Good afternoon, and thank you for joining us today to discuss the Company's financial and operating results for the first half of 2022. A copy of today's presentation is posted on our website. For those who may not have the presentation, you may download it from www.pldt.com under the Investor Relations section. Kindly note that this meeting is being recorded. The broadcast of this event will be available on our website after the call. For today's presentation, we have with us Mr. Al Panlilio, President and CEO of PLDT and Smart Communications; Anabelle Lim Chua, Chief Finance Officer and Chief Risk Officer; Mr. Orlando Vea, Founder and CEO of Voyager Innovations as well as other members of the PLDT management team. Our Chairman, Mr. Manny Pangilinan, will join us later. Despite that, we turn the floor over to Mr. Panlilio to begin the presentation.

Thank you. Thank you, Melissa, and good afternoon to all, and thank you for joining us. Today, hopefully, after this, we can do face-to-face next time. Again, good afternoon to all and thank you for being here again. Happy to report our first half 2022 business performance and give you a glimpse of what is expected for the rest of 2022. So for the first half, we closed Telco core net income in the second quarter at PHP 8.8 billion, which is 14% higher versus the same period last year of PHP 7.7 billion. If you add up our Telco core for the first half, it's PHP 17 billion, up 12% versus last year's PHP 15.2 billion. In terms of revenues, we achieved an all-time high in terms of the quarter ended in the second quarter of 2022 of PHP 47.9 billion and first half service revenues of PHP 94.3 billion, also an all-time high, which is 5% higher than last year's PHP 89.9 billion. Having grown by 5% in terms of expenses, we managed to increase them by only 1% to PHP 43.8 billion, due primarily to lower provisions. However, just to plan for the second half, we must continue to monitor this as headwinds can arise from the economic conditions affecting not only the Telco industry but businesses globally. I'm also pleased to report that the first half EBITDA is at PHP 50.5 billion, another all-time high, 8% higher than last year's PHP 46.6 billion. Across the last four quarters, I think PLDT has achieved PHP 100 billion in EBITDA, reaching this good milestone. We improved our EBITDA margin by 1% to 52%. I want to emphasize that we have fully transformed the business so that 79% of our revenue is now driven by data and wireless. The highest contributor was PHP 35.7 billion, a growth of 2% in peso terms, which means PHP 700 million growth from last year. The fastest sector, of course, is Home, now at PHP 24.6 billion, an increase of 22%, which is PHP 4.4 billion in peso terms compared to last year. Corporate ended at PHP 11.9 billion or 11% increase, translating to PHP 1.2 billion in revenue growth. ICT benefited from a healthy growth of 14% or PHP 300 million in peso terms. We are making these revenues a priority, continuing to support this through our CapEx investments. Talking about CapEx, we are proud to note that we're still the largest syndicated Telco, and we continue expanding our networks, having added 1.92 million ports compared to a year ago. We presently have 6.72 million ports available for service, up from 4.8 million last year. We continue to roll out on our 5G base stations, having added 2,500 compared to last year, ending the year-to-date at 7,289 from last year's 4,776. We also continue expanding our fiber ports, with a current total of 837,000 kilometers of fiber and having already passed 16.2 million homes in network coverage. In the data center space, we have added 612 racks, reaching 6,133 racks available for service, with 74% already utilized. We will continue to expand additional racks into the system, ensuring we remain ahead of demand from metal prices, especially with hyperscalers. We're looking forward to completing the Santa Rosa hyperscaler data center by the year's end, everything is on track. We recently announced the launch of the Jupiter Cable System, tripling our international capacity from 20 terabits to 60 terabits. We currently hold 65% market share in terms of international capacity available in the country. We will continue investing in our capacity through additional submarine cable systems like ABC and APRICOT that should be in service next year. In addition, I'm pleased to report that we are jump-starting our journey towards a greener fleet by introducing our first electric vehicle. We've ordered ten of these, and we aim for at least 10% or 8% of our fleet to be EVs in partnership with eSakay of Meralco. Lastly, I wanted to note that we are continually transforming the company. There are three driving forces behind this transformation: 1) a solid plan for 2022; 2) managing uncontrollable factors affecting the business; and 3) preparing for a stronger 2023 and 2024. We're enhancing our ways of working for PLDT, breaking down silos, enabling cross-functionality, and strengthening execution to enhance productivity and efficiency. Lastly, we are committed to driving and fulfilling our commitments to our stakeholders and the market. I would now like to pass it on to Anabelle for more detailed financials for the first half. Anabelle, over to you.

