Good afternoon, everyone. Thank you for waiting, apologies for that delay.

Thank you for joining us today. My name is Gina Navarroza, I'm the Head of Investor Relations here at PLDT, and it's my pleasure to welcome you to our first half 2026 financial and operating results briefing.

Joining us today to share insights into PLDT's performance and strategic direction, our PLDT Chief Operating Officer, Mr. Butch Jimenez; our OIC, CFO, Mr.

Leo Posadas. We also have here with us, SVP and Head of Consumer Home Business, Mr.

John Palanca. We also have our Head or OIC for Smart Communications, Mr.

Lloyd Manaloto, and our Chief Legal Counsel, Attorney Joan De Venecia-Fagpon. We will also be joined later by our other key officers for Enterprise Business, as well as our Data Center Business.

Before we begin, I'd like to remind everyone that we will have a Q&A session after the presentation. You may submit your questions via the MS Teams Q&A panel.

Thank you also to those who have submitted the questions beforehand, and we'll make sure to address those during the call. To start, I'd like to invite our Chief Operating Officer, Mr.

Butch Jimenez, to walk us through PLDT's financial and operating performance.

Good afternoon, everyone, and thank you for joining us today. I'll take you through PLDT's first half 2026 financial and operating results.

For the first half, gross service revenues grew 2% to ₱108.5 billion, while service revenues net of interconnection costs increased 1% to ₱97.8 billion. Growth was tempered by softer consumer spending in wireless and the lagged revenue impact of first quarter installation constraints in home, partly offset by continued enterprise growth.

Cash opex, subsidies, and provisions were broadly flat at ₱41.7 billion, supporting EBITDA of ₱56.1 billion and a stable 52% margin. Below EBITDA, depreciation and amortization increased 6%, reflecting our past investments in network and infrastructure.

Telco core income declined 2% to ₱16.6 billion, while stable financing costs, contribution from Maya, and asset sales helped stabilize core income at ₱17.3 billion. Overall, the business remained resilient with stable margins and continued financial discipline.

Looking more closely at the top line, consolidated service revenues were up 1% to ₱97.8 billion for the first half. Excluding legacy services, revenues grew 2% to ₱89.2 billion and now account for 91% of total.

Wireless revenues were broadly stable at ₱42.1 billion, with mobile data and fixed wireless access grew 2% to ₱38.7 billion. Home revenues were ₱30 billion, down 1%, reflecting the revenue lag from the installation constraints we experienced in the first quarter.

Enterprise remained our strongest growth driver, with revenues up 5% to ₱24.8 billion, led by corporate data and ICT. While overall growth remains measured, the mix continues to shift toward data and ICT services.

Let me now take you through the performance of each of our major business units. Starting with wireless, where we saw an improvement in trends through the second quarter.

Wireless consumer revenues were ₱42.1 billion for the first half, broadly stable year-on-year. Data and fixed wireless access revenues grew 2% to ₱38.7 billion and now account for 92% of wireless consumer revenues.

More importantly, the trajectory within the first half has improved. Monthly year-on-year top-ups moved from negative 3% in March to flat in April and May, and positive 1% in June.

This brought wireless revenues back to roughly flat for the first half. The usage numbers back this up.

Active data users reached 44.1 million. Data traffic increased 12% year-on-year to 3,273 petabytes, and 5G devices increased to 12.5 million, now representing 21% of the device base.

ARPUs also remained resilient despite the softer consumer spending environment. Wireless started the year under pressure and is ending the half on firmer footing.

A lot of that comes down to how we're approaching pricing and customer engagement. Let me show you what we're doing on that end.

Two things are driving better monetization. First, we are being more deliberate on pricing, selectively moving some prepaid offers to higher price points while adding more data and benefits so customers still see good value.

For example, the selected prepaid offers moved from ₱99 to ₱109 with additional data in the package. Second, we're getting much better at engaging individual customers.

Our hyper-personalized offers use each customer's behavior and usage patterns to make promotions more relevant. The results have been encouraging.

