(22 ) (38 )
Transactions designated as
hedges:
PLDT
Interest rate swaps(c) Various dates in January 16,
US$240 2013 and 2015 300 Term Loan 2018 2.17 % — — — — —
August 11,
US$100 August 2014 100 PNB 2020 3.46 % — US$95 (6 ) US$96 55
September 2,
US$50 September 2014 50 Metrobank 2020 3.47 % — US$48 (5 ) US$48 25
April and June February 25,
US$150 2015 200 Term Loan 2022 2.70 % — US$56 2 US$79 66
Long-term currency October 2015 to January 16,
swaps(d) US$140 June 2016 300 Term Loan 2018 2.20 % Php46.67 — — — —
August 11,
US$4 January 2017 100 PNB 2020 1.01 % Php49.79 US$1 1 US$2 7
April and June 200 MUFG August 26,
US$6 2017 Bank, Ltd. 2019 1.63 % Php49.51 — — US$3 9
200 MUFG August 26,
US$2 January 2018 Bank, Ltd. 2019 1.59 % Php49.86 — — US$1 3
200 MUFG February 26,
US$6 February 2018 Bank, Ltd. 2020 1.82 % Php51.27 US$1 (2 ) US$5 6
November 2018 200 MUFG February 25,
US$22 to June 2019 Bank, Ltd. 2022 2.28 % Php52.08 US$17 (30 ) US$11 17
(40 ) 188
Smart
Interest rate swaps(e) Various dates in
US$110 2013 and 2014 120 Term Loan June 20, 2018 2.22 % — — — — —
Various dates in 100 Bank of
US$85 2014 and 2015 Tokyo March 7, 2019 2.23 % — — — US$10 3
US$50 October 2, 2014 50 Mizuho May 14, 2019 2.58 % — — — US$5 2
Various dates
US$200 in 2015 200 Mizuho March 4, 2020 2.10 % — US$22 4 US$67 52
December 7,
US$30 February 2016 100 Mizuho 2021 2.03 % — US$12 5 US$18 24
Long-term currency Various dates
swaps(f) US$100 in 2015 200 Mizuho March 5, 2018 2.21 % Php46.66 — — — —
Various dates December 7,
US$45 in 2016 100 Mizuho 2018 1.93 % Php46.55 — — — —
Various dates
US$11 in 2017 80 CBC May 31, 2018 1.28 % Php49.66 — — — —
9 81
F-157
2019 2018
Net Net
Mark- Mark-
Weighted to- to-
Various dates in
2017, 2018 and December 7,
US$18 2019 100 Mizuho 2020 1.77 % Php50.98 US$9 (3 ) US$16 28
Various dates
in 2018 and
US$13 2019 200 Mizuho March 4, 2020 2.06 % Php51.93 US$4 (6 ) US$9 6
2015 Mizuho December 7,
US$6 February 2019 US$100M 2021 2.22 % Php51.83 US$4 (5 ) — —
(14 ) 34
(71 ) 243
(a) If the EUR to U.S. Dollar spot exchange rate on the fixing date settles below €1.161, PLDT will sell the
EUR at €1.161. However, if on the fixing date, the exchange rate settles between the €1.161 and €1.185,
there will be no settlement by PLDT, and if the exchange rate is above €1.185, PLDT will sell the EUR
at €1.185.
(b) If the Philippine Peso to U.S. Dollar spot exchange rate on the maturity date settles between Php51.58 to
Php52.48, Smart will purchase the U.S. Dollar at Php51.58. However, if on maturity, the exchange rate
settles above Php52.48, Smart will purchase the U.S. Dollar at Php51.58 plus the excess above
Php52.48, and if the exchange rate is lower than Php51.58, Smart will purchase the U.S. Dollar at the
prevailing Philippine Peso to U.S. Dollar spot exchange rate, subject to a floor of Php50.64.
(c) PLDT’s interest rate swap agreements outstanding as at December 31, 2019 and 2018 were designated
as cash flow hedges, wherein the effective portion of the movements in fair value is recognized in our
consolidated statements of other comprehensive income, while any ineffective portion is recognized
immediately in our consolidated income statements. The mark-to-market loss amounting to Php11
million and mark-to-market gain amounting to Php129 million were recognized in our consolidated
statements of other comprehensive income as at December 31, 2019 and 2018, respectively. Interest
accrual on the interest rate swaps amounting to Php2 million and Php17 million were recorded as at
December 31, 2019 and 2018, respectively. There were no ineffective portion in the fair value
recognized in our consolidated income statements for the years ended December 31, 2019 and 2018.
(d) PLDT’s long-term principal only-currency swap agreements outstanding as at December 31, 2019 and
2018 were designated as cash flow hedges, wherein effective portion of the movements in the fair value
is recognized in our consolidated statements of other comprehensive income, while any ineffective
portion is recognized immediately in our consolidated income statements. The mark-to-market loss
amounting to Php23 million and mark-to-market gain amounting to Php45 million were recognized in
our consolidated statement of other comprehensive income as at December 31, 2019 and 2018,
respectively. Hedge cost accrual on the long-term principal only-currency swaps amounting to Php7
million and Php3 million were recognized as at December 31, 2019 and 2018, respectively. The
amounts recognized as other comprehensive income are transferred to profit or loss when the hedged
loan is revalued for changes in the foreign exchange rate. The hedge cost portion of the movements in
the fair value amounting to Php2 million and Php1 million were recognized in our consolidated income
statements for the years ended December 31, 2019 and 2018, respectively.
(e) Smart’s interest rate swap agreements outstanding as at December 31, 2019 and 2018 were designated as
cash flow hedges, wherein the effective portion of the movements in fair value is recognized in our
consolidated statements of other comprehensive income, while any ineffective portion is recognized
immediately in our consolidated income statements. The mark-to-market gains amounting to Php6
million and Php63 million were recognized in our consolidated statements of other comprehensive
income as at December 31, 2019 and 2018, respectively. Reduction on interest arising from the interest
rate swaps amounted to Php3 million and Php18 million as at December 31, 2019 and 2018,
respectively. There were no ineffective portion in the fair value recognized in our consolidated income
statements for the years ended December 31, 2019 and 2018.
F-158
(f) Smart’s long-term principal only-currency swap agreements outstanding as at December 31, 2019 and
2018 were designated as cash flow hedges, wherein the effective portion of the movements in fair value
is recognized in our consolidated statements of other comprehensive income, while any ineffective
portion is recognized immediately in our consolidated income statements. The mark-to-market loss
amounting to Php12 million and mark-to-market gain amounting to Php50 million were recognized in
our consolidated statements of other comprehensive income as at December 31, 2019 and 2018,
respectively. Hedge cost accrual on the long-term principal only-currency swaps amounting to Php2
million and Php16 million were recognized as at December 31, 2019 and 2018, respectively. The
amounts recognized as other comprehensive income are transferred to profit or loss when the hedged
loan is revalued for changes in the foreign exchange rate. The hedge cost portions of the movements in
the fair value amounting to Php1 million and Php2 million were recognized in our consolidated income
statements for the years ended December 31, 2019 and 2018, respectively.
2019 2018
(in million pesos)
Presented as:
Noncurrent assets 1 140
Current assets 41 183
Noncurrent liabilities (25 ) —
Current liabilities (88 ) (80 )
Net assets (liabilities) (71 ) 243
Movements of our consolidated mark-to-market gains (losses) for the years ended December 31, 2019 and
2018 are summarized as follows:
2019 2018
(in million pesos)
Net mark-to-market gains at beginning of the year 243 237
Effective portion recognized in the profit or loss for the cash flow hedges 14 27
Gains (losses) on derivative financial instruments (Note 4) (233 ) 1,135
Net fair value losses on cash flow hedges charged to other comprehensive income (330 ) (286 )
Settlements, interest expense and others 235 (870 )
Net mark-to-market gains (losses) at end of the year (71 ) 243
Our consolidated analysis of gains (losses) on derivative financial instruments for the years ended December
31, 2019, 2018 and 2017 are as follows:
2019 2018 2017

