PLDT Inc. (TELPM)

PLDT’s current credit quality is best viewed as that of a stable investment-grade telecommunications issuer. The direction is stable, improvement is gradual, and confirmation is still needed on post-dividend cash flow and debt reduction. The probability of rapid deterioration is not high, but the view could change if regulation, interest rates, market access, and capex re-acceleration overlap.

The central view in this report is that PLDT has enough business strength to manage its debt, but it is not a low-debt company. 2025 adjusted EBITDA of PHP111.2bn and a 1Q 2026 EBITDA margin of 52% are strong. Mobile data, fixed data, enterprise telecommunications, and ICT are likely to continue supporting demand. If capex falls to the mid-PHP50bn range, pre-dividend cash flow should be easier to improve, but confirmation is needed on dividends, interest payments, and refinancing terms before concluding that debt reduction or liquidity improvement is progressing.

At the same time, PLDT should not be treated as a simple safe asset. At end-2025, long-term debt was PHP295.0bn and lease liabilities were PHP64.2bn. Cash is thin, floating-rate debt is 67%, and the company has US dollar-denominated debt. Policy changes such as the Konektadong Pinoy Act and Data Rollover Bill are directly relevant to monetisation of telecommunications services. These factors can affect spreads and rating headroom even within the investment-grade category.