PLDT INC.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS AT SEPTEMBER 30, 2024 (UNAUDITED) AND DECEMBER 31, 2023 (AUDITED)

AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (UNAUDITED)

F-1
 PLDT INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at September 30, 2024 and December 31, 2023
(in million pesos)

September 30, December 31,

2024 2023
(Unaudited) (Audited)
ASSETS
Noncurrent Assets
Property and equipment (Notes 2, 9 and 21) 308,216 287,103
Right-of-use assets (Note 10) 37,310 32,717
Investments in associates and joint ventures (Note 11) 52,577 50,308
Financial assets at fair value through profit or loss (Note 27) 1,139 578
Debt instruments at amortized cost – net of current portion (Note 12) 370 395
Investment properties (Note 13) 846 1,315
Goodwill and intangible assets (Note 14) 64,334 64,335
Deferred income tax assets – net (Note 7) 13,876 18,172
Derivative financial assets – net of current portion (Note 27) 232 96
Prepayments and other nonfinancial assets – net of current portion (Notes 2, 18, 24 and 25) 72,903 80,365
Contract assets – net of current portion (Note 5) 546 531
Other financial assets – net of current portion (Note 27) 2,835 3,481
Total Noncurrent Assets 555,184 539,396
Current Assets
Cash and cash equivalents (Note 15) 12,306 16,177
Short-term investments (Note 27) 102 391
Trade and other receivables (Note 16) 28,596 26,086
Inventories and supplies (Note 17) 1,985 3,340
Current portion of contract assets (Note 5) 1,502 1,387
Current portion of derivative financial assets (Note 27) 11 —
Current portion of debt instruments at amortized cost (Note 12) 25 200
Current portion of prepayments and other nonfinancial assets (Notes 18 and 24) 12,249 13,215
Current portion of other financial assets (Notes 19 and 27) 847 320
57,623 61,116
Assets classified as held-for-sale (Notes 9 and 10) 7,188 9,007
Total Current Assets 64,811 70,123
TOTAL ASSETS 619,995 609,519

EQUITY AND LIABILITIES

Equity
Non-voting serial preferred stock (Note 19) 360 360
Voting preferred stock (Note 19) 150 150
Common stock (Note 19) 1,093 1,093
Treasury stock (Note 19) (6,505) (6,505)
Capital in excess of par value (Note 19) 130,312 130,312
Retained earnings (Note 19) 29,304 22,020
Other comprehensive loss (Note 6) (43,031) (42,212)
Total Equity Attributable to Equity Holders of PLDT 111,683 105,218
Noncontrolling interests (Note 19) 1,248 5,168
TOTAL EQUITY 112,931 110,386

See accompanying Notes to Consolidated Financial Statements.

F-2
 PLDT INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)

As at September 30, 2024 and December 31, 2023
(in million pesos)

September 30, December 31,

2024 2023
(Unaudited) (Audited)
Noncurrent Liabilities
Interest-bearing financial liabilities – net of current portion (Note 20) 251,476 243,152
Lease liabilities – net of current portion (Note 10) 45,477 41,625
Deferred income tax liabilities – net (Note 7) 30 165
Derivative financial liabilities – net of current portion (Note 27) — 12
Customers’ deposits (Note 27) 2,255 2,238
Pension and other employee benefits (Note 25) 4,578 5,661
Deferred credits and other noncurrent liabilities (Notes 5 and 21) 9,828 9,607
Total Noncurrent Liabilities 313,644 302,460
Current Liabilities
Accounts payable (Note 22) 74,954 81,014
Accrued expenses and other current liabilities (Notes 23 and 26) 85,849 88,750
Current portion of interest-bearing financial liabilities (Note 20) 19,107 11,646
Current portion of lease liabilities (Note 10) 7,098 5,921
Dividends payable (Note 19) 2,004 1,912
Current portion of derivative financial liabilities (Note 27) 413 1,021
Income tax payable 2,267 4,630
191,692 194,894
Liabilities associated with assets classified as held-for-sale (Note 10) 1,728 1,779
Total Current Liabilities 193,420 196,673
TOTAL LIABILITIES 507,064 499,133
TOTAL EQUITY AND LIABILITIES 619,995 609,519

See accompanying Notes to Consolidated Financial Statements.

F-3
 PLDT INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

For the Nine Months Ended September 30, 2024 and 2023
(in million pesos, except earnings per common share amounts which are in pesos)

For the Nine Months Ended For the Three Months Ended
September 30, September 30,
2024 2023 2024 2023
(Unaudited) (Unaudited)
CONTINUING OPERATIONS
REVENUES FROM CONTRACTS WITH CUSTOMERS
Service revenues (Note 5) 154,995 149,752 51,552 50,501
Non-service revenues (Note 5) 5,947 6,604 1,807 1,817
160,942 156,356 53,359 52,318
EXPENSES
Selling, general and administrative expenses (Notes 5 and 18) 58,735 58,889 18,990 19,056
Depreciation and amortization (Notes 9, 10 and 18) 37,162 36,044 12,881 12,094
Cost of sales and services (Note 5) 10,019 10,902 3,174 3,212
Asset impairment (Note 5) 3,069 3,289 1,020 1,142
Interconnection costs 10,102 7,463 3,556 2,743
119,087 116,587 39,621 38,247
41,855 39,769 13,738 14,071

OTHER EXPENSES – NET (Note 5) 4,792 2,225 978 1,301

INCOME BEFORE INCOME TAX FROM CONTINUING OPERATIONS 37,063 37,544 12,760 12,770

PROVISION FOR INCOME TAX (Note 7) 8,839 9,533 3,053 3,295

NET INCOME FROM CONTINUING OPERATIONS (Note 4) 28,224 28,011 9,707 9,475

NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS

(Notes 2, 4 and 8) — (13) — 16
NET INCOME (Note 4) 28,224 27,998 9,707 9,491
ATTRIBUTABLE TO:
Equity holders of PLDT (Note 8) 28,070 27,879 9,657 9,428
Noncontrolling interests 154 119 50 63
28,224 27,998 9,707 9,491
Earnings Per Share Attributable to Common Equity Holders
of PLDT (Notes 4 and 8)
Basic 129.71 128.83 44.62 43.56
Diluted 129.71 128.83 44.62 43.56
Earnings Per Share from Continuing Operations Attributable to
Common Equity Holders of PLDT (Notes 4 and 8)
Basic 129.71 128.89 44.62 43.49
Diluted 129.71 128.89 44.62 43.49

See accompanying Notes to Consolidated Financial Statements.

F-4
 PLDT INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Nine Months Ended September 30, 2024 and 2023
(in million pesos)

For the Nine Months Ended For the Three Months Ended
September 30, September 30,
2024 2023 2024 2023
(Unaudited) (Unaudited)
NET INCOME 28,224 27,998 9,707 9,491
OTHER COMPREHENSIVE INCOME (LOSS) – NET OF TAX (Note 6)
Foreign currency translation differences of subsidiaries 66 — 62 (90)
Net transactions on cash flow hedges: (910) (1,245) (148) (505)
Net fair value losses on cash flow (Note 27) (1,214) (1,660) (198) (673)
Income tax related to fair value adjustments charged directly to equity (Note 7) 304 415 50 168
Net other comprehensive loss to be reclassified to profit or loss in subsequent years (844) (1,245) (86) (595)
Actuarial gains (losses) on defined benefit obligations: (10) 155 1 67
Remeasurement in actuarial gains (losses) on defined benefit obligations (Note 25) (42) 155 — 67
Income tax related to remeasurement adjustments (Note 7) 32 — 1 —
Net other comprehensive income (loss) not to be reclassified to profit or loss in
subsequent years (10) 155 1 67
Total Other Comprehensive Loss – Net of Tax (854) (1,090) (85) (528)
TOTAL COMPREHENSIVE INCOME 27,370 26,908 9,622 8,963
ATTRIBUTABLE TO:
Equity holders of PLDT 27,251 26,791 9,573 8,897
Noncontrolling interests 119 117 49 66
27,370 26,908 9,622 8,963

See accompanying Notes to Consolidated Financial Statements.

F-5
 PLDT INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Nine Months Ended September 30, 2024 and 2023
(in million pesos)

Total Equity
Capital in Other Attributable to
Preferred Common Treasury Excess of Retained Comprehensive Equity Holders Noncontrolling Total
Stock Stock Stock Par Value Earnings Loss of PLDT Interests Equity
Balances as at January 1, 2024 510 1,093 (6,505) 130,312 22,020 (42,212) 105,218 5,168 110,386
Cash dividends (Note 19) — — — — (20,786) — (20,786) (50) (20,836)
Total comprehensive income (loss): — — — — 28,070 (819) 27,251 119 27,370
Net income (Note 8) — — — — 28,070 — 28,070 154 28,224
Other comprehensive loss (Note 6) — — — — — (819) (819) (35) (854)
Acquisition and dilution of noncontrolling interests — — — — — — — 235 235
Perpetual notes settlement (Note 19) — — — — — — — (4,200) (4,200)
Distribution charges on perpetual notes (Note 19) — — — — — — — (59) (59)
Transaction costs from settlement of perpetual notes (Note 19) — — — — — — — 35 35
Balances as at September 30, 2024 (Unaudited) 510 1,093 (6,505) 130,312 29,304 (43,031) 111,683 1,248 112,931

Balances as at January 1, 2023 510 1,093 (6,505) 130,312 18,799 (35,482) 108,727 5,234 113,961
Cash dividends (Note 19) — — — — (23,378) — (23,378) (25) (23,403)
Total comprehensive income (loss): — — — — 27,879 (1,088) 26,791 117 26,908
Net income (Note 8) — — — — 27,879 — 27,879 119 27,998
Other comprehensive loss (Note 6) — — — — — (1,088) (1,088) (2) (1,090)
Distribution charges on perpetual notes (Note 19) — — — — — — — (177) (177)
Balances as at September 30, 2023 (Unaudited) 510 1,093 (6,505) 130,312 23,300 (36,570) 112,140 5,149 117,289

See accompanying Notes to Consolidated Financial Statements.

F-6
 PLDT INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2024 and 2023
(in million pesos)

For the Nine Months Ended

September 30,
2024 2023
(Unaudited)
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Income before income tax and noncontrolling interest from continuing operations 37,063 37,544
Loss before income tax and noncontrolling interest from discontinued operations (Note 2) — (13)
Net income before income tax (Note 4) 37,063 37,531
Adjustments for:
Depreciation and amortization (Notes 9, 10 and 18) 37,162 36,065
Interest on loans and other related items – net (Note 5) 7,744 7,359
Asset impairment (Note 5) 3,069 3,292
Accretion on lease liabilities (Notes 5 and 10) 2,900 2,372
Equity share in net losses of associates and joint ventures (Notes 5 and 11) 1,119 2,303
Pension benefit costs (Notes 5 and 25) 1,110 903
Incentive plan (Notes 5 and 25) 857 668
Accretion on financial liabilities (Notes 5 and 20) 275 270
Amortization of intangible assets (Notes 5 and 14) 171 166
Impairment of investments (Note 11) — 70
Gains on disposal of property and equipment (Notes 5 and 9) (79) (389)
Interest income (Note 5) (718) (734)
Gain on sale and leaseback of telecom towers (Note 9) (1,165) (5,008)
Foreign exchange gains – net (Notes 5 and 27) (1,389) (34)
Gains on derivative financial instruments – net (Notes 5 and 27) (2,066) (2,207)
Others (334) (284)
Operating income before changes in assets and liabilities 85,719 82,343
Decrease (increase) in:
Prepayments 8,813 2,009
Inventories and supplies 1,354 1,301
Contract assets (264) 73
Trade and other receivables (9,659) (2,203)
Other financial and non-financial assets (1,138) 303
Increase (decrease) in:
Customers' deposits 17 (83)
Accrued expenses and other current liabilities (2,346) (3,021)
Pension and other employee benefits (3,096) (3,909)
Accounts payable (8,812) (8,569)
Other noncurrent liabilities 96 (45)
Net cash flows generated from operations 70,684 68,199
Income taxes paid (2,566) (2,361)
Net cash flows from operating activities 68,118 65,838

See accompanying Notes to Consolidated Financial Statements.

F-7
 PLDT INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

For the Nine Months Ended September 30, 2024 and 2023
(in million pesos)

For the Nine Months Ended

September 30,
2024 2023
(Unaudited)
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Proceeds from:
Disposal of property and equipment (Note 9) 3,480 14,263
Redemption of investment in debt securities (Note 12) 200 —
Maturity of short-term investments 21 440
Interest received 700 706
Payments for:
Purchase of short-term investments (3) (329)
Purchase of financial assets at fair value through profit or loss (152) —
Interest capitalized to property and equipment (Notes 5 and 9) (2,126) (1,628)
Acquisition of investments in associates and joint ventures (Note 11) (3,692) (72)
Purchase of property and equipment (Note 9) (46,550) (65,199)
Decrease (Increase) in other financial and non-financial assets 915 (39)
Net cash flows used in investing activities (47,207) (51,858)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from:
Availments of long-term debt (Notes 20 and 28) 25,300 35,000
Collection from derivative financial instruments - net (Notes 27 and 28) 84 —
Payments for:
Settlements of derivative financial instruments - net (Notes 27 and 28) — (1,042)
Short-term debt (Notes 20 and 28) — (4,000)
Distribution charges on perpetual notes (Note 19) (59) (177)
Debt issuance costs (Notes 20 and 28) (150) (199)
Redemption of perpetual notes (Note 19) (4,200) —
Interest – net of capitalized portion (Notes 5, 20 and 28) (7,285) (6,831)
Obligations under lease liabilities (Notes 10 and 28) (8,994) (7,993)
Long-term debt (Notes 20 and 28) (10,084) (8,975)
Cash dividends (Notes 19 and 28) (20,744) (23,313)
Net cash flows used in financing activities (26,132) (17,530)
NET EFFECT OF FOREIGN EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS 1,350 (189)
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,871) (3,739)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD (Note 15) 16,177 25,211
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD (Note 15) 12,306 21,472

See accompanying Notes to Consolidated Financial Statements.

F-8
 PLDT INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Corporate Information

PLDT Inc., which we refer to as PLDT or the Parent Company, was incorporated under the 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. PLDT holds a perpetual corporate term under Section 11 of the Revised Corporation Code of the
Philippines (Republic Act No. 11232), which grants existing corporations perpetual existence unless a majority vote of
stockholders elects to retain a specified corporate term.

In 1967, effective control of PLDT was transferred from General Telephone and Electronics Corporation, a major shareholder
since PLDT’s incorporation, to a group of Filipino investors. In 1981, as part of the Philippine government’s policy to
integrate the country’s telecommunications industry, PLDT acquired substantially all assets and liabilities of the Republic
Telephone Company, then the second largest telephone provider 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 a strategic partner of PLDT initially holding approximately a 15% economic and voting interest in
PLDT’s common stock. Concurrent with NTT Communications’ investment, PLDT acquired 100% of Smart
Communications, Inc., or Smart.

On March 14, 2006, NTT DOCOMO, Inc., or NTT DOCOMO, acquired approximately 7% of PLDT’s then outstanding
common shares from NTT Communications, which retained ownership of about 7% of PLDT’s common shares. Since then,
NTT DOCOMO has made additional purchases of PLDT shares, bringing the combined beneficial ownership of NTT
DOCOMO and NTT Communications (both part of Nippon Telegraph and Telephone Corporation) to approximately 20% of
PLDT’s outstanding common stock as at September 30, 2024.

On February 28, 2007, Metro Pacific Asset Holdings, Inc., a Philippine affiliate of First Pacific, completed an acquisition of
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 PLDT’s outstanding common shares at
the time and raised the First Pacific Group’s and its Philippine affiliates’ beneficial ownership to approximately 28% of
PLDT’s outstanding common stock as of that date. Since then, the First Pacific Group’s beneficial ownership interest in
PLDT has decreased by approximately 2%, mainly due to the holders of Exchangeable Notes issued in 2005 by a subsidiary
of First Pacific, which were fully exchanged into PLDT shares. The First Pacific Group and its Philippine affiliates held
beneficial ownership of approximately 26% of PLDT’s outstanding common stock as at September 30, 2024.

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 collectively, the JG Summit Group. As consideration
for the assets acquired, 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, under
separate option agreements entered into between JGSHI with the Philippine affiliate of First Pacific and NTT DOCOMO,
respectively. As at September 30, 2024, the JG Summit Group beneficially owned approximately 11.27% of PLDT’s
outstanding common stock.

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. This subscription was made pursuant to a subscription
agreement between BTFHI and PLDT dated October 15, 2012. Consequently, the issuance of these Voting Preferred Shares
reduced the voting power of the NTT Group (comprising of NTT DOCOMO and NTT Communications), the First Pacific
Group and its Philippine affiliates, and JG Summit Group to 9.68%, 15% and 6.65%, respectively, as at September 30, 2024.
See Note 19 – Equity – Preferred Stock – Voting Preferred Stock.

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, under 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 the successor depositary for its
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”. As of September 30, 2024, there were approximately 16.6 million ADSs outstanding.

F-9
 PLDT and our Philippine-based fixed line and wireless subsidiaries operate under the jurisdiction of the Philippine National
Telecommunications Commission, or NTC. The NTC’s jurisdiction includes, among other responsibilities, the approval of
major services offered and certain rates charged to customers.

We are the largest and most diversified telecommunications company in the Philippines, providing nationwide data and
multi-media services. Our business is organized into distinct units based on our products and services, with three reportable
operating segments that form 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 Material Accounting Policies – Basis of Consolidation. Information on other
related party relationships of the PLDT Group is provided in Note 24 – Related Party Transactions.

Our consolidated financial statements as at September 30, 2024 and December 31, 2023, and for the nine months ended
September 30, 2024 and 2023 were approved and authorized by the Board of Directors on November 12, 2024 as reviewed by
the Audit Committee on November 11, 2024.

2. Summary of Material 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 Financial and Sustainability Reporting Standards Council.

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, 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.

F-10
Basis of Consolidation

Our consolidated financial statements include the financial statements of PLDT and the following subsidiaries (collectively, the “PLDT Group”) as at September 30, 2024 and
December 31, 2023:

September 30, 2024 December 31, 2023

(Unaudited) (Audited)
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, and Subsidiary Philippines Internet broadband distribution services — 100.0 — 100.0
Primeworld Digital Systems, Inc., or PDSI Philippines Internet broadband distribution services — 100.0 — 100.0
I-Contacts Corporation(a) Philippines Operations support servicing business — 100.0 — 100.0
Far East Capital Limited, or FECL(a) Cayman Islands Cost effective offshore financing and risk management activities for — 100.0 — 100.0
Smart
PH Communications Holdings Corporation(a) Philippines Investment company — 100.0 — 100.0
Connectivity Unlimited Resource Enterprise, Inc.(a) Philippines Cellular mobile services — 100.0 — 100.0
Francom Holdings, Inc.(a) Philippines Investment company — 100.0 — 100.0
Chikka Holdings Limited, or Chikka, and Subsidiaries, or Chikka Group(a) British Virgin Islands Content provider, mobile applications development and services — 100.0 — 100.0
Wifun, Inc.(a) Philippines Software developer and selling of WiFi access equipment — 100.0 — 100.0
PLDT Global, Inc.(a) Philippines Cross-border digital platforms and other allied services 100.0 — 100.0 —
ACeS Philippines Cellular Satellite Corporation, or ACeS Philippines(a) Philippines Satellite information and messaging services 88.5 11.5 88.5 11.5
Digitel Mobile Philippines, Inc., or DMPI, (a wholly-owned subsidiary of Digitel) Philippines Cellular mobile services — 99.6 — 99.6
Fixed Line
PLDT Clark Telecom, Inc., or ClarkTel Philippines Telecommunications services 100.0 — 100.0 —
PLDT Subic Telecom, Inc., or SubicTel(a) Philippines Telecommunications services 100.0 — 100.0 —
PLDT Global Corporation, or PLDT Global, and Subsidiaries British Virgin Islands Telecommunications services 100.0 — 100.0 —
PLDT-Philcom, Inc., or Philcom, and Subsidiaries, or Philcom Group(a) Philippines Telecommunications services 100.0 — 100.0 —
Talas Data Intelligence, Inc.(a) Philippines Business infrastructure and solutions; intelligent data processing and 100.0 — 100.0 —
implementation services and data analytics insight generation
Multisys Technologies Corporation, or Multisys Philippines Software development and IT solutions services — 45.7 — 50.7
(a) Ceased commercial operations.

F-11
\

September 30, 2024 December 31, 2023

(Unaudited) (Audited)
Place of Percentage of Ownership
Name of Subsidiary Incorporation Principal Business Activity Direct Indirect Direct Indirect

ePLDT, Inc., or ePLDT: Philippines Information and communications infrastructure for 100.0 — 100.0 —
internet-based services, e-commerce, customer
relationship management and IT related services
IP Converge Data Services, Inc., or IPCDSI, and Subsidiary, or IPCDSI Group Philippines Information and communications infrastructure for — 100.0 — 100.0
internet-based services, e-commerce, customer
relationship management and IT related services
Curo Teknika, Inc., or Curo(a) Philippines Managed IT outsourcing — 100.0 — 100.0
ABM Global Solutions, Inc., or AGS, and Subsidiaries, or AGS Group(a) Philippines Internet-based purchasing, IT consulting and professional services — 100.0 — 100.0
ePDS, Inc., or ePDS(a) Philippines Bills printing and other related value-added services, or VAS — 100.0 — 100.0
netGames, Inc.(a) Philippines Gaming support services — 57.5 — 57.5
MVP Rewards Loyalty Solutions, Inc., or MRSI(a) Philippines Full-services customer rewards and loyalty programs — 100.0 — 100.0
VITRO, Inc., or Vitro Philippines Information and communications infrastructure for — 100.0 — 100.0
internet-based services, e-commerce, customer
relationship management and IT related services
ePLDT Capital Investment Pte. Ltd. or ePLDT Capital(b) Singapore Investment holding and acquisition of companies — 100.0 — —
Digitel Philippines Telecommunications services 99.6 — 99.6 —
Digitel Information Technology Services, Inc.(a) Philippines Internet services — 99.6 — 99.6
PLDT-Maratel, Inc., or Maratel(a) Philippines Telecommunications services 98.0 — 98.0 —
Bonifacio Communications Corporation, or BCC Philippines Telecommunications, infrastructure and related VAS 75.0 — 75.0 —
Pilipinas Global Network Limited, or PGNL, and Subsidiaries British Virgin Islands International distributor of Filipino channels and content 64.6 — 64.6 —
Others
PLDT Global Investments Holdings, Inc., or PGIH Philippines Investment company 100.0 — 100.0 —
PLDT Digital Investments Pte. Ltd., or PLDT Digital, and Subsidiaries Singapore Investment company 100.0 — 100.0 —
PLDT Communications and Energy Ventures, Inc., or PCEV Philippines Investment company — 99.9 — 99.9
(a)
Ceased commercial operations.
(b)
On January 3, 2024, the Accounting and Corporate Regulatory Authority of Singapore approved the incorporation of ePLDT Capital, a wholly-owned subsidiary of ePLDT.

F-12
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.

Investment of PGIH in PCEV

On March 22, 2022, the Board of Directors of PGIH approved an investment of US$20 million in the common stock of PCEV
at a subscription price of Php13 thousand per share, to support the growth of Maya Innovations Holdings Pte. Ltd., or MIH
(formerly Voyager Innovations Holdings Pte. Ltd.). Following this approval, PGIH remitted US$20 million, or
Php1,031 million, to PCEV as deposit for future stock subscription on April 11, 2022. On February 16, 2024, the Philippine
SEC approved the capital increase of PCEV.

Investment in Class C2 Convertible Preference Shares in MIH

On December 13, 2023, PCEV, along with other existing shareholders KKR, Tencent, SIG, First Pacific Ventures and Jumel
Holdings, entered into a new subscription agreement with MIH to subscribe to US$80 million Class C2 convertible preferred
shares of MIH. On the same date, PCEV paid a consideration of US$28 million or Php1,563 million for 12.3 million MIH
Class C2 convertible preferred shares and received warrants for 4.9 million shares valued at Php281 million, thereby
increasing PCEV’s ownership in MIH from 36.63% to 36.97%.

On April 5, 2024, PCEV paid the subsequent consideration of US$15.3 million or Php857 million for 6.7 million MIH Class
C2 convertible preferred shares and received warrants for 2.7 million shares valued at Php152 million, resulting in an increase
of PCEV’s ownership in MIH from 36.97% to 37.66%.

Sale of Interest in Multisys

On January 5, 2024, PGIH entered into a Share Purchase Agreement for the sale of 227 common shares of Multisys,
representing a 4.99% equity interest, for a total consideration of Php270 million. The transaction was completed and fully
paid on January 12, 2024. Following this sale, PGIH retained ownership of 2,080 common shares representing 45.73% equity
interest in Multisys. Pursuant to the Third Restated Shareholders’ and related Amendment Agreement signed on
January 30, 2024 and March 1, 2024, respectively, PGIH remains entitled to nominate three out of the five directors in
Multisys, who manage and control the operations of Multisys. Consequently, the results of operation and financial position of
Multisys will continue to be consolidated with the PLDT Group.

Investment in Kayana Solutions Inc., or Kayana (formerly Limitless Growth Ventures, Inc.)

In February 2024, PLDT invested in Kayana, to serve as a digital entity designed to harness the data assets of the MVP Group
of Companies (MVP Group) and provide a platform for a Group-wide digitalization initiative. This collaboration marks the
first step in a collective effort aimed at creating new growth opportunities and value within the MVP Group.

Kayana will leverage a technology platform capable of enabling the MVP Group to scale operations and achieve seamless
integration of services and capabilities. Additionally, payments and rewards systems are expected play a pivotal role in
enhancing the overall user experience.

As of September 27, 2024, PLDT has invested Php840 million in Kayana representing 840 million common shares, or 60%
equity interest, including subscription payable of Php288 million.

On September 30, 2024, Kayana entered into share subscription agreements with its shareholders, wherein PLDT subscribed
to additional shares valued at Php46.5 million. As a result, PLDT’s equity ownership in Kayana stood at 45%, leading PLDT
to account for its remaining interest as an investment in associate. A gain on deconsolidation amounting to Php146 million
was recognized.

The following summarizes the subscription agreements entered into by PLDT with Kayana:

Number of Shares
Date Acquired
(in millions)
March 1, 2024 754.5
September 27, 2024 85.5
September 30, 2024 46.5

F-13
As at September 30, 2024, PLDT’s investment in Kayana amounted to Php886.5 million, including subscription payable of
Php334.5 million, with carrying value of Php872 million. See Note 11 – Investment in Associates and Joint Venture –
Investment in Associates.

Investment in Radius Telecom, Inc., or Radius

On April 30, 2024, PLDT Inc. invested Php2,116 million for 2,491,516 common shares, or 34.9% equity interest in Radius.
This strategic investment aims to enhance PLDT’s market share through an integrated alignment of solution capabilities and
expanded market coverage. See Note 11 – Investment in Associates and Joint Venture – Investment in Associates.

Reduction of Capital in PLDT Capital Pte Ltd., or PLDT Capital

On May 6, 2024, the Directors of PLDT Capital approved the reduction of the company’s issued and paid-up share capital
from Php891 million, comprising 26,773,606 ordinary shares, to Php1 million, comprising 30,058 fully paid ordinary shares.
The Accounting and Corporate Regulatory Authority of Singapore approved the reduction capital of PLDT Capital on
July 12, 2024.

Discontinued Operations

In 2023, ePLDT completed the winding down of operations of certain subsidiaries. As a result, the operations of these
discontinued ePLDT subsidiaries were classified as discontinued operations in the consolidated income statements.

The results of the operations of the discontinued ePLDT subsidiaries, net of intercompany transactions, for the nine months
ended September 30, 2023 are as follows:

September 30, 2023

(Unaudited)
(in million pesos)
Revenues 107
Expenses:
Selling, general and administrative expenses 149
Depreciation and amortization 21
Cost of services 3
173
Net operating loss (66)

Other income (expenses):

Foreign exchange gains – net 6
Interest income 1
Financing costs (1)
Others 47
53
Loss before and after tax from discontinued operations (13)
Loss per share (Note 8):
Basic/Diluted – Loss from discontinued operations (0.06)

As at December 31, 2023, below are the assets and liabilities of the discontinued ePLDT subsidiaries, net of intercompany
transactions, which are included in our consolidated statements of financial position:

December 31, 2023

(Audited)
(in million pesos)
Assets:
Cash and cash equivalents 109
Short-term investments 9
Other assets 236
354
Liabilities:
Accrued expenses and other current liabilities 224
Income tax payable 3
Accounts payable 2
Other liabilities 10
239
Net assets directly associated with disposal group 115

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The net cash flows generated by (used in) the discontinued ePLDT subsidiaries, net of intercompany transactions, for the nine
months ended September 30, 2023 are as follows:

September 30, 2023

(Unaudited)
(in million pesos)
Operating activities (56)
Investing activities 25
Financing activities (49)
Net effect of foreign exchange rate changes on cash and cash equivalents 8
Net cash outflows (72)

Amended Standards

Effective beginning on or after January 1, 2024

The following amendments are effective for annual reporting periods beginning on or after January 1, 2024.

