Prepared remarks
Good afternoon, everyone, and welcome to PLDT's First Quarter 2026 Financial and Operating Results. My name is Jinggay Nograles. I'm the Head of Investor Relations here at PLDT, and it's my pleasure to welcome you this afternoon. So joining us today to share insights into PLDT's performance and strategic direction are PLDT's Chief Financial Officer, Mr. Danny Yu; PLDT's Chief Operating Officer, Mr. Butch Jimenez, Jr.; PLDT Chief Legal Counsel, Attorney Joan De Venecia-Fabul; SVP and Head of Consumer Business Home, Mr. John Palanca; SVP and Head of Enterprise Business Group, Mr. Blums Pineda; Smart Communications Officers in Charge, Mr. Lloyd Manaloto; and I think later Marjorie is just joining us as well. And I think perhaps later, we'll be joined by some other key PLDT officers as well. So before we begin, I'd like to remind everyone that we have a Q&A session later in the presentation. So you can definitely submit your questions via the MS Teams Q&A panel. You can also send those to me on my phone if you prefer that way. So to start, I'd like to invite our Chief Financial Officer, Mr. Danny Yu, and he will walk us through PLDT's financial performance.
Good afternoon, everyone, and thank you for joining us today. Please allow me to present PLDT's financial and operating highlights for the first quarter of 2026. Our gross service revenues were PHP 54.9 billion, up 3% or PHP 1.5 billion year-on-year. Our net service revenues were stable at PHP 48.9 billion. The top line was held back by temporary factors. For Home, a system migration from a legacy platform affected activations and installs. For wireless, revenues were weighed down by lower mobility and pressured consumer wallets brought about by soaring fuel prices. Despite this, EBITDA improved 2% to PHP 28.3 billion. EBITDA margin was steady at 52%, supported by our focus on cost control as cash subsidies and provisions came down by PHP 0.5 billion or 2%. Telco core income was PHP 8.6 billion, down 2%, mainly due to higher depreciation. Net financing costs were kept steady as we successfully negotiated better rates with our creditors.
Group core income improved 2% to PHP 9.1 billion, supported by Maya's continued profitability and asset sales. Overall, the first quarter was softer, mainly due to the temporary impact of Home operational support system migration and Middle East-related pressure on consumer wallets. Some wallet pressure may carry into the second quarter as prices remain elevated. Home orders, on the other hand, that install are now normalizing. We remain focused on stabilizing installs, continued monetization in our wireless segment and sustained growth in our enterprise while keeping tight control on costs. While net service revenues were flat in the first quarter, revenues excluding legacy services grew 2% to PHP 44.6 billion. These growing segments now account for 91% of our total service revenues. Mobile data and fixed wireless remained positive, up 1%. However, this was offset by the continued decline in legacy services such as voice and SMS.
As a result, wireless consumer revenues came in at PHP 21 billion, down 1% year-on-year. Home revenues were PHP 15 billion, down 1% year-on-year. Fiber revenues were broadly flat at PHP 14.7 billion as installs were temporarily constrained during the quarter. More on this later. More importantly, customer demand remained healthy with orders at pre-migration levels. Enterprise was the bright spot for the first quarter as revenues grew by 4% to PHP 12.4 billion, driven by corporate data, ICT and A2P. Overall, the growth areas of the business remain intact. Let's take a closer look at each of the business segments. Enterprise were our main growth driver this quarter. Enterprise revenues reached PHP 12.4 billion, up 4% year-on-year. Corporate data and ICT, which includes A2P or application-to-person messaging, grew 5% to PHP 9.3 billion and now accounts for 75% of the enterprise revenues. Growth was led by areas where we have been investing and building scale.