(in million pesos)
Gains (losses) on derivative financial instruments (Note 4) (233 ) 1,135 724
Hedge costs (51 ) (49 ) (191 )
Net gains (losses) on derivative financial instruments (Notes 4 and 5) (284 ) 1,086 533
Financial Risk Management Objectives and Policies

The main risks arising from our financial instruments are liquidity risk, foreign currency exchange risk,
interest rate risk and credit risk. The importance of managing those risks has significantly increased in light
of the considerable change and volatility in both the Philippine and international financial markets. Our
Board of Directors reviews and approves policies for managing each of these risks, which are summarized
below. We also monitor the market price risk arising from all financial instruments.
F-159
Liquidity Risk
Our exposure to liquidity risk refers to the risk that our financial requirements, working capital requirements
and planned capital expenditures will not be met.
We manage our liquidity profile to be able to finance our operations and capital expenditures, service our
maturing debts and meet our other financial obligations. To cover our financing requirements, we use
internally generated funds and proceeds from debt and equity issues and sales of certain assets.
As part of our liquidity risk management program, we regularly evaluate our projected and actual cash flows,
including our loan maturity profiles, and continuously assess conditions in the financial markets for
opportunities to pursue fund-raising initiatives. These activities may include bank loans, export credit
agency-guaranteed facilities, debt capital and equity market issues.
Any excess funds are primarily invested in short-term and principal-protected bank products that provide
flexibility of withdrawing the funds anytime. We also allocate a portion of our cash in longer tenor
investments such as fixed income securities issued or guaranteed by the Republic of the Philippines, and
Philippine banks and corporates and managed funds. We regularly evaluate available financial products and
monitor market conditions for opportunities to enhance yields at acceptable risk levels. Our investments are
also subject to certain restrictions contained in our debt covenants. Our funding arrangements are designed
to keep an appropriate balance between equity and debt and to provide financing flexibility while enhancing
our businesses.
Our cash position remains sufficient to support our planned capital expenditure requirements and service our
debt and financing obligations; however, we may be required to finance a portion of our future capital
expenditures from external financing sources. We have cash and cash equivalents, and short-term
investments amounting to Php24,369 million and Php314 million, respectively, as at December 31, 2019,
which we can use to meet our short-term liquidity needs. See Note 16 – Cash and Cash Equivalents.
The following table summarizes the maturity profile of our financial assets based on our consolidated
undiscounted claims outstanding as at December 31, 2019 and 2018:
Less than More than

Total 1 year 1-3 years 3-5 years 5 years
(in million pesos)
December 31, 2019
Financial instruments at amortized cost: 60,971 58,687 1,768 338 178
Other financial assets 3,504 1,220 1,768 338 178
Debt instruments at amortized cost 150 150 — — —
Temporary cash investments 17,663 17,663 — — —
Short-term investments 314 314 — — —
Retail subscribers 17,178 17,178 — — —
Corporate subscribers 13,005 13,005 — — —
Foreign administrations 1,896 1,896 — — —
Domestic carriers 889 889 — — —
Dealers, agents and others 6,372 6,372 — — —
Financial instruments at FVPL: 10,235 6,866 — — 3,369
Financial assets at fair value through profit or loss 3,369 — — — 3,369
Other financial assets 6,866 6,866 — — —
Financial instruments at FVOCI: 2,919 2,757 162 — —
comprehensive income 2,919 2,757 162 — —
Total 74,125 68,310 1,930 338 3,547
F-160
Less than More than
(in million pesos)
December 31, 2018
Financial instruments at amortized cost: 90,232 87,526 2,190 349 167
Other financial assets 2,686 130 2,040 349 167
Debt instruments at amortized cost 150 — 150 — —
Temporary cash investments 45,672 45,672 — — —
Short-term investments 1,165 1,165 — — —
Retail subscribers 19,444 19,444 — — —
Corporate subscribers 11,073 11,073 — — —
Foreign administrations 4,225 4,225 — — —
Domestic carriers 270 270 — — —
Dealers, agents and others 5,547 5,547 — — —
Financial instruments at FVPL: 11,596 6,833 — — 4,763
Financial assets at fair value through profit or loss 4,763 — — — 4,763
Financial instruments at FVOCI: 4,353 1,604 2,749 — —
comprehensive income 4,353 1,604 2,749 — —
Total 106,181 95,963 4,939 349 4,930
The following table summarizes the maturity profile of our financial liabilities based on our consolidated
contractual undiscounted obligations outstanding as at December 31, 2019 and 2018:
Payments Due by Period