• Amendments to PAS 7, Statement of Cash Flows and PFRS 7, Financial Instruments: Disclosures, Supplier Finance
Arrangements

The amendments clarified the characteristics of supplier finance arrangements which involve one or more finance providers
paying amounts an entity owes to its suppliers. Different terms are used to describe these arrangements, such as supply chain
finance, payables finance and reverse factoring arrangements. Arrangements that are solely credit enhancements for the
entity or instruments used by the entity to settle the amounts owed directly with a supplier, for example, credit cards, are not
supplier finance arrangements.

The amendments required an entity to provide information about the impact of supplier finance arrangements on liabilities
and cash flows, including:
a. Terms and conditions;
b. Carrying amount of supplier finance arrangement financial liabilities and the line items in which those liabilities
are presented;
c. Carrying amounts of financial liabilities and the line items, for which the finance providers have already settled
the corresponding trade payables;
d. The range of payment due dates for financial liabilities owed to the finance providers and for comparable trade
payables that are not part of those arrangements; and
e. The type and effect of non-cash changes in the carrying amounts of supplier finance arrangement financial
liabilities, which prevent the carrying amounts of the financial liabilities from being comparable.

• Amendments to PAS 1, Classification of Liabilities as Current or Noncurrent

The amendments to paragraphs 69 to 76 of PAS 1 specified the requirements for classifying liabilities as current or non-
current. The amendments clarify:
a. What is meant by a right to defer settlement;
b. That a right to defer must exist at the end of the reporting period;
c. That classification is unaffected by the likelihood that an entity will exercise its deferral right; and
d. That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a
liability not impact its classification.

In addition, a requirement has been introduced to require disclosure when a liability arising from a loan agreement is
classified as non-current and the entity’s right to defer settlement is contingent on compliance with future covenants within
twelve months. The amendments must be applied retrospectively.

• Amendments to PFRS 16, Lease Liability in a Sale and Leaseback

The amendments to PFRS 16 specified the requirements that a seller-lessee uses in measuring the lease liability arising in a
sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the
right of use it retains. The amendments must be applied retrospectively.

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The amendments do not have a material impact on the Group’s financial statements.

Summary of Material Accounting Policies

The following is the summary of material accounting policies we applied in preparing our consolidated financial statements.
These policies have been consistently applied to all the periods presented, unless otherwise stated.

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, the 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.

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.

F-16
Investments in Associates

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.

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 statements of comprehensive income and consolidated statements 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
statements. This is the profit or loss attributable to equity holders of the associate and net of the noncontrolling interest in the
subsidiaries of the associate.

Joint Arrangements

When 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.

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 the 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 translated 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 statements 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 PLDT Global and certain of its subsidiaries, and PGNL and certain of its subsidiaries is the U.S.
Dollar. 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 statements.

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.

Assets Classified as Held-for-Sale

We classify assets as held-for-sale if their carrying amounts will be recovered principally through a sale transaction rather
than through continuing use. Assets classified as held-for-sale are measured at the lower of their carrying amount and fair
value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group),
excluding finance costs and income tax expense.

F-17
The criteria for held-for-sale classification is regarded as met only when the sale is highly probable, and the asset is available
for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that
significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to
the plan to sell the asset and the sale expected to be completed within one year from the date of the classification.

Property and equipment and intangible assets are not depreciated or amortized once classified as held-for-sale.

Assets and liabilities classified as held-for-sale are presented separately as current items in the consolidated statements of
financial position.

Additional disclosures are provided in Note 9 – Property and Equipment – Sale and Leaseback of Telecom Towers and
Note 10 – Leases. All other notes to the financial statements include amounts for continuing operations, unless indicated
otherwise.

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 financial instruments at fair value through other comprehensive income, or 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 give 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-18
 Financial assets at amortized cost

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 ‘Other income (expenses) – net’ 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, portions of short-
term investments, trade and other receivables, and portions of other financial assets as at September 30, 2024 and
December 31, 2023. See Note 12 – Debt Instruments at Amortized Cost, Note 15 – Cash and Cash Equivalents,
Note 16 – Trade and Other Receivables and Note 27 – 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 portions of short-term investments, derivative financial assets, equity investments and
redemption trust fund as at September 30, 2024 and December 31, 2023. See Note 27 – Financial Assets and Liabilities.

Classification of financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings, payables, or as
derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.

Financial liabilities are subsequently 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.

F-19
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 derivative financial liabilities and liability from redemption of preferred stock as at
September 30, 2024 and December 31, 2023. See Note 19 – Equity – Redemption of Preferred Stock,
Note 23 – Accrued Expenses and Other Current Liabilities and Note 27 – Financial Assets and Liabilities.

Our other financial liabilities include interest-bearing financial liabilities, lease liabilities, customers’ deposits, dividends
payable, certain accounts payable, certain accrued expenses and other current liabilities and certain deferred credits and other
noncurrent liabilities, (except for statutory payables) as at September 30, 2024 and December 31, 2023. See
Note 10 – Leases, Note 20 – Interest-bearing Financial Liabilities, Note 21 – Deferred Credits and Other Noncurrent
Liabilities, Note 22 – Accounts Payable, Note 23 – Accrued Expenses and Other Current Liabilities and
Note 27 – 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.

Offsetting of Financial Instruments

Financial assets and liabilities are offset, and the net amount is reported in the consolidated statements of financial position if,
and only if, there is a currently enforceable legal right to offset the recognized amounts; and there is an intention to settle on a
net basis, or to realize the assets and settle the liabilities simultaneously. We assess that it has a currently enforceable right of
offset if the right is not contingent on a future event and is legally enforceable in the normal course of business, event of
default, and event of insolvency or bankruptcy of the Group and all of the counterparties.

Impairment of Financial Assets

We recognize expected credit losses, or ECL for debt instruments that are measured at amortized cost and FVOCI.

No ECL is recognized on financial assets at FVPL.

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 representing the ECLs that result from all possible default
events within the 12-months after the reporting date are recognized.

F-20
 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 instrument 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.

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, and
we have exhausted all practical recovery efforts and concluded that we have 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’.

F-21
 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.

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 statements.

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 statements.

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 27 – Financial Assets and
Liabilities.

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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.

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 statements.

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 27 – Financial Assets and
Liabilities for more details.

Amounts taken to other comprehensive income are transferred to our consolidated income statements when the hedged
transaction affects our consolidated income statements, 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.

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 statements. 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, and
long-term foreign currency options agreement to hedge our foreign exchange exposure on certain outstanding loan balances.
See Note 27 – Financial Assets and Liabilities.

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.

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The residual values, the 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 our
consolidated income statements when the asset is derecognized.

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 with 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.

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 contract lease 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 and right-of-use asset. The amount of asset retirement obligations is accreted, and such accretion is recognized as
interest expense. See Note 10 – Leases and Note 21 – Deferred Credits and Other Noncurrent Liabilities.

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 14 – 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.

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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.

For assets, excluding goodwill and intangible assets with indefinite useful life, 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, or ROU, assets, and intangible assets with finite useful lives

For property and equipment and ROU assets, we assess for impairment on the basis of impairment indicators such as evidence
of internal obsolescence or physical damage. For intangible assets with finite 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 – Leases and Note 14 – 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 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 14 – Goodwill and Intangible Assets 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.

See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Impairment of non-financial assets
and Note 14 – Goodwill and Intangible Assets for further disclosures relating to impairment of non-financial assets.

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Fair Value Measurement

We measure financial instruments such as derivatives, financial assets at FVPL, assets classified as held-for-sale and
non-financial assets such as investment properties and pension plan assets, at fair value at each reporting date. The fair values
of investment properties are disclosed in Note 13 – Investment Properties. The fair values of the pension plan assets are
disclosed in Note 25 – Pension and Other Employee Benefits. The fair values of financial instruments measured at amortized
cost are disclosed in Note 27 – Financial Assets and Liabilities.

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.

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 reassessing 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 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 remeasured or reassessed 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.

Revenues from contracts with customers

The disclosures of significant accounting judgments, estimates and assumptions relating to revenues 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, SMS 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.

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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
Signature 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 from Prepaid
Home WiFi, Sulit Talk, Landline Plus products, Smart, TNT and SmartBro. 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 expiry of airtime load in proportion to the pattern of rights
exercised by the customer if we expect to be entitled to that expired amount. If we do not expect to be entitled to an
expired amount based on historical experience with the customers, then we recognize the expected expired 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 collected, 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.

Activation fees for both voice and data services are also considered as a single performance obligation together with
monthly service fees, recognized over the customer subscription period.

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.

Activation services and installation services for voice and data services that are not a distinct performance obligation are
considered together with monthly voice and data services as a single performance obligation, 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. The related incremental costs are recognized in the same manner in
our consolidated income statements, if such costs are expected to be recovered. On the other hand, custom-built
installation services provided to data services subscribers are considered a distinct separate performance obligation and is
recognized when services are rendered.

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 on a straight-line basis over the contract period when
the services are provided to subscribers.

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 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

Through our customer loyalty program called Giga Points, points are earned through subscription of promo, purchase of
load, and payment of bill for postpaid subscribers. Points are also earned through other activities such as daily login in the
Giga App. These points can be used to redeem items such as giga promos, bill rebates, content subscription, discounts,
exclusive tickets, and more.

Our contract with customers for revenue-related activity includes a promise to provide future telco services or rights to
third-party services in the form of earning points. We consider these revenue-related earnings as performance obligation
and the transaction price is allocated to each performance obligation. For earnings on non-revenue activity, we recognize a
financial liability upon redemption of the points from third party partners.

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.

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 the 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 at a
point in time 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 over the period that the
services are performed.

Subscriber Contract Costs

Costs to obtain a contract with customers, such as commission, and costs to fulfill the contract, such as installation and
Customer Premises Equipment (CPE) costs, are capitalized if we expect to recover those costs. These subscriber contract
costs are stated at cost net of accumulated amortization and impairment losses. Subscriber contract costs are amortized on
a systematic basis consistent with the pattern of transfer of goods and services to which the assets relates.

The amortization of costs to obtain and costs to fulfill are presented as part of selling, general and administrative expenses,
and depreciation and amortization, respectively, in the consolidated income statements.

Impairment losses are recognized to the extent that the carrying amount of the subscriber contract costs exceed the net of
(i) remaining amount of consideration that we expect to receive in exchange for the goods or services to which the asset
relates, less (ii) any costs that relate directly to providing those goods or services that have not yet been recognized as
expenses.

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Retirement Benefits

PLDT and certain of its subsidiaries are covered under Republic Act No. 7641 otherwise known as “The Philippine
Retirement Law”.

Defined benefit pension plans

PLDT has separate and distinct retirement plans for itself and some 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 “Prepayments, net of
current portion” and net defined benefit obligation is recognized as part of “Pension and other employee benefits” in our
consolidated statements of financial position.

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 25 – Pension and Other Employee Benefits – Defined Benefit Pension Plans for
more details.

Defined contribution plans

Smart maintains a defined contribution plan that covers all regular full-time employees under which it pays fixed
contributions based on the employees’ monthly salaries and 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 Republic Act
No. 7641.

Accordingly, Smart accounts for its 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 statements.

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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 25 – Pension and Other Employee Benefits –
Defined Contribution Plans for more details.

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 statements.

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 25 – Pension and Other Employee Benefits – Other Long-term Employee Benefits for more details.

Leases

We assess at contract inception whether the contract is, or contains, a lease that is, if the contract conveys the 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 right to use the
underlying assets.

• ROU assets

We recognize ROU assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).
ROU assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of ROU 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 ROU assets are
depreciated on a straight-line basis over the shorter of its estimated useful life, or EUL, and the lease term. ROU assets are
subject to impairment. Refer to the accounting policies in impairment of non-financial assets section.

• 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 if 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.

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 operating 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.

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Sale and Leaseback. If we transfer an asset to another entity (the buyer-lessor) and leases that asset back from the buyer-
lessor, we account for the transfer contract and the lease by applying the requirements of PFRS 16. We first apply the
requirements for determining when a performance obligation is satisfied in PFRS 15 to determine whether the transfer of an
asset is accounted for as a sale of that asset.

For transfer of an asset that satisfies the requirements of PFRS 15 to be accounted for as a sale of the asset, we measure the
right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the
right of use retained by us. Accordingly, we recognize only the amount of any gain or loss that relates to the rights transferred
to the buyer-lessor.

If the transfer of an asset does not satisfy the requirements of PFRS 15 to be accounted for as a sale of the asset, we continue
to recognize the transferred asset and recognize a financial liability equal to the transfer proceeds. We account for the
financial liability applying PFRS 9.

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
statements. 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.

Contingencies

Contingent liabilities are not recognized in our consolidated financial statements. Unless the possibility of an outflow of
resources embodying economic benefits is probable and measurable, they are disclosed in the notes to our consolidated
financial statements. On the other hand, 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.

Segment Information

PLDT and its subsidiaries are organized into three business segments. Such business segments are the bases upon which we
report our primary segment information. Financial information on business segments is presented in Note 4 – Operating
Segment Information.

Events After the End of the Reporting Period

Post reporting period 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 reporting period events that are classified as non-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 statements
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

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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 statements 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 statements of changes in equity.

Retained earnings represent our net accumulated earnings less cumulative dividends declared.

Other comprehensive income comprises of income and expense, including reclassification adjustments, that are not
recognized in our consolidated income statements as required or permitted by PFRS.

Standards Issued But Not Yet Effective

Effective beginning on or after January 1, 2025

• PFRS 17, Insurance Contracts

PFRS 17 is a comprehensive new accounting standard for insurance contracts covering recognition and measurement,
presentation and disclosure. PFRS 17 replaces PFRS 4 Insurance Contracts. PFRS 17 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 a comprehensive accounting model for insurance contracts that is more useful and
consistent for insurers, covering all relevant accounting aspects. PFRS 17 is based on a general model, supplemented by:
• A specific adaptation for contracts with direct participation features (the variable fee approach)
• A simplified approach (the premium allocation approach) mainly for short-duration contracts

The new standard will have no impact on the Group’s consolidated financial statements.

• Amendments to PAS 21, Lack of Exchangeability

The amendments specify when a currency is considered exchangeable. A currency is exchangeable if it can be exchanged for
another currency through markets or mechanisms that create enforceable rights and obligations without undue delay. When a
currency is not exchangeable, the amendments provide guidance on estimating the spot exchange rate. This rate should
reflect the rate that would have applied in an orderly transaction between market participants at the measurement date.
Entities are required to disclose information that helps users understand the impact of a currency’s lack of exchangeability on
financial performance, financial position, and cash flows.

Earlier application is permitted. If an entity applies the amendments for an earlier period, it is required to disclose that fact.
In applying the amendments, an entity is not permitted to restate comparative information.

The amendments will have no significant impact on our consolidated financial statements.

Effective beginning on or after January 1, 2026

• Amendments to PFRS 9 and PFRS 7, Amendments to the Classification and Measurement of Financial Instruments

The amendments to PFRS 9 provide guidance on the derecognition of a financial liability settled in cash using electronic
payment system before settlement date if the specified criteria are met:
a. No practical ability to withdraw, stop or cancel the payment instruction
b. No practical ability to access the cash to be used for settlement as a result of the payment instruction; and
c. The settlement risk associated with the electronic payment system is insignificant.

In addition, the amendments introduced an additional SPPI test on the classification of financial assets with ESG
(environment, social and governance)-linked features.

Amendments to PFRS 7 include additional disclosures on investments in equity instruments designated at FVOCI. An entity
would be required to disclose the fair value gain or loss presented in OCI during the period, showing separately the fair value
gain or loss that relates to investments derecognized in the period and the fair value gain or loss that relates to investments
held at the end of the period. If an entity derecognizes investments in equity instruments measured at FVOCI during the

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reporting period, it is now required, under the amendments, to disclose any transfers of the cumulative gain or loss within
equity during the reporting period related to the investments derecognized during that reporting period.

In addition, the amendments require disclosure of contractual terms that could change the timing or amount of contractual
cash flows on the occurrence (or non-occurrence) of a contingent event that does not relate directly to changes in a basic
lending risks and costs. The requirements apply to each class of financial asset measured at amortized cost or FVOCI and
each class of financial liability measured at amortized cost.

Effective beginning on or after January 1, 2027

• PFRS 18, Presentation and Disclosure in Financial Statements

PFRS 18 is a new accounting standard for presentation and disclosure in financial statements. This new standard replaces
PAS 1 Presentation of Financial Statements while carrying forward many of the requirements of PAS 1 PFRS 18 introduces
new requirements to:
a. Present specified categories and defined subtotals in the Statement of Profit or Loss
b. Provide disclosures on Management-defined Performance Measures (MPMs)
c. Improve aggregation and disaggregation

Consequential to this new standard are minor amendments to PAS 7 and PAS 33.

• Amendments to PAS 7, Statement of Cash Flows

Amendments to PAS 7 include the changing of starting point for determining cash flows from operations under the indirect
method, from “profit or loss” to “operating profit or loss”.

• Amendments to PAS 33, Earnings per Share

Entities may report additional EPS based on any component of the statement of comprehensive income. These additional
EPS figures can only be disclosed in the notes if the numerator is a total or subtotal identified in PFRS 18 or an MPM.

Earlier application is permitted but it is required to disclose that fact. It applies retrospectively, requiring restatement of
comparative periods in interim and annual financial statements, along with a reconciliation of the statement of profit or loss
for the preceding comparative period.

• PFRS 19, Subsidiaries without Public Accountability: Disclosures

PFRS 19 is a new accounting standard disclosure for subsidiaries without public accountability. This new accounting
standard will allow subsidiaries to keep only one set of accounting records to meet both parent company and user needs and
reduce disclosure requirements, permitting disclosures more suited to user needs.

A subsidiary is eligible for the reduced disclosures if it does not have public accountability, and its parent produces publicly
available PFRS-compliant consolidated financial statements. A subsidiary does not have public accountability if it has no
listed equities or debt and does not hold assets in a fiduciary capacity for a broad group of outsiders.

Earlier application is permitted but it is required to disclose that fact.

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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. Selected critical
judgments and estimates applied in the preparation of the consolidated financial statements are 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 consolidated financial statements.

Revenue Recognition

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.

Revenues earned from multiple-deliverable 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 three years
for fixed line and two years for wireless). 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 and data services that are not custom-built for the subscribers 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. On the other hand, installation fees of data services that are custom-built for the subscribers are considered as
a separate performance obligation and is recognized upon completion of the installation services. Activation fees for both
voice and data services are also considered as a single performance obligation together with monthly service fees, recognized
over the customer subscription period.

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:

a) We are primarily responsible for fulfilling the promise to provide the specified equipment;
b) We bear inventory risk on our inventory before it has been transferred to the customer; and
c) 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.

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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 revenues 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 or more years,
revenue is recognized monthly as we provide the service because control is transferred over time. For the device, which is
sold at the inception of the contract, revenue is recognized at the time of delivery because control is transferred at a point in
time.

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, 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, and trade and other receivables, the business model is to collect the contractual cash flows until maturity.

PFRS 9, however, emphasizes that if more than an infrequent number of sales are made out of a portfolio and those sales are
more than insignificant in value, 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.

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.

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 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 the PLDT Group is the Philippine
Peso, except for PLDT Global and certain of its subsidiaries, and PGNL and certain of its subsidiaries which use the U.S.
Dollar.

Determining the lease term of contracts with renewal and termination options – Company as a Lessee

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. See Section Leases for the accounting policy.

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 term for leases such as poles and leased circuits due to the significance of these
assets to our operations. These leases have a non-cancellable period (i.e., one to 30 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 the lease term only when they are reasonably certain not to be exercised.

See Note 10 – Leases 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 depreciation of ROU assets from continuing operations recognized in our consolidated income statements amounted to
Php5,255 million and Php4,937 million for the nine months ended September 30, 2024 and 2023, respectively, while that
from discontinued operations amounted to nil and Php19 million for the nine months ended September 30, 2024 and 2023,
respectively. Total lease liabilities amounted to Php52,575 million and Php47,546 million as at September 30, 2024 and
December 31, 2023, respectively. See Note 2 - Summary of Material Accounting Policies - Discontinued Operations,
Note 10 – Leases and Note 27 – Financial Assets and Liabilities.

Sale and Leaseback of Telecom Towers

The accounting for sale and leaseback transaction depends on whether the transfer of the asset qualifies as a sale. We applied
judgment to determine whether the transfer of asset is accounted for as a sale based on the requirements for determining when
a performance obligation is satisfied in PFRS 15. We also applied estimates and judgment in determining many aspects,
among others, the passive telecom assets and land lease as unit of accounts, the fair value of the towers sold, the measurement
of the ROU assets retained by us and determining an appropriate discount rate to calculate the present value of the minimum
lease payments.

Assets classified as held-for-sale

The criteria for held-for-sale classification is regarded as met only when the sale is highly probable, and the asset is available
for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that
significant changes to the sale will be made or that the decision to sell will be withdrawn.

Smart and DMPI entered into sale and purchase agreements with certain tower companies in connection with the sale of
telecom towers and related passive telecom infrastructure. The closing of the agreements will be on a staggered basis
depending on the satisfaction of closing conditions based on the number of towers transferred and is expected to be completed
within the year. With this agreement, we believe that certain conditions were met that qualified the related assets to be
reclassified as held-for-sale.

See related discussion in Note 9 – Property and Equipment and Note 10 – Leases.

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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 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 and Cignal TV as evidenced by provision of essential technical information and material transactions among
PLDT, Smart, Satventures and Cignal TV, and thus are accounted for as investments in associates using the equity method.

See related discussion in Note 11 – Investments in Associates and Joint Ventures – Investments in Associates – Investment of
ePLDT in MediaQuest PDRs.

Accounting for investment of PCEV in Maya Bank, Inc., or Maya Bank

The shareholders’ agreement of Voyager Finserve Corporation, or VFC, and Paymaya Finserve Corporation, or PFC,
(collectively known as the Bank HoldCos) requires affirmative vote of at least one director nominated by both PCEV and
MIH to direct the relevant activities of the Bank HoldCos. The Bank HoldCos were incorporated for the sole purpose of
holding shares or equity investments in Maya Bank. Because of the contractual arrangement between the parties, the
investments in the Bank HoldCos are accounted for as joint venture.

See Note 11 – Investments in Associates and Joint Ventures – Investments in Associates – Investment of PCEV in Maya Bank.

Accounting for investments in Vega Telecom Inc., or VTI, Bow Arken Holdings Company, or Bow Arken, and
Brightshare Holdings, Inc., or Brightshare

PLDT acquired a 50% equity interest in each of VTI, Bow Arken and Brightshare on May 30, 2016. See related discussion
on Note 11 – Investments in Associates and Joint Ventures – Investments in Joint Ventures – Investments of PLDT in VTI,
Bow Arken and Brightshare. Based on the Memorandum of Agreement, PLDT and Globe Telecom, Inc., or Globe, each has
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 has the right
to 50% of the net assets of VTI, Bow Arken and Brightshare and their respective subsidiaries.

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 –
Investments in Associates and Joint Ventures – Investment in Joint Ventures – Investments of PLDT in VTI, Bow Arken and
Brightshare.

Assessment of loss of control over Kayana

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, the
Company 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.

The September 30, 2024 subscription agreement resulted to PLDT’s owning 45% interest and MPIC and Meralco ownership
at 27.5% each. Consequently, as at September 30, 2024, PLDT lost its control over Kayana and accounted for its remaining
interest as investment in associate.

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 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 September 30, 2024 and December 31,
2023.

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 September 30, 2024 and December 31, 2023.

Determining Taxable Profit, Tax Bases, Unused Tax Losses, Unused Tax Credits and Tax Rates

We assess whether we have any uncertain tax position and applies significant judgment in identifying uncertainties over our
income 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.

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.

Subscriber contract costs

Subscriber contract costs are costs to obtain (i.e., commissions) and costs to fulfill (i.e., installation and CPE costs) in relation
to the services we provide to our subscribers. We assessed that these subscriber contract costs are incremental in obtaining
and fulfilling our performance obligations. Accordingly, we capitalized subscriber contract costs and amortized as expense
over the average customer relationship period.

We apply judgment to estimate the amortization period of subscriber contract costs. As part of our annual evaluation of the
average customer relationship period, our reassessment in 2023 resulted to a shorter amortization period with a range of 3-6
years for certain types of subscriber contracts brought by the effect of Corona Virus Disease, or COVID-19 Pandemic, given
the dynamic nature of subscriber behavior and market condition.

The change in the amortization period reflects the expected timing of transfer of the services to our subscribers. This was
accounted for prospectively as a change in accounting estimate, thereby resulting in additional charges to profit or loss
amounting to Php13,924 million for the full year 2023. Further details on subscriber contract costs are disclosed in
Note 18 – Prepayments and Other Non-Financial Assets.

Leases – Estimating the incremental borrowing rate, or IBR

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 ROU 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 Php52,575 million and Php47,546 million as at September 30, 2024 and December 31, 2023,
respectively. See Note 10 – Leases.

F-39
 Impairment of non-financial assets

PAS 36 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 14 – Goodwill and Intangible Assets – Impairment Testing of Goodwill for the key assumptions used to determine the
VIU of the relevant CGUs.

Determining the recoverable amount of property and equipment, ROU assets, investments in associates and joint ventures,
goodwill and 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, ROU assets, 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 of future market conditions.
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.

See Note 4 – Operating Segment Information, Note 5 – Income and Expenses – Asset Impairment, and Note 9 – Property and
Equipment.

The carrying values of our property and equipment, ROU 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 13 – Investment Properties,
Note 14 – Goodwill and Intangible Assets and Note 18 – 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 asset are reviewed at least 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 2023, PLDT and Smart increased the EUL of Information Technology assets and general computers and peripherals, due to
technological advancement allowing extended warranty and Maintenance Agreement for hardware and services from vendor.
Had the affected assets been depreciated using the original EUL, the depreciation would have been higher by Php546 million
for PLDT and Php50 million for Smart for the full year 2023.

In 2023, Smart increased the EUL of Self-Supporting Tower due to cost-effective structure to transport, which allows future
expansion and upgrades of mounting antennas and is designed for durability and resistance to withstand the elements, hence
extending the vendor’s warranty. Had the affected assets been depreciated using the original EUL, the depreciation would
have been higher by Php338 million for the full year 2023.

The total depreciation and amortization of property and equipment from continuing operations amounted to
Php26,387 million and Php31,107 million for the nine months ended September 30, 2024 and 2023, respectively, while that
from discontinued operations amounted to nil and Php2 million for the nine months ended September 30, 2024 and 2023,
respectively. Total carrying values of property and equipment, net of accumulated depreciation and amortization, amounted
to Php308,216 million and Php287,103 million as at September 30, 2024 and December 31, 2023, respectively. See
Note 2 - Summary of Material Accounting Policies - Discontinued Operations, Note 4 – Operating Segment Information and
Note 9 – Property and Equipment.

F-40
 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 Php171 million and Php166 million for the nine
months ended September 30, 2024 and 2023, respectively. Total carrying values of intangible assets with finite lives
amounted to Php1,173 million and Php1,174 million as at September 30, 2024 and December 31, 2023, respectively. See
Note 5 – Income and Expenses – Selling, General and Administrative Expenses and Note 14 – Goodwill and Intangible
Assets.

Investment Properties

We carry our investment properties at fair value, with changes in fair value being recognized in the consolidated income
statements. Investment properties 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 while 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. See Note 13 – Investment Properties.

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 years. 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 Php704 million and
Php817 million as at September 30, 2024 and December 31, 2023, respectively. Total consolidated provision for deferred
income tax amounted to Php4,504 million and Php4,749 million for the nine months ended September 30, 2024 and 2023,
respectively. Total consolidated recognized net deferred income tax assets amounted to Php13,876 million and
Php18,172 million as at September 30, 2024 and December 31, 2023, respectively. See Note 4 – Operating Segment
Information and Note 7 – Income Taxes.

Estimating allowance for ECLs

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.