ICT revenues, which include data centers, were up 17%, but if you look at the tech services on their own, revenue grew even faster at 25%. This is an important part of the story because it shows strong demand for high-value solutions such as managed IT, cloud, cybersecurity, data and AI. We also saw growth in SD-WAN lines, fiber lines and third-party racks. A key driver for this success is our one enterprise model. PLDT has the largest enterprise footprint in the country with many of our client relationships starting from connectivity. We are now modernizing the base through high-value solutions like SD-WAN. Simply put, SD-WAN helps clients manage their network across many branches and sites through one platform with better control, security and reliability. From there, we're also bringing more services across cloud, data center, A2P, Bizloads and global services. This helped us deepen client relationships and move the business beyond basic connectivity.
We also had good wins during the quarter, including government contracts, cloud productivity deals and international connectivity accounts. This helped offset the continued decline in legacy services. Overall, enterprise continued to show good momentum where demand is moving increasingly towards solutions that help clients digitize, automate, improve security and manage cost. To give more color on enterprise, we would like to show where the growth is coming from across the group. First is PLDT Global or the international connectivity business. PLDT Global supports hyperscalers, carriers and enterprises that need secure and reliable links between the Philippines and overseas markets. Revenues grew 26%, driven by demand for high-capacity IPLC, strategic connectivity and carrier-grade colocation. Our wireless arm, Smart Enterprise, is also showing promise. Smart supports corporate and public sector clients through mobile connectivity, A2P messaging, IoT and load disbursement platforms.
Revenues grew 13%, driven by higher A2P SMS traffic, mobile load disbursement and the Bayanihan SIM program, which supports digital inclusion for Filipinos. These are recurring enterprise use cases from customer alerts and authentication to workforce mobility and workload distribution. One of our fastest-growing subsidiaries is ePLDT, our ICT solutions business. ePLDT supports enterprises and government clients across managed IT, cloud, cybersecurity, data and AI. ePLDT's tech service revenues grew 34%, supported by steady demand from both private and public sector clients. These solutions help organizations improve efficiency, strengthen security and modernize their operations. Finally, VITRO, our data center business, is a pioneer and the leading data center provider in the Philippines. Revenues grew 10%, driven by enterprise and hyperscale workloads. In the first quarter alone, VITRO contracted 254 new racks and 680 kilowatts of incremental capacity.
Overall, this shows that the enterprise growth is coming from several areas, including international connectivity, wireless enterprise solutions, ICT and data centers. This gives us a broader base for growth beyond traditional connectivity. Now let me move to Home. Home revenues were PHP 15 billion, down 1% year-on-year. Fiber revenues were broadly stable at PHP 14.7 billion and now account for 98% of Home revenues. While the headline number was soft, the underlying demand remained strong. More specifically, the order pipeline remained healthy. The constraint was not in customer interest, but in converting those orders into completed installs. This was due to the migration from our 21-year legacy OSS system. This system was outdated and fragmented, and we needed to move to a more modern platform that can support a better digital customer journey, better order flow and future AI-enabled capabilities.
However, during the migration period, account installations and activations slowed, impacting fiber net adds. While churn remained low, we ended the quarter with 44,000 fiber net adds, lower than previous quarters due to the bottleneck. ARPU was also affected by two short-term factors. First, we extended temporary payment relief to subscribers affected by typhoons. This was part of our support for customers who needed time to get back on their feet. Most of these customers recovered, which helped preserve the base, but it weighed on ARPU in the short term. Second, the migration slowed some of the higher-value fiber installs. At the same time, prepaid fiber continued to grow because it was easier to activate during the period. This created a temporary customer mix impact on ARPU. The important point is that the business fundamentals remain sound and demand remains healthy. We are also seeing stabilization in the second quarter as install conversion improves.
The focus is now to bring installation throughput back to normal levels and rebuild Home fiber momentum from the second quarter onwards. For Home, we continue to focus on improving the customer experience. We are pleased to see that our NPS score improved by 12 points in 2025. NPS measures how likely customers are to recommend PLDT. It also looks at the key factors behind that rating, including how important each factor is to customers and how well we perform on each one. The good news is that PLDT scores improved in the areas that matter most to Home subscribers: network reliability, broadband quality and value. On network reliability, customers are seeing more stable connectivity, more consistent speeds and fewer slowdown issues. This was supported by around PHP 3 billion in broadband capacity investments last year across peering, backbone and caching. Network slowdown tickets were also down 38% in 2025.