App-based hyper-personalized offers are converting at as much as 5% versus around 0.2% for generic SMS broadcast offers. That's as much as 25 times higher.

These actions are helping us support higher spend while keeping ARPUs resilient in a softer consumer environment. Our network experience also remains a key strength.

In Opensignal's latest Philippine report, Smart earned eight mobile experience awards with outright wins across gaming, voice apps, 5G upload, and 5G coverage, and joint wins in video. What's worth noting is that Opensignal looks at coverage in the places people live, work, and travel rather than simply measuring land area or population covered.

It is designed to reflect the coverage users can reasonably expect in their day-to-day lives. Smart's network performance was also recognized in Ookla Speedtest Awards for the first half of 2026.

Smart was named the Philippines' fastest mobile network, best mobile network, and best mobile video experience. Sharper pricing, better personalization, and a strong network experience are giving us a better path to improve monetization.

Turning to home, home revenues were ₱30 billion for the first half, down 1%, with fiber also down 1% at ₱29.4 billion. It's worth remembering how home works.

It's a 99% postpaid business, there's a natural three-to-four-month lag between an installation and when it shows up meaningfully in revenue. Each new installation adds to the recurring revenue base, the benefit builds as new subscribers accumulate.

That's why the first half number still carries the impact from the installation constraints we saw in the first quarter, when the OSS migration slowed how quickly customer orders were converted into completed installations. The good news is that we started seeing recovery signs in the second quarter, as installation volumes picked up and postpaid net adds turned positive in May.

On fundamentals, ARPU remains best-in-industry at ₱1,330 for the first half, though down from a year ago. Blended churn is industry-leading at 1.8%, with postpaid churn improving to 1.4%.

Lastly, fiber net adds improved to 97,000 in the second quarter, more than double the first quarter print. Let me show you those operating indicators in more detail, because that's really where the recovery story is clearest.

You can see the improvement more clearly in the operating indicators. Postpaid installations increased steadily through the second quarter, with June reaching the highest monthly level so far this year.

As installations throughput improved, postpaid net additions turned positive from May. Churn also remains well managed, with monthly postpaid churn at 1.3% in June.

We also continue to strengthen the home proposition beyond connectivity. Fiber Unli All brings fiber together with Cignal, HBO Max, and Smart data in one package.

The idea is to give customers more value from their relationship and support deeper engagement and retention. We continue to improve the service experience.

Storjini, our AI-enabled front-line service tool, helps our customer-facing teams resolve inquiries directly and much faster. Inquiry resolution is now around 10 times faster, ticket escalations have been cut by half, and more than 61,000 hours of customer waiting time have been avoided.

The operating recovery is already underway. As installations rebuild the recurring subscriber base, we expect revenues to follow with the usual lag.

Let me now turn to enterprise, which remained our strongest growth business in the first half. Enterprise revenues increased 5% to ₱24.8 billion, while corporate data and ICT revenues also grew 5% to ₱18.4 billion.

The mix continues to shift toward higher-growth services. ICT revenues increased 22% in the first half, led by 35% growth in tech services.

This more than offset the continued decline in legacy services. We are also seeing good growth across underlying infrastructure builds.

Fiber lines increased 6%, SD-WAN lines grew 18%, and contracted third-party racks across our VITRO data centers increased 6%. A key part of the strategy is One Enterprise.

We bring together PLDT, Smart, ePLDT, PLDT Global, and VITRO to offer clients a broad set of solutions under one relationship. Increasingly, our wins involve more than one part of the group, combining connectivity with cloud, managed IT, cybersecurity, and data center services.

That breadth is reflected in the growth we are seeing across the different enterprise businesses. You can see that momentum across the different businesses supporting our enterprise customers.

PLDT Global's enterprise revenues grew 30%, supported by hyperscaler and carrier demand for international connectivity, cable capacity, and colocation. Smart's enterprise business grew 15%, driven by services such as A2P, Giga, Enterprise Postpaid, and IoT.

ePLDT tech services grew 37%, reflecting continued demand for managed IT, cloud, cybersecurity, and customer experience solutions. VITRO data center revenues grew 13%, supported by enterprise, cloud, and hyperscaler demand.