F-41
 b. Inputs, assumptions and estimation techniques

• General approach for cash in bank, short-term investments, debt securities, financial assets at FVOCI 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. We consider the probability of our counterparty to default on its obligation and the
expected loss at default after considering the effects of collateral, any potential value when realized and time value of money.
Based on our assessment, there is no significant increase in credit risk and the ECL for these financial assets under a general
approach is measured on a 12-month basis.

The assumptions underlying the ECL calculation are monitored and reviewed on a quarterly basis.

• Simplified approach for trade and other receivables and contract assets

The simplified approach does not require the tracking of changes in credit risk, but instead requires the recognition of lifetime
ECL. For trade receivables and contract assets, we use the simplified approach for calculating ECL. We have considered
similarities in underlying credit risk characteristics and behavior in determining the groupings of various customer segments.

We used historically observed default rates and adjusted these historical credit loss experiences with forward-looking
information. At every reporting date, the historical default rates are updated and changes in the forward-looking estimates are
analyzed.

There have been no significant changes in the estimation techniques used for calculating ECL on trade and other receivables
and contract assets.

• Incorporation of forward-looking information

We incorporated 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 macroeconomic assumptions and probability weights
for the determination of unbiased general industry adjustments and any related specific industry adjustments that support the
calculation of ECLs.

The macroeconomic factors are aligned with information used by us for other purposes such as strategic planning and
budgeting.

The probability weights used in the calculation of ECLs cover a range of possible outcomes based on the current and
projected economic conditions.

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 macroeconomic 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 three to eight years. The methodologies and assumptions including
any forecasts of future economic conditions are reviewed regularly.

Due to lack of reasonable and supportable information, we have not identified any uncertain event that was assessed to be
relevant to the risk of default occurring, thus we are not able to estimate the impact on ECL.

Total provision for expected credit losses for trade and other receivables from continuing operations amounted to
Php2,712 million and Php3,019 million for the nine months ended September 30, 2024 and 2023, respectively, while that
from discontinued operations amounted to nil and Php3 million for the nine months ended September 30, 2024 and 2023,
respectively. Trade and other receivables, net of allowance for expected credit losses, amounted to Php28,596 million and
Php26,086 million as at September 30, 2024 and December 31, 2023, respectively. See Note 5 – Income and Expenses and
Note 16 – Trade and Other Receivables.

Total impairment losses on contract assets amounted to Php134 million and Php180 million for the nine months ended
September 30, 2024 and 2023, respectively. Contract assets, net of allowance for expected credit losses, amounted to
Php2,048 million and Php1,918 million as at September 30, 2024 and December 31, 2023, respectively. See Note 5 – Income
and Expenses – Contract Balances.

F-42
 • Grouping of instruments for losses measured on collective basis

A broad range of forward-looking information was considered as economic inputs such as the gross domestic product, or
GDP, inflation rate, unemployment rates, export rates, The Group of Twenty, or G20 GDP and G20 inflation rates. For
expected credit loss provisions modelled on a collective basis, 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 acceptable. 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
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 financial assets at FVOCI, and other financial
assets.

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 consist, 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 25 – Pension and Other
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.

The net consolidated pension benefit costs from continuing operations amounted to Php1,110 million and Php903 million for
the nine months ended September 30, 2024 and 2023, respectively. The prepaid benefit costs amounted to Php976 million
and Php917 million as at September 30, 2024 and December 31, 2023, respectively. The accrued benefit costs amounted to
Php1,625 million and Php3,541 million as at September 30, 2024 and December 31, 2023, respectively. See
Note 5 – Income and Expenses – Compensation and Employee Benefits, Note 18 – Prepayments and
Note 25 – Pension and Other Employee Benefits.

Long-term Incentive Plan, LTIP

The Executive Compensation Committee (ECC) of the PLDT Board of Directors approved the LTIP covering the years 2022
to 2026, on December 23, 2021. It covers two cycles and is intended to provide incentive compensation in the form of cash to
key officers, executives and other eligible participants who are consistent performers, compliant with codes of conduct and
contributors to our strategic and financial goals, with defined metrics based on the achievement of telco core income,
customer experience and sustainability. The target metrics for Sustainability are expected to capture the Company’s
performance in various environmental, social, and governance (ESG) materiality areas, including but not limited to, climate
action such as initiatives to reduce energy consumption and greenhouse gas (GHG) emissions, employee and customer
welfare, diversity and inclusion, cyber security and data privacy, and business ethics. Cycle 1 covers the performance period
from 2022 to 2024 and payout will be based on the achievement of performance targets. Cycle 2 covers the performance
period from 2025 to 2026 and is subject to the ECC’s further evaluation and approval of the final terms.

This long-term employee benefit liability was recognized and measured using the projected unit credit method and was
amortized on a straight-line basis over the vesting period.

The expense accrued for the LTIP amounted to Php857 million and Php668 million for the nine months ended
September 30, 2024 and 2023, respectively.

F-43
 The accrued incentive payable amounted to Php3,039 million and Php2,182 million as at September 30, 2024 and
December 31, 2023, respectively. See Note 5 – Income and Expenses – Compensation and Employee Benefits and
Note 25 – Pension and Other Employee Benefits – Other Long-term Employee Benefits.

Provision for asset retirement obligations

Provision for asset retirement obligations is recognized in the period in which this is 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 Php1,213 million
and Php1,164 million as at September 30, 2024 and December 31, 2023, respectively. See Note 21 – 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. Based on management’s assessment, appropriate provisions were made. 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 the effectiveness of our
strategies relating to these proceedings and assessments. See Note 26 – Provisions and Contingencies.

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 September 30, 2024 amounted to Php3,053 million and
Php243,371 million, respectively, while the total fair values of noncurrent financial assets and noncurrent financial liabilities
as at December 31, 2023 amounted to Php3,571 million and Php233,845 million, respectively. See
Note 27 – 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;
• Fixed Line – fixed line telecommunications services primarily provided by PLDT. We also provide fixed line
services through PLDT’s subsidiaries, namely, ClarkTel, BCC and PLDT Global and certain subsidiaries; data
center, cloud, cyber security services, managed information technology services through ePLDT and its subsidiaries;
distribution of Filipino channels and content through PGNL and its subsidiaries; and software development and IT
solutions provided by Multisys; and
• Others – PCEV, PGIH, PLDT Digital and its subsidiaries, our investment companies.

See Note 2 – Summary of Material Accounting Policies for further discussion.

Segment revenues, segment expenses and segment results include transfers between business segments. These transfers are
eliminated in full upon consolidation.

F-44
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 nine months ended September 30, 2024 and 2023, and as at September 30, 2024 and December 31, 2023 are as follows:

Inter-
segment
Wireless Fixed Line Others Transactions Consolidated
(in million pesos)
September 30, 2024 (Unaudited)
Revenues
External customers 77,924 83,018 — — 160,942
Service revenues 72,294 82,701 — — 154,995
Non-service revenues 5,630 317 — — 5,947
Inter-segment transactions 611 12,417 — (13,028) —
Service revenues 611 12,417 — (13,028) —
Non-service revenues — — — — —
Total revenues 78,535 95,435 — (13,028) 160,942
Results
Depreciation and amortization 24,852 19,329 — (7,019) 37,162
Asset impairment 648 2,421 — — 3,069
Interest income 545 182 12 (21) 718
Equity share in net losses of associates and joint ventures — (145) (974) — (1,119)
Financing costs – net 7,112 5,188 — (1,328) 10,972
Provision for (benefit from) income tax 2,527 5,998 (12) 326 8,839
Net income (loss) / Segment profit (loss) 8,318 27,116 (1,099) (6,111) 28,224

Assets and liabilities

Operating assets 337,964 281,802 17,371 (83,595) 553,542
Investments in associates and joint ventures 41 44,680 7,856 — 52,577
Deferred income tax assets – net 6,401 7,484 65 (74) 13,876
Total assets 344,406 333,966 25,292 (83,669) 619,995
Operating liabilities 291,592 291,871 3,525 (79,954) 507,034
Deferred income tax liabilities 8 21 — 1 30
Total liabilities 291,600 291,892 3,525 (79,953) 507,064
Other segment information
Capital expenditures, including capitalized interest (Note 9)(1)(2) 19,129 33,023 185 — 52,337
(1)
Net of additions subject to sale and leaseback from tower companies.
(2)
Includes capitalization of subscriber contract cost to fulfill.

F-45
 Inter-
segment
Wireless Fixed Line Others Transactions Consolidated
(in million pesos)
September 30, 2023 (Unaudited)
Revenues
External customers 76,723 79,633 — — 156,356
Service revenues 70,410 79,342 — — 149,752
Non-service revenues 6,313 291 — — 6,604
Inter-segment transactions 511 10,094 — (10,605) —
Service revenues 511 10,094 — (10,605) —
Non-service revenues — — — — —
Total revenues 77,234 89,727 — (10,605) 156,356

Results
Depreciation and amortization 23,376 20,158 — (7,490) 36,044
Asset impairment 618 2,671 — — 3,289
Interest income 507 247 6 (27) 733
Equity share in net losses of associates and joint ventures — (585) (1,718) — (2,303)
Financing costs – net 6,668 5,067 — (1,658) 10,077
Provision for income tax 4,016 5,466 — 51 9,533
Net income (loss) / Segment profit (loss) 13,246 25,609 (1,807) (9,037) 27,998
Continuing operations 13,246 25,609 (1,807) (9,037) 28,011
Discontinued operations (Notes 2 and 8) — — — — (13)

December 31, 2023 (Audited)

Assets and liabilities
Operating assets 291,140 260,220 13,415 (23,736) 541,039
Investments in associates and joint ventures 41 42,709 7,558 — 50,308
Deferred income tax assets – net 5,356 11,270 53 1,493 18,172
Total assets 296,537 314,199 21,026 (22,243) 609,519
Operating liabilities 233,237 279,660 1,883 (15,812) 498,968
Deferred income tax liabilities — 165 — — 165
Total liabilities 233,237 279,825 1,883 (15,812) 499,133

September 30, 2023 (Unaudited)

Other segment information
Capital expenditures, including capitalized interest (Note 9)(1) 27,308 28,000 — — 55,308
(1)
Net of additions subject to sale and leaseback from tower companies.

F-46
 The following table presents our revenues from external customers by category of products and services for the nine months
ended September 30, 2024 and 2023:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Wireless services
Service revenues:
Mobile 71,181 69,168
Home broadband 1,113 1,242
72,294 70,410
Non-service revenues:
Sale of mobile handsets and broadband data modems 5,630 6,313
Total wireless revenues 77,924 76,723
Fixed line services
Service revenues:
Data 61,690 60,655
Voice and miscellaneous 21,011 18,687
82,701 79,342
Non-service revenues:
Sale of phone units, devices and others 317 291
Total fixed line revenues 83,018 79,633
Total revenues 160,942 156,356

Disclosure of the geographical distribution of our revenues from external customers and the geographical location of our total
assets are not provided since 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 nine months ended September 30, 2024 and 2023.

5. Income and Expenses

Revenues 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 segment under PFRS 8, Operating
Segments. See Note 4 – Operating Segment Information.
Set out below is the disaggregation of PLDT Group’s revenues from contracts with customers for the nine months ended
September 30, 2024 and 2023:
Inter-
segment
Revenue Streams Wireless Fixed Line Others Transactions Consolidated
(in million pesos)
September 30, 2024 (Unaudited)
Type of good or service
Service revenue 72,905 95,118 — (13,028) 154,995
Non-service revenue 5,630 317 — — 5,947
Total revenues from contracts with customers 78,535 95,435 — (13,028) 160,942

Timing of revenue recognition

Transferred over time 72,905 95,118 — (13,028) 154,995
Transferred at a point time 5,630 317 — — 5,947
Total revenues from contracts with customers 78,535 95,435 — (13,028) 160,942

September 30, 2023 (Unaudited)

Type of good or service
Service revenue 70,921 89,436 — (10,605) 149,752
Non-service revenue 6,313 291 — — 6,604
Total revenues from contracts with customers 77,234 89,727 — (10,605) 156,356

Timing of revenue recognition

Transferred over time 70,921 89,436 — (10,605) 149,752
Transferred at a point time 6,313 291 — — 6,604
Total revenues from contracts with customers 77,234 89,727 — (10,605) 156,356

Remaining performance obligations are associated with our wireless and fixed line subscription contracts. As at
September 30, 2024, excluding the performance obligations for contracts with original expected duration of less than one year,

F-47
the aggregate amount of the transaction price allocated to remaining performance obligations was Php26,864 million, of which
we expect to recognize approximately 20% in 2024 and 80% in 2025 and onwards. As at December 31, 2023, 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 Php40,487 million, of which we recognized
approximately 56% in 2024 and expect to recognize 44% in 2025 and onwards.

Contract Balances
Contract balances as at September 30, 2024 and December 31, 2023 consists of the following:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Trade and other receivables (Note 16) 47,788 43,301
Contract assets 2,094 1,960
Contract liabilities and unearned revenues (Notes 21 and 23) 18,699 18,895

Set out below is the movement in the allowance for expected credit losses of contracts assets as at September 30, 2024 and
December 31, 2023.

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Balances at beginning of the period 42 45
Provisions 4 —
Reversals — (3)
Balances at end of the period 46 42

Changes in the contract liabilities and unearned revenues accounts for the nine months ended September 30, 2024 and for the
year ended December 31, 2023 follow:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Balances at beginning of the period 18,895 17,114
Deferred during the period 95,590 135,982
Recognized as revenue during the period (95,786) (134,201)
Balances at end of the period 18,699 18,895

The contract liabilities and unearned revenues accounts as at September 30, 2024 and December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Unearned revenues from prepaid contracts 6,435 6,864
Short-term advances for installation services 5,386 5,004
Leased facilities (Note 24) 4,860 4,851
Advance monthly service fees 1,990 2,152
Long-term advances from equipment 28 24
Total contract liabilities and unearned revenues 18,699 18,895

Contract liabilities:
Noncurrent (Note 21) 269 300
Current (Note 23) 17 16

Unearned revenues:
Noncurrent (Note 21) 8,133 7,906
Current (Note 23) 10,280 10,673

F-48
 Selling, General and Administrative Expenses
Selling, general and administrative expenses for the nine months ended September 30, 2024 and 2023 consist of the following:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Repairs and maintenance (Notes 13, 17 and 24) 22,749 22,046
Compensation and employee benefits 18,869 18,719
Professional and other contracted services (Note 24) 5,609 6,111
Selling and promotions (Notes 18 and 24) 4,211 4,588
Taxes and licenses 3,980 3,793
Insurance and security services (Note 24) 1,014 972
Rent (Notes 10 and 24) 905 1,196
Communication, training and travel (Note 24) 878 851
Amortization of intangible assets (Note 14) 171 166
Other expenses 349 447
Total selling, general and administrative expenses 58,735 58,889

Compensation and Employee Benefits

Compensation and employee benefits for the nine months ended September 30, 2024 and 2023 consist of the following:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Salaries and other employee benefits 15,460 15,251
Pension benefit costs (Note 25) 1,110 903
Incentive plan (Note 25) 857 668
MRP 1,442 1,897
Total compensation and employee benefits 18,869 18,719

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 nine months ended September 30, 2024 and 2023 consist of the following:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Cost of mobile handsets, phone units, broadband data modems and devices 7,211 7,953
Cost of services 2,808 2,949
Total cost of sales and services 10,019 10,902

Asset Impairment

Asset impairment for the nine months ended September 30, 2024 and 2023 consist of the following:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Trade and other receivables (Note 16) 2,712 3,019
Inventories and supplies (Note 17) 155 90
Contract assets 134 180
Property and equipment 67 —
Prepayments 1 —
Total asset impairment 3,069 3,289

F-49
 Other Income (Expenses) – Net

Other income (expenses) – net for the nine months ended September 30, 2024 and 2023 consist of the following:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Gains on derivative financial instruments – net (Note 27) 2,066 2,207
Foreign exchange gains – net 1,389 28
Gain on sale and leaseback of telecom towers – gross of expenses (Note 9) 1,165 5,008
Interest income 718 733
Gain on disposal of property and equipment 79 389
Equity share in net losses of associates and joint ventures (Note 11) (1,119) (2,303)
Financing costs – net (10,972) (10,077)
Others – net 1,882 1,790
Total other expenses – net (4,792) (2,225)

Interest Income

Interest income for the nine months ended September 30, 2024 and 2023 consist of the following:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Interest income arising from revenue contracts with customers 428 335
Interest income on cash and cash equivalents (Note 15) 231 340
Interest income on financial instruments at amortized cost (Note 12) 36 41
Interest income on financial instruments at FVPL 8 8
Interest income – others 15 9
Total interest income 718 733

Financing Costs – Net

Financing costs – net for the nine months ended September 30, 2024 and 2023 consist of the following:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Interest on loans and other related items (Notes 20 and 27) 9,870 8,987
Accretion on lease liabilities (Note 10) 2,900 2,371
Accretion on financial liabilities (Note 20) 275 270
Financing charges 53 77
Capitalized interest (Notes 9 and 28) (2,126) (1,628)
Total financing costs – net 10,972 10,077

F-50
 6. Components of Other Comprehensive Loss

Changes in other comprehensive loss under equity of our consolidated statements of financial position for the nine months ended September 30, 2024 and 2023 are as follows:

Share in the
other
comprehensive Total other
Actuarial loss of comprehensive
Foreign Net loss on Net Revaluation gains (losses) associates and Fair value loss
currency financial transactions increment on on defined joint ventures changes of attributable
translation investments at on cash flow investment benefit accounted for financial to equity Share of Total other
differences of FVPL hedges properties plans using the instrument holders noncontrolling comprehensive
subsidiaries – net of tax – net of tax – net of tax – net of tax equity method at FVOCI of PLDT interests loss – net of tax
(in million pesos)
Balances as at January 1, 2024 133 — (4,608) 544 (38,260) (21) — (42,212) 10 (42,202)
Other comprehensive income (loss) 101 — (910) — (10) — — (819) (35) (854)
Balances as at September 30, 2024 (Unaudited) 234 — (5,518) 544 (38,270) (21) — (43,031) (25) (43,056)

Balances as at January 1, 2023 149 (9) (3,287) 544 (32,856) (20) (3) (35,482) 25 (35,457)
Other comprehensive income (loss) 2 — (1,245) — 155 — — (1,088) (2) (1,090)
151 (9) (4,532) 544 (32,701) (20) (3) (36,570) 23 (36,547)
Adjustments (8) 9 (65) — 65 (4) 3 — — —
Balances as at September 30, 2023 (Unaudited) 143 — (4,597) 544 (32,636) (24) — (36,570) 23 (36,547)

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-51
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 September 30, 2024 and December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Net deferred income tax assets 13,876 18,172
Net deferred income tax liabilities 30 165

The components of our consolidated net deferred income tax assets and liabilities as at September 30, 2024 and
December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Net deferred income tax assets:
Unearned revenues 4,251 5,192
Accumulated provision for expected credit losses 3,704 3,667
Lease liability over ROU assets under PFRS 16(1) 3,356 3,448
Fixed asset impairment/depreciation due to shortened life of property and equipment 2,310 2,875
Pension and other employee benefits 2,206 2,224
Unamortized past service pension costs 1,908 2,629
Unrealized foreign exchange gains 1,036 1,157
NOLCO 473 199
Accumulated write-down of inventories to net realizable values 340 393
Excess MCIT over RCIT 6 —
Derivative financial instruments (75) 215
Taxes and duties capitalized (162) (147)
Customer list and trademark (338) (272)
Capitalized charges and others (5,139) (3,408)
Total deferred income tax assets – net 13,876 18,172
Net deferred income tax liabilities:
Investment property 10 240
Unrealized foreign exchange gains 13 21
Others 7 (96)
Total deferred income tax liabilities 30 165
(1)
As at September 30, 2024 and December 31, 2023, the deferred tax asset on lease liability amounted to Php12,988 million and Php11,909 million,
respectively while the deferred tax liability on right of use asset amounted to Php9,632 million and Php8,461 million, respectively.

Changes in our consolidated net deferred income tax assets (liabilities) for the nine months ended September 30, 2024 and for
the year ended December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Net deferred income tax assets – balances at beginning of the period 18,172 17,636
Net deferred income tax liabilities – balances at beginning of the period (165) (204)
Net balances at beginning of the period 18,007 17,432
Movement charged directly to other comprehensive income 335 2,226
Provision for deferred income tax (4,504) (1,648)
Others 8 (3)
Net balances at end of the period 13,846 18,007

The analysis of our consolidated net deferred income tax assets as at September 30, 2024 and December 31, 2023 are as
follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Deferred income tax assets:
Deferred income tax assets to be recovered after 12 months 9,316 15,423
Deferred income tax assets to be recovered within 12 months 4,560 2,749
Net deferred income tax assets 13,876 18,172

F-52
The analysis of our consolidated net deferred income tax liabilities as at September 30, 2024 and December 31, 2023 are as
follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Deferred income tax liabilities:
Deferred income tax liabilities to be settled after 12 months 30 165
Deferred income tax liabilities to be settled within 12 months — —
Net deferred income tax liabilities 30 165

Provision for income tax for the nine months ended September 30, 2024 and 2023 consist of:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Current 4,335 4,784
Deferred (Note 3) 4,504 4,749
8,839 9,533

The reconciliation between the provision for income tax at the applicable statutory tax rate and the actual provision for
corporate income tax for the nine months ended September 30, 2024 and 2023 are as follows:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Provision for income tax at the applicable statutory tax rate 9,266 9,383
Tax effects of:
Equity share in net losses of associates and joint ventures 240 575
Nondeductible expenses 17 46
Loss not subject to income tax 54 (1)
Special deductible items and income subject to lower tax rate (130) (103)
Income subject to final tax (143) (199)
Difference between Optional Standard Deduction (OSD) and itemized deductions (247) (315)
Net movement in unrecognized deferred income tax assets and other adjustments (218) 147
Actual provision for income tax 8,839 9,533

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
September 30, 2024 and December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Accumulated provision for expected credit losses 1,274 1,294
NOLCO 1,204 1,541
Fixed asset impairment 176 192
Unrealized foreign exchange losses 51 37
Customer list and trademark 49 49
Provisions 36 72
Accumulated write-down of inventories to net realizable values 14 22
Unearned revenues 8 9
Lease liability over ROU assets under PFRS 16 3 1
Excess MCIT over RCIT 3 2
Pension and other employee benefits (4) (3)
Derivative financial instruments (6) 44
2,808 3,260
Unrecognized deferred income tax assets 704 817

In 2024, DMPI, IP Converge and VITRO availed the OSD method in computing their taxable income. This assessment is
based on projected taxable profits at a level where it is favorable to use OSD method. These companies are also expected to
avail of the OSD method in the foreseeable future. Thus, certain deferred income tax assets of DMPI, IP Converge and
VITRO amounting to Php226 million as at September 30, 2024 were not recognized.

F-53
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 September 30, 2024 are as follows:

Date Incurred Expiry Date MCIT NOLCO

(in million pesos)
December 31, 2021 December 31, 2024 1 —
December 31, 2021(a) December 31, 2026 — 53
December 31, 2022 December 31, 2025 — 764
December 31, 2023 December 31, 2026 1 1,116
September 30, 2024 December 31, 2026 7 1,211
9 3,144
Consolidated tax benefits 9 786
Consolidated unrecognized deferred income tax assets (3) (313)
Consolidated recognized deferred income tax assets 6 473
(a)
Under R.A. 11494.

The excess MCIT totaling Php9 million as at September 30, 2024 can be deducted against future RCIT liability. There was
no excess MCIT that was deducted against RCIT for the nine months ended September 30, 2024 and 2023.

NOLCO totaling Php3,144 million as at September 30, 2024 can be claimed as deduction against future taxable income. The
NOLCO claimed as deduction against taxable income amounted to Php379 million and Php129 million for the nine months
ended September 30, 2024 and 2023, respectively.

Republic Act No. 11494 Bayanihan to Recover as One Act, or Bayanihan II

Republic Act No. 11494, otherwise known as the Bayanihan to Recover as One Act, or Bayanihan II, was signed by
President Rodrigo Duterte on September 11, 2020. It contains the government’s second wave of relief measures to address
the health and economic crises that stemmed from the COVID-19 outbreak.

As part of mitigating the costs and losses stemming from the disruption of economic activities, Bayanihan II extended the
carry-over of the NOLCO incurred in 2021 as deductions from gross income for the next five consecutive taxable years
immediately following the year of the loss. Hence, NOLCO incurred in 2021 amounting to Php53 million, which ordinarily
can be carried over until December 31, 2024, has been extended until December 31, 2026.

Registration with Clark Special Economic Zone

ClarkTel is registered with Clark Special Economic Zone, or Economic Zones, under Republic Act No. 7227 otherwise
known as the Bases Conversion and Development Act of 1992. As registrant, ClarkTel is 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 Republic Act No. 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. See Note 19 – Equity.

F-54
8. Earnings Per Common Share

The following table presents information necessary to calculate the EPS for the nine months ended September 30, 2024 and
2023:

September 30,
2024 2023
Basic Diluted Basic Diluted
(in million pesos)
Net income attributable to equity holders of PLDT from:
Continuing operations 28,070 28,070 27,892 27,892
Discontinued operations — — (13) (13)
Consolidated net income attributable to common shares 28,070 28,070 27,879 27,879
Dividends on preferred shares (Note 19) (44) (44) (44) (44)
Consolidated net income attributable to common equity holders of PLDT 28,026 28,026 27,835 27,835

(in thousands, except per share amounts which are in pesos)

Outstanding common shares at beginning of period 216,056 216,056 216,056 216,056
Weighted average number of common shares 216,056 216,056 216,056 216,056

EPS from continuing operations 129.71 129.71 128.89 128.89

EPS from discontinued operations — — (0.06) (0.06)
EPS attributable to common equity holders of PLDT 129.71 129.71 128.83 128.83

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 period.

Diluted EPS amounts are calculated in the same manner assuming that, at the beginning of the period or at the time of
issuance during the period, 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.

Where the effect of the assumed conversion of the preferred shares and the exercise of all outstanding options has an anti-
dilutive effect, basic and diluted EPS are stated at the same amount.

F-55
9. Property and Equipment
Changes in property and equipment account for the nine months ended September 30, 2024 and for the year ended December 31, 2023 are as follows:
Vehicles,
Cable furniture IT
and Building and and other Information Land and systems Property
wire Central Network lease network Origination land and Security under
facilities equipment facilities improvement equipment Termination improvements platforms platforms construction Total
(in million pesos)
Nine Months Ended September 30, 2024 (Unaudited)
Net book value at beginning of the period 81,227 384 101,941 7,979 3,654 — 4,122 18,794 1,162 67,840 287,103
Additions (Note 4) 72 — 68 43 299 — — 271 — 45,428 46,181
Disposals/retirements — — (5) — (229) — — — (131) — (365)
Reclassification 16,788 — 33,022 455 117 — 52 4,096 182 (53,217) 1,495
Translation differences charged directly to cumulative translation
adjustments (2) — — — — — — — — — (2)
Depreciation of valuation increment on investment property — — — — — — 450 — — — 450
Adjustments — (24) (4) — 21 — — — — (185) (192)
Impairment losses recognized during the period — — — — — — — — (67) — (67)
Depreciation and amortization (Notes 3) (7,580) (77) (12,573) (813) (847) — (60) (4,208) (229) — (26,387)
Net book value at end of the period 90,505 283 122,449 7,664 3,015 — 4,564 18,953 917 59,866 308,216
As at September 30, 2024 (Unaudited)
Cost 296,353 532 367,920 29,301 40,203 — 5,006 54,703 1,855 59,866 855,739
Accumulated depreciation, impairment and amortization (205,848) (249) (245,471) (21,637) (37,188) — (442) (35,750) (938) — (547,523)
Net book value 90,505 283 122,449 7,664 3,015 — 4,564 18,953 917 59,866 308,216

December 31, 2022 (Audited)

Cost 261,429 7,338 328,729 26,788 40,572 77,429 4,591 35,095 377 55,427 837,775
Accumulated depreciation, impairment and amortization (190,472) (3,732) (226,766) (20,142) (36,415) (42,643) (319) (24,297) (244) — (545,030)
Net book value 70,957 3,606 101,963 6,646 4,157 34,786 4,272 10,798 133 55,427 292,745
Year Ended December 31, 2023 (Audited)
Net book value at beginning of the period 70,957 3,606 101,963 6,646 4,157 34,786 4,272 10,798 133 55,427 292,745
Additions (Note 4) 5,221 19 4,913 108 529 7,945 212 952 11 65,173 85,083
Disposals/retirements (1) — (17) (8) (119) — (320) (6) — — (471)
Reclassification — — 1,311 — — (24,470) — — — (15,269) (38,428)
Transfers and others 14,484 — 10,245 2,291 321 204 68 8,364 1,210 (37,187) —
Translation differences charged directly to cumulative translation
adjustments 1 — — — 1 — — — — — 2
Adjustments — (3,055) — 13 1 (83) (45) 3,106 84 (304) (283)
Depreciation and amortization from
(a)
continuing operations (Notes 2 and 3) (9,435) (186) (16,474) (1,071) (1,234) (18,382) (65) (4,420) (276) — (51,543)
Depreciation and amortization from
discontinued operations (Notes 2 and 3) — — — — (2) — — — — — (2)
Net book value at end of the period 81,227 384 101,941 7,979 3,654 — 4,122 18,794 1,162 67,840 287,103
As at December 31, 2023 (Audited)
Cost 280,237 683 344,218 28,881 40,387 — 4,504 50,344 1,914 67,840 819,008
Accumulated depreciation, impairment and amortization (199,010) (299) (242,277) (20,902) (36,733) — (382) (31,550) (752) — (531,905)
Net book value 81,227 384 101,941 7,979 3,654 — 4,122 18,794 1,162 67,840 287,103

(a) This includes amortization of cost to fulfill amounting to Php11,789 million.