We also saw better feedback on the day-to-day broadband experience, including streaming, loading and take time performance on product offers. We continue to strengthen value through bundles, which customers recognize as a key advantage of PLDT Home. PLDT has been first to market on several relevant bundles, including Netflix, HBO, IoT and PC gaming. This helped us improve value perception without relying on price cuts. Taken together, these improvements strengthen the whole value proposition as it helps improve customer stickiness, reduce churn risk and create more room to upsell over time. Now let's move to wireless consumer. While total wireless consumer revenues were down 1% to PHP 21 billion, the core data business remained resilient. Data revenues, including fixed wireless, grew 1% to PHP 19.4 billion and now account for 92% of wireless consumer revenues. Active data users reached 44.1 million.
Wireless data traffic, including fixed wireless, rose 10%. 5G individual devices grew 34% to 12.2 million and now make up 20% of the device base. The softness was mainly in revenue contraction. With higher fuel prices, lower mobility and tighter consumer wallets, subscribers became more careful with their daily spending. Many also stayed home more and shifted part of their usage to Wi-Fi. So while subscribers remain connected, some top up less often or stretch their current offers. Fixed wireless remained a bright spot with revenues up 18%, supported by stay-at-home data demand. To address the pressure, we're managing the base in a more targeted way. We're using hyper-personalized offers to match the right offer to the right subscriber. For some users, this means keeping them active with more affordable offers. For others, it means moving them to high-value offers where they get the capacity to pay.
We're also using dynamic pricing to improve monetization. Lastly, 5G adoption continues to move up; as more customers move to 5G, they tend to use more data and take up bigger offers. This also helps improve experience across both 5G and LTE. Overall, wireless was affected by wallet pressure in the first quarter, but the subscriber base remains intact. Data usage continued to grow and we're taking a more targeted approach to monetization. Let me now move to operating expenses. Total cash expenses, subsidies and provisions came down to PHP 20.6 billion, lower by PHP 0.5 billion or 2% year-on-year. Compensation and benefits were down 4%, supported by workforce productivity efforts. Selling and promo were also lower, down 9%. Taxes and licenses were down 23%. Repairs and maintenance were broadly stable, down 1%. These savings more than offset the increase in contract-specific service costs.
That increase was tied mainly to growth areas, including ICT projects, cloud, data center and content costs. We're keeping a tight grip on OpEx while still supporting the areas that drive growth and service quality. For the first quarter of 2026, EBITDA, excluding MRP, reached PHP 28.3 billion, up 2% year-on-year. EBITDA margin remained steady at 52%. This was achieved despite flat service revenues, mainly because of lower cash expenses. Telco core income was at PHP 8.6 billion, down 2% year-on-year. The decline was mainly due to higher depreciation as we continue to invest in the network and infrastructure. This was partly offset by Maya's continued contribution. Maya contributed PHP 285 million to PLDT's core income in the first quarter. We also booked PHP 0.3 billion from property sales. This is part of our broader asset monetization program as we continue to unlock value from our non-core assets.
As a result, group core income improved to PHP 9.1 billion, up 2% year-on-year. Reported income was PHP 8.9 billion, down 2%. This reflects unrealized foreign exchange losses and MRP costs. Overall, while the Telco core was slightly lower, group core income improved, supported by Maya and asset monetization. Let me now move to CapEx and free cash flow. CapEx for the first quarter was PHP 10 billion, lower than PHP 10.8 billion last year. CapEx intensity continued to come down from 20% in the first quarter last year to 18% this quarter. This reflects our continued focus on discipline and better pricing and terms. At the same time, we continue to invest in the areas that matter for growth and service quality. These include new cell sites, home fiber ports, AI, submarine cables, data centers and network and IT upgrades. EBITDA less CapEx improved to PHP 18.3 billion from PHP 17 billion last year.
