PLDT, a leading telecommunications company in the Philippines, faced a budget overrun of P48 billion attributed to mismanagement, unexpected expenses, and industry challenges, raising concerns about corporate governance. The company struggled with transparency and accountability, prompting regulatory investigations into its financial practices. To restore trust and prevent future issues, PLDT must enhance financial controls, improve communication with stakeholders, strengthen regulatory oversight, and ensure active board oversight.

1. PLDT’s P48 Billion
Over budget
Group 4
FREDDY C. NAVARRO, CMITAP, MBA
Presenter

3. RATIONALE
PLDT, a leading telecommunications company in
the Philippines, experienced a significant budget
overrun of P48 billion. The overrun occurred due to a
combination of factors, including mismanagement,
unexpected expenses, and economic challenges in the
telecommunications industry.

4. Q1: GOOD GOVERNANCE AND
CAPITAL MARKET ISSUES:
1. Transparency and Accountability:
PLDT's failure to promptly disclose the budget
overrun raises concerns about transparency and
accountability in corporate governance. Shareholders
and investors expect accurate and timely financial
reporting, but the delay in disclosure may erode trust in
the company's leadership.

5. 2. Regulatory Compliance:
Regulatory authorities may question whether
PLDT complied with financial regulations and
standards in managing its finances and reporting
financial information to stakeholders. Failure to adhere
to regulatory requirements could result in legal and
financial repercussions for the company.

6. Q2: HANDLING OF ISSUES:
PLDT Management: Initially, PLDT management struggled to
effectively communicate the reasons behind the budget overrun
and provide a comprehensive plan to address the issue. This lack of
transparency may have contributed to uncertainty among
shareholders and investors.
Regulatory Authorities: Regulatory bodies launched
investigations into PLDT's financial management practices and
compliance with regulatory requirements. They sought to ensure
that the company adhered to industry standards and took
appropriate measures to rectify the situation.

7. Q3: RESOLUTION APPROACH:
1. Enhanced Financial Controls:
PLDT should implement stricter financial controls
and oversight mechanisms to prevent future budget
overruns. This includes enhancing budgeting processes,
conducting regular audits, and implementing risk
management strategies to mitigate financial risks.

8. 2. Improved Communication:
PLDT should prioritize transparent
communication with shareholders and investors,
providing timely updates on financial performance and
addressing concerns promptly. Open communication
channels will help rebuild trust and confidence in the
company.

9. 3. Strengthened Regulatory Oversight:
Regulatory authorities should continue to monitor
PLDT's compliance with financial regulations and
standards, conducting thorough audits and inspections
to ensure accountability. They should also impose
sanctions or penalties for any violations to deter
misconduct.

10. 4. Board Oversights:
PLDT's board of directors should play a more
active role in overseeing financial management
practices and holding management accountable for
governance lapses. Board oversight is crucial in
ensuring that the company operates with integrity and
transparency.

11. CONCLUSION:
The PLDT P48 Billion Budget Overrun highlights the
importance of good governance and regulatory compliance in
corporate finance. By addressing issues related to transparency,
accountability, and regulatory oversight, PLDT can rebuild
trust with stakeholders and strengthen its position in the
telecommunications industry. However, achieving lasting
change will require concerted efforts from PLDT management,
regulatory authorities, and the board of directors to implement
effective governance reforms and prevent similar incidents in
the future.

13. Thank you!