What ties these businesses together is the ability to serve more of our customers' digital requirements, from connectivity all the way through to the cloud, cybersecurity, and data centers. I'd like to spend a little more time on VITRO, where we see a particularly strong growth runway.

VITRO data center revenues grew 13% in the first half, supported by demand from enterprises, the public sector, and hyperscalers. Today, VITRO has approximately 34 megawatts of activated IT-ready capacity across its portfolio, making us the largest data center operator in the Philippines by live colocation IT capacity.

We have significant room to scale from here. The next 10 megawatts at VITRO Santa Rosa are targeted for activation by the end of this year.

Beyond that, identified expansion opportunities across Santa Rosa, Clark, and Cebu 2 could take total IT-ready capacity to 62.4 megawatts. That represents more than 80% growth from our current activated capacity.

We also see a supportive backdrop for the industry. Executive Order 119 reinforces the importance of secure in-country hosting for sensitive government data.

More broadly, it strengthens the case for building digital infrastructure locally and could support further cloud and hyperscale investment in the Philippines. VITRO is well positioned for that opportunity given its track record, scale, nationwide footprint, and its integration with PLDT's broader ecosystem.

We are also continuing to build the platform to global standards. VITRO Santa Rosa is TIA-942 Rated 3 and LEED Gold certified, while S&P Global Ratings assigned VITRO a light green shade of green assessment.

Turning now to operating expenses, cost management remained disciplined in the first half. Total cash expenses, subsidies, and provisions were slightly lower at ₱41.7 billion despite continued investments to support the business.

The main increases came from repairs and maintenance, up 3%, and contract-specific service costs, which rose 26% in line with higher project activities. Subsidies were also higher, reflecting our continued push to drive device adoption and customer engagement.

These increases were largely offset by lower compensation and benefits, selling and promotions, and taxes and licenses. Overall, we were able to keep the cash cost base stable while continuing to fund the areas that support growth and customer experience.

This cost discipline helped preserve margins, which I'll discuss on the next slide. Turning to EBITDA, the semestral trend shows a steadily expanding earnings base.

EBITDA reached ₱56.1 billion in the first half, marking the fifth consecutive semester of growth from ₱53.9 billion in the first half of 2024. This has been supported by a combination of steady revenues and disciplined cost management.

This allowed us to maintain EBITDA margin at 52%, broadly consistent with the levels we have sustained over the past several periods. Moving below EBITDA, telco core income was ₱16.6 billion, down 2% year-on-year, mainly reflecting the higher depreciation and amortization.

Maya continued to contribute positively, with PLDT's share of core income reaching ₱559 million for the first half compared with ₱406 million last year. Maya's second quarter contribution was lower, mainly due to one-time accounting adjustments rather than a weakening in the underlying business.

Excluding these effects, the contribution would have been stronger. We also recognized around ₱0.3 billion from asset sales.

These helped stabilize core income at ₱17.3 billion. Reported income was ₱16.4 billion, down 6% year-on-year, on losses in foreign exchange and derivatives, which moved from a net gain last year to a net loss in the first half of 2026.

Overall, while higher depreciation weighed on telco core earnings, Maya and asset sales helped cushion the impact on core income. Turning to capex, we continue to bring investment intensity down while maintaining focus on growth and network quality.

Capex for the first half was ₱20.7 billion, down from ₱27.4 billion last year. This brought capex intensity down to 19% of service revenues from 26% a year ago.

We continue to prioritize investments that support growth and customer experience, including new cell sites, home fiber ports, AI, submarine cables, and IT modernization. For the full year, we continue to expect capex in the mid-₱50 billion range.

Our objective remains the same: continue bringing capex intensity down over time while sustaining positive free cash flow and investing where we see the best returns. Turning to the balance sheet, net debt stood at ₱287.3 billion at the end of June, with net debt to EBITDA at 2.57 times.