We remain focused on sustaining positive free cash flow while bringing CapEx intensity down over time. For 2026, our guidance remains in the mid PHP 50 billion range. Let me now move to our debt profile. I'll start with a key point. PLDT sustained positive free cash flow as of the end of March. Net debt was PHP 282.3 billion, while net debt to EBITDA was at 2.53x, slightly better than 2.56x in December 2025. Gross debt was PHP 297.3 billion and our maturity profile remains long dated with 50% of our maturities post-2031. This keeps near-term refinancing needs manageable. Interest cover remains healthy at 3.3x. Average interest cost improved to 5.08% from 5.43% as of end of '25. This reflects the work that we have done with our banks to negotiate more favorable funding terms, which resulted in keeping net financing costs flat year-on-year. Our debt mix remained balanced with 32% fixed-rate loans and 68% floating-rate loans.
We also continue to maintain our investment-grade ratings from both S&P Global and Moody's. Looking ahead, our focus is to maintain positive free cash flow in 2026 and work towards around 2.0x net debt to EBITDA, supported by our asset monetization plans. In the first quarter of 2026, Maya, the Philippines' leading digital financial services platform, sustained its growth and profitability. Its integrated payments and digital banking platform helps consumers manage their finances. It also gives business tools to improve cash flow and access financing. This supports Maya's position as the country's leading digital bank and merchant acquirer. During the quarter, Maya continued to enhance its banking, credit and payment suite using its proprietary data-led underwriting platform. By end of March 2026, Maya's deposits increased 73% year-on-year to PHP 76 billion. Its loan portfolio reached PHP 33 billion, driven by growth across multiple credit products.
Demand and adoption stayed across consumer and enterprise segments, including merchant scaling through Maya Business for integrated payment acceptance, business deposits and credit solutions. Results were driven by Maya's proprietary technology platform and AI capabilities. On the funding side, Maya Savings, Maya Personal Goals and Maya Time Deposit Plus continue to attract customers with competitive rates. In the first quarter of '26, Maya accelerated credit growth across easy credit, personal loans, Maya Bank and Landers credit cards and SME loans. Asset quality remained stable with an NPL ratio of 4.9%. Maya delivered a net interest margin of 17.1%, underscoring strong lending margins. Maya's momentum continues to earn industry recognition, including Neobank of the Year, Best Digital Fraud Protection Experience at The Asset Triple A Awards as well as inclusion in Forbes' World's Best Bank of 2026.
Beyond financial results, Maya broadened partnerships to advance financial inclusion. Through its collaboration with the IT and Business Process Association of the Philippines, Maya is extending digital banking credit access to 1.9 million digital workers, helping build formal credit histories and enhancing payroll and disbursement processes for participants. After PLDT's inclusion in the S&P Global Sustainability Yearbook for '25 and 2026, PLDT was also apprised of its inclusion in the universe of eligible companies for potential inclusion in the Dow Jones Best-in-class Index. While the company was not included in the final list of constituents, PLDT remains focused on embedding sustainability in the business and advancing its environmental, social and governance commitments. PLDT remained active in the broader sustainability community in the pursuit of shared goals. The group's program on digital farmers and innovation in agriculture were also featured in international events.
Other examples of embedding sustainability in the business are the solarization of leased cell sites, which meet our triple goals of cost savings, service reliability and decarbonization. Combating cybercrimes and online harms remain a priority and are part of our efforts to keep our customers safe online. Finally, we are able to use our e-waste program in marketing, particularly for younger markets. So that concludes our prepared remarks for PLDT's first quarter results. We are now open for questions.
