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A Three‑Part Business Column Series: $TEL’s Dividend Story — Sustain, Then Grow? PART 2


(Based on PLDT Inc.’s SEC Form 17‑Q for the nine months ended Sept. 30, 2025, filed Nov. 11, 2025; plus public disclosures on Kayana through Jan. 28, 2026. Not investment advice.)


Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.



PART 2 — “Where the Cash Goes: Network, Fiber, 5G—and the Price of Staying Ahead”

A dividend investor’s favorite question is not “How much did they pay?” but “What will they need to spend to keep paying?” On that front, PLDT’s 17‑Q reads like a familiar telecom playbook: spend heavily now to defend the network, monetize data, and keep enterprise growth moving.

The headline number: ₱52.1 billion spent on purchases of property and equipment (including capitalized interest) in 9M25—up 7% year‑on‑year. In cash flow terms, investing activities used ₱49.6 billion. Network spending remains the gravitational center of TEL’s capital allocation. 

And the capex isn’t abstract. PLDT’s own segment narratives point to the same growth map:

  • Wireless growth leans on mobile data and 5G expansion. In 9M25, mobile data revenues rose to ₱59.0 billion, driven by mobile internet at ₱56.6 billion as 5G device adoption and usage increased. The company explicitly cites data offers (e.g., Power All, Magic Data, Unli 5G) and digital channels (Smart App and online store), plus device financing partnerships to accelerate 5G adoption. 
  • Fixed wireless broadband—home WiFi via wireless—grew 25% to ₱1.396 billion, a reminder that “wireless” isn’t just about phones; it’s also increasingly about home connectivity alternatives. 

On the fixed line side, growth is still about fiber and enterprise:

  • Home broadband revenues increased 4% to ₱39.9 billion, reflecting ongoing demand for reliable home connectivity.
  • Enterprise ICT stood out: ICT revenues rose 21% to ₱6.584 billion, with management pointing to data center, managed IT services, and data & AI solutions delivered through ePLDT and Vitro. Those are not “nice to have” add-ons; they are PLDT’s higher-growth, higher-value counterweight to the natural decline of legacy voice and SMS. 

This is where the dividend discussion becomes a balancing act. PLDT openly states that dividends must be weighed against capex, working capital, and debt servicing needs, and it has a long-standing payout framework. In plain terms: TEL wants to be an income stock—without starving the network. 

The tradeoff is visible in the financials. Expenses rose 4% year‑on‑year, with higher depreciation and amortization a key driver. In wireless, depreciation and amortization jumped 15% (a mix of modernization and leaseback-related amortization effects). That accounting drag doesn’t necessarily kill cash flow today, but it’s the shadow of heavy investment—showing up as lower net income, which can affect market comfort around future dividend increases. 

Then there’s the leverage layer. When capex is high and dividends are high, the third leg of the stool is often debt. Total interest-bearing financial liabilities rose to ₱297.5 billion, and interest coverage fell—suggesting financing costs are becoming a larger claimant on future cash. Again, not a crisis—but it’s a constraint on dividend growth. The market typically rewards telecoms that can show a capex downtrend or a monetization uptrend—ideally both. 

One encouraging detail is PLDT’s disclosure of network vendor commitments: earlier “major vendor” commitments were reduced significantly, and as of Sept. 30, 2025, major vendor commitments net of advances stood at about ₱3.4 billion, while newer purchase commitments rose to ₱18.8 billion, and other capex vendor commitments to ₱15.3 billion. That reads like “cleanup done, but orders continue”—a sign that PLDT is maintaining build momentum, not freezing it. 

So what should dividend-focused readers conclude from Part 2?

  • Sustainability remains supported so long as operating cash flow stays strong and capex is disciplined. 
  • Dividend growth depends on whether the network investments translate into improved wireless economics (lower churn, steadier ARPU) and higher-margin enterprise ICT expansion—without pushing leverage higher. 

In short: TEL is investing for growth, but growth must show up in cash and coverage before dividends can confidently step up. 

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