F-56
Interest capitalized to property and equipment that qualified as borrowing costs amounted to Php2,126 million and
Php1,628 million for the nine months ended September 30, 2024 and 2023, respectively. See
Note 5 – Income and Expenses – Financing Costs – Net. The average interest capitalization rate used was approximately 5%
and 4% for the nine months ended September 30, 2024 and 2023, respectively.

Our net foreign exchange differences, which qualified as borrowing costs, amounted to Php635 million and Php336 million
for the nine months ended September 30, 2024 and 2023, respectively.

As at September 30, 2024, the estimated useful lives of our property and equipment are as follows:

Cable and wire facilities 5 – 15 years

Central equipment 3 – 15 years
Network facilities 3 – 20 years
Buildings 25 – 50 years
Vehicles, furniture and other network equipment 3 – 15 years
Land and land improvements 10 years
IT systems and platforms 5 years
Security platforms 5 years
Leasehold improvements 3 – 10 years or the term of the lease, whichever is shorter

See Note 3 – Management’s Use of Accounting Judgments, Estimates and Assumptions – Estimating useful lives of property
and equipment.

Sale and Leaseback of Telecom Towers

On various on dates in 2022 and 2023, Smart and DMPI signed Sale and Purchase Agreements with Edotco Towers, Inc.,
Edgepoint Towers, Inc., Unity Digital Infrastructure and Frontier Tower Associates Philippines, Inc., or the TowerCos in
connection with the sale of 7,569 telecom towers and related passive telecommunication infrastructure for Php98,309 million.

Concurrent with the execution of the Sale and Purchase Agreements, Smart also entered into Master Service Agreements, or
MSAs, with the TowerCos wherein Smart agreed to lease back the towers sold in the transaction for a period of 10 years. In
addition to space, the TowerCos are responsible for providing operations and maintenance services, as well as power to the
sites. The sale and leaseback with the TowerCos is complemented by a commitment to place service orders for a total of
1,220 Build-To-Suit, or BTS, sites within the next two to four years and 1,050 committed BTS sites within the next three to
four years. Thus, total committed BTS sites with the TowerCos is 2,270 sites. The closing of the agreements is on a
staggered basis depending on the satisfaction of closing conditions based on the number of towers transferred.

In 2022, we completed the sale of 4,665 telecom towers. As a result, we received total proceeds of Php60,492 million, and
recognized gain on sale and leaseback amounting to Php25,234 million.

In 2023, we completed additional sale of 1,705 telecom towers for a total consideration of Php22,465 million. We recognized
gain on sale and leaseback for these transactions totaling to Php7,467 million.

In 2024, we completed additional sale of 247 telecom towers for a consideration of Php3,037 million. We recognized gain on
sale and leaseback for these transactions totaling to Php1,213 million.

The following summarizes the completed sale of Smart and DMPI telecom towers as at September 30, 2024:

Net Book Value

of Tower Assets
Closing Date Number of Tower Assets Sold Cash Consideration (excluding taxes)
(in million pesos)
2022 4,665 60,492 22,874
2023 1,705 22,465 13,377
2024 247 3,037 745
6,617 85,994 36,996

The remaining telecom towers with net book value of Php5,190 million and Php7,163 million as at September 30, 2024 and
December 31, 2023, respectively, subject to sale and purchase agreement within one year, were reclassified from “Property
and equipment” to “Assets classified as held-for-sale” under current assets in our consolidated statements of financial
position.

F-57
10. Leases

Group as a Lessee

We have lease contracts for various items of sites, buildings, leased circuits and poles 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.

Our consolidated estimated useful lives of ROU assets as at September 30, 2024 are as follows:

Sites 1 – 30 years
International leased circuits(1) 1 – 19 years
Poles 1 – 12 years
Domestic leased circuits 3 – 10 years
Office buildings 1 – 25 years
Co-located sites 2 – 11 years
(1) As at December 31, 2023, the estimated useful life ranges from 2-20 years.

F-58
Our consolidated roll forward analysis of ROU assets as at September 30, 2024 and December 31, 2023 are as follows:

International Domestic
Leased Leased Office Co-located
Sites Circuits Poles Circuits Buildings Sites Total
(in million pesos)
September 30, 2024 (Unaudited)
Costs:
Balances at beginning of the period 38,461 4,305 3,364 2,001 1,144 53 49,328
Additions (Note 28) 4,908 1,385 3,995 690 316 8 11,302
Asset retirement obligation 36 — — — 2 — 38
Modifications 190 (17) 95 136 13 — 417
Terminations (2,471) (1,047) (2,442) (262) (206) — (6,428)
Balances at end of the period 41,124 4,626 5,012 2,565 1,269 61 54,657

Accumulated depreciation and amortization:

Balances at beginning of the period (7,599) (3,298) (3,156) (1,632) (887) (39) (16,611)
Modifications (3) (12) (3) (75) (19) — (112)
Charge from asset retirement obligation 3 — — — — — 3
Terminations 722 1,013 2,442 262 189 — 4,628
Depreciation (Notes 3) (3,478) (563) (698) (291) (218) (7) (5,255)
Balances at end of the period (10,355) (2,860) (1,415) (1,736) (935) (46) (17,347)
Net book value as at September 30, 2024 (Unaudited) 30,769 1,766 3,597 829 334 15 37,310

December 31, 2023 (Audited)

Costs:
Balances at beginning of the period 29,535 4,259 4,179 2,436 1,420 15 41,844
Additions (Note 28) 14,942 341 66 99 255 56 15,759
Asset retirement obligation 93 — — — (26) — 67
Modifications (35) (46) (851) (326) (149) (18) (1,425)
Terminations (3,566) (249) (30) (208) (356) — (4,409)
Reclassification to ROU assets classified as held-for-sale (2,508) — — — — — (2,508)
Balances at end of the period 38,461 4,305 3,364 2,001 1,144 53 49,328

Accumulated depreciation and amortization:

Balances at beginning of the period (5,415) (2,696) (2,504) (1,370) (987) (9) (12,981)
Modifications 23 — 278 147 236 6 690
Charge from asset retirement obligation 16 — — — 17 — 33
Terminations 1,163 220 10 208 198 — 1,799
Depreciation from continuing operations (Notes 2 and 3) (4,151) (822) (940) (617) (332) (36) (6,898)
Depreciation from discontinued operations (Notes 2 and 3) — — — — (19) — (19)
Reclassification to ROU assets classified as held-for-sale 765 — — — — — 765
Balances at end of the period (7,599) (3,298) (3,156) (1,632) (887) (39) (16,611)
Net book value as at December 31, 2023 (Audited) 30,862 1,007 208 369 257 14 32,717

F-59
The following amounts are recognized in our consolidated income statements for the nine months ended September 30, 2024
and 2023:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Depreciation expense of ROU assets from continuing operations 5,255 4,937
Depreciation expense of ROU assets from discontinued operations — 19
Interest expense on lease liabilities from continuing operations 2,900 2,371
Interest expense on lease liabilities discontinued operations — 1
Variable lease payments (included in general and administrative expenses) 511 453
Expenses relating to short-term leases (included in general and administrative expenses) 394 741
Total amount recognized in consolidated income statements 9,060 8,522

Our consolidated roll forward analysis of lease liabilities as at September 30, 2024 and December 31, 2023 are as follows:
September 30, December 31,
2024 2023
(Unaudited) (Audited)
(in million pesos)
Balances at beginning of the period 47,546 42,435
Additions (Note 28) 11,302 15,759
Accretion on lease liabilities from continuing operations (Note 5) 2,900 3,266
Accretion on lease liabilities from discontinued operations — 2
Reclassification to lease liabilities classified as held-for-sale — (1,503)
Foreign exchange gains – net 48 1
Lease modifications 261 (933)
Termination (488) (774)
Settlement of obligations (8,994) (10,707)
Balances at end of the period (Notes 3 and 28) 52,575 47,546
Less current portion of lease liabilities (Note 27) 7,098 5,921
Noncurrent portion of lease liabilities (Note 27) 45,477 41,625

We had total cash outflows for leases of Php8,994 million and Php7,993 million for the nine months ended
September 30, 2024 and 2023, respectively. We had non-cash additions to ROU assets of Php11,302 million and
Php15,759 million and lease liabilities of Php11,302 million and Php15,759 million as at September 30, 2024 and
December 31, 2023, respectively. The future cash outflows relating to leases that have not yet commenced are disclosed in
Note 28 – Notes to the Statements of Cash Flows.
We have entered into several lease contracts that include automatic 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. However, in
some of these lease contracts, we did not impute the renewal period in our assessment of the lease terms of these contracts
since said renewal period is not yet reasonably estimable at the time of transition or commencement date of the lease. See
Note 3 – Managements Use of Accounting Judgments, Estimates and Assumptions – Determining the lease term of contracts
with renewal and termination options – Company as a Lessee.

As disclosed in Note 9 – Property and Equipment, on the sale and leaseback of telecom towers, Smart and DMPI signed Sale
and Purchase Agreements with the TowerCos in connection with the sale of 7,569 telecom towers and related passive telecom
infrastructure, with the concurrent execution of MSAs with the TowerCos where Smart has agreed to lease back the towers
sold in the transaction for a period of 10 years.

In 2022, 2023 and nine months ended September 30, 2024, the MSAs covering the leaseback arrangements of 4,665, 1,705
and 247 telecom towers, respectively, became effective. As a result, we recognized cumulative lease liability of
Php39,584 million and cumulative ROU assets of Php24,214 million as at September 30, 2024. The difference between lease
liability and ROU assets represents the rights retained by the PLDT Group over the telecom assets leased back from the tower
companies.

Including the related accounts on Unity and Frontier, the ROU assets relating to leasehold land with net book value of
Php1,998 million and Php1,844 million, and the related lease liabilities amounting to Php1,728 million and Php1,779 million
were respectively reclassified as “Assets classified as held-for-sale” under current assets and “Liabilities associated with
assets classified as held-for-sale” under current liabilities in our consolidated statement of financial position as at
September 30, 2024 and December 31, 2023, respectively.

Common Tower Pilot, or CTP, Program

The CTP Program, established by Smart in January 2020, in partnership with several TowerCos duly accredited by the
Department of Information and Communications Technology, aims to accelerate new site roll-outs and reduce upfront the
capital expenditures spending.

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 Under the MSAs, TowerCos will handle site acquisition and permitting, site development works, construction and permanent
electrification of the towers. Effective 30 days after the sites are Ready For Telecommunication Installation, or RFTI, Smart
will be liable to settle a monthly fixed fee covering rental and maintenance costs for a contract term of 15 years. The monthly
fee will be subject to agreed escalation rates with TowerCos. As anchor tenant, Smart will also be entitled to colocation
discounts when additional tenants come on board.

Group as a Lessor

We have entered into operating leases on our investment property portfolio consisting of certain office buildings and business
offices. See Note 13 – Investment Properties. These leases have a term of five years. All leases include a clause to enable
upward revision of the rental charge on an annual basis according to prevailing market conditions. The lessee is also required
to provide a residual guarantee on the properties. Rental income recognized by us amounted to Php45 million and
Php42 million for the nine months ended September 30, 2024 and 2023, respectively.

Future minimum rentals receivable under non-cancellable operating leases expected within one year amounted to
Php62 million and Php59 million, and after one year but not more than five years, amounted to Php78 million and
Php125 million both as at September 30, 2024 and December 31, 2023, respectively.

11. Investments in Associates and Joint Ventures

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Carrying value of investments in associates:
MediaQuest PDRs 9,111 9,260
MIH 6,755 7,250
Radius 2,120 —
Individually immaterial associates 959 108
18,945 16,618
Carrying value of investments in joint ventures:
VTI, Bow Arken and Brightshare 33,591 33,649
Individually immaterial joint ventures 41 41
33,632 33,690
Total carrying value of investments in associates and joint ventures 52,577 50,308

Changes in the cost of investments for the nine months ended September 30, 2024 and for the year ended December 31, 2023
are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Balances at beginning of the period 64,658 63,020
Additions during the period 3,415 1,636
Translation and other adjustments (133) 2
Balances at end of the period 67,940 64,658

Changes in the accumulated impairment losses for the nine months ended September 30, 2024 and for the year ended
December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Balances at beginning of the period 2,875 2,805
Additions during the period (Note 4) — 70
Adjustments (112) —
Balances at end of the period 2,763 2,875

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Changes in the accumulated equity share in net earnings (losses) of associates and joint ventures for the nine months ended
September 30, 2024 and for the year ended December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Balances at beginning of the period (11,475) (8,669)
Equity share in net earnings (losses) of associates and joint ventures: (1,119) (2,806)
MediaQuest PDRs (149) (595)
MIH (918) (2,273)
Radius 4 —
VTI, Bow Arken and Brightshare (58) 66
Individually immaterial associates and joint ventures 2 (4)
Translation and other adjustments (6) —
Balances at end of the period (12,600) (11,475)

Investments in Associates

Investment of ePLDT in MediaQuest PDRs

In 2012 and 2013, ePLDT made deposits totaling Php9.6 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 through
Satventures. 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.

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 Php9,111 million and Php9,260 million as at
September 30, 2024 and December 31, 2023, 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 and subsidiaries as at September 30, 2024 and
December 31, 2023, and for the nine months ended September 30, 2024 and 2023:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Statements of Financial Position:
Noncurrent assets 22,900 22,153
Current assets 8,546 7,974
Noncurrent liabilities 2,160 1,682
Current liabilities 14,050 12,976
Equity 15,236 15,469
Carrying amount of interest in Satventures 9,111 9,260
Additional Information:
Cash and cash equivalents 673 797
Current financial liabilities(1) 2,374 2,635
Noncurrent financial liabilities(1) 1,237 469
(1) Excluding trade, other payables and provisions.

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 September 30,
2024 2023
(Unaudited)
(in million pesos)
Income Statements:
Revenues 6,192 6,460
Depreciation and amortization 1,047 939
Interest income (36) (34)
Interest expense 260 201
Benefit from income tax (67) (308)
Net loss / Total comprehensive loss (233) (914)
Equity share in net losses of Satventures (149) (585)

Investment of PCEV in MIH

The following summarizes the subscription agreements entered into by PCEV with MIH:

Number PCEV's Equity

Date Agreement of Shares Total Consideration Interest
(in millions)
March 14, 2018 Acquisition of Ordinary Shares 53.4 465 100.00%
March 14, 2018 Subscription of Ordinary Shares 95.9 3,806 100.00%
December 31, 2020 Conversion of notes to Class A2 preference shares 7.9 544 43.97%
March 12, 2021 Exercise of warrants to subscribe Class A2 preference shares 6.7 447 41.87%
June 11, 2021 Subscription to Class B convertible preferred shares 15.6 1,218 38.45%
April 7, 2022 Subscription to Class C convertible preferred shares 27.2 3,252 36.82%
(a)
December 13, 2023 Subscription to Class C2 convertible preferred shares 19.0 2,420 37.66%
(a)
Includes subscription payable amounting to US$15.3 million, or Php857 million subsequently paid on April 5, 2024.

PCEV’s percentage equity interest in MIH stood at 37.66% and 36.97% as at September 30, 2024 and December 31, 2023.

Investment in Class C2 Convertible Preference Shares

On December 13, 2023, PCEV, along with other existing shareholders KKR, Tencent, SIG, First Pacific Ventures and Jumel
Holdings, entered into a new subscription agreement with MIH to subscribe to US$80 million Class C2 convertible preferred
shares of MIH. On the same date, PCEV paid a consideration of US$28 million or Php1,563 million for 12.3 million MIH
Class C2 convertible preferred shares and received warrants for 4.9 million shares valued at Php281 million, thereby
increasing PCEV’s ownership in MIH from 36.63% to 36.97%.

On April 5, 2024, PCEV paid the subsequent consideration of US$15.3 million or Php857 million for 6.7 million MIH Class
C2 convertible preferred shares and received warrants for 2.7 million shares valued at Php152 million, resulting in an increase
of PCEV’s ownership in MIH from 36.97% to 37.66%.

The summarized financial information of MIH as at September 30, 2024 and December 31, 2023, and for the nine months
ended September 30, 2024 and 2023 is shown below:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Statements of Financial Position:
Noncurrent assets 6,672 4,309
Current assets 13,737 17,942
Noncurrent liabilities 775 190
Current liabilities 12,882 13,446
Equity 6,752 8,615
Carrying amount of interest in MIH 6,755 7,250
Additional Information:
Cash and cash equivalents 2,906 6,682
Current financial liabilities(1) 12,742 13,317
(1) Excluding statutory payables and accrued taxes.

F-63
 September 30,
2024 2023
(Unaudited)
(in million pesos)
Income Statements:
Revenues 9,889 7,084
Depreciation and amortization 293 251
Interest income 128 99
Provision for income tax 46 5
Net loss/Total comprehensive losses (2,458) (4,821)
Equity share in net losses of MIH (1) (918) (1,766)
(1) 2023 amounts include impact of 2022 audit adjusting entries, respectively.

The carrying value of PCEV’s investment in MIH as at September 30, 2024 and December 31, 2023 are as follows.

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
MIH Equity(1) 4,768 6,895
PCEV's noncontrolling interests 37.66% 36.97%
Share in net assets of MIH 1,795 2,549
Goodwill arising from acquisition 4,960 4,701
Carrying amount of interest in MIH 6,755 7,250
(1) MIH Equity is net of Php1,984 million and Php1,549 million Stock Option in 2024 and 2023, respectively.

Investment in Radius

On April 30, 2024, PLDT Inc. invested Php2,116 million in 2,491,516 common shares, or 34.9% equity interest in Radius.
This strategic investment aims to enhance PLDT’s market share through an integrated alignment of solution capabilities and
expanded market coverage.

Investments in Joint Ventures

Investments of PLDT in VTI, Bow Arken and Brightshare

The Company’s acquisition of 50% equity interest, including outstanding advances and assumed liabilities, in the
telecommunications business of San Miguel Corporation, or SMC, was approved by the PLDT Board on May 30, 2016.
Globe acquired the remaining 50% interest. PLDT and Globe executed separate purchase agreements : (i) 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) 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 Share
Purchase Agreements on May 30, 2016, 25% on December 1, 2016 and the final 25% on May 30, 2017. The Share Purchase
Agreements 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 Share Purchase Agreements 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. PLDT and Globe paid the
previous owners the net amount of Php2.6 billion on May 29, 2017 in relation to the aforementioned price adjustment based
on the result of the confirmatory due diligence. See Note 27 – Financial Assets and Liabilities – Commercial Commitments.

As part of 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 largest 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.

PLDT and Globe each subscribed to 2.8 million new preferred shares on February 28, 2017. The shares were 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

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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. 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
upon execution of the relevant agreement. The remaining balance of the subscription price of PLDT and Globe has been fully
paid as at December 29, 2017.

PLDT and Globe each subscribed to 600 thousand new preferred shares of the authorized capital stock of VTI on
December 15, 2017, 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 of PLDT, to cover for the assumed liabilities and working capital requirements of the
acquired companies, each amounted to Php69 million as at September 30, 2024 and December 31, 2023.

The table below presents the summarized financial information of VTI, Bow Arken and Brightshare as at September 30, 2024
and December 31, 2023, and for the nine months ended September 30, 2024 and 2023:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Statements of Financial Position:
Noncurrent assets 77,905 78,046
Current assets 4,795 4,375
Noncurrent liabilities 9,493 9,186
Current liabilities 2,193 2,174
Equity 71,014 71,061
Carrying amount of assets in VTI, Bow Arken and Brightshare 35,507 33,649
Additional Information:
Cash and cash equivalents 2,819 2,387
Current financial liabilities (1) 72 72
(1)
Excluding trade, other payables and provisions.

September 30,
2024 2023
(Unaudited)
(in million pesos)
Income Statements:
Revenues 3,260 3,140
Depreciation and amortization 1,423 1,249
Interest income 92 81
Provision for income tax 39 120
Net income (loss) / Total comprehensive income (loss) (117) 87
Equity share in net income (loss) of VTI, Bow Arken and Brightshare (58) 44

The carrying value of PLDT’s investment in VTI, Bow Arken and Brightshare as at September 30, 2024 and
December 31, 2023:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
VTI, Bow Arken and Brightshare equity 71,014 71,061
PLDT's share 50% 50%
Share in net assets of VTI, Bow Arken and Brightshare 35,507 35,530
Share in adjustment based on liability and ETPI net cash balance 442 442
Reimbursements (246) (239)
Share in SMC's advances in VTI, Bow Arken and Brightshare (840) (840)
Non-controlling interests (1,115) (1,055)
Others (157) (189)
Carrying amount of interest in VTI, Bow Arken and Brightshare 33,591 33,649

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 Notice of Transaction filed with the PCC

Prior to closing the transaction on May 30, 2016, 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, 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
that the Circulars apply, the Bow Arken Notice and the Brightshare Notice are deficient and defective in form and substance.

In response to the PCC’s letter, PLDT submitted its response on June 10, 2016, 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 Sale and Purchase Agreements for the PCC’s information and reference.

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 in a letter dated June 17, 2016. 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

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
on July 12, 2016. The Petition sought 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).

PLDT filed its Reply to Respondent PCC’s Comment on August 19, 2016. 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, or the First CA Resolution: (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.

The CA issued a Resolution, or the Second CA Resolution, denying PCC’s Motion for Reconsideration dated
September 14, 2016, for lack of merit on February 17, 2017. 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

F-66
Second CA 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.

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 on April 18, 2017. 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 the Supreme Court in a Resolution
dated November 28, 2017.

During the intervening period, the CA rendered its Decision on 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.

PCC filed a Motion for Additional Time to file a Petition for Review on Certiorari before the Supreme Court on
November 7, 2017. The Supreme Court granted PCC’s motion in its Resolution dated November 28, 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, on December 13, 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 Transactions 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.

PLDT received Globe’s Motion for Leave to File and Admit the Attached Rejoinder on February 13, 2018, 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.

PLDT filed its Comment on the Petition for Review on Certiorari on April 5, 2018. 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, PLDT received the PCC’s Motion to Expunge [Respondent PLDT’s Comment on the Petition for Review on
Certiorari] dated April 18, 2018. 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.

The Supreme Court’s Resolution dated April 24, 2018 which granted PLDT's motion for an extension, was received by PLDT
on June 5, 2018. It noted PLDT's Comment on the Petition for Review on Certiorari filed in compliance with the Supreme
Court’s Resolution dated January 30, 2018 and required the PCC to file a Consolidated Reply to the comments within ten
days from notice. The PCC’s Urgent Omnibus Motion for: (1) Partial Reconsideration of the Resolution dated
April 24, 2018; and (2) Additional Time dated June 11, 2018 was received by PLDT, through counsel, on June 20, 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.

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

F-67
Comments on August 14, 2018, 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.

PLDT received a Resolution dated August 7, 2018 where the Supreme Court noted the PCC’s Consolidated Reply Ad
Cautelam on October 4, 2018.

PLDT received a Resolution dated March 3, 2020 requiring petitioners in G.R. No. 242352 (Atty. Joseph Lemuel Baligod
Baquiran and Ferdinand C. Tecson v. NTC, et al.,) to file a Consolidated Reply to the comments on the petition within
10 days from notice on July 2, 2020.

PLDT received a Resolution dated June 30, 2020 where the Supreme Court resolved to Await the Consolidated Reply of the
petitioners in G.R. No. 242352 as required in the resolution dated March 3, 2020, on September 2, 2020.

PLDT received a Resolution of the Supreme Court dated October 6, 2020 which granted the motions filed by the petitioners
in G.R. No. 242352 to extend the filing of the Consolidated Reply until September 29, 2020, on November 16, 2020.

On February 8, 2021, PLDT received a Resolution where the Supreme Court noted the Consolidated Reply dated September
29, 2020 filed by the Petitioners in G.R. 242352.

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

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 was approved by the Board of Directors of
VTI on August 18, 2016. 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.

Individually immaterial associates and joint ventures

As at September 30, 2024 and December 31, 2023, following are the carrying values of individually immaterial associates and
joint ventures:
September 30, December 31,
2024 2023
(Unaudited) (Audited)
(in million pesos)
Individually immaterial associates:
Kayana 872 —
Appcard, Inc. 87 108
PG1 — —
AF Payments, Inc. — —
959 108
Individually immaterial joint ventures:
Telecommunications Connectivity, Inc. 41 41
PFC — —
VFC — —
41 41
Total individually immaterial associates and joint ventures 1,000 149

F-68
 As at September 30, 2024, following is the summarized financial information of individually immaterial associates and joint
ventures:

(in million pesos)

Statements of Financial Position:
Noncurrent assets 7,390
Current assets 976
Noncurrent liabilities 5,549
Current liabilities 3,047
Equity (230)
Carrying amount of interest in individually immaterial associates and joint ventures 1,000
Additional Information:
Cash and cash equivalents 501
Current financial liabilities 2,850
Noncurrent financial liabilities 2,398

Income Statements:
Revenues 834
Depreciation and amortization 235
Interest income 8
Interest expense —
Provision for income tax 27
Net loss / Total comprehensive loss (1,554)
Equity share in net income of individually immaterial associates and joint ventures 2

12. Debt Instruments at Amortized Cost

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Retail Treasury Bonds 340 440
Fixed Rate Treasury Notes, or FXTN 55 55
BDO Asean Bonds — 100
395 595
Less: Current portion of debt instrument at amortized cost (Note 27) 25 200
Noncurrent portion of debt instrument at amortized cost (Note 27) 370 395

Retail Treasury Bonds

On March 9, 2021, Smart purchased at par a three-year Retail Treasury Bond Tranche 25 with face value of Php100 million
which matured on March 9, 2024. The bond has a gross coupon rate of 2.375% payable on a quarterly basis. Interest income,
net of withholding tax, recognized on this investment amounted to Php359 thousand and Php1.4 million for the nine months
ended September 30, 2024 and 2023. The carrying value of this investment amounted to nil and Php100 million as at
September 30, 2024 and December 31, 2023, respectively.

On December 2, 2021, PLDT and Smart purchased at par a 5.5-year Retail Treasury Bond Tranche 26 with face value of
Php300 million maturing on June 2, 2027. The bond has a gross coupon rate of 4.6250% payable on a quarterly basis.
Interest income, net of withholding tax, recognized on this investment amounted to Php8.3 million each for the nine months
ended September 30, 2024 and 2023. The carrying value of this investment amounted to Php300 million as at
September 30, 2024 and December 31, 2023.

On March 4, 2022, PLDT and Smart purchased at par a five-year Retail Treasury Bond Tranche 27 with face value of
Php240 million maturing on March 4, 2027. The bond has a gross coupon rate of 4.8750% payable on a quarterly basis.
Interest income, net of withholding tax, recognized on this investment amounted to Php1.2 million each for the nine months
ended September 30, 2024 and 2023. The carrying value of this investment amounted to Php40 million as at
September 30, 2024 and December 31, 2023.

FXTN
On June 3, 2022, Smart purchased at a discount a three-year FXTN 03-27 with face value of Php25 million maturing on
April 7, 2025. The bond has a gross coupon rate of 4.25% payable on a semi-annual basis. Interest income, net of
withholding tax, recognized on this investment amounted to Php639.8 thousand each for the nine months ended
September 30, 2024 and 2023. The carrying value of this investment amounted to Php25 million as at September 30, 2024
and December 31, 2023.