Thank you, Danny, for the insights on our growth initiatives and key developments across our business units. Before we open the floor to your questions, allow me to reintroduce the business leaders in the room who can also help you with your queries. And we have PLDT's CFO, Mr. Danny Yu; PLDT's Chief Operating Officer, Mr. Butch Jimenez, Jr.; Chief Legal Counsel, Attorney Joan De Venecia-Fabul; SVP and Head of Consumer Business Home, Mr. John Palanca; SVP and Head of Enterprise Business, Mr. Blums Pineda; and our Smart Communications Officers In Charge, Ms. Marjorie Garrovillo and Mr. Lloyd Manaloto. Okay. So let me see. It looks like we have a question from Arthur Pineda of Citi.
Questions and answers
Two questions, please. Firstly, are you able to elaborate on the monthly consumption trends? How has this changed going into March, April and May? I'm just wondering if there's any change in consumer spending given the impact of inflation. Second question I had is with regard to your Maya business. You've seen a recovery in this quarter. I'm just wondering what your expectations are in the trends. Any added stresses on the lending side given all the consumer pressures?
Yes. Sorry, we missed the beginning part of your first question, but allow me to take your question first on Maya, and then we can go back to your first question earlier. So you mentioned that you've seen Maya continue to grow, and you were wondering if there were any pressures that we're seeing. So Maya has continued to grow really strongly, and it did improve its profitability in the first quarter, and that was driven by growth in both the payments and digital banking side. So as you saw, Maya's loan book grew by 52% year-on-year. And if you look at quarter-on-quarter, that grew at 10%. So that really represents consumers continuing to adopt the service. Our NPL ratio also came down from 6.1% to 4.9%. So that really reflects the strong portfolio growth as well as the effectiveness of Maya's proprietary underwriting platform. Provisioning remains aligned with Maya's risk appetite. And when looking at the effects of the Middle East crisis, when we've spoken to Maya on this, they mentioned that they have not observed any material impact on overall business performance and activity actually remains stable. So they expect that to continue in growth, but they are monitoring key metrics across the portfolio. As of now, they're not seeing pressure points yet.
I'll take the question on monthly consumption trends for wireless consumer. What we initially saw was that from January to February, we had an increase in top-ups. But starting in March, we began to see a softening in terms of top-ups because subscribers' top-up frequency slowed down. This does not mean all subscribers; we see this behavior in certain segments. Having said that, we've instituted programs and product capabilities like our hyper-personalization, wherein we now offer targeted offers to these subscribers to get them to adjust their top-up behavior. So we're seeing some improvements in April. But in general, we do see a slowing down of top-up behavior.
John of UBS, I see you have your hand raised.
Three questions for me. First is on mobile. I think you characterized the softness quarter-on-quarter as due to mobility restrictions. Could you comment on how the competitive landscape was in the first quarter? Because I think your competitor alluded to some price hikes that were implemented. So I was wondering whether you see the same trends. Second, on broadband, how long can we expect this systems migration to continue? Or put another way, how far along are you in this process? And how will it affect future net adds in probably the second and third quarter? Third is, I think I observed a spike in both international voice revenues and the corresponding increase in interconnection costs. So I was wondering what the interplay between these two accounts was and why the sudden spike in the first quarter?
I'll take the first question on competitive behavior. I would characterize quarter 1 as more benign compared to previous quarters. I think the key now is for the industry to go after subscribers to encourage more frequent top-ups or, for subscribers who can afford it, to move to higher-value SKUs. Not saying we should do blanket price increases, but there are certain SKUs where we can do tactical price adjustments. Having said that, we're really leveraging our capabilities for hyper-targeting and hyper-personalization because we can't do blanket pricing increases. What we need to do is target the right product and service to match the economic needs of the consumer and their context at that point in time.
If I may just add, to provide context for our consumers: what is different today is that connectivity is actually one of their basic needs already. So even as the consumer wallet starts to shrink, staying connected remains a core need. Therefore, there is a certain level of resilience in how they will stay connected. In that way, the real role of wireless is to make sure that we are able to offer them the most price-effective offers that they can actually avail at that time. By doing this, we should be able to keep subscribers engaged with the network.