Less than More than
(in million pesos)
December 31, 2019
Debt(1): 243,226 19,014 66,052 54,146 104,014
Principal 193,047 15,221 44,253 40,288 93,285
Interest 50,179 3,793 21,799 13,858 10,729
Lease obligations: 37,299 13,454 10,254 6,864 6,727
Various trade and other obligations: 153,255 148,839 2,405 38 1,973
Suppliers and contractors 70,169 68,051 2,118 — —
Utilities and related expenses 51,875 51,843 32 — —
Employee benefits 8,673 8,673 — — —
Liability from redemption of preferred shares 7,851 7,851 — — —
Customers’ deposits 2,205 — 194 38 1,973
Dividends 1,584 1,584 — — —
Carriers and other customers 1,387 1,387 — — —
Others 9,511 9,450 61 — —
Total contractual obligations 433,780 181,307 78,711 61,048 112,714
December 31, 2018

Debt(1): 218,791 13,892 72,007 51,098 81,794
Principal 176,694 13,292 49,747 41,401 72,254
Interest 42,097 600 22,260 9,697 9,540
Lease obligations: 22,674 12,727 4,066 2,616 3,265
Operating lease 22,674 12,727 4,066 2,616 3,265
Various trade and other obligations: 145,892 140,548 3,207 176 1,961
Suppliers and contractors 72,064 69,099 2,828 137 —
Utilities and related expenses 48,189 48,128 61 — —
Employee benefits 7,955 7,955 — — —
Liability from redemption of preferred shares 7,862 7,862 — — —
Customers’ deposits 2,194 — 194 39 1,961
Carriers and other customers 1,815 1,815 — — —
Dividends 1,533 1,533 — — —
Others 4,280 4,157 123 — —
Total contractual obligations 387,357 167,167 79,280 53,890 87,020
(1)
Consists of long-term debt, including current portion; gross of unamortized debt discount and debt issuance costs.
F-161
Debt
See Note 21 – Interest-bearing Financial Liabilities – Long-term Debt for a detailed discussion of our debt.
Our consolidated future minimum lease commitments payable with non-cancellable leases as at December
2019 2018
(in million pesos)
Within one year 13,477 12,867
After one year but not more than five years 17,095 6,542
More than five years 6,727 3,265
Total 37,299 22,674
Various Trade and Other Obligations

PLDT Group has various obligations to suppliers for the acquisition of phone and network equipment,
contractors for services rendered on various projects, foreign administrations and domestic carriers for the
access charges, shareholders for unpaid dividends distributions, employees for benefits and other related
obligations, and various business and operational related agreements. Total obligations under these various
agreements amounted to approximately Php153,255 million and Php145,892 million as at December 31,
2019 and 2018, respectively. See Note 23 – Accounts Payable and Note 24 – Accrued Expenses and Other
Current Liabilities.
Commercial Commitments
Our outstanding consolidated commercial commitments, in the form of letters of credit, amounted to nil and
Php20 million as at December 31, 2019 and 2018, respectively. These commitments will expire within one
year. See Note 11 – Investments in Associates and Joint Ventures – Investments of PLDT in VTI, Bow Arken
and Brightshare.
Collateral
We have not made any pledges as collateral with respect to our financial liabilities as at December 31, 2019
and 2018.
Foreign Currency Exchange Risk

Foreign currency exchange risk is the risk that the fair value of future cash flows of a financial instrument
will fluctuate because of changes in foreign exchange rates.
The revaluation of our foreign currency-denominated financial assets and liabilities as a result of the
appreciation or depreciation of the Philippine Peso is recognized as foreign exchange gains or losses as at the
end of the reporting period. The extent of foreign exchange gains or losses is largely dependent on the
amount of foreign currency denominated financial assets and liabilities. While a certain percentage of our
revenues are either linked to or denominated in U.S. Dollars, a substantial portion of our capital
expenditures, a portion of our indebtedness and related interest expense and a portion of our operating
expenses are denominated in foreign currencies, mostly in U.S. Dollars. As such, a strengthening or
weakening of the Philippine Peso against the U.S. Dollar will decrease or increase in Philippine Peso terms
both the principal amount of our foreign currency-denominated debts and the related interest expense, our
foreign currency-denominated capital expenditures and operating expenses as well as our U.S. Dollar-linked
and U.S. Dollar-denominated revenues. In addition, many of our financial ratios and other financial tests are
affected by the movements in the Philippine Peso to U.S. Dollar exchange rate.
F-162
To manage our foreign exchange risks and to stabilize our cash flows in order to improve investment and
cash flow planning, we enter into forward foreign exchange contracts, currency swap contracts, currency
option contracts and other hedging products aimed at reducing and/or managing the adverse impact of
changes in foreign exchange rates on our operating results and cash flows. Further details of the risk
management strategy is recognized in our hedge designation documentation. We use forward foreign
exchange purchase contracts, currency swap contracts and currency option contracts to manage the foreign
currency risks associated with our foreign currency-denominated financial liabilities. We accounted for
these instruments as either cash flow hedges, wherein changes in the fair value are recognized in our
consolidated other comprehensive income until the hedged transaction affects our consolidated income
statement or transactions not designated as hedges, wherein changes in the fair value are recognized directly
as income or expense for the year.
The impact of the hedging instruments on our consolidated statements of financial position as at December
Notional Carrying
Amount Amount Line item in the Consolidated Statements
(U.S. Dollar) (Php) of Financial Position
(in million pesos)
December 31, 2019
Long-term currency swaps 37 1 Derivative financial assets – net of current portion
— 3 Current portion of derivative financial assets
— (24 ) Derivative financial liabilities – net of current portion
— (24 ) Current portion of derivative financial liabilities
December 31, 2018

Long-term currency swaps 46 83 Derivative financial assets – net of current portion
The impact of the hedged items on our consolidated statements of financial position as at December 31, 2019
2019 2018
Cash flow Cost of Cash flow Cost of
hedge hedging hedge hedging
reserve reserve reserve reserve
(in million pesos)
PLDT:
US$300M Term Loan (273 ) — (273 ) 4
US$100M PNB (11 ) — (7 ) —
US$200M MUFG Bank, Ltd. (48 ) 8 (3 ) —
(332 ) 8 (283 ) 4
Smart:
US$200M Mizuho (12 ) 5 7 3
US$100M Mizuho (22 ) 12 43 13
(34 ) 17 50 16
The effect of the cash flow hedge on our consolidated income statements and statements of other
comprehensive income as at December 31, 2019 and 2018 are as follows:
Line item in the

Total hedging loss Consolidated Income
recognized in OCI Statements
(in million pesos)
December 31, 2019
Long-term currency swaps (366 ) Other comprehensive loss
December 31, 2018