Thank you. Thank you, Al. So let me show you our first half results today. As we announced earlier today, despite very tight market conditions out there, PLDT is quite pleased to report a record high in terms of our service revenues of PHP 94.3 billion for the first six months of this year, up 5% versus a year ago. Home continues to lead the charge with revenue achievement of PHP 28.1 billion in the first half, growing 24% year-on-year. The Fiber revenues now account for PHP 23.2 billion of Home revenues, growing at a clip of 62% year-on-year. Our enterprise business has performed excellently, achieving an all-time high of PHP 23.2 billion for the first semester, with a 9% increase year-on-year. Individual remains our largest business but faced certain challenges, declined about 6% year-on-year. I will show more details later regarding how it is also experiencing better tracking. The International and Carrier segment continues to decline due to the limitations on roaming and international termination voice business, down 17% year-on-year. Moving on, in the breakdown between the first quarter and the second quarter revenues, in the first quarter, we grew our revenues by 3%. In the second quarter, we doubled that to a 6% increase, translating to PHP 1.5 billion in the first quarter versus PHP 2.9 billion increase year-on-year for the second quarter. Breaking it down by major segments, Home increased PHP 14.5 billion in the second quarter compared to PHP 13.6 billion in the first quarter, marking an increase of almost PHP 1 billion and up by PHP 2.7 billion relative to last year. Enterprise maintained its growth momentum from 7% in the first quarter to 11% in the second quarter. In the case of the Individual Mobile business, the second quarter results improved by about PHP 0.5 billion from the first quarter, increasing from PHP 20.4 billion to PHP 20.9 billion, with a decline of less than 4% compared to 8% in the first quarter. This next chart shows a longer trajectory of 10 quarters, and we see the PHP 47.9 billion record high after five quarters of sequential growth. Regarding data versus non-data revenues, from earlier indicated, 79% of our revenues in the first half were from data, and in fact, already reaching 80% in the second quarter, compared to about 70% at the start of 2020 with data growing at a rate of 10% higher year-on-year compared to overall growth of 5%. In terms of our subscriber base, we serve 77.3 million customers across our fixed mobile and broadband categories. On the broadband front, we have over 4 million broadband customers across our fixed and fixed wireless platforms. Fiber marks the highest growth segment among these at 2.8 million customers, having added 400,000 during the first half of the year. We connected over 90,000 new subscribers in each of the first two quarters every month, which is better than the early part of last year, although not yet at levels achieved in the third and fourth quarters. We added 550,000 new connections in the first half, alongside another 117,000 migrations; however, there was a slightly higher churn, especially in the second quarter, as we dealt with the effects of Typhoon Odette, which struck us in December 2021. We managed to restore services in some areas by March and April, but once services were normalized, we noticed higher churn from some customers who opted out of our service. As mentioned earlier, we successfully managed our operating expenses with a 1% increase owing to lowered provisions. Our EBITDA increased by 8% to PHP 50.5 billion, also reflecting a 52% EBITDA margin, another all-time high for us. EBIT of PHP 26.1 billion indicates a 27% margin, up 15% year-on-year, while the Telco core stands at PHP 17 billion, representing a 12% increase from PHP 15.2 billion last year. This improvement in EBITDA was fueled by higher revenues and lower provisions, albeit offset by increased cash OpEx. Noteworthy is that within the higher cash OpEx, we incurred about PHP 1.1 billion as expenses related to restoring services in areas affected by Typhoon Odette. Had this been excluded, our EBITDA would have been even higher, at PHP 51.5 billion year-on-year. The strengthening of our Telco core income is supported by this increased EBITDA, counterbalanced by heightened depreciation and financing costs from elevated investments in fixed net assets. It's important to mention that we have surpassed PHP 100 billion in EBITDA over the last four quarters. This year, our guidance is to cross this PHP 100 billion line, which we've already managed as of the end of June.