And the next question is in regards to the OSS migration...
So just for context, we've been operating and offering fiber services for a couple of decades now. The current operation support system that we are using is a legacy-driven system. We've been using it for over 20 years, and it is no longer able to scale and innovate as much as we want to. So we embarked on a modernization program, and we consciously accepted a very short-term softness resulting from a migration of such magnitude. We actually experienced some temporary operational friction. We began the OSS migration in December of 2025, and we actually were stable as of the first week of March. We are seeing that the flow-throughs have been enhanced and the processing of our orders from order to fulfillment have greatly accelerated. That is giving us the capacity to accept more applications and serve more customers. More importantly, the operation support system serves as our foundation for future modernization such as the BSS stack, the digital stack for unassisted channels and, of course, the move to AI. I think we have the modernization for this particular stage of the OSS transformation behind us now. We have stabilized, and we are now postured for growth Q2 onwards.
And the third question is in regards to our international voice revenues and the corresponding interconnection costs.
We have a wholly-owned subsidiary named PLDT Global, and PLDT Global sells or trades international traffic volume to different operators. That business has a margin of less than 2%. That's why you can see high gross revenues with a high cost of interconnection. So that explains the increase in interconnection costs as well as the increase in reported international voice revenues. We've been doing that for a while—about the last five years—and it's giving us income. For analysis purposes, you can look at our financials by taking that out. In our management reporting we usually separate the hubbing business from service revenues. If you look at our operating expenses in certain presentations, you may not see interconnection costs included there because we try to separate the hubbing business from the telco service revenues.
Just read some of the questions that came in earlier this afternoon. This one is from Marky Carunungan. This is for our mobile business. Last briefing, management highlighted hyper-personalization and improving ARPUs as a key driver for mobile recovery. However, in the first quarter, data traffic grew 10%, while wireless data revenues grew 1%. Could you give us some color on what is limiting monetization conversion despite the stronger metrics?
So the power of that service is that we can analyze subscriber behavior. We're seeing segments of subscribers who are fully using up their load wallets. Before, they would top up and have some breakage of unused load. What we're seeing now, as a response to inflationary pressures, is that certain segments are fully consuming their wallets, so there's no breakage to capture as additional revenue. Having said that, what we're doing as part of our hyper-personalization is, aside from upselling, offering next-best-offer services to these subscribers because we know they're under pressure from inflation. We try to give them the next-best-offer at a slightly lower price to keep them in the system. As you can see from our subscriber base, it's fairly stable right now and churn rates are stable at 2.5% for prepaid. It's not going up, and our subscriber base is slightly increasing because of those kinds of services. So essentially, we're not just using hyper-personalization to upsell; we're also using it to protect the base, keep churn low and move subscribers to the next-best-offer.
Thank you, Lloyd. It looks like this question is for Home. John, this is in regards to ARPUs. You mentioned that ARPU softness is partly mix-driven rather than structural pricing pressure. With fiber ARPU declining this quarter, has your view changed regarding the long-term pricing environment in broadband?
Yes. I recall during the last investor meeting that we would put a lot of focus on product mix to help sustain our ARPUs. We are continuing that effort. During the OSS modernization exercise, first, let me clarify what OSS is. OSS is our operation support system. It flows orders from order taking to validation, provisioning, activation and fulfillment. During the period of modernization and migration in the first quarter, prepaid orders flowed more easily because they had to go through fewer gates, and the mix skewed slightly more towards prepaid. There was just a slight increase—nothing extreme—so you will see a slight dip in ARPU. Moreover, we did have some subscribers affected by disasters that occurred in the third and fourth quarter of 2025. We wanted to keep them on the network and give them an extended relief during recovery from typhoons and earthquakes. Because of that, we zeroed out their revenue temporarily so that we did not see inflated revenue figures in Q1.