Long-term currency swaps (234 ) Other comprehensive loss
F-163
The following table shows our consolidated foreign currency-denominated monetary financial assets and
liabilities and their Philippine Peso equivalents as at December 31, 2019 and 2018:
2019 2018
U.S. Dollar Php(1) U.S. Dollar Php(2)
(in millions)
Derivative financial assets – net of current portion — 1 3 140
Other financial assets – net of current portion — 13 — 12
Total noncurrent financial assets — 14 3 152
Cash and cash equivalents 122 6,181 717 37,688
Short-term investments 6 285 22 1,138
Trade and other receivables – net 777 39,472 261 13,741
Current portion of derivative financial assets 1 41 3 183
Current portion of other financial assets — 11 — 11
Total current financial assets 906 45,990 1,003 52,761
Total Financial Assets 906 46,004 1,006 52,913
Interest-bearing financial liabilities – net of current portion 126 6,389 336 17,668
Derivative financial liabilities – net of current portion — 25 — —
Other noncurrent liabilities — 15 — 12
Total noncurrent financial liabilities 126 6,429 336 17,680
Accounts payable 676 34,325 415 21,797
Accrued expenses and other current liabilities 208 10,555 170 8,961
Current portion of interest-bearing financial liabilities 210 10,687 110 5,780
Current portion of derivative financial liabilities 2 88 2 80
Total current financial liabilities 1,096 55,655 697 36,618
Total Financial Liabilities 1,222 62,084 1,033 54,298
(1)
The exchange rate used to convert the U.S. Dollar amounts into Philippine Peso was Php50.80 to US$1.00, the Philippine Peso-
U.S. Dollar exchange rate as quoted through the Bankers Association of the Philippines as at December 31, 2019.
(2)
The exchange rate used to convert the U.S. Dollar amounts into Philippine Peso was Php52.56 to US$1.00, the Philippine Peso-
U.S. Dollar exchange rate as quoted through the Bankers Association of the Philippines as at December 31, 2018.
As at March 4, 2020, the Philippine Peso-U.S. Dollar exchange rate was Php50.58 to US$1.00. Using this
exchange rate, our consolidated net foreign currency-denominated financial liabilities would have decreased
in Philippine Peso terms by Php70 million as at December 31, 2019.
Approximately 9% and 13% of our total consolidated debts (net of consolidated debt discount) were
denominated in U.S. Dollars as at December 31, 2019 and 2018, respectively. Our consolidated foreign
currency-denominated debt decreased to Php17,029 million as at December 31, 2019 from Php23,352
million as at December 31, 2018. See Note 21 – Interest-bearing Financial Liabilities. The aggregate
notional amount of our consolidated outstanding long-term principal only-currency swap contracts were
US$37 million and US$47 million as at December 31, 2019 and 2018, respectively. Consequently, the
unhedged portion of our consolidated debt amounts was approximately 8% (or 8%, net of our consolidated
U.S. Dollar cash balances allocated for debt) and 12% (or 8%, net of our consolidated U.S. Dollar cash
balances allocated for debt) as at December 31, 2019 and 2018, respectively.
Approximately 15% and 16% of our consolidated revenues were denominated in U.S. Dollars and/or were
linked to U.S. Dollars for the years ended December 31, 2019 and 2018, respectively. Approximately 11%
and 8% of our consolidated expenses were denominated in U.S. Dollars and/or linked to the U.S. Dollar for
the years ended December 31, 2019 and 2018, respectively. In this respect, the higher weighted average
exchange rate of the Philippine Peso against the U.S. Dollar increased our revenues and expenses, and
consequently, affects our cash flow from operations in Philippine Peso terms. In view of the anticipated
continued decline in dollar-denominated/dollar-linked revenues, which provide a natural hedge against our
foreign currency exposure, we are progressively refinancing our dollar-denominated debts in Philippine
Pesos.
F-164
The Philippine Peso appreciated by 3.35% against the U.S. Dollar to Php50.80 to US$1.00 as at December
31, 2019 from Php52.56 to US$1.00 as at December 31, 2018. As a result of our consolidated foreign
exchange movements, as well as the amount of our consolidated outstanding net foreign currency financial
assets and liabilities, we recognized net consolidated foreign exchange gain of Php408 million for the years
ended December 31, 2019, while we recognized net consolidated foreign exchange losses of Php771 million
and Php411 million for the years ended December 31, 2018 and 2017, respectively.
Management conducted a survey among our banks to determine the outlook of the Philippine Peso-U.S.
Dollar exchange rate until March 31, 2020. Our outlook is that the Philippine Peso-U.S. Dollar exchange
rate may weaken/strengthen by 0.59% as compared to the exchange rate of Php50.80 to US$1.00 as at
December 31, 2019. If the Philippine Peso-U.S. Dollar exchange rate had weakened/strengthened by 0.59%
as at December 31, 2019, with all other variables held constant, profit after tax for the year ended December
31, 2019 would have been approximately Php62 million lower/higher and our consolidated stockholders’
equity as at December 31, 2019 would have been approximately Php58 million lower/higher, mainly as a
result of consolidated foreign exchange gains and losses on conversion of U.S. Dollar-denominated net
assets/liabilities and mark-to-market valuation of derivative financial instruments.
Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of change in market interest rates.
Our exposure to the risk of changes in market interest rates relates primarily to our long-term debt
obligations with floating interest rates.
Our policy is to manage interest cost through a mix of fixed and variable rate debts. We evaluate the fixed to
floating ratio of our loans in line with movements of relevant interest rates in the financial markets. Based
on our assessment, new financing will be priced either on a fixed or floating rate basis. We enter into interest
rate swap agreements in order to manage our exposure to interest rate fluctuations. Further details of the risk
management strategy is recognized in our hedge designation documentation. We make use of hedging
instruments and structures solely for reducing or managing financial risk associated with our debt obligations
and not for trading purposes.
The impact of the hedging instruments on our consolidated statements of financial position as at December
Notional Carrying
Amount Amount Line item in the Consolidated Statements
(U.S. Dollar) (Php) of Financial Position
(in million pesos)
December 31, 2019
Interest rate swaps 233 1 Derivative financial assets – net of current portion
— (1 ) Derivative financial liabilities – net of current portion
— (31 ) Current portion of derivative financial liabilities
233 —
December 31, 2018