We continue to manage the debt profile proactively, with a well-spread maturity schedule. Only 3% of total debt matures in 2026, while more than half matures beyond 2031.

Average debt maturity remains healthy at over six years. Our average pre-tax interest cost also improved to 5.05% from 5.43% at the end of 2025.

Foreign currency exposure remains limited. US dollar-denominated debts account for 14% of total debt, with only a small portion left unhedged.

PLDT remains investment grade, rated BBB by S&P Global and Baa2 by Moody's. Our focus remains on maintaining positive free cash flow and steadily bringing net debt to EBITDA towards two times.

Finally, on dividends, the Board declared an interim cash dividend of ₱46 per share for the first half of 2026. This represents a 60% payout of telco core income, consistent with our dividend policy.

PLDT continues to offer an attractive return to shareholders, with a trailing 12-month dividend yield of around 8% based on the June 30 share price. At the same time, we are balancing shareholder returns with the need to strengthen the balance sheet.

Our focus remains on sustaining positive free cash flow, continuing our asset monetization programs, and bringing leverage down over time. In the second quarter of 2026, Maya continued to scale its integrated ecosystem and remained profitable.

Through one platform, Maya enables consumers to save, borrow, and transact, while helping businesses accept payments, manage cash flow, and access financial solutions. This integrated model creates strong network effects across consumers and businesses, reinforcing Maya's position as the Philippines' leading digital bank and merchant acquirer.

Maya sustained strong growth across both digital banking and payments. As of end June 2026, Maya's deposit balance reached ₱86 billion, while loans outstanding rose to ₱39 billion.

In merchant acquiring, Maya accounts for 53% of POS terminals nationwide as of December 2025, based on BSP industry data and Maya's corresponding regulatory submission under the same reporting definitions. On digital banking, Maya's deposit balance grew 71% year-on-year, while loans outstanding increased 56% year-on-year, reflecting continued demand for its savings and credit products.

The loan-to-deposit ratio stood at 45%, supporting the continued expansion of the lending portfolio. Asset quality remains stable, with gross NPL ratio of 4.8%, while annualized net interest margin stood at 17.3% for the first half of 2026, reflecting strong lending margins.

Maya expanded payment flexibility for consumers through Maya mini payments, which allows Maya credit card users to convert any purchase into monthly payments without requiring a merchant tie-up. For businesses, the new Maya Business app brings together payments, banking, lending, cash flow management, and business insights and analytics in one app for MSMEs.

Maya also enabled Apple Pay acceptance through Maya terminals and Maya Checkout, giving Apple Pay users a simple, secure, and convenient way to pay at Maya-powered businesses in-store and online. These products and services demonstrate how Maya continues to innovate across both the consumer and business sides of its integrated ecosystem.

On sustainability, we continue to strengthen the depth and transparency of our reporting. As supplements to our 2025 annual and sustainability report, we published five focus reports covering business continuity and network resilience, gender equality, human rights and environmental due diligence, just transition, and materiality and impact assessment.

These reports help convey an even more holistic corporate narrative for PLDT. PLDT continues to participate in industry forums and thematic discussions covering areas such as finance, accounting, human capital, child protection, and nature-based sustainability.

These platforms allow us to share what we have learned, exchange best practices, and contribute to the broader conversation on integrating sustainability into business. To wrap up, the first half showed a resilient performance despite a softer operating environment.

Wireless trends improved through the second quarter, home's operating indicators are moving in the right direction, and enterprise continued to deliver solid growth. At the same time, disciplined cost and capital management helped us protect margins, strengthen cash generation, and maintain our focus on deleveraging.

We believe these trends give us a firmer base as we move into the second half of the year. With that, we thank you for your time, and we're happy to take your questions.

Thank you very much, Butch, for that presentation. Before we open the floor for your questions, let me just acknowledge the presence of some of our other key officers here.

We have also with us SVP Lom Spineda, who heads our Enterprise Business. We also have Attorney Malva, our Corporate Secretary.

Thank you for joining us as well. Please feel free to go ahead and put in your questions in the Q&A box if you feel free to do so.