However, since they remained active in the system, that had a dilution effect on our ARPUs. Again, that too is temporary and was part of our recovery efforts for the typhoon-affected customers. That has since been normalized as we have cleaned up our base, and you will see a regularization of ARPUs from Q2 onwards. I won't disclose exact numbers, but we lost only about 17% to 17.5% of those who were affected by the typhoons. They appreciated the gesture of extending and not billing them during the typhoons and earthquakes.
This question is for our enterprise business, and this is from Matteo Lorenzo. On the one enterprise model, are you already seeing measurable cross-sell uplift from existing connectivity clients into cloud, data centers, SD-WAN, A2P and managed IT? Or is the current enterprise growth still mostly driven by stand-alone product demand?
Thank you for the question, Matteo. We are beginning to see that growth already. We focus on larger corporate and enterprise accounts where a single relationship manager carries the full bag of enterprise solutions, whether that be fixed, wireless or ICT. We're seeing healthy attach rates, especially in companies that are scaling up their digital infrastructure. They see the value of coming to one company for big circuit connectivity, data center requirements and other services. With native companies up to big hyperscalers, being able to consolidate those needs in one place is a big plus. So yes, we're beginning to see cross-sell uplift, and we're continuing to roll that out to the rest of our large accounts to get more lift.
Thank you, Blums. This message is from Marky as well, which he sent earlier, and it is in regards to KPA, so Attorney Joan. Have there been any meaningful developments since the last update on KPA? How do you assess the potential impact on industry pricing and infrastructure competition?
Thank you for that question. Since our last update, there's been movement on the KPA, particularly on the drafting of the initial access list. As you know, there's a technical working group comprised of the DICT, the PCC and the NTC, and they are in charge of formulating the initial access list. They have sought and we have given our views on the initial access list. Other telco players and access seekers were also asked to provide their views. The access list should have been released per the IRR timeline last March; however, it's already May and there are many views to consider. In fact, the PLDT Group met with the TWG just two days ago to share more information about our technical and operational capabilities to meet the demands of the initial access list. Given the situation, we believe the initial access list may come out in the next month or so. Per the timeline set in the IRR, that would give us two months to issue the reference access offer.
We informed the TWG candidly that it is virtually impossible to meet the two-month deadline for the reference access offer because the pricing itself would take at least a year. In other jurisdictions, it took more than a year to formulate a reference access offer. We urged them to do their own survey, and they considered our views in the latest meeting. So there is movement but also understandable delays given the number of stakeholders. Regarding spectrum management, there was an initial invitation for us to participate, but not much movement there; the TWG is taking one item at a time. We imagine spectrum management might be pushed back to the end of this year or even next year. So that's the current status on the KPA. Everything on pricing is still up in the air. We have started work from our end, but there is no definitive movement yet.
Thank you, Attorney Joan. There are a couple of questions here in the Q&A box from Fernandez Michael. So the first is in regards to a potential REIT listing. Would this still push through this year? Is there an envisioned listing date? How much does PLDT expect to raise? And will proceeds be used to pay down debt? While there's no certainty on this...
Yes. The REIT is a key priority project as part of our asset monetization program. Unfortunately, we cannot divulge timing or the amount to be raised. This is a very important and urgent project for us, and as a general matter, proceeds from asset monetization would go towards debt reduction to pay down debts.
In regards to any asset monetization proceeds, whether from asset sales or other transactions...
Yes. As I mentioned, proceeds will go to debt reduction. On the question about margin compression as a result of the U.S.-Iran war, we are monitoring the situation. Managing the costs efficiently is critical, but the impact depends on how prolonged the crisis becomes. If it's prolonged, it is likely to impact our operating costs. We have taken measures to mitigate those risks, but the situation is fluid.
It's really very fluid at this point in time. But we've definitely taken measures to mitigate those costs as well. This question is from Paolo Manansala of COL in regards to Maya. Just wanted more color on Maya's contributions given the sharp improvement in profits. Should we expect this level of profitability for the rest of the year? Or are there one-off gains in this period?