Interest rate swaps 323 57 Derivative financial assets – net of current portion
323 227
F-165
The impact of the hedged items on our consolidated statements of financial position as at December 31, 2019
2019 2018
Cash flow Cost of Cash flow Cost of
hedge hedging hedge hedging
reserve reserve reserve reserve
(in million pesos)
PLDT:
US$100M PNB (6 ) — 50 —
US$50M MBTC (4 ) — 24 —
US$200M MUFG Bank, Ltd. (1 ) — 55 —
(11 ) — 129 —
Smart:
2014 BTMU US$100M (1 ) — (6 ) —
2014 Mizuho US$50M (1 ) — (2 ) —
2015 Mizuho US$200M (36 ) — (11 ) —
2015 Mizuho US$100M (19 ) — — —
2013 Sumitomo US$120M — — (3 ) —
(57 ) — (22 ) —
The effect of the cash flow hedge on our consolidated income statements and statements of other
comprehensive income as at December 31, 2019 and 2018 are as follows:
Total hedging Line item in the

gain (loss) Consolidated Income
recognized in OCI Statements
(in million pesos)
December 31, 2019
Interest rate swaps (68 ) Other comprehensive loss
December 31, 2018

Interest rate swaps 179 Other comprehensive gain
F-166
The following tables set out the carrying amounts, by maturity, of our financial instruments that are expected
to have exposure on interest rate risk as at December 31, 2019 and 2018. Financial instruments that are not
subject to interest rate risk were not included in the table.

In U.S. Dollars Discount/ Fair Value
Debt
Issuance Carrying
Below 1 1-2 2-3 3-5 Over 5 Cost Value In U.S.
year years years years years Total In Php In Php In Php Dollar In Php
(in millions)
Assets:
Debt Instruments at Amortized Cost
Philippine Peso 3 — — — — 3 150 — 150 3 150
Interest rate 4.8371% — — — — — — — — — —
Cash in Bank
U.S. Dollar 31 — — — — 31 1,586 — 1,586 31 1,586
Interest rate 0.0100% to
1.0000% — — — — — — — — — —
Philippine Peso 83 — — — — 83 4,228 — 4,228 83 4,228
1.2500% — — — — — — — — — —
Other Currencies 2 — — — — 2 92 — 92 2 92
0.5000% — — — — — — — — — —
Temporary Cash Investments
U.S. Dollar 72 — — — — 72 3,645 — 3,645 72 3,645
4.7500% — — — — — — — — — —
Philippine Peso 276 — — — — 276 14,018 — 14,018 276 14,018
5.0000% — — — — — — — — — —
Philippine Peso 1 — — — — 1 29 — 29 1 29
3.0000% — — — — — — — — — —
Other Currencies 6 — — — — 6 285 — 285 6 285
Interest rate 0.0000% — — — — — — — — — —
474 — — — — 474 24,033 — 24,033 474 24,033
Liabilities:
Long-term Debt
Fixed Rate
U.S. Dollar Fixed
Loans — 15 4 — — 19 952 — 952 19 945
Interest rate — 2.8850 % 2.8850% — — — — — — — —
Philippine Peso 42 376 302 673 1,697 3,090 156,996 408 156,588 3,024 153,644
Interest rate 3.9000% 3.9000% 3.9000% 4.2500%
4.4850% to to to to to
5.5000% 6.7339% 6.7339% 6.7339% 6.7339% — — — — — —
Variable Rate
U.S. Dollar Loans 165 76 26 50 — 317 16,124 47 16,077 317 16,123
Interest rate 0.7900% 0.7900%
0.7900% to to to
1.4500% 0.9500% 0.9500% 1.0500%
over over over over
LIBOR LIBOR LIBOR LIBOR — — — — — — —
Philippine Peso 93 69 3 70 139 374 18,975 36 18,939 374 18,975
Interest rate 0.5000% 0.5000% 0.5000%
to to to
1.0000% 0.6000% 0.6000% 0.6000%
1.0000% over over over over
over PHP PHP PHP PHP
PHP BVAL BVAL BVAL BVAL BVAL — — — — — —
300 536 335 793 1,836 3,800 193,047 491 192,556 3,734 189,687
F-167
In U.S. Dollars Discount/ Fair Value