F-69
 On June 16, 2022, Smart purchased at a premium a seven-year FXTN 07-67 with a face value of Php10 million maturing on
May 19, 2029. The bond has a gross coupon rate of 6.5% payable on a semi-annual basis. Interest income, net of
withholding tax, recognized on this investment amounted to Php393 thousand each for the nine months ended
September 30, 2024 and 2023. The carrying value of this investment amounted to Php10 million as at September 30, 2024
and December 31, 2023.

On July 7, 2022, PLDT and Smart purchased at a premium a four-year FXTN 07-62 with face value of Php20 million
maturing on February 14, 2026. The bond has a gross coupon rate of 6.25% payable on a semi-annual basis. Interest income,
net of withholding tax, recognized on this investment amounted to Php744 thousand each for the nine months ended
September 30, 2024 and 2023, respectively. The carrying value of this investment amounted to Php20 million as at
September 30, 2024 and December 31, 2023.

BDO ASEAN Sustainable Bond

On January 28, 2022, PLDT and Smart purchased at par a two-year BDO Fixed Rate ASEAN Sustainability Bond Due 2024
with face value of Php100 million which matured on January 28, 2024. The bond has a gross coupon rate of 2.90% payable
on a quarterly basis. Interest income, net of withholding tax, recognized on this investment amounted to Php88 thousand and
Php1.7 million for the nine months ended September 30, 2024 and 2023, respectively. The carrying value of this investment
amounted to nil and Php100 million as at September 30, 2024 and December 31, 2023, respectively.

13. Investment Properties

Changes in investment properties account for the nine months ended September 30, 2024 and for the year ended
December 31, 2023 are as follows:
Land
Land Improvements Building Total
(in million pesos)
September 30, 2024 (Unaudited)
Balances at beginning of the period 1,184 12 119 1,315
Net gains from fair value adjustments charged to profit or loss — — 2 2
Transfers to property and equipment (450) — (21) (471)
Balances at end of the period 734 12 100 846

December 31, 2023 (Audited)

Balances at beginning of the period 858 2 155 1,015
Net gains (losses) from fair value adjustments charged to profit or loss 58 8 (36) 30
Transfers from property and equipment 363 2 2 367
Disposals during the period (95) — (2) (97)
Balances at end of the period 1,184 12 119 1,315

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. 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
Php87 million and Php91 million for the nine months ended September 30, 2024 and 2023.

Rental income relating to investment properties that are being leased and included as part of revenues amounted to
Php45 million and Php42 million for the nine months ended September 30, 2024 and 2023, respectively. See
Note 10 – Leases.

The above investment properties were categorized under Level 2 and Level 3 of the fair value hierarchy. There were no
transfers in and out of Level 2 and Level 3 of the fair value hierarchy.

Significant increases or decreases in price per square meter for land, current material and labor costs of improvements would
result in a significantly higher or lower fair value measurement.

F-70
14. Goodwill and Intangible Assets

Changes in goodwill and intangible assets account for the nine months ended September 30, 2024 and for the year ended December 31, 2023 are as follows:

Total Total
Intangible Intangible Goodwill
Assets with Intangible Assets with Finite Life Assets with Total and
Indefinite Customer Finite Intangible Intangible
Life Trademark Franchise Licenses List Spectrum Others Life Assets Goodwill Assets
(in million pesos)
September 30, 2024 (Unaudited)
Costs:
Balances at beginning of the period 220 4,561 3,017 135 4,703 1,205 1,321 14,942 15,162 63,595 78,757
Additions during the period — — — — — — 167 167 167 — 167
Translation and other adjustments — 4 — — — — 3 7 7 — 7
Balances at end of the period 220 4,565 3,017 135 4,703 1,205 1,491 15,116 15,336 63,595 78,931
Accumulated amortization and impairment:
Balances at beginning of the period — 4,561 2,265 135 4,703 1,205 899 13,768 13,768 654 14,422
Amortization during the period — — 140 — — — 31 171 171 — 171
Translation and other adjustments — 4 — — — — — 4 4 — 4
Balances at end of the period — 4,565 2,405 135 4,703 1,205 930 13,943 13,943 654 14,597
Net balances at end of the period 220 — 612 — — — 561 1,173 1,393 62,941 64,334
Estimated useful lives (in years) — — 16 — — — 5-10 — — — —
Remaining useful lives (in years) — — 4 — — — 3-10 — — — —
December 31, 2023 (Audited)
Costs:
Balances at beginning of the period 220 4,505 3,016 135 4,703 1,205 1,320 14,884 15,104 63,595 78,699
Translation and other adjustments — 56 1 — — — 1 58 58 — 58
Balances at end of the period 220 4,561 3,017 135 4,703 1,205 1,321 14,942 15,162 63,595 78,757
Accumulated amortization and impairment:
Balances at beginning of the period — 4,505 2,078 135 4,703 1,205 870 13,496 13,496 654 14,150
Amortization during the period — — 186 — — — 35 221 221 — 221
Translation and other adjustments — 56 1 — — — (6) 51 51 — 51
Balances at end of the period — 4,561 2,265 135 4,703 1,205 899 13,768 13,768 654 14,422
Net balances at end of the period 220 — 752 — — — 422 1,174 1,394 62,941 64,335
Estimated useful lives (in years) — — 16 — — — 5-10 — — — —
Remaining useful lives (in years) — — 4 — — — 3-8 — — — —

F-71
The consolidated goodwill and intangible assets of our reportable segments as at September 30, 2024 and December 31, 2023
are as follows:

September 30, 2024 (Unaudited) December 31, 2023 (Audited)

Wireless Fixed Line Total Wireless Fixed Line Total
(in million pesos)
Franchise 612 — 612 752 — 752
Customer list with indefinite life — 220 220 — 220 220
Others — 561 561 — 422 422
Total intangible assets 612 781 1,393 752 642 1,394
Goodwill 56,571 6,370 62,941 56,571 6,370 62,941
Total goodwill and intangible assets 57,183 7,151 64,334 57,323 7,012 64,335

The consolidated future amortization of intangible assets as at September 30, 2024 are as follows:

Year (in million pesos)

2024 (1) 57
2025 238
2026 238
2027 232
2028 53
2029 and onwards 355
1,173
(1)
From October 1, 2024 to December 31, 2024

Impairment Testing of Goodwill

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 September 30, 2024, the PLDT Group’s goodwill
comprised of goodwill resulting from PGIH’s acquisition of Multisys in 2022, 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, cash inflows are not considered
coming from independent group of assets on a per Company basis due largely to the significant portion of shared and
commonly used network/platform that generates related revenue. 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 from 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 the lowest CGUs to which goodwill is to be allocated and
tested for impairment 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 9.29% for the Wireless and Fixed Line CGUs. Cash flows beyond the
projection period of three years are determined using a 2.4% 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 rate 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 as at
September 30, 2024 and December 31, 2023.

F-72
15. Cash and Cash Equivalents

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Cash on hand and in banks (Note 27) 9,894 9,993
Temporary cash investments (Note 27) 2,412 6,184
12,306 16,177

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 27 – Financial Assets and Liabilities.

Interest income earned from cash in banks and temporary cash investments amounted to Php231 million and Php340 million
for the nine months ended September 30, 2024 and 2023, respectively. See Note 5 – Income and Expenses.

16. Trade and Other Receivables

As at September 30, 2024 and December 31, 2023, this account consists of receivables from:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Retail subscribers (Note 27) 21,038 19,894
Corporate subscribers (Note 27) 18,319 15,934
Foreign administrations (Note 27) 1,068 1,250
Domestic carriers (Note 27) 297 188
Dealers, agents and others (Note 27) 7,066 6,035
47,788 43,301
Less: Allowance for expected credit losses 19,192 17,215
28,596 26,086

Trade and other receivables are noninterest-bearing and generally have settlement terms of 30 to 180 days.

Receivables from foreign administrations and domestic carriers represent receivables based on interconnection agreements
with other telecommunications carriers. The aforementioned amounts of receivable 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.

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.

For terms and conditions relating to related party receivables, see Note 24 – Related Party Transactions.

See Note 27 – 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.

F-73
 The following table explains the changes in the allowance for expected credit losses as at September 30, 2024 and December 31, 2023:

Foreign Dealers, Agents

Retail Subscribers Corporate Subscribers Administrations Domestic 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)
September 30, 2024 (Unaudited)
Balances at beginning of the period 1,448 8,250 2,126 3,820 8 116 — 1 608 838 4,190 13,025 17,215
Provisions (386) 2,547 193 347 6 — — — — 5 (187) 2,899 2,712
Translation adjustments — — 6 1 — — — — — — 6 1 7
Write-offs — (182) — (610) — — — — — — — (792) (792)
Reclassifications and reversals (401) 519 (74) 168 4 (51) — (1) (5) (109) (476) 526 50
Balances at end of the period 661 11,134 2,251 3,726 18 65 — — 603 734 3,533 15,659 19,192

December 31, 2023 (Audited)

Balances at beginning of the period 1,866 5,023 1,717 3,382 1 133 — 1 652 886 4,236 9,425 13,661
Provisions from continuing operations (394) 3,716 335 451 — (4) — — 10 5 (49) 4,168 4,119
Provisions from discontinued operations — — 4 — — — — — — — 4 — 4
Translation adjustments — — (3) (1) — — — — — — (3) (1) (4)
Write-offs — (506) — — — — — — — — — (506) (506)
Reclassifications and reversals (24) 17 73 (12) 7 (13) — — (54) (53) 2 (61) (59)
Balances at end of the period 1,448 8,250 2,126 3,820 8 116 — 1 608 838 4,190 13,025 17,215

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 27 – Financial Assets and Liabilities.

F-74
17. Inventories and Supplies

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Cost
Commercial 1,524 2,053
Network 1,388 1,971
Others 454 928
Total 3,366 4,952

Allowance for inventory obsolescence and write-down

Commercial 377 306
Network 877 1,020
Others 127 286
Total 1,381 1,612

Net realizable value

Commercial 1,147 1,747
Network 511 951
Others 327 642
Total 1,985 3,340

The cost of inventories and supplies recognized as expense for the nine months ended September 30, 2024 and 2023 are as
follows:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Cost of sales 7,698 7,869
Repairs and maintenance 314 601
Provision for inventory obsolescence 155 90
8,167 8,560

Changes in the allowance for inventory obsolescence and write-down for the nine months ended September 30, 2024 and for
the year ended December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Balances at beginning of the period 1,612 2,218
Provisions (Note 5) 155 89
Reversals (212) (252)
Disposals and other adjustments (39) (59)
Cost of sales (135) (384)
Balances at end of the period 1,381 1,612

F-75
18. Prepayments and Other Non-Financial Assets

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Advances to suppliers and contractors 39,012 47,706
Subscriber contract costs 29,500 28,926
Prepaid taxes 9,199 11,914
Prepaid fees and licenses 2,496 2,022
Prepaid repairs and maintenance 1,282 455
Prepaid benefit costs (Note 25) 976 917
Prepaid rent 405 399
Prepaid insurance (Note 24) 264 150
Other prepayments 999 518
Other non-financial assets 1,019 573
85,152 93,580
Less current portion of prepayments and other nonfinancial assets 12,249 13,215
Noncurrent portion of prepayments and other nonfinancial assets 72,903 80,365

Advances to suppliers and contractors are non-interest bearing and are to be applied to contractors’ subsequent progress
billings for projects.

Subscriber contract costs consist of the cost to obtain and cost to fulfill a contract with subscribers. Cost to obtain amounted
to Php4,394 million and Php4,456 million as at September 30, 2024 and December 31, 2023, respectively. Amortization of
cost to obtain presented under selling and promotions amounted to Php882 million and Php927 million for the nine months
ended September 30, 2024 and 2023, respectively. Costs to fulfill amounted to Php25,106 million and Php24,470 million as
at September 30, 2024 and December 31, 2023, respectively. Amortization of cost to fulfill, which is presented under
depreciation and amortization in the Income Statement, amounted to Php5,520 million and Php6,596 million for the nine
months ended September 30, 2024 and 2023, respectively.

Prepaid taxes include creditable withholding taxes and input VAT.

Prepaid fees and licenses include advance payments for NTC license fees and unexpired portion of fees paid to the NTC.

19. Equity

PLDT’s number of shares of subscribed and outstanding capital stock as at September 30, 2024 and December 31, 2023 are as
follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(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
Voting Preferred Stock 150 150
Common Stock 219 219
Outstanding
Non-Voting Serial Preferred Stock(1) 300 300
Voting Preferred Stock 150 150
Common Stock 216 216
Treasury Stock
Common Stock 3 3
(1) 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 nine months ended September 30, 2024 and for the year ended
December 31, 2023.

F-76
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, earn 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 any time 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.

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

F-77
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 9.68%, 15% and 6.65%, respectively, as at September 30, 2024. See Note 1 – Corporate
Information.

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 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 interest 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 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 of 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. 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 interest 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 the 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 the Series HH Shares issued in 2007, the holders of the 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.

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PLDT 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 the 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. 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 interest 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.

On January 28, 2014, 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 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 the Series HH Shares issued in 2008, the holders of the 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 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 of the 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. 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.

On January 26, 2016, the Board of Directors approved the redemption of all outstanding shares of PLDT’s 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 May 11, 2016. In accordance with the terms and conditions of the Series II
Shares, the holder of the 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 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. 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.

On January 28, 2020, the Board of Directors authorized and approved the retirement of shares of PLDT’s Series JJ 10%
Cumulative Convertible Preferred Stock, or SIP Shares, effective May 12, 2020. The record date for the determination of the
holders of outstanding SIP Shares available for redemption was February 11, 2020.

On January 20, 2022, RCBC returned to PLDT the remaining unclaimed balance of the Trust Account for the Series A to FF,
amounting to Php7,839 million. Due to the prescription of PLDT’s obligations to pay the trust amounts for Series A to FF,
income from prescription of preferred shares redemption liability of Php7,839 million was recognized in 2022.

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PLDT has withdrawn Php13 thousand and Php353 thousand from the Trust Account, representing total payments on
redemption nine months ended September 30, 2024 and 2023, respectively. The balance of the Trust Account of amounting
to nil and Php13 thousand were presented as part of “Current portion of other financial assets” and the related redemption
liability were presented as part of “Accrued expenses and other current liabilities” in our consolidated statements of financial
position as at September 30, 2024 and December 31, 2023, respectively. See related disclosures below under Perpetual Notes
and Note 27 – Financial Assets and Liabilities.

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 nine months ended September 30, 2024 and 2023 are detailed as follows:

September 30, 2024 (Unaudited)

Date Amount
Class Approved Record Payable Per Share Total
(in million pesos, except per share amounts)
Cumulative Non-Convertible
Redeemable Preferred Stock
Series IV (1) January 30, 2024 February 14, 2024 March 15, 2024 — 12
May 9, 2024 May 24, 2024 June 15, 2024 — 13
August 13, 2024 August 28, 2024 September 15, 2024 — 12
37

Voting Preferred Stock March 21, 2024 April 5, 2024 April 15, 2024 — 2
June 11, 2024 June 28, 2024 July 15, 2024 — 3
August 13, 2024 September 16, 2024 October 15, 2024 — 2
7

Common Stock
Regular Dividend March 7, 2024 March 21, 2024 April 5, 2024 46.00 9,938
August 13, 2024 August 27, 2024 September 11, 2024 50.00 10,804
20,742
Charged to retained earnings 20,786
(1)
Dividends were declared based on total amount paid up.

September 30, 2023 (Unaudited)

Date Amount
Class Approved Record Payable Per Share Total
(in million pesos, except per share amounts)
Cumulative Non-Convertible
Redeemable Preferred Stock
Series IV (1) January 31, 2023 February 27, 2023 March 15, 2023 — 12
May 4, 2023 May 19, 2023 June 15, 2023 — 12
August 3, 2023 August 19, 2023 September 15, 2023 — 12
36

Voting Preferred Stock March 2, 2023 March 17, 2023 April 15, 2023 — 3
June 13, 2023 June 28, 2023 July 15, 2023 — 3
August 29, 2023 September 13, 2023 October 15, 2023 — 2
8

Common Stock
Regular Dividend March 23, 2023 April 11, 2023 April 24, 2023 45.00 9,722
August 3, 2023 August 17, 2023 September 4, 2023 49.00 10,587
Special Dividend March 23, 2023 April 11, 2023 April 24, 2023 14.00 3,025
23,334
Charged to retained earnings 23,378
(1)
Dividends were declared based on total amount paid up.

F-80
 Our dividends declared after September 30, 2024 are detailed as follows:

Date Amount
Class Approved Record Payable Per Share Total
(in million pesos, except per share amounts)
Cumulative Non-Convertible
Redeemable Preferred Stock
Series IV (1) November 12, 2024 November 28, 2024 December 15, 2024 — 12

Charged to retained earnings 12

(1)
Dividends were declared based on total amount paid up.

Noncontrolling Interests – 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 for as a deduction from the perpetual notes. Smart paid distributions amounting to
Php59 million and Php177 million for the nine months ended September 30, 2024 and 2023, respectively. The notes are
subordinated to and rank junior to all senior loans of Smart. In accordance with PAS 32, Financial Instruments:
Presentation, the notes are classified as part of Smart’s equity and recorded as noncontrolling interests in PLDT’s
consolidated financial statements.

Proceeds from the issuance of these notes were used to finance capital expenditures. The notes have no fixed redemption
dates. On March 3, 2024 and March 6, 2024, Smart redeemed its Perpetual Notes amounting to Php2,610 million and
Php1,590 million, respectively.

20. Interest-bearing Financial Liabilities

As at September 30, 2024 and December 31, 2023, this account consists of the following:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Long-term portion of interest-bearing financial liabilities:
Long-term debt (Notes 27 and 28) 251,476 243,152

Current portion of interest-bearing financial liabilities:

Long-term debt maturing within one year (Notes 27 and 28) 19,107 11,646
270,583 254,798

Unamortized debt discount, representing debt premium, 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 Php2,006 million and
Php2,129 million as at September 30, 2024 and December 31, 2023, respectively. See Note 27 – Financial Assets and
Liabilities.

The following table describes all changes to unamortized debt discount for the nine months ended September 30, 2024 and for
the year ended December 31, 2023:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Unamortized debt discount at beginning of the period 2,129 2,279
Additions 150 214
Revaluations 2 (2)
Accretion included as part of financing costs – net (275) (362)
Unamortized debt discount at end of the period 2,006 2,129

F-81
The scheduled maturities of our consolidated outstanding long-term debt at nominal values as at September 30, 2024 are as
follows:

U.S. Dollar Debt Php Debt Total

Year U.S. Dollar Php Php Php
(in millions)
2024(1) 4 196 1,770 1,966
2025 14 784 22,693 23,477
2026 14 784 14,878 15,662
2027 14 784 26,498 27,282
2028 28 1,569 19,408 20,977
2029 and onwards 614 34,395 148,830 183,225
Total long-term debt (Note 27) 688 38,512 234,077 272,589
(1)
From October 1, 2024 to December 31, 2024.

Long-term Debt

As at September 30, 2024 and December 31, 2023, long-term debt consists of:

September 30, 2024 December 31, 2023

(Unaudited) (Audited)
U.S. U.S.
Description Interest Rates Dollar Php Dollar Php
(in millions)
U.S. Dollar Debts:
Fixed Rate Notes 2.5000% to 3.4500% in 2024 and 2023 590 33,076 590 32,691
Term Loans:
Others (1) SOFR + 1.31161 % to 1.47826% in 2024 and 87 4,879 122 6,788
SOFR + 1.31161 % to 1.47826% & US$LIBOR
+1.0500% in 2023
677 37,955 712 39,479
Philippine Peso Debts:
Fixed Rate Retail Bonds 5.2813% in 2024 and 2023 — 2,599
Term Loans:
Unsecured Term Loans 4.0000% to 5.3500%; PHP BVAL + 0.5000% to 232,628 212,720
1.0000% (floor rate 4.5000% to 4.6250%) in
2024 and 3.9500% to 5.3500%; PHP BVAL +
0.5000% to 1.0000% (floor rate 4.5000% to
4.6250%) in 2023
232,628 215,319
Total long-term debt (Notes 27 and 28) 270,583 254,798
Less portion maturing within one year (Note 27) 19,107 11,646
Noncurrent portion of long-term debt (Note 27) 251,476 243,152
(1)
Effective September 2023, the benchmark rate of our U.S. Dollar-denominated debts was changed from LIBOR to SOFR.

F-82
 Outstanding Amounts
September 30, 2024 December 31, 2023
Repurchase Amount (Unaudited) (Audited)
Paid in U.S. U.S.
Loan Amount Issuance Date Trustee Terms Php Dates full on Dollar Php Dollar Php
(in millions) (in millions)
Fixed Rate Notes(1)
(2) (2)
US$600M June 23, 2020 The Bank of New Non-amortizing, payable in full upon maturity — — — 590 33,076 590 (2) 32,691 (2)

York Mellon, London on January 23, 2031 and June 23, 2050
Branch
590 33,076 590 32,691

(1)
The purpose of this loan is to refinance the existing loan obligations, prepay outstanding loans and partially finance capital expenditures.
(2)
Amounts are net of unamortized debt discount/premium and/or debt issuance cost.

Cancelled
Drawn Undrawn Outstanding Amounts
September 30, 2024 December 31, 2023
Amount Amount (Unaudited) (Audited)
Date of Loan Paid in U.S. U.S.
Loan Amount Agreement Lender(s) Terms Dates Drawn U.S. Dollar full on Dollar Php Dollar Php
(in millions) (in millions)
U.S. Dollar Debts
Other Term Loans(1)

US$50M 2016 and 2017 NTT TC Leasing Non-amortizing, payable upon maturity on March 30, 2023 and 2016 and 2017 50 — March 30, — — 25 (2) 1,385 (2)

March 27, 2024 2023 and

March 27,
2024

US$140M March 4, 2020 PNB Quarterly amortization rates equivalent to: (a) 2.5% of the total December 14, 140 — — 87 (2) 4,879 (2) 97 (2) 5,403 (2)

amount drawn payable on the first interest payment date up to the 2020
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 on December 13,
2030

87 4,879 122 6,788

(1)
The purpose of this loan is to finance the capital expenditures and/or to refinance existing loan obligations which were utilized for network expansion and improvement programs.
(2)
Amounts are net of unamortized debt discount/premium and/or debt issuance cost.

Outstanding Amounts
Date of Payments September 30, 2024 December 31, 2023
Issuance/ Amount (Unaudited) (Audited)
Loan Amount Agreement Paying Agent Terms Drawdown Php Date Php Php
(in millions) (in millions)
Fixed Rate Retail Bonds(1)
PLDT
Php15,000M January 22, 2014 Philippine Depositary Php12.4B – non-amortizing, payable in full upon maturity on February 6, 2014 12,400 February 8, 2021 — 2,599 (2)

Trust Corp. February 6, 2021; Php2.6B – non-amortizing payable in full on February 2,600 February 6, 2024
6, 2024

(1)
The purpose of this loan is to finance the capital expenditures and/or to refinance existing loan obligations which were utilized for network expansion and improvement programs.
(2)
Amounts are net of unamortized debt discount/premium and/or debt issuance cost.

F-83
 Outstanding Amounts
Drawn September 30, 2024 December 31, 2023
Date of Loan Amount (Unaudited) (Audited)
Loan Amount Agreement Lender(s) Terms Dates Drawn Php Php Php
(in millions) (in millions)
Term Loans
Unsecured Term Loans(1)

Php14,900M Various dates in Union Bank Various dates in 14,900 7,822 (2)
9,298 (2)

2014, 2016 and 2019 With annual amortization up to 7 and 10 years 2014, 2016 and 2019

Php71,300M Various dates in BPI Various dates in 69,800 53,704 (2)

54,436 (2)

2015 to 2023 With annual amortization up to 6, 7, 10 and 11 years 2015 to 2024

Php46,500M Various date in Metrobank Various date in 46,500 38,663 (2)

26,443 (2)

2015 to 2024 With annual amortization up to 7, 10 and 11 years 2015 to 2024

Php18,500M Various dates in China Banking Corporation Various dates in 18,500 16,557 (2)
16,616 (2)

2019 and 2023 With annual amortization up to 10 years 2019 and 2023

Php14,000M Various dates in Security Bank Various dates in 14,000 10,584 (2)
10,760 (2)

2016 and 2017 With semi-annual amortization up to 10 years 2017

Php22,500M Various dates in BDO Various dates in 22,500 21,701 (2)

14,318 (2)

2016, 2020, 2021 and 2016, 2020, 2021

2023 With annual amortization up to 7 and 10 years and 2024

Php8,500M Various dates in PNB Various dates in 8,500 7,915 (2)

7,946 (2)

2016, 2017 and 2019 With annual amortization up to 7, 8 and 10 years 2017, 2018 and 2019

Php41,500M Various dates in LBP Various dates in 41,500 39,553 (2)

39,824 (2)

2016 to 2023 With annual amortization up to 10 years 2016 to 2023

Php14,000M Various dates in DBP Various dates in 14,000 13,547 (2)

13,629 (2)

2019 to 2021 With annual amortization up to 8, 9 and 10 years 2019 to 2022

Php2,000M September 6, 2019 Bank of China (Hong Kong) September 6, 2019 2,000 1,895 (2)
1,914 (2)

Limited, Manila Branch With annual amortization up to 7 years

Php15,000M Various dates in RCBC Various dates in 15,000 14,436 (2)

14,566 (2)

2020, 2021 and 2023 With annual amortization up to 8, 10 and 11 years 2020, 2021 and 2023

Php2,500M April 2, 2020 MUFG Bank, Ltd. With semi-annual amortization up to 6 years April 2, 2020 2,500 1,472 (2)
1,970 (2)

Php3,800M Various dates in 2023 and Bank of Commerce Various dates in 3,800 3,779 (2)
1,000 (2)

2024 With annual amortization up to 9 and 10 years 2023 and 2024

Php1,000M April 3, 2024 HSBC With annual amortization up to 5 years April 3, 2024 1,000 1,000 (2)
— (2)

232,628 212,720
(1)
The purpose of this loan is to finance the capital expenditures and/or to refinance existing loan obligations which were utilized for network expansion and improvement programs.
(2)
Amounts are net of unamortized debt discount/premium and/or debt issuance cost.

F-84
Short-term Debt

PLDT and Smart availed unsecured short-term debt from various banks amounting to Php6,000 million and Php4,000 million,
respectively, with an interest rate of 2.60% in March and April 2022. In July 2022, PLDT prepaid its outstanding short-term
debt amounting to Php2,000 million. In October 2022, Smart paid its outstanding short-term debt amounting to
Php4,000 million. In November 2022, PLDT and Smart availed unsecured short-term debt amounting to Php4,000 million
and Php2,000 million, respectively, with an interest rate of 5.16%. In March 2023, PLDT paid its outstanding short-term debt
amounting to Php4,000 million. In October 2023, PLDT and Smart paid their remaining outstanding short-term debt
amounting to Php4,000 million and Php2,000 million, respectively. As at September 30, 2024 and December 31, 2023,
PLDT and Smart has no outstanding balance of short-term debt.

Interest-bearing financial liabilities drawn after September 30, 2024 are detailed as follows:

Date of Loan Drawn Amount

Loan Amount Agreement Lender(s) Terms Dates Drawn Php
(in millions)
Term Loans
Unsecured Term Loans(1)
PLDT
Php530M September 30, 2024PVB With annual amortization up to 7 years October 30, 2024 530
Php2,000M October 21, 2024HSBC With annual amortization up to 5 years October 30, 2024 2,000

Smart
Php2,000M October 11, 2024BDO With annual amortization up to 10 years October 16, 2024 2,000
Php3,000M October 21, 2024BDO With annual amortization up to 10 years October 24, 2024 3,000

(1)
The purpose of this loan is to finance the capital expenditures and/or to refinance existing loan obligations which were utilized for network
expansion and improvement programs.

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.

PLDT’s debt instruments also 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; (e) merging or consolidating with any other company; and
(f) making or permitting any preference or priority in respect of any other relevant indebtedness of PLDT. 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.

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 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.

ePLDT’s debt instruments contain certain restrictive covenants that require ePLDT to comply with specified financial ratios
and other financial tests at quarterly measurement dates. ePLDT’s loan agreement includes compliance with financial tests
such as total debt to equity and interest coverage ratio. The agreement also contains 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. ePLDT’s debt instruments also contain a number of other negative covenants that, subject to certain
exceptions and qualifications, restrict ePLDT’s ability to take certain actions without lenders’ approval.