It's both. There were very good improvements in the core business on both the payment side and the banking side. Loan growth has grown substantially, NIMs remain healthy and NPLs are trending down. The payments business is also expanding and remains strong in the merchant acquiring space. We expect Maya to continue contributing, but there were also some one-offs that were booked by Maya as well as some catch-up provisions recognized this quarter. These are non-recurring in nature. The PHP 285 million contribution to core income does include some catch-up adjustments. To clarify, the PHP 285 million includes catch-up adjustments because Maya finalizes its financials later than the usual February 28 close for our consolidated financial process. In this case, they finished around mid-April, so certain catch-up adjustments were recognized in this reporting period. That is part of the core income that we booked in the first quarter.
On Slide 12, you'll see Maya's contribution to PLDT's core income. In our financials, you'll see the impact as well on reported net income, which in that line would include some of the one-offs. So that would more accurately show contributions from the business unit. Okay. I see Raymond Franco has his hand raised. Raymond, you may unmute and ask your questions.
To continue on the Maya thread, just a couple of—three questions on Maya. First, has there been a significant increase in the average term of the loan book? Second, does Maya, like the banks, employ an expected credit loss model? And if yes, does this ECL model impute the higher level of inflation as well as the weaker GDP growth? Third, any update on potential or planned listing of Maya?
Thank you, Raymond. On the IPO or listing, we're unable to comment on any speculation regarding timing or whether it would happen. Regarding the loan book composition, Maya's bread and butter is Maya Easy Credit, which is a popular short-term product—typically up to 30 days and up to PHP 30,000. That product makes up a good chunk of the loan book. As the mix changes with growth in other consumer and enterprise products, you may see some changes in average loan tenor, but there hasn't been a significant structural shift away from short-term consumer credit. Regarding provisioning and credit loss models, I can't comment in full detail in this forum, but Maya maintains strong provisioning coverage. If you look at BSP statistics, coverage levels are healthy. They are monitoring macro indicators, and provisioning is aligned with their risk appetite.
Yes, thank you. That's all for me.
Sorry, just a follow-up on Maya as well. Just to clarify, when I look at Slide 34, you have PHP 1.08 billion in equity contributions versus the PHP 200 billion to PHP 300 billion that you've mentioned. Just wanted to check what accounts for that big difference?
Those are fair value adjustments on convertible and exchangeable bonds. The larger figures you referenced earlier relate to the total contemplated equity injections or contemplated funding ranges in various scenarios, while the PHP 1.08 billion on the slide reflects the accounting equity contributions recognized in the period. The fair value adjustments on convertible and exchangeable bonds are one-time items recorded below core income.
Okay. So it's a one-time adjustment. We should really be looking at the PHP 0.2 billion, PHP 0.3 billion figures for recurring contributions.
So if you look at the earlier slide, Slide 12, that would include the contributions of Maya to PLDT's core income and would more accurately show contributions from the business unit.
What is your CapEx guidance for 2027?
We don't have our 2027 budget finalized yet. The general direction is to remain prudent on CapEx, bringing CapEx intensity down as we continue to aim for positive free cash flows and a medium-term net debt to EBITDA target of around 2.0x. We'll provide guidance once budgets are finalized.
Is there any guidance for 2026?
Given the current conditions, it's hard to give more detailed guidance beyond the broad items we've discussed. The environment is very fluid.
How much does PLDT expect to raise from tower sales in 2026?
We expect around PHP 2 billion to PHP 4 billion from tower sales in 2026.
Okay. So we have a few minutes left here. I don't see any other questions from the Q&A box or raised hands. So that is it for today. Thank you so much for joining us this afternoon. We hope that we were able to answer all of your questions. If we missed any, please feel free to reach out to me via the PLDT Investor Relations inbox or by my phone. We look forward to seeing you in our next earnings briefing come August. So thank you again, and have a great afternoon.
Thank you very much.
Thank you.