PLDT’s credit score kept at BBB

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December 4, 2025 | 12:00am

MANILA, Philippines — Telco giant PLDT Inc. has retained a credit score of “BBB” from S&P Global Ratings on the resolution of its budget mess and the strength of its broadband business, although risks are becoming harsher.

S&P yesterday said it is maintaining the “BBB” credit rating for PLDT, believing that the telco has succeeded in improving spending controls to resolve the budget mess revealed in 2022.

The credit rating agency also adjusted its management and governance score of PLDT to neutral, from moderately negative, because of improvements in the balance sheet of the telco.

S&P projects PLDT’s capital expenditures to land between P63 billion and P66 billion this year, far from the P94 billion it spent in 2022. The telco has also brought down its commitments related to the budget mess to P3.4 billion as of Sept. 30 from P33 billion in 2023.

The future is also looking up for the country’s largest telco, with its revenues from the broadband segment seen growing by as much as seven percent through 2027, according to S&P.

The telco is projected to benefit from the adoption of broadband services in low-penetration areas.

S&P also anticipates PLDT to squeeze more earnings from the enterprise cluster, acknowledging the accelerating demand for artificial intelligence (AI) and cloud computing in the Philippines.

“The increasing demand for cloud services, cybersecurity (solutions), data centers and AI-driven services will continue to support PLDT’s enterprise segment,” S&P said.

However, S&P flags PLDT’s wireless unit Smart Communications Inc. as a growth laggard, as it is expected to face tougher competition from Globe Telecom Inc. and Dito Telecommunity Corp.

Overall, S&P said PLDT would improve its discretionary cash flow from overall revenue growth by up to five percent from 2026 to 2027. This will be paired with a decline in capex intensity, or capex as a ratio of revenue.

Given this, PLDT should turn its discretionary cash flow to positive by 2027, the first time it will do so since 2018.

S&P said PLDT would still be restricted in terms of leverage, as debts will remain thrice its earnings before interest, taxes, depreciation and amortization.

“PLDT’s plan to sell partial stakes in its data centers and monetize its legacy copper assets could lead to faster deleveraging than our base-case expectations,” S&P said.

Moreover, S&P believes PLDT could expose itself to a rating downgrade if it fails to keep up its competitiveness once the new players encouraged by the Konektadong Pinoy Act enter.