F-85
 The principal factors that could negatively affect our ability to comply with these financial ratio covenants and other financial
tests are poor operating performance of PLDT and its subsidiaries, depreciation of the Philippine Peso relative to the U.S.
Dollar, 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 (net of consolidated debt
discount), approximately 14% and 15% were denominated in U.S. Dollars as at September 30, 2024 and December 31, 2023,
respectively. Considering our consolidated outstanding hedges, the unhedged portion of the PLDT’s net debt amounts was
approximately 7% (or 5%, net of our consolidated U.S. Dollar cash balances allocated for debt) and 5% (or 5%, net of our
consolidated U.S. Dollar cash balances allocated for debt) as at September 30, 2024 and December 31, 2023, 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 27 – Financial Assets and Liabilities – Foreign Currency Exchange Risk.

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 September 30, 2024 and December 31, 2023, we were in compliance with all of our debt covenants. See
Note 27 – Financial Assets and Liabilities – Derivative Financial Instruments.

21. Deferred Credits and Other Noncurrent Liabilities

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Contract liabilities and unearned revenues 8,402 8,206
Provision for asset retirement obligations 1,213 1,164
Accrual of capital expenditures under long-term financing (a) 108 198
Others 105 39
9,828 9,607
(a)
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 20 – Interest-bearing Financial Liabilities.

The following table summarizes the changes to provision for asset retirement obligations for the nine months ended
September 30, 2024 and for the year ended December 31, 2023:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Provision for asset retirement obligations at beginning of the period 1,164 1,514
Capitalized to ROU assets during the period 43 163
Accretion expenses 40 63
Settlement of obligations and others (3) (2)
Change in assumptions (31) (30)
Revaluation due to change in IBR — (175)
Reclassification to liabilities associated with assets classified as held-for-sale — (369)
Provision for asset retirement obligations at end of the period 1,213 1,164

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22. Accounts Payable

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Suppliers and contractors (Note 27) 65,326 74,518
Taxes (Note 26) 6,262 3,964
Carriers and others (Note 27) 2,992 2,362
Related parties (Notes 24 and 27) 374 170
74,954 81,014

Certain suppliers entered into Trade Financing Agreements (TFAs) to sell a portion of their receivables. The balances of
accounts entered into TFA amounted to Php18,158 million and Php20,553 million as at September 30, 2024 and
December 31, 2023, respectively. These amounts are included in the payables to Suppliers and Contractors. Under the terms
of the TFAs, the Purchaser will have exclusive ownership of the purchased receivables and all of its rights, title and interest.
There were no changes in the payment terms.

For terms and conditions pertaining to the payables to related parties, see Note 24 – Related Party Transactions.

For detailed discussion on the PLDT Group’s liquidity risk management processes, see Note 27 – Financial Assets and
Liabilities – Liquidity Risk.

23. Accrued Expenses and Other Current Liabilities

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Accrued utilities and related expenses (Notes 24 and 27) 59,434 61,407
Contract liabilities and unearned revenues (Note 5) 10,297 10,689
Accrued taxes and related expenses (Note 26) 4,925 5,943
Accrued employee benefits and other provisions (Note 27) 6,441 5,510
Accrued interests and other related costs (Note 28) 2,583 2,157
Others 2,169 3,044
85,849 88,750

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 and
other operational related expenses pending receipt of billings and statement of accounts from suppliers. These liabilities are
noninterest-bearing and 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 portions of prepaid loads.

Accrued taxes and related expenses pertain to licenses, permits and other related business taxes, which are normally settled
within a year.

Accrued employee benefits and other provisions pertain to accrued salaries, wages and bonuses, and other employee benefits
that are normally settled within a year.

Accrued interests and other related costs includes interest expense on loans, which are normally settled within a year.

Other accrued expenses and other current liabilities are noninterest-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.

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24. 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.

Settlement of outstanding balances of related party transactions at year-end are expected to be settled with cash.

The following table provides the summary of outstanding balances as at September 30, 2024 and December 31, 2023, and transactions for the nine months ended September 30, 2024 and
2023 that have been entered into with related parties:

September 30, December 31, September 30,

Statement of Income
Financial 2024 2023 Statement 2024 2023
Position
Company Name Particulars Terms Conditions Classification (Unaudited) (Audited) Classification (Unaudited)
(in million pesos) (in million pesos)

Manila Electric Company, or Meralco Electricity services to PLDT and certain Immediately upon receipt of Unsecured Accounts payable 628 603 Repairs and 2,322 2,414
subsidiaries’ offices within Meralco's invoice and accrued expenses maintenance
franchise area and other current
liabilities
Pole attachment contracts, wherein 45 days upon receipt of billings Unsecured Accrued expenses — — Rent — 40
Meralco leases its pole spaces to and other current
accommodate PLDT and Smart’s cable liabilities
network facilities
Upon depreciation or expiration Unsecured ROU assets 2,926 598 Depreciation 327 2,041
of lease and
amortization
2024 – due after September 30, Unsecured Lease liabilities - net 2,154 2
2024; of current portion
2023 – due after December 31,
2023
2024 – due after September 30, Unsecured Current portion of 556 1
2024; lease liabilities
2023 – due after December 31,
2023
Meralco Industrial Engineering Services Customer line installation, repair, 30 days upon receipt of invoice Unsecured Accrued expenses 13 3
Corporation, or MIESCOR rehabilitation and maintenance activities and other current
liabilities
Transactions with major stockholders, directors and officers:
NTT TC Leasing PLDT signed a US$25 million term loan Non-amortizing, payable upon Unsecured Interest-bearing — — Financing — 19
facility agreement on March 22, 2016 maturity on March 30, 2023 financial liabilities costs – net
PLDT signed a US$25 million term loan Non-amortizing, payable upon Unsecured Interest-bearing — 1,385 Financing 26 69
facility agreement on January 31, 2017 maturity on March 27, 2024 financial liabilities costs – net

F-88
 September 30, December 31, September 30,
Statement of Income
Financial 2024 2023 Statement 2024 2023
Position
Company Name Particulars Terms Conditions Classification (Unaudited) (Audited) Classification (Unaudited)
(in million pesos) (in million pesos)
Transactions with major stockholders, directors and officers:
NTT World Engineering Marine Corporation On February 1, 2008, PLDT entered into a 1st month of each quarter; Unsecured Accounts payable 237 261 Repairs and 98 35
service agreement, wherein NTT World noninterest-bearing and accrued expenses maintenance
Engineering Marine Corporation provides and other current
offshore submarine cable repair and other liabilities
allied services for the maintenance of
PLDT’s domestic fiber optic network
submerged plant.
NTT Communications On March 24, 2000, PLDT entered into an 30 days upon receipt of Unsecured Accrued expenses 28 104 Professional 91 83
advisory service agreement (as amended on invoice; noninterest- and other current and other
March 31, 2003, March 31, 2005 and June bearing liabilities contracted
16, 2006), under which NTT services
Communications provides PLDT with
technical, marketing and other consulting
services for various business areas of
PLDT starting April 1, 2000.
On March 24, 2000, PLDT entered into an 30 days upon receipt of Unsecured Accounts payable — 3
agreement with NTT Communications invoice; noninterest-
under which PLDT and NTT bearing
Communications agreed to cooperative
arrangements for conventional international
telecommunications services to enhance
their respective international businesses.
NTT Worldwide Telecommunications On March 24, 2000, PLDT entered into an 30 days upon receipt of Unsecured Accounts payable — 6 Selling and — 1
Corporation agreement under which PLDT markets, and invoice; noninterest- promotions
manages data and other services under bearing
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.
NTT DOCOMO On June 5, 2006, in accordance with the 30 days upon receipt of Unsecured Accrued expenses 50 103 Professional 82 77
Cooperation Agreement dated January 31, invoice; noninterest- and other current and other
2006, an Advisory Services Agreement bearing liabilities contracted
was entered into by NTT DOCOMO and services
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.

F-89
 September 30, December 31, September 30,
Statement of Income
Financial 2024 2023 Statement 2024 2023
Position
Company Name Particulars Terms Conditions Classification (Unaudited) (Audited) Classification (Unaudited)
(in million pesos) (in million pesos)
Transactions with major stockholders, directors and officers:
JGSHI and Subsidiaries PLDT and certain of its subsidiaries have existing agreements 1st month of each Unsecured Accounts payable 51 81 Rent 199 257
with Universal Robina Corporation and Robinsons Land quarter; 30 days upon and accrued
Corporation for office and business office rental. receipt of invoice; expenses and other
noninterest-bearing current liabilities
Upon depreciation or Unsecured ROU assets 4 4 Depreciation and — —
expiration of lease amortization
2024 – due after Unsecured Lease liabilities - — 78
September 30, 2024; net of current
2023 – due after portion
December 31, 2023
PLDT group's other transactions with JGSHI and subsidiaries 30 days upon receipt of Unsecured Accrued expenses 43 44 Repairs and 121 51
invoice; noninterest- and other current maintenance
bearing liabilities
Communication, — —
training and travel
Malayan Insurance Co., Inc., or PLDT and certain of its subsidiaries have insurance policies Immediately upon Unsecured Accounts payable 69 8 Insurance and 163 162
Malayan with Malayan covering directors, officers, liability to receipt of invoice and accrued security services
employees and material damage for buildings, building expenses and other
improvements, equipment and motor vehicles. The premiums current liabilities
are directly paid to Malayan.
Immediately upon Unsecured Prepayments and — 152
receipt of invoice other nonfinancial
assets
Gotuaco del Rosario and Gotuaco acts as the broker for certain insurance companies to Immediately upon Unsecured Accounts payable — — Insurance and 100 111
Associates, or Gotuaco cover certain insurable properties of the PLDT Group. receipt of invoice and accrued security services
Insurance premiums are remitted to Gotuaco and the broker’s expenses and other
fees are settled between Gotuaco and the insurance companies. current liabilities

F-90
 September 30, December 31, September 30,
Statement of Income
Financial 2024 2023 Statement 2024 2023
Position
Company Name Particulars Terms Conditions Classification (Unaudited) (Audited) Classification (Unaudited)
(in million pesos) (in million pesos)
Transactions with major stockholders, directors and officers:
First Pacific Investment Management 'On March 1, 2018, Smart entered into an Advisory Unsecured Accounts 13 — Professional 111 124
Limited, Services Agreement with FPIML effective for a period of payable and and other
or FPIML one-year subject to a 12-month automatic renewal unless accrued contracted
either party notifies the other party of its intent not to renew expenses and services
the agreement. FPIML provides advisory and related other current
services in connection with the operation of Smart’s liabilities
business of providing mobile communications services, (Notes 23 and
high-speed internet connectivity, and access to digital 24)
services and content. The agreement provides that Smart
shall pay a monthly service fee of US$250 thousand and
any additional fee shall be mutually agreed upon by both
parties on a monthly basis. On March 26, 2020, Smart and
FPIML mutually agreed to reduce the monthly service fee
to US$100 thousand in consideration of the services
provided under this agreement, effective April 1, 2020.
Starting April 2021, the fee has been increased to $220
thousand per month. Smart prepaid the fees for the period
April to October 2021 (US$1.54 million).
Other related parties:
Various PLDT and certain of its subsidiaries provide telephone, data 30 days upon receipt of invoice Unsecured Trade and other 6,322 5,193 Revenues 1,950 2,343
communication and other services to various related receivables
parties. (Note 16)
PLDT and certain of its subsidiaries avail of lease and other 2024 – due after September 30, Unsecured Lease liabilities 184 66 Expenses 2,783 2,919
services from various related parties. 2024; - net of current
2023 – due after December 31, portion (Note
2023 10)
2024 – due after September 30, Unsecured Current portion 91 42
2024; of lease
2023 – due after December 31, liabilities (Note
2023 10)
Upon depreciation or expiration of Unsecured ROU assets 310 148
lease (Note 10)
30 days upon receipt of billing; Unsecured Accounts 661 666
noninterest-bearing payable
(Note 22)
Immediately upon receipt of Unsecured Accrued 100 603
billing expenses and
other current
liabilities (Note
23)

F-91
Compensation of Key Officers of the PLDT Group

The compensation of key officers of the PLDT Group by benefit type for the nine months ended September 30, 2024 and
2023 are as follows:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Short-term employee benefits 278 368
Other long-term employee benefits (Note 25) 89 124
Post-employment benefits (Note 25) 16 19
Total compensation paid to key officers of the PLDT Group 383 511

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, is 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,
governance, nomination and sustainability, executive compensation, technology strategy, and risk and data privacy and
information security committees is 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 Php63 million and Php69 million for the nine
months ended September 30, 2024 and 2023, respectively.

Except for the fees mentioned above, the directors are not compensated, directly or indirectly, for their services as such
directors.

There are no agreements between PLDT Group and any of its key management personnel providing benefits upon
termination of employment, except for such benefits to which they may be entitled under PLDT Group’s retirement and
incentive plans.

F-92
25. Pension and Other 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, in which case, benefits are computed based on R.A. 7641 (Retirement Pay Law) or the minimum mandated
benefit by the law. For the purpose of complying with Revised PAS 19, Employee Benefits, pension benefit expense has been
actuarially computed based on defined benefit plan.

PLDT and certain of its subsidiaries' actuarial valuation is performed every year-end. There is no significant change in the
fair value of plan assets for the nine months ended September 30, 2024. Based on the latest actuarial valuation, the actual
present value of accrued (prepaid) benefit costs as at September 30, 2024 and December 31, 2023, and net periodic benefit
costs and average assumptions used in developing the valuation for the nine months ended September 30, 2024 and 2023 are
as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Changes in the present value of defined benefit obligations:
Present value of defined benefit obligations at beginning of the period 17,964 15,883
Service costs 824 1,016
Interest costs on benefit obligation 53 1,065
Actuarial losses on obligations – experience — 154
Actuarial losses on obligations – economic assumptions — 2,303
Actual benefits paid/settlements (2,235) (2,848)
Curtailment and others 20 391
Present value of defined benefit obligations at end of the period 16,626 17,964
Changes in fair value of plan assets:
Fair value of plan assets at beginning of the period 14,522 16,291
Actual contributions 2,838 4,507
Interest income on plan assets 654 1,138
Actual benefits paid/settlements (2,855) (2,510)
Return on plan assets (excluding amount included in net interest) — (4,904)
Fair value of plan assets at end of the period 15,159 14,522
Unfunded status – net (1,467) (3,442)
Accrued benefit costs 1,625 3,541
Prepaid benefit costs 158 99

For the Nine Months Ended

September 30,
2024 2023
(Unaudited)
Components of net periodic benefit costs:
Service costs 824 690
Interest costs - net 53 (155)
Curtailment/settlement losses and other adjustments 20 145
Net periodic benefit costs 897 680

Actual net gain on plan assets amounted to Php654 million and Php641 million for the nine months ended September 30,
2024 and 2023, respectively.

Based on the latest actuarial valuation, our expected contribution to the defined benefit plan in 2024 will amount to
Php4,374 million.

The following table sets forth the expected future settlements by the Plan of maturing defined benefit obligation as at
September 30, 2024:

(in million pesos)

2024(1) 238
2025 344
2026 538
2027 593
2028 1,284
2029 to 2033 12,214
(1) From October 1, 2024 to December 31, 2024.

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The average duration of the defined benefit obligation at the end of the reporting period is 12.21 years.

The weighted average assumptions used to determine pension benefits for the nine months ended September 30, 2024 and
2023 are as follows:

September 30,
2024 2023
(Unaudited)
(in percentage)
Rate of increase in compensation 5.7 5.7
Discount rate 6.0 7.3

The sensitivity analysis below has been determined based on reasonably possible changes of each significant assumption on
the defined benefit obligation as at September 30, 2024 and December 31, 2023, assuming all other assumptions were held
constant:

Increase (Decrease)
(in percentage) (in million pesos)
Discount rate 1 15,762
(1) (19,838)

Future salary increases 1 19,903

(1) (15,732)

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 the 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 year to liquid/semi-liquid assets such as government securities, 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.

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The following table sets forth the fair values, which are equal to the carrying values, of PLDT’s plan assets recognized as at
September 30, 2024 and December 31, 2023:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Noncurrent Financial Assets
Investments in:
Unquoted equity investments 11,790 9,439
Shares of stock 2,142 2,017
Corporate bonds and loans receivable 299 2,287
Mutual funds 210 225
Government securities 4 10
Total noncurrent financial assets 14,445 13,978
Current Financial Assets
Cash and cash equivalents 457 399
Receivables 99 42
Total current financial assets 556 441
Total PLDT’s Plan Assets 15,001 14,419
Subsidiaries Plan Assets 158 103
Total Plan Assets of Defined Benefit Pension Plans 15,159 14,522

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 quoted market prices at reporting date.

Unquoted Equity Investments

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31, September 30, December 31,

2024 2023 2024 2023
(Unaudited) (Audited) (Unaudited) (Audited)
(Percentage of Ownership) (in million pesos)
MediaQuest 100 100 8,507 8,507
Tahanan Mutual Building and Loan Association, Inc.,
or TMBLA, (net of subscriptions payable of Php32 million) 100 100 692 672
BTFHI 100 100 2,591 260
11,790 9,439

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 five years based on the 2024 financial budgets approved by 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 post-tax discount rates applied to cash flow projections range from 11.3% to 12.2%. Cash flows beyond
the five-year period are determined using 0.0% to 4.8% growth rates.

The Board of Trustees of the PLDT Beneficial Trust Fund approved an issuance by MediaQuest of PDRs with underlying
shares of stocks of Cignal TV held by MediaQuest through Satventures (Cignal TV PDRs) amounting to Php6 billion on
May 8, 2012. 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 various dates in 2012, MediaQuest received a deposit for
future PDRs subscription of Php6 billion from ePLDT.

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 on January 25, 2013. 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

F-95
September 27, 2013, providing ePLDT an effective 64% economic interest in Cignal TV. Also, on the same date, 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.

ePLDT’s Board of Directors approved on February 19, 2014 an additional Php500 million investment in Hastings PDRs of
which Php300 million was received by MediaQuest on March 11, 2014. As at December 31, 2014, total deposit for PDRs
subscription amounted to Php2,250 million.

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 on May 21, 2015. 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.

The Board of Trustees of the PLDT Beneficial Trust Fund approved additional investment in MediaQuest amounting to
Php3,100 million and Php1,400 million to fund MediaQuest’s investment requirements in 2019 and 2020, respectively, which
were fully drawn by MediaQuest during the same years. The full amounts were fully drawn by MediaQuest during 2019 and
2020.

In 2021 and 2022, the Board of Trustees of the PLDT Beneficial Trust Fund approved an additional investment in
MediaQuest to fund its cash requirements amounting to Php2,000 million and Php1,000 million, respectively. Both
investments were already fully drawn by MediaQuest in 2022.

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’s total investment into TMBLA amounted to Php119 million consisting of
initial direct subscription in shares of stocks of TMBLA in the amount of Php20 million (net of unpaid subscription
amounting to Php32 million) and subsequently via a Deed of Pledge amounting to Php99 million. The cumulative change in
the fair market values of this investment amounted to Php573 million and Php553 million as at September 30, 2024 and
December 31, 2023, respectively.

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.

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 on October 26, 2012. Total cash dividend income each amounted to
Php7 million for the nine months ended September 30, 2024 and 2023. Dividend receivables each amounted to Php2 million
as at September 30, 2024 and December 31, 2023.

On April 30, 2024, the Board of Trustees of PLDT Beneficial Trust Fund subscribed and paid an additional subscription into
BTFHI amounting to Php2,480 million.

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Shares of Stocks

As at September 30, 2024 and December 31, 2023, this account consists of:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Common shares
PSE 1,188 1,134
PLDT 40 34
Others 554 489
Preferred shares 360 360
2,142 2,017

Dividends earned on PLDT common shares each amounted to Php3 million for the nine months ended September 30, 2024
and 2023.

Preferred shares represent 300 million unlisted preferred shares of PLDT at Php10 par value, net of subscription payable of
Php2,640 million both as at September 30, 2024 and December 31, 2023. These shares, which bear a 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 Php37 million each for the nine months ended September 30, 2024
and 2023.

Corporate Bonds and Loans Receivable

Investment in corporate bonds includes various long-term peso and dollar denominated bonds with maturities ranging from
February 2025 to May 2031 and fixed interest rates from 3.36% to 7.53% per annum.

On various dates in 2023 and on January 24, 2024, the Board of Trustees of the PLDT Beneficial Trust Fund entered into
10-year loan agreements with TV5 Network Inc. with an aggregate amount of Php2,300 million (“TV5 Loans”). The total
amount was fully drawn by TV5 Network Inc. on the respective loan agreement dates. The applicable interest rates for the
loans shall be based on the average of the One Year PHP BVAL for the three consecutive business days immediately prior to
and including the interest rate setting date plus a credit margin of 125 bps per annum. On April 30, 2024, the Board of
Trustees of the PLDT Beneficial Trust Fund entered into an Assignment Agreement, transferring all of its rights, title and
interests in and to the TV5 Loans, with BTF Properties, Inc. On the same date, TV5 settled the loan with BTF Properties, Inc.
through dacion en pago for and in consideration of TV5’s real properties with an aggregate value of Php2,300 million.

Mutual Funds

Investment in mutual funds includes UITF, bond and equity funds, which aims to out-perform benchmarks in various indices
as part of its investment strategy.

Government Securities

Investments in government securities include Retail Treasury Bonds and FXTN bearing interest rates ranging from 3.9% to
4.8% per annum. These securities are fully guaranteed by the government of the Republic of the Philippines.

The allocation of the fair value of the assets for the PLDT pension plan as at September 30, 2024 and December 31, 2023 are
as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in percentage)
Investments in listed and unlisted equity securities 93 79
Temporary cash investments 3 3
Debt and fixed income securities 2 16
Mutual funds 1 2
Receivables and other assets 1 —
100 100

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 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 Republic
Act No. 7641. As at September 30, 2024 and December 31, 2023, Smart and certain of its subsidiaries were in compliance
with the requirements of Republic Act No. 7641.

Smart’s and certain of its subsidiaries’ actuarial valuation is performed every year-end. There is no significant change in the
fair value of plan assets for the nine months ended September 30, 2024. Based on the latest actuarial valuation, the actual
present value of prepaid benefit costs as at September 30, 2024 and December 31, 2023, and net periodic benefit costs and
average assumptions used in developing the valuation as at and for the nine months ended September 30, 2024 and 2023 and
for year ended December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Changes in the present value of defined contribution obligations:
Present value of defined contribution obligations at beginning of the period 2,800 2,777
Service costs 213 262
Interest costs on contribution obligation — 210
Actuarial losses – economic assumptions — 8
Actuarial gains – experience — (98)
Actual benefits paid/settlements — (344)
Curtailment and others 324 (15)
Present value of defined contribution obligations at end of the period 3,337 2,800
Changes in fair value of plan assets:
Fair value of plan assets at beginning of the period 3,618 3,485
Actual contributions 211 248
Interest income on plan assets — 261
Return on plan assets (excluding amount included in net interest) — (4)
Actual contribution paid/settlements 326 (372)
Fair value of plan assets at end of the period 4,155 3,618
Funded status – net 818 818
Prepaid contribution costs (Note 18) 818 818

For the Nine Months Ended September 30,

2024 2023
(Unaudited)
Components of net periodic contribution costs:
Service costs 213 223
Net periodic contribution costs 213 223

Actual net income on plan assets amounted to nil for the nine months ended September 30, 2024 and 2023.

Based on the latest actuarial valuation, Smart and certain of its subsidiaries expect to contribute the amount of approximately
Php309 million to the plan in 2024.

The following table sets forth the expected future settlements by the Plan of maturing defined contribution obligation as at
September 30, 2024:

(in million pesos)

2024(1) 85
2025 144
2026 140
2027 186
2028 254
2029 to 2033 2,069
(1)
From October 1, 2024 to December 31, 2024.

The average duration of the defined contribution obligation at the end of the reporting period is 10 years.

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The weighted average assumptions used to determine pension benefits for the nine months ended September 30, 2024 and for
the year ended December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in percentage)
Rate of increase in compensation 5.0 5.0
Discount rate 7.3 7.3

The sensitivity analysis below has been determined based on reasonably possible changes of each significant assumption on
the defined contribution obligation as at September 30, 2024 and December 31, 2023, assuming if all other assumptions were
held constant:

Increase (Decrease)
(in percentage) (in million pesos)
Discount rate 1 33
(1) (33)

Future salary increases (1) (33)

1 33

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 70% and 30% for fixed income securities
and equity securities, respectively.

The following table sets forth the fair values, which are equal to the carrying values, of Smart’s plan assets recognized as at
September 30, 2024 and December 31, 2023:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Noncurrent Financial Assets
Investments in:
Domestic fixed income 2,743 2,471
International equities 1,006 723
Philippine foreign currency bonds 754 670
Domestic equities 689 613
International fixed income 176 259
Total noncurrent financial assets 5,368 4,736
Current Financial Assets
Cash and cash equivalents 241 217
Total current financial assets 241 217
Total plan assets 5,609 4,953
Less: Employee’s share, forfeitures and mandatory reserve account 1,454 1,335
Total Plan Assets of Defined Contribution Plans 4,155 3,618

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 2.90% to 11.00% per annum.

International Equities
Investments in international equities include exchange traded funds in iSHARES Core MSCI World UCITS ETF USD and
Invesco QQQ ETF USD, and WisdomTree Japan ETF.

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 2.38% to 10.63% per annum.

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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. This includes investment in PLDT shares with fair value of
Php39 million and Php33 million as at September 30, 2024 and December 31, 2023, respectively.

International Fixed Income

Investments in international fixed income include iSHARES U.S. Treasury Bond ETF and PIMCO GIS Global Bond Fund.

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.

The allocation of the fair value of Smart and certain of its subsidiaries' pension plan assets as at September 30, 2024 and
December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in percentage)
Investments in debt and fixed income securities and others 70 73
Investments in listed and unlisted equity securities 30 27
100 100

Other Long-term Employee Benefits

LTIP

The ECC approved on December 23, 2021 the LTIP covering the years 2022 to 2026, covering two cycles, based on the
achievement of telco core income targets, with additional performance metrics on Customer Experience and Sustainability to
impact the LTIP payout. Cycle 1 covers the performance period from 2022 to 2024. Payout will be based on the
achievement of performance targets. Cycle 2 covers the performance period from 2025 and 2026 and is subject to the ECC’s
further evaluation and approval of the final terms.

This long-term employee benefit liability was recognized and measured using the projected unit credit method and was
amortized on a straight-line basis over the vesting period.

The expense accrued for the LTIP amounted to Php857 million and Php668 million for the nine months ended
September 30, 2024 and 2023, respectively.

The accrued incentive payable amounted to Php3,039 million and Php2,182 million as at September 30, 2024 and
December 31, 2023, respectively. 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.

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26. Provisions and Contingencies

PLDT’s Local Business and Franchise Tax Assessments

As at September 30, 2024, PLDT has no contested LGU assessments for franchise taxes based on gross receipts received or
collected for services within its respective territorial jurisdiction.

Smart’s Local Business and Franchise Tax Assessments

Province of Cagayan
The Province of Cagayan, or the Province, issued a tax assessment against Smart in 2016 for alleged local franchise tax
covering years 2011 to 2015. Smart appealed the assessment to the Regional Trial Court, or RTC, on the ground that Smart
cannot be held liable for local franchise tax mainly because it has no sales office within the Province pursuant to Section 137
of the Local Government Code (Republic Act No. 7160). The RTC rendered its Decision on November 29, 2021 dismissing
the appeal of Smart for lack of jurisdiction without prejudice. Subsequently, a motion for reconsideration was filed by the
Province. On April 25, 2023, the RTC ruled in favor of the Province and denied Smart’s subsequent Motion for
Reconsideration. On May 24, 2023, Smart filed its Petition for Review before the Court of Tax Appeals. On June 27, 2023,
the Second Division of the CTA, in a resolution, ordered the Province to file their Comment to the Petition for Review filed
by Smart. The same was complied with. On December 14, 2023, Smart filed its Memorandum requesting for favorable
decision by stating all legal and factual bases. The case is pending as of the date of this report.

City of Makati
The City of Makati sent letters to Smart and SBI for alleged franchise tax liability, which Smart and SBI refuted through
respective protest letters and judicial actions on the ground that Makati City is imposing tax on revenues outside its
jurisdiction. After several court proceedings, on March 2, 2023, the City of Makati, Smart and SBI, mutually agreed to
execute respective Compromise Agreements to abbreviate the long and protracted court cases. On March 17, 2023, the court
approved the Compromise Agreement. Pursuant thereto, on March 28, 2023 and June 30, 2023, external counsels informed
Smart and SBI, respectively, that the Courts approved Compromise Agreements, which eventually ended the cases. On April
27, 2023, the City of Makati issued the Business Permits of Smart and SBI. For 2024, all Business Permits were issued by
the City of Makati to Smart and SBI.