Good afternoon. Let me start by saying that at PayMaya Philippines and Maya Bank, we are committed to delivering the most advanced financial services to Filipino consumers and enterprises. Consumers and businesses seek the convenience of an all-in-one money app. Last April, PayMaya rebranded to Maya, a fintech super app that provides seamless e-wallet, crypto, savings, and credit services, with prospective offerings in investment, insurance, and other financial services. Just last week, we relaunched PayMaya Enterprise into Maya Business, which is now the country's largest merchant payment processor in terms of transaction volume. The positive traction validates our all-in-one money app strategy. As of the end of June, Maya had 60 million registered users across its consumer platforms. We've seen over 650,000 customers open a Maya Save account in under three months, making Maya Bank the fastest-growing digital bank in the country, operating like fintech on steroids. We've accomplished what others took more than six months or even years to achieve. On the enterprise side, we are indeed the largest fully integrated payment processor for businesses, with over 760,000 registered merchant acceptance points. Additionally, we have over 65,000 agents, including Maya Centers, previously smart agents but now touchpoints for Maya as well. As we grow our trade-blazing financial services ecosystem, we ensure a seamless, convenient, reliable experience for our customers. In our Maya Business segment, we are leading in QR PH person-to-merchant payments. We have also introduced a business deposit service for our Maya Business clients, and we're extending MSME credit to our Maya center agents via the Negosyo app. Soon, we will offer other credit products to enterprise partners and their customers. On the consumer front, Maya is currently the top-rated local finance app in both the Android and iOS markets. We have introduced seamless crypto integration with 15 popular coins. Also, the 6% interest rate for Maya Save and personal goals is one of the highest in the market today. We now offer Maya credit to customers up to PHP 15,000. So expect more exciting services as we enable Filipinos to make bolder choices through fintech. Thank you.

Okay. The Chairman should be joining us, but let me provide guidance for 2022. For service revenue growth, we are maintaining our mid-single-digit growth guidance. Our Home broadband segment continues to lead growth with revenue momentum expected to accelerate even more. The Enterprise segment is projected to register strong performance underpinned by ICT and data center revenues. The wireless segment is facing a challenging environment but should benefit from the economy's reopening, with new programs launched a couple of weeks ago expected to improve trends in the second half. We maintain our Telco core income guidance of PHP 33 billion as we expect robust increases in our EBITDA, along with possible reductions in financing costs from the tower sale. However, we must balance this against the prolonged pandemic effects in a challenging market that affect our consumers' wallets and increase our operating costs. Notably, 45% of our CapEx is US-dollar denominated. Hence, we may see increases in CapEx as a result of foreign exchange rate impacts. We expect PHP 85 billion in CapEx guidance, but this may need adjustment due to FX rate effects which could lead to PHP 2 billion to PHP 3 billion fluctuations. We aim to continue delivering positive free cash flow and deleverage back to two times while also improving our position for special dividends. That's the guidance we wanted to share with you today. Thank you.

We're now ready to take your questions.

I'll read out the first question that was sent via email by Steven Olivera from China Bank. The first question is: Can you provide insights on how mobile towers performed during the second quarter and the first half of the year, and whether you have noticed any trends in the early part of the third quarter? His second question will follow.

We have Francis Flores here in the room; he is head of our wireless business. Please answer the question, Francis.

So quarter two of this year versus quarter one, we again experienced a slight increase of around 2%. However, for the first half compared to the latter half of last year, we did experience a decline of around 3%. Nonetheless, in the coming months, we expect quarterly top-ups to increase, especially with mobility returning. One factor contributing to this will be the back-to-school season, which should help increase top-ups as well.

The second question from Steven is: With the upcoming launches and developments in the country, how would these affect PLDT?

I think I can take that. Essentially, I see these developments as complementary to the services we offer today. The degree to which they compete depends on how their services compare to our fiber-optic broadband service, wireless service, and the costs associated with them. Obviously, in regions where our wireless and fixed services aren't available, they may have the satellite option. However, it ultimately depends on their commercial viability in the market and how consumers would perceive these services' affordability in relation to our offerings. So, yes, it is complementary. We are also in discussions with several networks, and I believe we can work together.

Yes, we're engaged with several entities, three of which we've already worked on B2B concepts, which is progressing well. This can also present opportunities for our Enterprise business. Maybe Doy can provide some insights on that.

Sure. Good afternoon. I'd just like to quickly share that we're also in talks with Starlink and similar entities regarding enabling them in the Philippines. Thus, our discussions would continue to complement each other, and we're open to providing services to them.

Yes, sure. Thanks, Melissa, and good afternoon, everyone. I have a couple of questions. First, I'd like to understand your view on the mobile segment. The mobile growth has been relatively slower. Is this due to macroeconomic factors, or is it competition-related? Additionally, has the competition landscape changed in the third quarter compared to the first and second quarters? My second question is about the macro factors; it has been indicated that debt remains somewhat challenging. Can you clarify which business segments are more exposed to macro challenges? Lastly, regarding the churn in fixed broadband, how much of it is linked to the aftermath of Typhoon Odette, and how much is reflective of general churn levels in the market? Lastly, for the data center, how much capacity or percentage increase will the fourth and fifth floors of the Makati VITRO data center add?