Or if you wish, you can also raise your hand, and I can unmute you and you can ask your question live to the audience. A number of you have sent in your questions before the meeting started, let me go ahead and ask those questions.

This first question is from Marky Carandang of FB Securities. The question is for our Mobile Business.

"You've highlighted the improvement in top-ups from negative 3% in March to positive 1 in June. How are you seeing July and early August trends, and do you now view the improvement as a structural recovery in consumer spending, or are customers simply responding to the price and offer changes?"

Thank you for the question. The first part of the question is, are we seeing improvement in top-ups?

For July, we're looking at roughly a plus-3 top-ups, and August we're trending somewhere between 2 and 3%, so that's positive. In response to the second part of the question, what part is structural, what part is driven by marketing interventions?

Recall that around in March, we went down to -3; April probably around -2. Then sometime around May, we saw an improvement in gasoline, the diesel prices, which, happily, positively affected mobility.

All told, if you were looking at the numbers, it seems that about from -2 to flat, that's driven by structural improvements in gasoline prices. From June, we saw a +1, July a +3, and roughly maybe a +2 around August.

That roughly +2 is now driven by our interventions. It's half structural, probably half driven by our marketing activities.

Thank you, Lloyd. Before I go to the next question, I apologies, Vboy, I forgot to acknowledge your presence here.

We also have Biboy Genuino, President and CEO of ePLDT and VITRO, our data center business. If you have questions for that side of the business as well, please feel free to ask the questions.

All right. This second question is for our Home Business, this is also from Marky Carandang of FB Securities.

"Given that installations and postpaid net adds have turned positive in May, should we expect the revenue inflection to become visible at around August or September, or is there still a longer lag from the OSS disruption?"

Yes, Marky, right?

Marky,

yeah. Hi, Marky.

Thank you for your question. Actually, we're very encouraged by the leading indicators that we've seen, as we mentioned during the briefing.

Our installation rates went up to pre-disruption levels. We've also seen the conversion rates improve, and the churn rates go down.

All these factors will add to the compounding of the installed revenue moving from month to month to higher levels. Yes, we are encouraged to see this impact very soon.

I'd like to say that it would be sooner than later, but we will see what the impact of this is. I can say, based on the initial figures that we're seeing, that we will see near improvements, for sure.

Thank you.

Thank you. As a follow-up to that, John, would you be able to share if there are any installation run rates that you need to reach for Home to return to positive revenue growth, or is this something...?

As a matter of principle, Jinggay, thank you. Marky, too.

As a matter of principle, our net adds is really a function of our gross adds and our churn rates. As long as we keep it on the positive side, this will compound.

In fact, our challenge in catching up was really the shortfall of the Q1 disruption that carrying over also compounded negatively into the first half. We're seeing that we are now positive net adds and at an increasing rate at that.

Also, we're seeing that the customers that we are acquiring are in the postpaid segment, which provides a much higher ARPU for us. As long as we continue to do that for the balance of the year and moving on to the next year, then we should be okay.

Thank you.

Thank you, John. All right.

Next question also from Marky. This is on Maya, and I'll be taking that question.

"So Maya remains profitable, but its contribution to PLDT's core income was slightly lower both Q-on-Q and year-on-year in the second quarter. Is it because of non-recurring accounting adjustments?

If you exclude those adjustments, how should we think about underlying earnings trajectory for Maya in the second half of 2026?" Also as a follow-through to that question, "With Maya's loan book up 56%, would that cause management to slow credit growth, and what early warning indicators would tell you that the current 4.8% NPL ratio is no longer sustainable?"

Just to address the Q-on-Q and year-on-year decline for Maya. The movement in that is really not reflective of the underlying performance of the business, and it's really primarily due to certain accounting treatment of expenses and non-recurring expenses for the quarter, right?

Definitely if were not for those accounting adjustments that are one-time, definitely year-on-year and both quarter-on-quarter contributions to PLDT would have been much stronger and positive. Now, regarding the question about credit growth, we did grow 56%.