Digitel’s Local Government Unit, or LGU, Assessments

Digitel is discussing with various LGUs as to the settlement of its local taxes.

DMPI vs. City of Trece Martires

DMPI petitioned in 2010 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 the
date of this report.

ACeS Philippines’ Withholding Tax Assessments

ACeS Philippines had a case filed 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. On October 19, 2016, ACeS Philippines filed a petition before the Supreme Court assailing the
decision of the CTA. On February 23, 2017 and March 15, 2017, respectively, the Company paid a compromise settlement
amounting to Php27 million and filed a formal request for compromise of tax liabilities before the Bureau of Internal
Revenue, or BIR, while the case is pending before the Supreme Court.

ACeS Philippines entered into an amicable settlement with the BIR on February 19, 2021 pursuant to the provisions of the
Civil Code of the Philippines and paid an additional compromise settlement amounting to Php20 million. The Commissioner
of Internal Revenue signed the judicial compromise agreement on April 18, 2021. The corresponding Certificate of
Availment (Compromise Settlement) was issued by the BIR. The parties filed with the Supreme Court on July 21, 2022 a
Joint Motion for Judgment based on Judicial Compromise Agreement. On January 31, 2023, ACeS Philippines received the
Decision of the Supreme Court dated August 30, 2022 affirming the decision of the CTA En Banc. On February 15, 2023,
ACeS Philippines filed its Motion for Reconsideration praying to consider the Joint Motion for Judgment based on Judicial
Compromise Agreement filed on July 21, 2022. In a Notice dated February 21, 2023, the Supreme Court required the BIR to
comment on the Motion for Reconsideration (on the Decision dated August 30, 2022). The BIR filed its Comment dated

F-101
March 13, 2023 submitting that the Judicial Compromise Agreement executed by and between the parties be considered and
judgment be rendered based thereon.

In a Notice received on June 29, 2023, the Supreme Court issued a Resolution dated April 25, 2023 resolving to deny ACeS
Philippines’ Motion for Reconsideration with finality. The corresponding Entry of Judgment was received on
September 20, 2023. While the Supreme Court Decision and Resolution did not mention the Judicial Compromise
Agreement, the BIR – National Evaluation Board previously approved ACeS Philippines’ application and payment for
compromise settlement and issued the Certificate of Availment.

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.

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. As of date
of this report, there are no changes on the status of the case.

Department of Labor and Employment, or DOLE, Compliance Order, or Order, to PLDT

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 of the
CA.

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, or IRM, of PLDT lines which individuals will be
covered by the regularization orders because they are performing the core functions of PLDT; 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-102
PLDT filed a motion on August 20, 2018 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 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 or core functions of
PLDT.” 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.

The CA issued a Resolution on February 14, 2019 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. PLDT submitted on February 17, 2020 its Comment on the
Petitions for Review filed by the DOLE Secretary and MKP. PLDT also received the Comment filed by MKP and the DOLE
Secretary dated January 13, 2020 and September 3, 2020, respectively. PLDT filed on September 10, 2020 a Motion for
Leave and for Time to File a Consolidated Reply (re: MKP’s Comment dated January 13, 2020 and DOLE Secretary’s
Comment dated September 3, 2020). PLDT filed on December 23, 2020 its Reply to the Comment submitted by MKP and
the DOLE Secretary. PLDT received DOLE’s Reply dated March 2, 2021 on March 11, 2021.

On March 20, 2024, we received the Supreme Court’s Decision dated February 14, 2024, dismissing PLDT’s, DOLE’s and
MKP’s petitions and affirming the Court of Appeal’s July 31, 2018 Resolution.

The Supreme Court affirmed the Court of Appeals’ modification of the DOLE Secretary’s Resolution and set aside the order
to regularize the workers of PLDT’s service contractors, except those performing installation, repair, and maintenance
services, who may be declared regular employees of PLDT subject to various terms of the remand of the SAVE proceedings
to the DOLE NCR Regional Office.

For clarity, the Supreme Court remanded the case to the Office of the Regional Director of the DOLE – NCR and ordered the
said office to: (a) review and properly determine the effects of the regularization of the workers performing installation,
repair, and maintenance services; (b) review, compute, and properly determine, the monetary award on the labor standards
violation, to which petitioner PLDT, Inc., and the concerned contractors are solidarily liable; and (c) conduct further
appropriate proceedings, consistent with the February 14, 2024 Decision.

On April 4, 2024, we filed PLDT’s Motion for Partial Reconsideration of even date and on April 16, 2024, PLDT received a
copy of MKP’s Motion for Partial Reconsideration. To date, the Motions for Partial Reconsideration are pending resolution
before the Supreme Court.

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, or the Co-Use
Agreement.

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;

F-103
(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 Republic Act No. 3019 and
other applicable laws; and (m) the said TRO/WPI be made permanent.

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 Republic Act No. 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 assignments. 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.

PLDT filed on November 23, 2018 an Entry of Appearance on behalf of PLDT and Smart. PLDT and Smart filed their
Comment on January 17, 2019. 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.

PLDT received a copy of BellTel’s Comment/Opposition dated January 10, 2019 on January 15, 2019. PLDT received a
copy of Globe Telecom, Inc.’s, or Globe’s Comment/Opposition dated January 21, 2019 on February 12, 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.

The Supreme Court issued on June 18, 2019 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 Supreme Court Division in
charge of G.R. No. 230798, the case with the lowest docket number.

On September 17, 2024, PLDT received a Notice of Resolution dated August 6, 2024 issued by the Supreme Court requiring
the parties to move in the premises within ten (10) days from notice. PLDT filed its compliance on October 3, 2024.

Notice of Material Breach and Demand for Payment on DITO

PLDT and DITO entered into an agreement in February 2021 for the construction of a transmission facility that served as the
point of interconnection for their subscribers. Under the agreement, PLDT established and managed the interconnection
facility that operated as the primary physical interface for both companies. The planned facility was completed in
March 2021.

PLDT served on DITO on October 6, 2022 a Notice of Material Breach and Demand for Payment due to DITO's refusal to
pay the outstanding balance of Php430 million for contracted services provided by PLDT in relation to the building and
provisioning of transmission facilities used by DITO to deliver telecommunication services to its subscribers. Upon DITO’s
request, PLDT agreed to limit the scope of work, the resulting in a reduction of the outstanding balance to Php280 million,
which will be payable in three tranches. To date, DITO has only paid the first and second tranche amounting to
Php168 million, with a remaining balance of Php112 million.

Meanwhile, DITO filed a petition with the NTC on September 22, 2021 seeking the latter’s intervention in directing Smart to
grant DITO’s request for additional capacity for interconnection. In response, Smart filed an answer on October 4, 2021
stating that the petition should be denied for DITO’s failure to prevent, detect, or block International Simple Resale, or
ISR,/Bypass Traffic emanating from its network and DITO’s failure to set up an effective fraud management system; and
requesting for compensation for losses incurred due to these ISR/ bypass activities, in violation of its Interconnection
Agreement with Smart, the provisions of R.A. No. 7925, and NTC MC No. 14-07-2000. The NTC facilitated mediation
conferences on November 5, 2021, November 18, 2021, February 4, 2022, and February 16, 2022. On March 6, 2024, Smart
filed a Manifestation informing the NTC that Smart already provided additional capacity for interconnection to DITO, and
that Smart and DITO executed a memorandum of agreement on bypass activities. On May 9, 2024, Smart filed a Motion to
Dismiss in light of the aforementioned supervening events.

Following news reports on August 8, 2022 that DITO had filed a complaint with the PCC against Globe and Smart involving
the same issue pending with the NTC on ISR, Smart received a subpoena duces tecum dated December 7, 2022 (“December

F-104
Subpoena”) from the PCC Competition Enforcement Office in relation to an ongoing full administrative investigation
involving the telecommunications industry. The subpoena notified Smart that it was the subject of ongoing investigation
pursuant to Section 2.9 of the 2017 PCC Rules of Procedure, involving allegations of violations by Smart of Section 14(b)(1),
15(b), 15(c) and 15(i) of the Philippine Competition Act. Smart was directed to submit its corporate documents, documents
and information pertaining to its operations as a PTE and its relationship with other PTEs, and documents and information on
ISR. to the PCC on January 23, 2023, followed by the submission of a supplemental submission on January 27, 2023. On
May 26, 2023, Smart received a subpoena ad testificandum from the PCC directing duly authorized representative(s)
knowledgeable on: (i) Smart’s operations, including but not limited to interconnection with other public telecommunications
entities, products and services offered, and corporate structure; and (ii) submitted documents in relation to the December
Subpoena, to appear before the PCC Enforcement Office on June 8, 2023. Accordingly, Smart representatives appeared
before the PCC on the said date for the clarificatory hearing. On July 4, 2023, Smart received a PCC Resolution setting
another hearing and requiring Smart's representatives to appear and address pending matters on competitor information,
market distinction between postpaid and prepaid services, network coverage, interconnection agreements, clarificatory
questions on documents already submitted, and other related matters. Accordingly, representatives attended the clarificatory
hearings before the PCC on July 20 and November 20, 2023. On January 19, 2024, DITO informed Smart that it had signed
the Memorandum of Agreement (Cooperation Against Bypass Activity) and provided a fully-signed copy on said date. On
March 2, 2024, Smart filed a Manifestation informing the PCC-Competition Enforcement Office (PCC-CEO) that an
agreement had been reached with DITO on bypass activities and that DITO acknowledged its ISR liabilities for 2021 to
August 2023. Smart filed another Manifestation on March 8, 2024, informing the PCC-CEO that it granted DITO additional
capacity for interconnection following the execution of the agreement on bypass activities. Smart has not received any
subsequent order or resolution from the PCC.

Class Action Suit Against PLDT

On February 6, 2023, Sophia Olsson, an investor in PLDT American Depositary Shares (“ADSs”), filed a putative class
action in the United States District Court for the Central District of California (the “Court”) against PLDT and certain current
and former directors and officers on behalf of herself and all other persons similarly situated who purchased or otherwise
acquired ADSs between January 1, 2019 and December 19, 2022 (“U.S. Class Action”). On April 7, 2023, Ms. Olsson and
another individual, Kevin Douglas, submitted separate motions to the Court to serve as lead plaintiff in the U.S. Class Action.
On May 1, 2023, the Court granted Mr. Douglas’s (“Plaintiff”) motion to serve as the lead plaintiff.

On July 7, 2023, Plaintiff filed an amended complaint. The amended complaint alleges that PLDT and certain of its current
and former directors and officers made materially false and misleading statements regarding PLDT’s capital expenditures and
internal controls (among other matters) during the period April 23, 2020 through December 19, 2022. On October 10, 2023,
PLDT and defendants Manuel V. Pangilinan, Alfredo S. Panlilio, and Marilyn A. Victorio-Aquino (together, “Defendants”)
moved for dismissal of the amended complaint in its entirety.

On December 1, 2023, Defendants and Plaintiff notified the Court that they had reached an agreement in principle to settle the
U.S. Class Action. The notification indicated that, accordingly, Defendants and Plaintiff jointly sought to vacate the schedule
for further briefing on PLDT’s pending motion to dismiss to allow the parties to finalize the settlement. On
December 4, 2023, the Court granted the request to vacate the briefing schedule.

On February 16, 2024, PLDT entered into a Stipulation of Settlement to resolve the U.S. Class Action, and on the same day
Plaintiff submitted a motion seeking preliminary approval of the proposed settlement. Under the proposed settlement, which
is subject to approval by the Court following notice to the settlement class, the settlement class will receive payment of a
settlement amount of $3,000,000. The proposed settlement agreement contains no admission of liability, fault or wrongdoing
by the Company or any of the named defendants. On March 7, 2024, the Court entered an order preliminarily approving the
proposed settlement and scheduling a hearing for August 5, 2024 to determine whether to finally approve the settlement.

On June 6, 2024, the Court rescheduled the final approval hearing from August 5, 2024 to August 9, 2024. On
August 9, 2024, following Plaintiff’s filing of a motion for final approval of the settlement (together with other motions
relating to Plaintiff’s proposed plan for allocating settlement proceeds, attorneys’ fees for counsel for the class, litigation
expenses and an award for Plaintiff), the Court held a hearing to address whether to grant final approval of the settlement.
After counsel for the class orally presented these motions, the Court reserved judgment. On September 17, 2024, the Court
granted final approval to PLDT’s case-ending settlement of the U.S. Class Action.

On September 17, 2024, the Court granted final approval to PLDT’s case-ending settlement of securities class action
litigation. The Judgment and Order of the Court provides that the Court will retain jurisdiction over (among other matters)
implementation of the settlement and the distribution and disposition of the settlement fund. There is a 30-day period to
appeal but any such appeal by a class member on the Plan of Allocation or the amount of attorney's fees will not affect the
finality of the Judgment and Order as to the approval of the Settlement vis-a-vis PLDT and the individual defendants. Given
that the 30-day period expired with no appeal on record, the case is now considered closed and terminated.

F-105
 Other disclosures required by PAS 37, Provisions, Contingent Liabilities and Contingent Assets, were not provided as it may
prejudice our position in ongoing claims, litigations and assessments. See Note 3 – Management’s Use of Accounting
Judgments, Estimates and Assumptions – Provision for legal contingencies and tax assessments

27. 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, lease liabilities, 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 Material Accounting Policies – Financial Instruments.

The following table sets forth our consolidated financial assets and financial liabilities as at September 30, 2024 and
December 31, 2023:

Financial instruments Financial Total

at amortized instruments financial
cost at FVPL instruments
(in million pesos)
Assets as at September 30, 2024 (Unaudited)
Noncurrent:
Financial assets at fair value through profit or loss — 1,139 1,139
Debt instruments at amortized cost – net of current portion 370 — 370
Derivative financial assets – net of current portion — 232 232
Other financial assets – net of current portion 2,835 (1)
— 2,835
Current:
Cash and cash equivalents 12,306 — 12,306
Short-term investments 102 — 102
Trade and other receivables 28,596 — 28,596
Current portion of derivative financial assets — 11 11
Current portion of debt instruments at amortized cost 25 — 25
Current portion of other financial assets 847 (1)
— 847
Total assets 45,081 1,382 46,463

Liabilities as at September 30, 2024 (Unaudited)

Noncurrent:
Interest-bearing financial liabilities – net of current portion 251,476 — 251,476
Lease liabilities – net of current portion 45,477 — 45,477
Customers' deposits 2,255 — 2,255
Deferred credits and other noncurrent liabilities 205 — 205
Current:
Accounts payable 68,658 — 68,658
Accrued expenses and other current liabilities 70,283 2 70,285
Current portion of interest-bearing financial liabilities 19,107 — 19,107
Current portion of lease liabilities 7,098 — 7,098
Dividends payable 2,004 — 2,004
Current portion of derivative financial liabilities — 413 413
Liabilities associated with assets classified as held-for-sale 1,728 — 1,728
Total liabilities 468,291 415 468,706
Net assets (liabilities) (423,210) 967 (422,243)
(1) Includes refundable deposits and notes receivable.

F-106
 Financial
instruments Financial Total
at amortized instruments financial
cost at FVPL instruments
(in million pesos)
Assets as at December 31, 2023 (Audited)
Noncurrent:
Financial assets at fair value through profit or loss — 578 578
Debt instruments at amortized cost – net of current portion 395 — 395
Derivative financial assets – net of current portion — 96 96
Other financial assets – net of current portion 3,481 (1)
— 3,481
Current:
Cash and cash equivalents 16,177 — 16,177
Short-term investments 122 269 (2)
391
Trade and other receivables 26,086 — 26,086
Current portion of debt instruments at amortized cost 200 — 200
Current portion of other financial assets 320 (1)
— (3)
320
Total assets 46,781 943 47,724

Liabilities as at December 31, 2023 (Audited)

Noncurrent:
Interest-bearing financial liabilities – net of current portion 243,152 — 243,152
Lease liabilities – net of current portion 41,625 — 41,625
Derivative financial liabilities – net of current portion — 12 12
Customers' deposits 2,238 — 2,238
Deferred credits and other noncurrent liabilities 229 — 229
Current:
Accounts payable 77,050 — 77,050
Accrued expenses and other current liabilities 71,756 — 71,756
Current portion of interest-bearing financial liabilities 11,646 — 11,646
Current portion of lease liabilities 5,921 — 5,921
Dividends payable 1,912 — 1,912
Current portion of derivative financial liabilities — 1,021 1,021
Liabilities associated with assets classified as held-for-sale 1,779 — 1,779
Total liabilities 457,308 1,033 458,341
Net liabilities (410,527) (90) (410,617)
(1) Includes refundable deposits and notes receivable.
(2) Includes investments in the funds of Credit Suisse and Julius Baer. In 2021, PLDT withdrew US$6.6 million from the Supply Chain Finance fund of
Credit Suisse and impaired the remaining fund value of US$3.4 million. In the same year, Smart invested US$5.0 million in the Focus Fixed
Income Asia Defensive fund of Julius Baer. As at December 31, 2023, the fund’s value amounted to US$4.85 million. On September 10, 2024,
Smart withdrew its investment with Julius Baer amounting to US$5.0 million with US$54 thousand earnings from the investment.
(3) Includes RCBC Redemption Trust Account. See Note 19 – Equity – Redemption of Preferred Stock.

The following table sets forth our consolidated offsetting of financial assets and liabilities recognized as at
September 30, 2024 and December 31, 2023:
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)
September 30, 2024 (Unaudited)
Current Financial Assets
Trade and other receivables
Foreign administrations 4,229 3,244 985
Domestic carriers 394 97 297
Total 4,623 3,341 1,282
Current Financial Liabilities
Accounts payable
Suppliers and contractors 65,379 53 65,326
Carriers and others 7,335 4,378 2,957
Total 72,714 4,431 68,283

December 31, 2023 (Audited)

Current Financial Assets
Trade and other receivables
Foreign administrations 4,606 3,480 1,126
Domestic carriers 332 145 187
Total 4,938 3,625 1,313
Current Financial Liabilities
Accounts payable
Suppliers and contractors 74,542 24 74,518
Carriers and others 4,713 2,351 2,362
Total 79,255 2,375 76,880

F-107
There are no financial instruments subject to an enforceable master netting arrangement as at September 30, 2024 and
December 31, 2023.

The following table sets forth our consolidated carrying values and estimated fair values of our financial assets and liabilities
recognized as at September 30, 2024 and December 31, 2023 other than those whose carrying amounts are reasonable
approximations of fair values:

Carrying Value Fair Value

September 30, December 31, September 30, December 31,
2024 2023 2024 2023
(Unaudited) (Audited) (Unaudited) (Audited)
(in million pesos)
Noncurrent Financial Assets
Debt instruments at amortized cost 370 395 366 387
Other financial assets – net of current portion 2,835 3,481 2,687 3,184
Total 3,205 3,876 3,053 3,571
Noncurrent Financial Liabilities
Interest-bearing financial liabilities:
Long-term debt – net of current portion 251,476 243,152 241,755 232,195
Customers' deposits 2,255 2,238 1,439 1,425
Deferred credits and other noncurrent liabilities 205 229 177 225
Total 253,936 245,619 243,371 233,845

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 September 30, 2024 and
December 31, 2023. This classification provides a reasonable basis to illustrate the nature and extent of risks associated with
those financial statements.

September 30, 2024 December 31, 2023

(Unaudited) (Audited)
Level 1(1) Level 2(2) Level 3(3) Total Level 1(1) Level 2(2) Level 3(3) Total
(in million pesos)
Noncurrent Financial Assets
Financial assets at FVPL — 1,136 3 1,139 — 575 3 578
Derivative financial assets
– net of current portion — 232 — 232 — 96 — 96
Current Financial Assets
Short-term investments — — — — — 269 — 269
Current portion of derivative
financial assets — 11 — 11 — — — —
Total — 1,379 3 1,382 — 940 3 943

Noncurrent Financial Liabilities

Derivative financial liabilities
– net of current portion — — — — — 12 — 12
Current Financial Liabilities
Accrued expenses and other current
liabilities — 2 — 2 — — — —
Current portion of derivative
financial liabilities — 413 — 413 — 1,021 — 1,021
Total — 415 — 415 — 1,033 — 1,033
(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 September 30, 2024 and December 31, 2023, there were no transfers into and out of Level 3 and between Level 1 and
Level 2 fair value measurements.

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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 values of
Noncurrent portion of advances and
future cash flows using the applicable zero-coupon rates plus Level 3
other noncurrent assets
counterparties’ credit spread.
Fixed rate loans: U.S. Dollar notes Quoted market price. Level 1
Fair values were determined using quoted prices.
Level 1
Investment in debt securities For non-quoted securities, fair values were determined using
Level 2
discounted cash flow based on market observable rates.
Estimated fair value is based on the discounted value of
future cash flows using the applicable Commercial Interest
Other loans in all other currencies Level 3
Reference Rate and BVAL rates for similar types of loans
plus PLDT’s credit spread.
The carrying value approximates fair value because of recent
Variable rate loans and regular repricing based on market Level 2
conditions.

Derivative Financial Instruments

Forward foreign exchange contracts, foreign currency swaps, foreign currency options 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 statements. 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 September 30, 2024 and December 31, 2023, 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.

F-109
 The table below sets out the information about our consolidated derivative financial instruments as at September 30, 2024 and
December 31, 2023:

September 30, 2024 December 31, 2023

(Unaudited) (Audited)
Net
Mark-
Weighted to- Net
Weighted Average market Mark-to-
Original Underlying Average Foreign Gains market 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
Various dates in
Forward foreign exchange October to December Various dates in
contracts US$396 2023 U.S. Dollar Liabilities January to June 2024 — Php56.56 US$— — US$396 (448)
Various dates in Various dates in
January 2024 to March to December
US$795 September 2024 U.S. Dollar Liabilities 2024 — Php57.12 275 (319) — —
Various dates in
October to November Various dates in
US$114 2024 U.S. Dollar Liabilities January to April 2025 — Php57.72 — — — —
Various dates in
October to November Various dates in
US$9 2024 U.S. Dollar Revenues July to October 2025 — Php58.21 — — — —
Various dates in
Foreign exchange options Various dates in March September 2024 to
seagull(a) US$13 to September 2024 U.S. Dollar Liabilities February 2025 — Php55.62 8 4 — —
— Php56.07 — — — —
— Php57.07 — — — —
Various dates in
October to November Various dates in
US$5 2024 U.S. Dollar Liabilities December 2024 — Php57.93 — — — —
— Php58.25 — — — —
— Php59.25 — — — —

(315) (448)
Smart
Various dates in June Various dates in
Forward foreign exchange 2023 January
contracts US$449 to December 2024 U.S. Dollar Liabilities to October 2024 — Php56.55 US$2 1 US$449 (493)
Various dates in Various dates in
January to September March
US$614 2024 U.S. Dollar Liabilities to December 2024 — Php56.74 186 (61) — —
Various dates in Various dates in
October to November January
US$89 2024 U.S. Dollar Liabilities to April 2025 — Php57.33 — — — —
Various dates in
October to November Various dates in
US$3 2024 U.S. Dollar Revenues July to October 2025 — Php58.05 — — — —
Php55.17
Foreign exchange options Various dates in June Various dates in Php55.85
seagull(b) US$15 2023 U.S. Dollar Liabilities February 2024 — Php56.87 — — US$15 (1)
Various dates in March Various dates in Php55.87
to September 2024 Php56.17
US$34 September 2024 U.S. Dollar Liabilities to March 2025 — Php57.17 29 8 — —
(52) (494)
(367) (942)
Transactions designated as hedges:
PLDT
Long-term foreign currency Various dates in
options(c) July 2020 and February Php49.61
US$290 to March 2021 300M Notes 2031 January 23, 2031 1.20% Php55.28 US$290 71 US$290 (87)
71 (87)
Smart
Long-term foreign currency Php48.00
options(d) US$109 February to April 2021 US$140 PNB Loan December 13, 2030 1.63% Php53.34 US$69 126 US$77 92
126 92
197 5
(170) (937)

(a) If the Philippine Peso to U.S. dollar spot exchange rate on fixing date settles between Php56.07 to Php57.07, PLDT will
purchase the U.S. Dollar for Php56.07. However, if on maturity, the exchange rate settles above Php57.07, PLDT will
purchase the U.S. Dollar for Php56.07 plus the excess above Php57.07, and if the exchange rate is lower than Php56.07,
PLDT will purchase the U.S. Dollar at the prevailing Philippine peso to U.S. Dollar spot exchange rate, subject to a floor
of Php55.62.
(b) If the Philippine Peso to U.S. Dollar spot exchange rate on fixing date settles between Php56.17 to Php57.17, Smart will
purchase the U.S. Dollar for Php56.17. However, if on maturity, the exchange rate settles above Php57.17, Smart will
purchase the U.S. Dollar for Php56.17 plus the excess above Php57.17, and if the exchange rate is lower than Php56.17,
Smart will purchase the U.S. Dollar at the prevailing Philippine Peso to U.S. Dollar spot exchange rate, subject to a floor
of Php55.87.
(c) PLDT’s long-term foreign currency option agreements outstanding as at September 30, 2024 and December 31, 2023
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. Settlement of the foreign currency option agreements will depend on the spot exchange
rate on the fixing date. If the Philippine peso to U.S. dollar spot exchange rate on fixing date is between Php49.61 and
Php55.28, PLDT will purchase the U.S. dollar at Php49.61. However, if on fixing date, the exchange rate is beyond

F-110
 Php55.28, PLDT will purchase the U.S. dollar at the prevailing Philippine peso to U.S. dollar spot exchange rate minus a
subsidy of Php5.67, and if the exchange rate is lower than Php49.61, PLDT will purchase the U.S. dollar at the
prevailing Philippine peso to U.S. dollar spot exchange rate. The mark-to-market gains amounting to Php104 million
and mark-to-market losses amounting to Php119 million were recognized in our consolidated statement of other
comprehensive income as at September 30, 2024 and December 31, 2023, respectively. Hedge cost accrual on the long-
term foreign currency option agreements amounting to Php33 million were recognized as at September 30, 2024 and
December 31, 2023, respectively. The intrinsic value of the long-term foreign currency options recognized as other
comprehensive income is 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 Php58 million gain and
Php60 million loss were recognized in our consolidated income statements for the nine months ended
September 30, 2024 and 2023, respectively.
(d) Smart’s long-term foreign currency option agreements outstanding as at September 30, 2024 and December 31, 2023
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. Settlement of the foreign currency option agreements will depend on the spot exchange
rate on the fixing date. If the Philippine Peso to U.S. Dollar spot exchange rate on fixing date is between Php48.00 and
Php53.34, Smart will purchase the U.S. Dollar at Php48.00. However, if on fixing date the exchange rate is beyond
Php53.34, Smart will purchase the U.S. Dollar for Php48.00 plus the excess above Php53.34, and if the exchange rate is
lower than Php48.00, Smart will purchase the U.S. Dollar at the prevailing Philippine Peso to U.S. Dollar spot exchange
rate. The mark-to-market gains amounting to Php129 million and Php96 million were recognized in our consolidated
statement of other comprehensive income as at September 30, 2024 and December 31, 2023, respectively. Hedge cost
accrual on the long-term foreign currency option agreements amounting to Php3 million each were recognized as at
September 30, 2024 and December 31, 2023. The intrinsic value of the long-term foreign currency options 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 gain amounting to
Php39 million each were recognized in our consolidated income statements for the nine months ended
September 30, 2024 and 2023, respectively.

Our derivative financial instruments as at September 30, 2024 and December 31, 2023 are presented in the statements of
financial position as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Asset:
Noncurrent assets 232 96
Current assets 11 —
Liabilities:
Noncurrent liabilities (Note 28) — (12)
Current liabilities (Note 28) (413) (1,021)
Net (170) (937)

Movements of our consolidated mark-to-market gains (losses) for the nine months ended September 30, 2024 and
for the year ended December 31, 2023 are summarized as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Net mark-to-market losses at beginning of the period (937) (1,069)
Gains on derivative financial instruments 2,238 1,436
Settlements, accretion and others (213) 436
Effective portion recognized in the profit or loss for the cash flow hedges (44) (66)
Net fair value losses on cash flow hedges charged to other comprehensive income (1,214) (1,674)
Net mark-to-market losses at end of the period (170) (937)

Our consolidated analysis of gains on derivative financial instruments for the nine months ended September 30, 2024 and
2023 are as follows:

September 30,
2024 2023
(Unaudited)
(in million pesos)
Gains on derivative financial instruments 2,238 2,386
Hedge costs (172) (179)
Net gains on derivative financial instruments (Notes 5) 2,066 2,207

F-111
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.

