Globe Telecom’s Dividend Promise: A Risky Bet in a Shifting Landscape

By any measure, Globe Telecom has been a darling of dividend investors. A steady stream of quarterly payouts—₱25 per share, totaling ₱75 so far this year—has reinforced its reputation as a shareholder-friendly blue chip. But beneath the surface of these generous distributions lies a troubling question: Can Globe really afford to keep this up?

The numbers tell a sobering story. Core service revenues fell 2% year-on-year to ₱121.7 billion in the first nine months of 2025. Mobile —the company’s bread and butter —is losing steam as voice and SMS revenues collapse under the weight of digital substitution. Home broadband is flat, and corporate data is shrinking. Yes, mobile data and fiber are growing—but not fast enough to offset the erosion elsewhere. This is not the profile of a company with expanding cash flows.

Meanwhile, costs are creeping upward. Operating expenses remain stubbornly high at ₱57.5 billion, and depreciation surged 7% to ₱40 billion as Globe races to keep its network competitive. EBIT is down 12%, and net income is down 14%. These aren’t just accounting quirks—they’re signals of margin compression in a capital-intensive business.

And then there’s the elephant in the room: debt. Globe’s borrowings climbed to ₱253.5 billion, pushing leverage ratios higher and interest expense up 14%. Add to that ₱31.4 billion in capital expenditures—mostly for fiber and 5G—and you have a company juggling heavy obligations while trying to maintain a payout ratio of up to 90% of core earnings. That’s a tightrope act, and the wind is picking up.

Some point to GCash, Globe’s fintech jewel, as a safety net. But here’s the catch: GCash doesn’t pay Globe in cash. Its profits show up as equity earnings, not operating cash flow. Unless Globe sells a stake or takes Mynt public, GCash remains an accounting trophy, not a liquidity engine. Counting on it to fund dividends is wishful thinking.

The hard truth? Globe’s dividend policy is colliding with economic reality. Weaker revenues, rising debt, and relentless capex needs make the current payout look less like a sustainable strategy and more like a short-term appeasement. If Globe wants to protect its balance sheet—and its future—it may need to dial back distributions or unlock value through bold moves like a GCash monetization.

Investors love certainty. But in today’s telecom market, certainty is expensive. Globe must decide: Will it keep paying for the illusion—or invest in the future?

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