Debt
Issuance Carrying
Below 1 1-2 2-3 3-5 Over 5 Cost Value In U.S.
year years years years years Total In Php In Php In Php Dollar In Php
(in millions)
Assets:
Debt Instruments at Amortized Cost
Philippine Peso — 3 — — — 3 150 — 150 3 148
Interest rate — 4.8371 % — — — — — — — — —
Cash in Bank
U.S. Dollar 30 — — — — 30 1,580 — 1,580 30 1,580
0.2500% — — — — — — — — — —
Philippine Peso 57 — — — — 57 3,017 — 3,017 57 3,017
1.2500% — — — — — — — — — —
Other Currencies — — — — — — 4 — 4 — 4
0.5000% — — — — — — — — — —
Temporary Cash Investments
U.S. Dollar 675 — — — — 675 35,467 — 35,467 675 35,467
3.0000% — — — — — — — — — —
Philippine Peso 194 — — — — 194 10,204 — 10,204 194 10,204
7.0500% — — — — — — — — — —
U.S. Dollar 22 — — — — 22 1,138 — 1,138 22 1,138
3.0000% — — — — — — — — — —
Philippine Peso 1 — — — — 1 27 — 27 1 27
Interest rate 3.5000% — — — — — — — — — —
979 3 — — — 982 51,587 — 51,587 982 51,585
Liabilities:
Long-term Debt
Fixed Rate
U.S. Dollar Fixed
Loans 2 15 7 4 — 28 1,483 1 1,482 28 1,502
Interest rate 1.4100 % 2.8850 % 2.8850% 2.8850 % — — — — — — —
Philippine Peso 234 123 319 730 1,232 2,638 138,637 278 138,359 2,319 121,868
Interest rate 3.9000% 3.9000% 3.9000% 4.2500%
4.9110% to to to to to
5.6038% 6.7339% 6.7339% 6.7339% 6.7339% — — — — — —
Variable Rate
U.S. Dollar Loans 17 286 38 52 25 418 21,964 94 21,870 418 21,965
Interest rate 0.7900% 0.7900% 0.7900%
to to to
0.9500% to 1.4500% 0.9500% 1.0500% 1.0500%
1.1000% over over over over
over LIBOR LIBOR LIBOR LIBOR LIBOR — — — — — —
Philippine Peso — 94 64 2 118 278 14,610 45 14,565 278 14,610
Interest rate* 0.5000% 0.5000% 0.5000% 0.5000%
to to to to
1.0000% 1.0000% 0.6000% 0.6000%
over over over over
PHP PHP PHP PHP
— BVAL BVAL BVAL BVAL — — — — — —
253 518 428 788 1,375 3,362 176,694 418 176,276 3,043 159,945
* Effective October 29, 2018, PHP BVAL Reference Rates replaced PDST Reference Rates (PDST-R1 and PDST-R2).
Fixed rate financial instruments are subject to fair value interest rate risk while floating rate financial
instruments are subject to cash flow interest rate risk.
Repricing of floating rate financial instruments is mostly done on intervals of three months or six months.
Interest on fixed rate financial instruments is fixed until maturity of the particular instrument.
Approximately 18% and 21% of our consolidated debts were variable rate debts as at December 31, 2019
and 2018, respectively. Our consolidated variable rate debt decreased to Php35,098 million as at December
31, 2019 from Php36,575 million as at December 31, 2018. Considering the aggregate notional amount of
our consolidated outstanding long-term interest rate swap contracts of US$233 million and US$323 million
as at December 31, 2019 and 2018, respectively, approximately 88% and 89% of our consolidated debts
were fixed as at December 31, 2019 and 2018, respectively.
F-168
Management conducted a survey among our banks to determine the outlook of the U.S. Dollar and Philippine
Peso interest rates until March 31, 2020. Our outlook is that the U.S. Dollar and Philippine Peso interest
rates may move 5 basis points, or bps, higher/lower each, as compared to levels as at December 31, 2019. If
Philippine Peso interest rates had been 5 bps higher/lower as compared to market levels as at December 31,
2019, with all other variables held constant, profit after tax for the year ended December 31, 2019 and our
consolidated stockholders’ equity as at December 31, 2019 would have been approximately Php2 million
lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings and loss/gain on
derivative transactions.
Credit Risk
Credit risk is the risk that we will incur a loss arising from our customers, clients or counterparties that fail to
discharge their contracted obligations. We manage and control credit risk by setting limits on the amount of
risk we are willing to accept for individual counterparties and by monitoring exposures in relation to such
limits.
We trade only with recognized and creditworthy third parties. It is our policy that all customers who wish to
trade on credit terms are subject to credit verification procedures. In addition, receivable balances are
monitored on an on-going basis to reduce our exposure to bad debts.
We established a credit quality review process to provide regular identification of changes in the
creditworthiness of counterparties. Counterparty limits are established and reviewed periodically based on
latest available financial data on our counterparties’ credit ratings, capitalization, asset quality and liquidity.
Our credit quality review process allows us to assess the potential loss as a result of the risks to which we are
exposed and allow us to take corrective actions.
Maximum exposure to credit risk of financial assets not subject to impairment

The gross carrying amount of financial assets not subject to impairment also represents our maximum
exposure to credit risk as at December 31, 2019 and 2018 are as follows:
2019 2018
(in million pesos)
Financial assets at fair value through profit or loss (Note 12) 3,369 4,763
Derivative financial assets – net of current portion 1 140
Current portion of derivative financial assets 41 183
Total 3,411 5,086
Maximum exposure to credit risk of financial assets subject to impairment

The table below shows the maximum exposure to credit risk for the components of our consolidated
statements of financial position, including derivative financial instruments as at December 31, 2019 and
2018. The maximum exposure is shown gross before both the effect of mitigation through use of master
netting and collateral arrangements. The extent to which collateral and other credit enhancements mitigate
the maximum exposure to credit risk is described in the footnotes to the table.
F-169
For financial assets recognized on our consolidated statements of financial position, the gross exposure to
credit risk equal their carrying amount.
2019
12-Month ECL Lifetime ECL Lifetime ECL Total
(in million pesos)
High grade 29,241 9,228 — 38,469
Standard grade 1,710 6,224 — 7,934
Substandard grade 7 6,984 — 6,991
Default 298 1,763 15,141 17,202
Gross carrying amount 31,256 24,199 15,141 70,596
Less allowance 298 1,763 15,141 17,202
Carrying amount 30,958 22,436 — 53,394
2018
12-Month ECL Lifetime ECL Lifetime ECL Total
(in million pesos)
High grade 58,299 8,776 — 67,075
Standard grade 1,470 7,881 — 9,351
Substandard grade 3 7,399 — 7,402
Default 236 1,595 14,908 16,739
Gross carrying amount 60,008 25,651 14,908 100,567
Less allowance 236 1,595 14,908 16,739
Carrying amount 59,772 24,056 — 83,828
Maximum exposure to credit risk after collateral held or other credit enhancements
Collateral held as security for financial assets depends on the nature of the instrument. Debt investment
securities are generally unsecured. Estimates of fair value are based on the value of collateral assessed at the
time of borrowing and are regularly updated according to internal lending policies and regulatory guidelines.
Generally, collateral is not held over loans and advances to us except for reverse repurchase agreements.
Collateral usually is not held against investment securities, and no such collateral was held as at December
31, 2019 and 2018.
Our policies regarding obtaining collateral have not significantly changed during the reporting period and
there has been no significant change in the overall quality of the collateral held by us during the year.
We have not identified significant risk concentrations arising from the nature, type or location of collateral
and other credit enhancements held against our credit exposures.
F-170
An analysis of the maximum exposure to credit risk for the components of our consolidated statements of
financial position, including derivative financial instruments as at December 31, 2019 and 2018:
2019
Gross Collateral and Net
Maximum Other Credit Maximum
Exposure Enhancements* Exposure
(in million pesos)
Financial instruments at amortized cost:
Current portion of other financial assets 3,206 — 3,206
Debt instruments at amortized cost 150 — 150
Cash and cash equivalents 24,369 184 24,185
Short-term investments 314 — 314
Retail subscribers 6,486 46 6,440
Corporate subscribers 8,388 331 8,057
Foreign administrations 1,519 — 1,519
Domestic carriers 800 — 800
Dealers, agents and others 5,243 — 5,243
Financial instruments at FVPL:
Financial assets at FVPL 3,369 — 3,369
Other financial assets – net of current portion 6,866 — 6,866
Interest rate swap 31 — 31
Forward foreign exchange contracts 8 — 8
Long-term currency swap 1 — 1
Currency swap 2 — 2
Financial instruments at FVOCI:
Financial instruments at FVOCI 2,919 — 2,919
Total 63,671 561 63,110
* Includes bank insurance, security deposits and customer deposits. We have no collateral held as at December 31, 2019.
2018
Gross Collateral and Net
Maximum Other Credit Maximum
Exposure Enhancements* Exposure
(in million pesos)
Financial instruments at amortized cost:
Other financial assets 2,450 — 2,450
Debt instruments at amortized cost 150 — 150
Cash and cash equivalents 51,654 187 51,467
Short-term investments 1,165 — 1,165
Retail subscribers 9,620 55 9,565
Corporate subscribers 6,564 273 6,291
Foreign administrations 3,306 — 3,306
Domestic carriers 193 — 193
Dealers, agents and others 4,373 1 4,372
Financial instruments at FVPL:
Financial assets at FVPL 4,763 — 4,763
Other financial assets 6,833 — 6,833
Interest rate swap 227 — 227
Long-term currency swap 83 — 83
Currency swap 13 — 13
Financial instruments at FVOCI:
Financial instruments at FVOCI: 4,353 — 4,353
Total 95,747 516 95,231
* Includes bank insurance, security deposits and customer deposits. We have no collateral held as at December 31, 2018.
F-171
The table below provides information regarding the credit quality by class of our financial assets according
to our credit ratings of counterparties as at December 31, 2019 and 2018:
Neither past due Past due