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 Php12,306 million and
Php102 million, respectively, as at September 30, 2024, which we can use to meet our short-term liquidity needs. See
Note 15 – Cash and Cash Equivalents.

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The following table summarizes the maturity profile of our financial assets based on our consolidated undiscounted claims
outstanding as at September 30, 2024 and December 31, 2023:

Less than More than

Total 1 year 1-3 years 3-5 years 5 years
(in million pesos)
September 30, 2024 (Unaudited)
Financial instruments at amortized cost: 54,641 51,174 3,306 10 151
Debt instruments at amortized cost 395 25 360 10 —
Other financial assets 3,944 847 2,946 — 151
Temporary cash investments 2,412 2,412 — — —
Short-term investments 102 102 — — —
Retail subscribers 21,038 21,038 — — —
Corporate subscribers 18,319 18,319 — — —
Foreign administrations 1,068 1,068 — — —
Domestic carriers 297 297 — — —
Dealers, agents and others 7,066 7,066 — — —
Financial instruments at FVPL: 1,139 — — — 1,139
Financial assets at fair value through profit or loss 1,139 — — — 1,139
Total 55,780 51,174 3,306 10 1,290

December 31, 2023 (Audited)

Financial instruments at amortized cost: 54,271 50,127 3,530 412 202
Debt instruments at amortized cost 595 200 45 340 10
Other financial assets 4,069 320 3,485 72 192
Temporary cash investments 6,184 6,184 — — —
Short-term investments 122 122 — — —
Retail subscribers 19,894 19,894 — — —
Corporate subscribers 15,934 15,934 — — —
Foreign administrations 1,250 1,250 — — —
Domestic carriers 188 188 — — —
Dealers, agents and others 6,035 6,035 — — —
Financial instruments at FVPL: 1,021 443 — — 578
Financial assets at fair value through profit or loss 578 — — — 578
Short-term investments 443 443 — — —
Total 55,292 50,570 3,530 412 780

The following table summarizes the maturity profile of our financial liabilities based on our consolidated contractual
undiscounted obligations outstanding as at September 30, 2024 and December 31, 2023:

Payments Due by Period

Less than More than
Total 1 year 1-3 years 3-5 years 5 years
(in million pesos)
September 30, 2024 (Unaudited)
Debt: 369,373 15,670 90,397 57,949 205,357
Principal 272,589 15,060 51,112 37,325 169,092
Interest 96,784 610 39,285 20,624 36,265
Lease obligations 77,283 16,956 18,936 15,803 25,588
Various trade and other obligations: 140,850 138,363 404 25 2,058
Suppliers and contractors 65,434 65,326 108 — —
Utilities and related expenses 59,119 59,092 27 — —
Carriers and others 2,957 2,957 — — —
Employee benefits 6,441 6,441 — — —
Customer deposits 2,255 — 172 25 2,058
Dividends 2,004 2,004 — — —
Others 2,640 2,543 97 — —
Total contractual obligations 587,506 170,989 109,737 73,777 233,003

December 31, 2023 (Audited)

Debt: 341,848 7,430 77,131 65,342 191,945
Principal 256,927 7,250 43,292 47,648 158,737
Interest 84,921 180 33,839 17,694 33,208
Lease obligations 72,686 15,651 15,767 13,673 27,595
Various trade and other obligations: 151,062 148,560 427 28 2,047
Suppliers and contractors 74,716 74,518 194 4 —
Utilities and related expenses 61,079 61,044 35 — —
Carriers and others 2,362 2,362 — — —
Employee benefits 5,510 5,510 — — —
Customers’ deposits 2,238 — 167 24 2,047
Dividends 1,912 1,912 — — —
Others 3,245 3,214 31 — —
Total contractual obligations 565,596 171,641 93,325 79,043 221,587

F-113
 Debt

See Note 20 – 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 as at September 30, 2024 and
December 31, 2023 are as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Within one year 16,956 15,651
After one year but not more than five years 34,739 29,440
More than five years 25,588 27,595
Total 77,283 72,686

Various Trade and Other Obligations

PLDT Group has various obligations to suppliers for the acquisition of 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 Php140,850 million and Php151,062 million as
at September 30, 2024 and December 31, 2023, respectively. See Note 22 – Accounts Payable and Note 23 – Accrued
Expenses and Other Current Liabilities.

Commercial Commitments

Major Network Vendors

Since the last quarter of 2022, we have engaged in discussions with the major network vendors regarding the status of the
PLDT Group's capital expenditure commitments and related outstanding balances. These discussions resulted in a number of
Settlement and Mutual Release Agreements, or SMRAs, signed between us and the vendors, taking into consideration our
program priorities and current business requirements. The significant commitment in respect of major network vendors
amounted to about Php33,000 million, net of advances, as a result of the signing of the SMRAs in March 2023. As at
September 30, 2024, such commitment has been reduced to Php4,200 million, net of advances and deliveries.

Moreover, new purchase orders relating to the same major network vendors issued in 2023 and 2024 amounted to
Php16,600 million, net of advances and deliveries.

Other Capital Expenditure Vendors

Commitments related to non-major capital expenditure vendors amounted to Php19,600 million, net of advances and
deliveries as of September 30, 2024.

We have no outstanding commercial commitments, in the form of letters of credit, as at September 30, 2024 and
December 31, 2023.

Collateral

There are no pledges as collaterals with respect to our financial liabilities as at as at September 30, 2024 and
December 31, 2023.

Foreign Currency Exchange Risk

Foreign currency exchange risk is the risk that the fair value or 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

F-114
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.

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 are 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 statements 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 September 30, 2024 and
December 31, 2023 are as follows:

Notional Carrying
Amount Amount Line item in our Consolidated Statements
(U.S. Dollar) (Php) of Financial Position
(in million pesos)
September 30, 2024 (Unaudited)
Long-term foreign currency options 359 232 Derivative financial assets – net of current portion
359 232

December 31, 2023 (Audited)

Long-term foreign currency options 367 96 Derivative financial assets – net of current portion
— (12) Derivative financial liabilities – net of current portion
367 84

The impact of the hedged items on our consolidated statements of financial position as at September 30, 2024 and
December 31, 2023 are as follows:

September 30, 2024 December 31, 2023

(Unaudited) (Audited)
Cash flow Cost of Cash flow Cost of
hedge hedging hedge hedging
reserve reserve reserve reserve
(in million pesos)
PLDT:
US$300M Notes 2031 (5,494) 33 (4,546) 75
(5,494) 33 (4,546) 75

Smart:
US$140M PNB (1,864) 3 (1,599) 3
(1,864) 3 (1,599) 3

The effect of the cash flow hedge on our consolidated statements of financial position as at September 30, 2024 and
December 31, 2023 are as follows:

Line item in our

Total hedging loss Consolidated Statements
recognized in OCI of Financial Position
(in million pesos)
September 30, 2024 (Unaudited)
Long-term foreign currency options (7,358) Other comprehensive loss
(7,358)

December 31, 2023 (Audited)

Long-term foreign currency options (6,145) Other comprehensive loss
(6,145)

F-115
The following table shows our consolidated foreign currency-denominated monetary financial assets and liabilities and their
Philippine Peso equivalents as at September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

(Unaudited) (Audited)
U.S. Dollar Php(1) U.S. Dollar Php(2)
(in millions)
Noncurrent Financial Assets
Derivative financial assets – net of current portion 4 232 2 96
Total noncurrent financial assets 4 232 2 96
Current Financial Assets
Cash and cash equivalents 66 3,707 76 4,232
Short-term investments — — 5 269
Trade and other receivables – net 81 4,556 115 6,411
Derivative assets — 11 — —
Current portion of other financial assets — 11 — 12
Total current financial assets 147 8,285 196 10,924
Total Financial Assets 151 8,517 198 11,020
Noncurrent Financial Liabilities
Interest-bearing financial liabilities – net of current portion 670 37,560 681 37,719
Derivative financial liabilities – net of current portion — — — 12
Other noncurrent liabilities 1 48 — 27
Total noncurrent financial liabilities 671 37,608 681 37,758
Current Financial Liabilities
Accounts payable 1,239 69,416 1,314 72,797
Accrued expenses and other current liabilities 230 12,865 207 11,481
Current portion of interest-bearing financial liabilities 14 772 39 2,149
Current portion of derivative financial liabilities 7 413 18 1,021
Total current financial liabilities 1,490 83,466 1,578 87,448
Total Financial Liabilities 2,161 121,074 2,259 125,206
(1) The exchange rate used to convert the U.S. Dollar amounts into Philippine Peso was Php56.02 to US$1.00, the Philippine Peso-U.S. Dollar exchange
rate as quoted through the Bankers Association of the Philippines, or BAP, as at September 30, 2024.
(2) The exchange rate used to convert the U.S. Dollar amounts into Philippine Peso was Php55.42 to US$1.00, the Philippine Peso-U.S. Dollar exchange
rate as quoted through the BAP as at December 31, 2023.

As at November 12, 2024, the Philippine Peso-U.S. Dollar exchange rate was Php58.55 to US$1.00. Using this exchange
rate, our consolidated net foreign currency-denominated financial liabilities would have increased in Philippine Peso terms by
Php6,286 million as at September 30, 2024.

Approximately 14% and 15% of our total consolidated debts (net of consolidated debt discount) was denominated in U.S.
Dollars as at September 30, 2024 and December 31, 2023, respectively. Our consolidated foreign currency-denominated debt
decreased to Php37,955 million as at September 30, 2024 from Php39,479 million as at December 31, 2023. See
Note 20 – Interest-bearing Financial Liabilities. The aggregate notional amount of our consolidated outstanding long-term
principal only-currency swap contracts, long-term foreign currency options and short-term forwards allocated for debt were
US$366 million and US$485 million as at September 30, 2024 and December 31, 2023, respectively. Consequently, the
unhedged portion of our consolidated debt amounts were approximately 7% (or 5%, net of consolidated U.S. Dollar cash
balances allocated for debt) and 5% (or 5%, net of consolidated U.S. Dollar cash balances allocated for debt) as at
September 30, 2024 and December 31, 2023, respectively.

Approximately 15% and 13% of our consolidated revenues were denominated in U.S. Dollars and/or were linked to U.S.
Dollars for the nine months ended September 30, 2024 and 2023, respectively. Approximately 15% and 12% of our
consolidated expenses were denominated in U.S. Dollars and/or linked to the U.S. Dollar for the nine months ended
September 30, 2024 and 2023, 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.

The Philippine Peso depreciated by 1.08% against the U.S. Dollar to Php56.02 to US$1.00 as at September 30, 2024 from
Php55.42 to US$1.00 as at December 31, 2023. 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 gains of Php1,389 million and Php28 million for the nine months ended September 30, 2024 and 2023,
respectively.

Management conducted a survey among our banks to determine the outlook of the Philippine Peso-U.S. Dollar exchange rate
until September 30, 2024. Our outlook is that the Philippine Peso-U.S. Dollar exchange rate may weaken/strengthen by
2.65% as compared to the exchange rate of Php56.02 to US$1.00 as at September 30, 2024. If the Philippine Peso-U.S.
Dollar exchange rate had weakened/strengthened by 2.65% as at September 30, 2024, with all other variables held constant,

F-116
consolidated profit after tax for the nine months ended September 30, 2024 and stockholders’ equity as at September 30, 2024
would have been approximately Php1,974 million and Php290 million, respectively, 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 changes
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 costs 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 are recognized in our hedge
designation documentation. We make use of hedging instruments and structures solely for reducing or managing the financial
risk associated with our debt obligations and not for trading purposes.

There are no outstanding interest rate hedges as at September 30, 2024 and December 31, 2024.

F-117
The following tables set out the carrying amounts, by maturity, of our financial instruments that are expected to have exposure to interest rate risk as at September 30, 2024 and
December 31, 2023. Financial instruments that are not subject to interest rate risk were not included in the table.

As at September 30, 2024 (Unaudited)

In U.S. Dollars Fair Value

Discount/
Debt Carrying
Issuance Cost Value
Below 1 year 1-2 years 2-3 years 3-5 years Over 5 years Total In Php In Php In Php In U.S. Dollar In Php
(in millions)
Assets:
Debt Instruments at Amortized Cost
Philippine Peso 1 — 6 — — 7 395 — 395 7 391
Interest rate 4.250% 6.250% 4.625% - 4.875% 6.500% — — — — — — —
Cash in Bank
U.S. Dollar 14 — — — — 14 791 — 791 14 791
Interest rate 0.0500% -
0.5000% — — — — — — — — — —
Philippine Peso 63 — — — — 63 3,549 — 3,549 63 3,549
Interest rate 0.0500% -
5.1000% — — — — — — — — — —
Temporary Cash Investments
U.S. Dollar 26 — — — — 26 1,472 — 1,472 26 1,472
Interest rate 4.5000% -
5.2500% — — — — — — — — — —
Philippine Peso 17 — — — — 17 940 — 940 17 940
Interest rate 0.2500% -
6.0000% — — — — — — — — — —
Short-term Investments
Philippine Peso 2 — — — — 2 102 — 102 2 102
Interest rate 6.0000% -
6.1000% — — — — — — — — — —
123 — 6 — — 129 7,249 — 7,249 129 7,245

Liabilities:
Long-term Debt
Fixed Rate
U.S. Dollar Notes — — — — 600 600 33,610 534 33,076 484 27,122
Interest rate 2.5000% -
— — — — 3.4500% — — — — — —
Philippine Peso 244 274 407 261 278 1,464 82,005 624 81,381 1,370 76,766
Interest rate 4.0000% to 4.0000% to 4.0000% to 4.0000% to 4.0000% to
4.6500% 5.3500% 5.3500% 5.2000% 5.1560% — — — — — —
Variable Rate
U.S. Dollar Loans — 28 14 32 14 88 4,902 23 4,879 88 4,902
Interest rate — SOFR+ 1.31161% SOFR+ 1.31161% SOFR+ 1.31161% SOFR+ 1.31161% — — — — — —
Philippine Peso 25 83 107 374 2,126 2,715 152,072 825 151,247 2,715 152,072
Interest rate BVAL + 1.0000% 0.6000% to 0.6000% to 0.6000% to 0.6000% to — — — — — —
1.0000% over 1.0000% over 1.0000% over 0.9000% over
PHP BVAL (floor PHP BVAL (floor PHP BVAL (floor PHP BVAL (floor
rate 4.5000% to rate 4.5000% to rate 4.5000% to rate 4.5000% to
4.6250%) 4.6250%) 4.6250%) 4.6250%)
269 385 528 667 3,018 4,867 272,589 2,006 270,583 4,657 260,862

F-118
As at December 31, 2023 (Audited)

In U.S. Dollars Fair Value

Discount/
Debt Carrying
Issuance Cost Value
Below 1 year 1-2 years 2-3 years 3-5 years Over 5 years Total In Php In Php In Php In U.S. Dollar In Php
(in millions)
Assets:
Debt Instruments at Amortized Cost
Philippine Peso 4 — — 6 — 10 595 — 595 10 587
Interest rate 2.3750% to 2.9000% 4.2500% 6.2500% 4.6250% to 4.8750% 6.5000% — — — — — —
Cash in Bank
U.S. Dollar 15 — — — — 15 850 — 850 15 850
Interest rate 0.0500% to 0.5000% — — — — — — — — — —
Philippine Peso 128 — — — — 128 7,082 — 7,082 128 7,082
Interest rate 0.0500% to 1.5000% — — — — — — — — — —
Temporary Cash Investments
U.S. Dollar 35 — — — — 35 1,933 — 1,933 35 1,933
Interest rate 4.9000% to
5.1250% — — — — — — — — — —
Philippine Peso 77 — — — — 77 4,251 — 4,251 77 4,251
Interest rate 0.2500% to
6.2500% — — — — — — — — — —
Short-term Investments
Philippine Peso 2 — — — — 2 122 — 122 2 122
Interest rate 0.5000% to 6.1000% — — — — — — — — — —
261 — — 6 — 267 14,833 — 14,833 267 14,825

Liabilities:
Long-term Debt
Fixed Rate
U.S. Dollar Notes — — — — 600 600 33,251 560 32,691 466 25,845
Interest rate — — — — 2.5000% to 3.4500% — — — — — —
Philippine Peso 72 377 227 564 334 1,574 87,225 748 86,477 1,471 81,545
Interest rate 4.0000% to
5.1021% to 5.2813% 5.3500% 4.0000% to 5.3500% 4.0000% to 5.2000% 4.0000% to 5.1560% — — — — — —
Variable Rate
U.S. Dollar Loans 25 28 14 42 14 123 6,816 28 6,788 123 6,816
Interest rate SOFR + 1.47826% SOFR + 1.31161% SOFR + 1.31161% SOFR + 1.31161% SOFR + 1.31161% — — — — — —
Philippine Peso 33 99 36 254 1,916 2,338 129,635 793 128,842 2,339 129,635
Interest rate 0.5000% over PHP 0.6000% to 0.6000% to 1.0000% 0.6000% to 1.0000% 0.6000% to 0.9000% — — — — — —
BVAL 1.0000% over PHP over PHP BVAL over PHP BVAL over PHP BVAL
BVAL (floor rate (floor rate 4.5000% to (floor rate 4.5000% to (floor rate 4.5000% to
4.5000% to 4.6250%) 4.6250%) 4.6250%)
4.6250%)
Short-term Debt
Notes Payable
130 504 277 860 2,864 4,635 256,927 2,129 254,798 4,399 243,841

F-119
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 our regular floating rate financial instruments is done on intervals of three months while repricing of our
structured floating rate instruments is done every one year or up to five years. Interest on fixed rate financial instruments is
fixed until maturity of the particular instrument.

Approximately 58% and 53% of our consolidated debts (net of consolidated debt discount) were variable rate debts as at
September 30, 2024 and December 31, 2023, respectively. Our consolidated variable rate debt increased to
Php156,126 million as at September 30, 2024 from Php135,630 million as at December 31, 2023.

Management conducted a survey among our banks to determine the outlook of the U.S. Dollar and Philippine Peso interest
rates until September 30, 2024. Our outlook is that the U.S. Dollar and Philippine Peso interest rates may move 30 basis
points, or bps, and 50 bps higher/lower, respectively, as compared to levels as at September 30, 2024. If the U.S. Dollar
interest rates had been 30 bps higher/lower as compared to market levels as at September 30, 2024, with all other variables
held constant, consolidated profit after tax for the nine months ended September 30, 2024 and stockholders’ equity as at
September 30, 2024 would have been approximately Php8 million and Php43 million, respectively, lower/higher, mainly as a
result of higher/lower interest expense on floating rate borrowings and loss/gain on derivative transactions. If the Philippine
Peso interest rates had been 50 bps higher/lower as compared to market levels as at September 30, 2024, with all other
variables held constant, consolidated profit after tax for the nine months ended September 30, 2024 and stockholders’ equity
as at September 30, 2024 would have been approximately Php1 million and Php48 million, respectively, 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 ongoing 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. Our credit quality review process allows us to assess the potential loss as a result of the risks to which we are
exposed and allows 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 as at September 30, 2024 and December 31, 2023 are
as follows:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Financial assets at fair value through profit or loss 1,139 578
Derivative financial assets – net of current portion 232 96
Current portion of derivative financial assets 11 —
Short-term investments — 269
Total 1,382 943

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 September 30, 2024 and December 31, 2023. 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.

For financial assets recognized on our consolidated statements of financial position as at September 30, 2024 and
December 31, 2023, the gross exposure to credit risk equal their carrying amount.

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For financial guarantees granted, the maximum exposure to credit risk is the maximum amount that we would have to pay if
the guarantees are called upon. For loan commitments and other credit related commitments that are irrevocable over the life
of the respective facilities, the maximum exposure to credit risk is the full amount of the committed facilities.

September 30, 2024

(Unaudited)
Stage 1 Stage 2 Stage 3
12-Month ECL Lifetime ECL Lifetime ECL Total
(in million pesos)
High grade 15,975 13,093 — 29,068
Standard grade 510 6,038 — 6,548
Substandard grade — 9,465 — 9,465
Default 262 3,533 15,659 19,454
Gross carrying amount 16,747 32,129 15,659 64,535
Less allowance 262 3,533 15,659 19,454
Carrying amount 16,485 28,596 — 45,081

December 31, 2023

(Audited)
Stage 1 Stage 2 Stage 3
12-Month ECL Lifetime ECL Lifetime ECL Total
(in million pesos)
High grade 20,424 11,070 — 31,494
Standard grade 271 3,683 — 3,954
Substandard grade — 11,333 — 11,333
Default 442 4,190 13,025 17,657
Gross carrying amount 21,137 30,276 13,025 64,438
Less allowance 442 4,190 13,025 17,657
Carrying amount 20,695 26,086 — 46,781

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 September 30, 2024 and December 31, 2023.

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.

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 September 30, 2024 and December 31, 2023:

September 30, 2024 (Unaudited)

Gross Collateral and Net
Maximum Other Credit Maximum
Exposure Enhancements* Exposure
(in million pesos)
Financial instruments at amortized cost: 45,081 434 44,647
Debt instruments at amortized cost 395 — 395
Other financial assets 3,682 — 3,682
Cash and cash equivalents 12,306 63 12,243
Short-term investments 102 — 102
Corporate subscribers 12,342 334 12,008
Retail subscribers 9,243 37 9,206
Foreign administrations 985 — 985
Domestic carriers 297 — 297
Dealers, agents and others 5,729 — 5,729
Financial instruments at FVPL: 1,382 — 1,382
Financial assets at FVPL 1,139 — 1,139
Forward foreign exchange contracts 11 — 11
Long-term foreign currency options 232 — 232
Total 46,463 434 46,029

* Includes bank insurance and customer deposits. We have no collateral held as at September 30, 2024.

F-121
 December 31, 2023 (Audited)
Gross Collateral and Net
Maximum Other Credit Maximum
Exposure Enhancements* Exposure
(in million pesos)
Financial instruments at amortized cost: 46,781 521 46,260
Debt instruments at amortized cost 595 — 595
Other financial assets 3,801 — 3,801
Cash and cash equivalents 16,177 146 16,031
Short-term investments 122 — 122
Corporate subscribers 9,988 338 9,650
Retail subscribers 10,196 37 10,159
Foreign administrations 1,126 — 1,126
Domestic carriers 187 — 187
Dealers, agents and others 4,589 — 4,589
Financial instruments at FVPL: 943 — 943
Financial assets at FVPL 578 — 578
Long-term foreign currency options 96 — 96
Short-term investments 269 — 269
Total 47,724 521 47,203
* Includes bank insurance, security deposits and customer deposits. We have no collateral held as at December 31, 2023.

The table below provides information regarding the credit quality by class of our financial assets according to our credit
ratings of counterparties as at September 30, 2024 and December 31, 2023:
Neither past due Past due
nor credit impaired but not
credit
Total Class A(1) Class B(2) impaired Impaired
(in million pesos)
September 30, 2024 (Unaudited)
Financial instruments at amortized cost: 64,535 29,068 6,548 9,465 19,454
Debt instruments at amortized cost 395 395 — — —
Other financial assets 3,944 3,681 1 — 262
Cash and cash equivalents 12,306 11,797 509 — —
Short-term investments 102 102 — — —
Retail subscribers 21,038 7,484 231 1,528 11,795
Corporate subscribers 18,319 4,069 2,717 5,556 5,977
Foreign administrations 1,068 107 542 336 83
Domestic carriers 297 — 155 142 —
Dealers, agents and others 7,066 1,433 2,393 1,903 1,337
Financial instruments at FVPL: 1,382 163 743 476 —
Financial assets at FVPL 1,139 (80) 743 476 —
Forward foreign exchange contracts 11 11 — — —
Long-term foreign currency options 232 232 — — —
Total 65,917 29,231 7,291 9,941 19,454

December 31, 2023 (Audited)

Financial instruments at amortized cost: 64,264 31,494 3,954 11,333 17,483
Debt instruments at amortized cost 595 595 — — —
Other financial assets 4,069 3,800 1 — 268
Cash and cash equivalents 16,177 15,907 270 — —
Short-term investments 122 122 — — —
Retail subscribers 19,894 8,083 266 1,847 9,698
Corporate subscribers 15,934 2,341 1,390 6,257 5,946
Foreign administrations 1,250 90 529 507 124
Domestic carriers 188 1 92 94 1
Dealers, agents and others 6,035 555 1,406 2,628 1,446
Financial instruments at FVPL: 1,117 701 242 — 174
Financial assets at FVPL 578 336 242 — —
Long-term foreign currency options 96 96 — — —
Short-term investments 443 269 — — 174
Total 65,381 32,195 4,196 11,333 17,657
(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.

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The aging analysis of past due but not impaired class of financial assets as at September 30, 2024 and December 31, 2023 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)
September 30, 2024 (Unaudited)
Financial instruments at amortized cost: 64,535 35,616 3,838 1,007 4,620 19,454
Debt instruments at amortized cost 395 395 — — — —
Other financial assets 3,944 3,682 — — — 262
Cash and cash equivalents 12,306 12,306 — — — —
Short-term investments 102 102 — — — —
Retail subscribers 21,038 7,715 1,461 171 (104) 11,795
Corporate subscribers 18,319 6,786 1,877 678 3,001 5,977
Foreign administrations 1,068 649 249 19 68 83
Domestic carriers 297 155 75 29 38 —
Dealers, agents and others 7,066 3,826 176 110 1,617 1,337
Financial instruments at FVPL: 1,382 906 476 — — —
Financial assets at FVPL 1,139 663 476 — — —
Forward foreign exchange contracts 11 11 — — — —
Long-term foreign currency options 232 232 — — — —
Total 65,917 36,522 4,314 1,007 4,620 19,454

December 31, 2023 (Audited)

Financial instruments at amortized cost: 64,264 35,448 3,505 618 7,210 17,483
Debt instruments at amortized cost 595 595 — — — —
Other financial assets 4,069 3,801 — — — 268
Cash and cash equivalents 16,177 16,177 — — — —
Short-term investments 122 122 — — — —
Retail subscribers 19,894 8,349 1,603 223 21 9,698
Corporate subscribers 15,934 3,731 1,500 248 4,509 5,946
Foreign administrations 1,250 619 164 87 256 124
Domestic carriers 188 93 39 20 35 1
Dealers, agents and others 6,035 1,961 199 40 2,389 1,446
Financial instruments at FVPL: 1,117 943 — — — 174
Financial assets at FVPL 578 578 — — — —
Long-term foreign currency options 96 96 — — — —
Short-term investments 443 269 — — — 174
Total 65,381 36,391 3,505 618 7,210 17,657

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.

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. 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. Starting 2019, we base our dividend payout on telco core income. 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.

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 nine months ended
September 30, 2024 and 2023.

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28. Notes to the Statements of Cash Flows

The following table shows the changes in liabilities arising from financing activities as at September 30, 2024 and
December 31, 2023:

Foreign
January 1, exchange September 30,
2024 movement 2024
(Audited) Cash flows Others (Unaudited)
(in million pesos)
Interest-bearing financial liabilities (Note 20) 254,798 15,066 443 276 270,583
Lease liabilities (Notes 3 and 10) 47,546 (8,994) — 14,023 52,575
Derivative financial liabilities 1,033 84 — (704) 413
Accrued interests and other related costs (Note 23) 2,157 (7,285) — 7,711 2,583
Dividends (Note 19) 1,912 (20,744) — 20,836 2,004
307,446 (21,873) 443 42,142 328,158

Foreign
January 1, exchange December 31,
2023 movement 2023
(Audited) Cash flows Others (Audited)
(in million pesos)
Interest-bearing financial liabilities (Note 20) 249,580 5,175 (319) 362 254,798
Lease liabilities (Notes 3 and 10) 42,435 (10,707) — 15,818 47,546
Derivative financial liabilities 1,150 (607) — 490 1,033
Accrued interests and other related costs (Note 23) 1,868 (9,715) — 10,004 2,157
Dividends (Note 19) 1,821 (23,328) — 23,419 1,912
296,854 (39,182) (319) 50,093 307,446

Others include the effect of accretion of long-term borrowings, effect of recognition and accretion of lease liabilities,
unrealized mark-to-market losses of derivative financial instruments, 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 as at
September 30, 2024 and December 31, 2023:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Acquisition of property and equipment on account 16,776 37,133
Additions to ROU assets (Note 10) 11,302 15,759
Capitalization to property and equipment of:
Inventories 3,120 2,169
Foreign exchange differences – net (Note 9) 635 195
31,833 55,256

Non-cash Financing Activities

The following table shows our significant non-cash financing activities and corresponding transaction amounts as at
September 30, 2024 and December 31, 2023:

September 30, December 31,

2024 2023
(Unaudited) (Audited)
(in million pesos)
Additions to lease liabilities (Note 10) 11,302 15,759

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