If you do look at the LDR, loan-to-deposit ratio, of Maya, which is published in the BSP website, it is still in the low 40s. There definitely is quite a bit of room to expand.

Really, if you look at Maya, it really is hand-in-hand with the BSP and really pushing financial inclusion, right, in the Philippines. Now, if we look at the credit quality of Maya, as well as the credit quality that is published by the BSP, based on that, Maya really hasn't observed any broad-based deterioration in credit quality.

In fact, Maya's loans continue to grow. Our NPLs continue to improve to 4.8%, and Maya really continues to monitor repayment behavior, portfolio performance, and developments across the customer segments very, very closely.

I think for now, they're at a comfortable position on that. Okay.

This next question is from Jojo Gonzaga, Jojo Gonzaga of Philippine Equity Partners. "Many thanks for sending ahead of the call.

My questions are around the cost side." This would be for our finance team.

"As opex appears to have outpaced the growth of revenues, especially in 2Q, specifically depreciation, interconnection, and the costs of devices and accessories, what is behind the seemingly faster rate of growth of these items? Thank you."

So...

Sure. In terms of the depreciation, there have been investments, predominantly related to the network, upgrading our core services.

We also plan to build out in terms of the transport, as well as the core network. Also to solidify our position.

We want to make sure that our 5G coverage is better. We are increasingly focusing on that within the boundaries of our capex guidelines, which this year we've signaled around a 55, mid-50s, billion-peso capex target for this year.

For us, that capex, which started and will continue in the second half, has elevated some of the depreciation associated. We have to invest to grow the business.

I think the challenge for us is to be prudent in terms of our cost management, but also looking with a view towards pushing on and driving the growth in the top line. This is what we are focusing on and will look to improve in the second half.

Thank you. All right, this next question is from Michael Fernandez of Metrobank.

I think this is in regards to capex as well. "How much is capex spend in the first half of 2026, that should be in our slides?

Is guidance for 2026 still in the mid-₱50 billion peso levels? What is capex guidance for 2027?

How much of capex will be funded by debt?"

Sure. In terms of the capex, so as you saw last year, the capex for the first half was 27.4.

This year, what we have done in the first half is lower than that, ₱20.7 billion. From an intensity perspective, the capex intensity last year of 26% has reduced down to 19%.

Why we are focused on that is the ability to then ensure the free cash flow generation. When we look at those measures, including, for instance, EBITDA less capex, then that's where we're showing the improvement that we have been able to do through the reduction.

Now, having said that, as I mentioned earlier, our target for the full year though still remains in the mid-50s, and therefore you would see a increase in the second half as we look to continue, as I mentioned, to support our network. We want better coverage, we want better quality in terms of our services that we provide across the board.

We are going to be continuing our investments. Now, in terms of guidance for next year, 2027, it's a little premature, but I think the message here is we want to continue to our discipline on capex.

We are looking at very closely at return on invested capital for the new capex that we're making. We want to make sure that it's spent in the right areas that need it, that will generate growth for our businesses as well, in terms of the top line, and provide an adequate return on that invested capital.

For next year, I think we would look to continue to seek to reduce, if possible, from the 55, below that. In terms of the amount and the quantity at this point, it's too early to say.

All right. Thank you very much for that.

This next question, also from Michael, is for VITRO. Biboy, this would be for you.

"Can management provide an update on the proposed VITRO REIT transaction?"

Yeah. Excellent question.

We're still targeting for a Q4 listing, but obviously this will be subject to market conditions. We have done our cornerstone roadshow already, internationally and locally.

Interest has been very positive. I think it clues to the view that it will be one of the only digital infrastructure REIT platforms in the country.

We will see by Q4 as to whether we will proceed.

Thank you. All right, this message, let me keep it within the VITRO space.

This is from Mateo Lorenzo. "On VITRO REIT, could you help us understand why it's the right time from both PLDT's and VITRO's perspective to list?

