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January 31, 2009

Philippines: PLDT expects steady capex amidst slow demand
Philippine Long Distance Telephone Co, the country's largest listed firm, is likely to keep its capital spending steady this year at 27-28 billion pesos ($571-592 million), Reuters quoted its chairman as saying Friday.

The business environment would remain difficult as mobile consumers try to keep a lid on spending, Manuel Pangilinan said.

"It's going to be a tough year," Pangilinan told reporters, adding more consumers shifted to promotional pricing schemes from traditional post-paid accounts and prepaid mobile phone cards.

Under promotional pricing schemes, consumers can send an unlimited number of text messages for a certain number of days or unlimited phone calls during the late evening to early morning.

"They are really trying to save, but the volume of messages and voice calls is slightly higher," Pangilinan said.

PLDT, partly owned by Hong Kong's First Pacific Co Ltd and Japan's NTT Communications and NTT DoCoMo, trimmed its spending budget by 1.5 billion pesos to 27 billion pesos last year, delaying investments in wireless broadband and general mobile infrastructure, as demand softened.

Pangilinan said PLDT, the Philippines biggest wireless phone provider, would probably add 3-4 million net additional subscribers, down from last year's 5 million.

PLDT has forecast its core earnings this year would rise from 2008's estimated 37 billion pesos, helped by a lower corporate income tax rate of 30 percent, down from 35 percent.

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