nor credit impaired but not
credit
Total Class A(1) Class B(2) impaired Impaired
(in million pesos)
December 31, 2019
Financial instruments at amortized cost: 67,677 35,550 7,934 6,991 17,202
Cash and cash equivalents 24,369 24,111 258 — —
Short-term investments 314 314 — — —
Retail subscribers 17,178 3,280 1,634 1,572 10,692
Corporate subscribers 13,005 3,652 2,041 2,695 4,617
Foreign administrations 1,896 460 414 645 377
Domestic carriers 889 374 40 386 89
Dealers, agents and others 6,372 1,462 2,095 1,686 1,129
Financial instruments at FVPL: 10,277 10,160 117 — —
Financial assets at FVPL 3,369 3,252 117 — —
Interest rate swap 31 31 — — —
Forward foreign exchange contracts 8 8 — — —
Currency swap 2 2 — — —
Long-term currency swap 1 1 — — —
Financial instruments at FVOCI: 2,919 2,919 — — —
Total 80,873 48,629 8,051 6,991 17,202
(1)
This includes low risk and good paying customer accounts with no history of account treatment for a defined period and no overdue
accounts as at report date; and deposits or placements to counterparties with good credit rating or bank standing financial review.
(2)
This includes medium risk and average paying customer accounts with no overdue accounts as at report date, and new customer
accounts for which sufficient credit history has not been established; and deposits or placements to counterparties not classified as
Class A.
Neither past due Past due

nor credit impaired but not
credit
Total Class A(1) Class B(2) impaired Impaired
(in million pesos)
December 31, 2018
Financial instruments at amortized cost: 96,214 62,722 9,351 7,402 16,739
Cash and cash equivalents 51,654 51,410 244 — —
Short-term investments 1,165 1,165 — — —
Retail subscribers 19,444 4,125 3,577 1,918 9,824
Corporate subscribers 11,073 2,806 1,519 2,239 4,509
Foreign administrations 4,225 593 850 1,863 919
Domestic carriers 270 29 49 115 77
Dealers, agents and others 5,547 1,223 1,886 1,264 1,174
Financial instruments at FVPL: 11,919 11,806 113 — —
Financial assets at FVPL 4,763 4,650 113 — —
Interest rate swap 227 227 — — —
Long-term currency swap 83 83 — — —
Currency swap 13 13 — — —
Total 112,486 78,881 9,464 7,402 16,739
(1)
This includes low risk and good paying customer accounts with no history of account treatment for a defined period and no overdue
accounts as at report date; and deposits or placements to counterparties with good credit rating or bank standing financial review.
(2)
This includes medium risk and average paying customer accounts with no overdue accounts as at report date, and new customer
accounts for which sufficient credit history has not been established; and deposits or placements to counterparties not classified as
Class A.
F-172
The aging analysis of past due but not impaired class of financial assets as at December 31, 2019 and 2018
are as follows:
Past due but not credit impaired

Neither
past due
nor credit 1-60 61-90 Over 91
Total impaired days days days Impaired
(in million pesos)
December 31, 2019
Financial assets at amortized cost: 67,677 43,484 2,006 1,247 3,738 17,202
Other financial assets 3,504 3,199 — — 7 298
Debt instruments at amortized cost 150 150 — — — —
Cash and cash equivalents 24,369 24,369 — — — —
Short-term investments 314 314 — — — —
Retail subscribers 17,178 4,914 994 150 428 10,692
Corporate subscribers 13,005 5,693 705 770 1,220 4,617
Foreign administrations 1,896 874 41 26 578 377
Domestic carriers 889 414 103 240 43 89
Dealers, agents and others 6,372 3,557 163 61 1,462 1,129
Financial instruments at FVPL: 10,277 10,277 — — — —
Financial assets at FVPL 3,369 3,369 — — — —
Other financial assets 6,866 6,866 — — — —
Interest rate swap 31 31 — — — —
Forward foreign exchange contracts 8 8 — — — —
Currency swap 2 2 — — — —
Long-term currency swap 1 1 — — — —
Financial instruments at FVOCI: 2,919 2,919 — — — —
Total 80,873 56,680 2,006 1,247 3,738 17,202
December 31, 2018

Financial assets at amortized cost: 96,214 72,073 3,262 398 3,742 16,739
Other financial assets 2,686 2,447 — — 3 236
Debt instruments at amortized cost 150 150 — — — —
Cash and cash equivalents 51,654 51,654 — — — —
Short-term investments 1,165 1,165 — — — —
Retail subscribers 19,444 7,702 1,747 62 109 9,824
Corporate subscribers 11,073 4,325 957 101 1,181 4,509
Foreign administrations 4,225 1,443 139 131 1,593 919
Domestic carriers 270 78 52 21 42 77
Dealers, agents and others 5,547 3,109 367 83 814 1,174
Financial instruments at FVPL: 11,919 11,919 — — — —
Financial assets at FVPL 4,763 4,763 — — — —
Other financial assets 6,833 6,833 — — — —
Interest rate swap 227 227 — —
Long-term currency swap 83 83 — — — —
Currency swap 13 13 — — — —
Total 112,486 88,345 3,262 398 3,742 16,739
Capital Management Risk