Before that, I'd like to note that our Chairman has just joined us, so if you have questions for him, please ask.

Let me address the first two questions and leave the churn to Jeremiah and the data center questions to Orlando. Regarding towers and input costs, it involves understanding where we should place towers and how to enhance coverage. We are using data to assess each location and its cost-effectiveness, including analytics behind these considerations. For business segments, everyone is impacted by consumer wallets due to the ongoing macroeconomic issues; inflation influences consumer spending behavior and financial capabilities. Despite these challenges, we still observe growth in the broadband segment driven by strong demand, and we also see potential in the mobile sector with the absence of previous lockdowns.

Sure. To address the churn in fixed broadband, that data is specifically tied to Typhoon Odette, where approximately 50,000 customers were directly affected. While we saw a slight decline in churn overall in the first quarter due to proactive measures, the churn percentages normalized to show only a slight increase for the second quarter overall.

Regarding the VITRO Makati expansion, we are on schedule. The expansion comprises two floors—672 new racks for the fourth floor and 896 for the fifth, totaling 1,568 new racks for Makati by the year's end.

To follow up on the mobile competition, could you clarify how competitive dynamics have changed in the third quarter compared to the first and second quarters?

In terms of competition, providers are increasingly focused on offering value for money. More consumers are seeking these propositions, particularly given economic conditions. Additionally, our competitors are working to improve their coverage while also enhancing their network. This will be essential to consider moving forward.

Thank you. I have several questions. You've mentioned headwinds primarily due to inflation issues. Are these starting to show up in changes in monthly consumption trends? Examining trends from April to July, have there been notable changes? My second question concerns the digital bank. You stated that you've reached 650,000 users in three months, which is impressive. Are you already monetizing these users with credit deployments? Thirdly, regarding data centers—have you secured any strategic investors as your competitors have locally and regionally? Lastly, regarding accelerated depreciation, can you discuss the impact across 3G, VVDSL, and HQ network assets? How does that translate into future financials?

First, on the inflationary impact on our business, as previously stated, all sectors have felt the effects. In July, we did see a slight drop in top-ups. That said, as Francis indicated, the market is looking for value-for-money propositions, and we've been responding with packages that align with these needs. We are watching consumption trends closely, as they're also affecting some broadband customers, particularly in affordability.

Regarding your second question, yes, we have begun deploying deposits into lending. Our credit services are just starting, but we're tracking a faster growth trajectory than our competitors, akin to savings. Expect to see results in the coming months as we increase traction in lending and savings.

As for the third question about the data center, we are focused on expanding capacity currently. We've broken ground on our largest data center yet, set to be completed next year, and have not moved forward with adding a strategic partner for now. Our current priority is to address the demand ourselves.

On accelerated depreciation, the impact for this half year is roughly PHP 2.2 to PHP 2.3 billion pretax. This will roughly double for next year.

Are you noticing any changes from the third operator, particularly with the mention of possible financial difficulties? Has their investment intensity changed?

Despite the challenges, they continue to build out their sites and have announced over 5,500 active sites, continuing their rollout.

Hello. I have two questions. Regarding accelerated depreciation, should we expect more in the upcoming quarters? I know a few details have been shared already, but what's your outlook for the next two to three quarters? My second question pertains to the financial services growth—what’s driving this rapid growth? Are there incentives or promotional offers involved?

We typically review asset performance at year-end, so we'll analyze the situation then. If there are one-time gains from tower sales, it might be a good opportunity to address any asset clean-up.

The growth of our financial services stems from our all-in-one app model, where consumers can seamlessly navigate between various services. Our app is designed for ease of use, and we're currently offering a strong introductory rate of 6% for savings, which is attracting a significant user base. The combination of an enticing user experience with treated offers has led to rapid growth.

If I may follow up on fixed broadband, could you share insights on competition, especially as you’re increasing speeds? Are there indications that churn is connected to users shifting to mobile, or are similar products offered elsewhere impacting your segment?

In terms of churn, a significant portion is related directly to the impact of Typhoon Odette, which aligns with our internal assessments. However, competitive pressure is consistently present, and we've maintained strong demand for our services. We've actually seen increases in gross and migration numbers for the same period last year, indicating continued strong performance despite competitive surroundings.

As for Telesat, the partnership we are exploring is focused on providing B2B solutions with higher ARPU, which does not directly compete with the current offerings available and won't be operational in the country until 2025 or 2026.

Thank you all for joining us today. We look forward to seeing you again in November when we announce our third quarter results.