We aim to achieve an optimal capital structure in pursuit of our business objectives which include
maintaining healthy capital ratios and strong credit ratings, and maximizing shareholder value.
In recent years, our cash flow from operations has allowed us to substantially reduce debts and, in 2005,
resume payment of dividends on common shares. Since 2005, our strong cash flow has enabled us to make
investments in new areas and pay higher dividends.
F-173
Our approach to capital management focuses on balancing the allocation of cash and the incurrence of debt
as we seek new investment opportunities for new businesses and growth areas. On August 5, 2014, the
PLDT Board of Directors approved an amendment to our dividend policy, increasing the dividend payout
rate to 75% from 70% of our core EPS as regular dividends, although we amended our dividend policy to
reduce the regular dividend payout to 60% of core EPS in 2016. In declaring dividends, we take into
consideration the interest of our shareholders, as well as our working capital, capital expenditures and debt
servicing requirements. The retention of earnings may be necessary to meet the funding requirements of our
business expansion and development programs.
However, in view of our elevated capital expenditures to build-out a robust, superior network to support the
continued growth of data traffic, plans to invest in new adjacent businesses that will complement the current
business and provide future sources of profits and dividends, and management of our cash and gearing levels,
the PLDT Board of Directors approved on August 2, 2016, the amendment of our dividend policy, reducing
the regular dividend payout to 60% of core EPS. As part of the dividend policy, in the event no investment
opportunities arise, we may consider the option of returning additional cash to our shareholders in the form
of special dividends or share buybacks. Philippine corporate regulations prescribe, however, that we can
only pay out dividends or make capital distribution up to the amount of our unrestricted retained earnings.
Some of our debt instruments contain covenants that impose maximum leverage ratios. In addition, our
credit ratings from the international credit ratings agencies are based on our ability to remain within certain
leverage ratios.
No changes were made in our objectives, policies or processes for managing capital during the years ended
December 31, 2019, 2018 and 2017.
29. Notes to the Statement of Cash Flows

The following table shows the changes in liabilities arising from financing activities for the years ended
December 31, 2019, 2018 and 2017:
Foreign
January 1, exchange December 31,
2019 Cash flows movement Others 2019
(in million pesos)
Interest-bearing financial liabilities (Note 21) 176,276 16,811 (653 ) 122 192,556
Lease liabilities (Note 10) 14,727 (9,543 ) — 11,149 16,333
Derivative financial liabilities 80 (50 ) — 83 113
Accrued interests and other related costs (Note 24) 1,347 (7,143 ) — 7,327 1,531
Dividends (Note 20) 1,533 (15,592 ) — 15,643 1,584
193,963 (15,517 ) (653 ) 34,324 212,117
Foreign
(in million pesos)
Interest-bearing financial liabilities (Note 21) 172,611 1,722 1,723 220 176,276
Derivative financial liabilities 149 886 — (955 ) 80
Dividends 1,575 (13,928 ) — 13,886 1,533
175,511 (17,934 ) 1,723 19,936 179,236
Foreign
(in million pesos)
Interest-bearing financial liabilities 185,032 (13,097 ) 417 259 172,611
Long-term financing for capital expenditures
(Note 21) 13,673 (7,735 ) — (358 ) 5,580
Dividends (Note 20) 1,544 (16,617 ) — 16,648 1,575
201,661 (44,525 ) 417 23,389 180,942
F-174
Others include the effect of accretion of long-term borrowings, effect of recognition and accretion of lease
liabilities, effect of accrued but not yet paid interest on interest-bearing loans and borrowings and accrual of
dividends that were not yet paid at the end of the period.
Non-cash Investing Activities
The following table shows our significant non-cash investing activities and corresponding transaction
amounts for the year ended December 31, 2019:
(in million pesos)

Initial recognition of ROU assets (Note 10) 13,824
Additions to ROU assets (Note 10) 5,474
Non-cash Financing Activities
The following table shows our significant non-cash financing activities and corresponding transaction
amounts for the year ended December 31, 2019:
(in million pesos)

Initial recognition of lease liabilities (Note 10) 14,727
Additions to lease liabilities (Note 10) 5,577
F-175

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PLDT INC.

CONSOLIDATED FINANCIAL STATEMENTS

AS AT DECEMBER 31, 2019 AND 2018

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

EQUITY AND LIABILITIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)

CONSOLIDATED INCOME STATEMENTS

2019 2018 2017

OTHER INCOME (EXPENSES) – NET (Note 5) (7,065 ) 9,042 5,058

PROVISION FOR INCOME TAX (Note 7) 9,550 3,842 1,103

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

2019 2018 2017

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

2019 2018 2017

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

2019 2018 2017

2. Summary of Significant Accounting Policies

Extension of Smart’s Congressional Franchise

Transfer of SBI’s Home Broadband Subscription Assets to PLDT

 Seamless upgrades of PLDT products;

 Flexibility for business in cross-selling of PLDT products; and

 Enhanced customer experience.

This transaction was eliminated in our consolidated financial statements.

ePLDT’s Additional Investment in ePDS

Expiration of Digitel’s Legislative Franchise

Prior to Amendments After Amendments

Expiration of Philcom’s Legislative Franchise

Expiration of Maratel’s Legislative Franchise

New and Amended Standards and Interpretations

1. Amendments to PFRS 9, Financial Instruments, Prepayment Features with Negative Compensation

3. Amendments to PAS 28, Investment in Associates and Joint Ventures

4. Annual Improvements to PFRSs 2015-2017 Cycle

5. Philippine Interpretation to International Financial Reporting Interpretations Committee, or IFRIC, 23,

 Whether an entity considers uncertain tax treatments separately;

 How an entity considers changes in facts and circumstances.

6. PFRS 16, Leases

The effect of adoption of PFRS 16 as at January 1, 2019 is as follows:

Net impact on equity:

Net impact on equity:

Consolidated statement of cash flows as at December 31, 2019

(in million pesos)

Net cash flows from financing activities:

 Leases previously classified as finance leases

 Leases previously accounted for as operating leases

We also applied the available practical expedients wherein we:

Based on the foregoing, as at January 1, 2019:

(in million pesos)

Business Combinations and Goodwill

Current Versus Noncurrent Classifications

An asset is current when it is:

 Expected to be realized or intended to be sold or consumed in the normal operating cycle;

 Held primarily for the purpose of trading;

 Expected to be realized within twelve months after the reporting period; or

All other assets are classified as noncurrent.

A liability is current when:

 It is expected to be settled in the normal operating cycle;

 It is held primarily for the purpose of trading;