PLDT is already in a lower capex and positive free cash flow and deleveraging phase, while VITRO still has significant growth upside. How much of the timing is about accelerating PLDT's own financial trajectory versus the current rate and yield environment versus what the REIT can unlock for VITRO?"

I guess Biboy can take the timing from VITRO's perspective, and then we can take the timing from PLDT's perspective.

Yeah. I think it's a good time.

From our nine data centers currently, we have eight that we are injecting into the REIT. That's 24 megawatts in total.

Our ninth data center, the newest one, is VITRO Santa Rosa, which is 36 megawatts in capacity. I think it's a good opportunity to come in and capitalize the 25 years of experience of us running data centers in the country.

We are the largest data center platform in terms of number of sites. We are the largest data center in terms of capacity.

We are the most carrier-dense data center in the Philippines today. We are the home of the Philippine internet.

We host over half of the internet exchanges in the Philippines today. It bodes well to the platform that we have built over 25 years.

We're very proud of the platform, and we think it's a good opportunity to list now. Having said that, the upside is still huge.

A lot of developments on the AI front, a lot of developments in terms of hyperscalers looking at us, entering the Philippines. Of course, we have our crown jewel, VITRO Santa Rosa, to be injected in the future in the VITRO REIT.

From the PLDT perspective, what I can say is that the timing is, of course, there's a lot of interest in this space. As you are aware, the recent Executive Order 119 has created an opportunity to scale up in this industry.

The REIT itself is a portfolio of eight data centers, which are mature, which have been around, part of it even over 20 years. As a result of it, and as the capacity of those are higher, this allows us to offer investors an attractive vehicle where they can invest into a attractive dividend-yield business that is listed.

Then in the future, we would look to grow by continuing to build on the data centers. As Biboy just alluded to, the developments in this market, with EO 119, even without it, we're seeing a lot of growth on the corporate side and the traditional colocation businesses.

Now with the interest coming from hyperscalers and AI-based providers, this is creating a lot of supply on the demand side for data centers. I think the opportunity to list would be one to then raise some capital, and perhaps some of that would go into the future investment.

Also, as mentioned earlier, it's also part of the overall group plan to delever. The debt, where we are now today at 2.6 times net debt to EBITDA, we'd like to see that come down.

Any proceeds that could be generated from a listing, that would help us in terms of reducing and improving and strengthening our balance sheet. This is an opportunity.

It could be this year, but it doesn't necessarily have to. Build the business as we fill up the capacity of VITRO Santa Rosa, and we look to further develop others in the future, I think that's really where the strategy of the business is, is recognizing the growth in this industry, and wanting to be a continued participant and increase our leadership in this category.

I think just to add to that I think you even had it embedded in your question, right, the market conditions. That is what we talk about, how would it price, right, in that period when we explore the listing.

I think we're obviously paying attention to that. We want to make sure that it's pricing in upside in growth, proper factoring into the REIT and how the eight data centers are performing.

We just wanted to highlight that as well.

Thank you, Lom. All right, I'll take some live questions now.

I see John Te of UBS with a raised hand. Let me go ahead and allow you to unmute.

Please go ahead and ask your question, John. Are you able to...?

Apologies, John. Feel free to send me your message offline if you're not able to ask it live.

Let me go ahead and move back to the Q&A side while I figure out the live question box. Apologies about that, John.

All right. This is from Dita Lang of Papa Securities.

This is for our Mobile segment. "Mobile subscribers saw churn across all segments this quarter.

Are you seeing more aggressive pricing from competitors, or just a case of subscribers self-selecting into lower-priced providers amid inflation?"

All right. Actually, we just did a cleanup on our subscriber base.

It's not a churn driven by subscribers, but rather, we saw some subscribers who don't make sense already to be in the network because they're just using resources. That's basically a cleanup for that part, for mobile.

Thank you. All right, this is from Michael Severo Alonso.

This is in regards to Pax Silica, maybe Lom or Biboy can comment on this. "Do you anticipate any potential disruption or increased competition in the data center business arising from the Pax Silica development?"

I can take a stab. I think we are still really waiting for details on what exactly Pax Silica is.

Obviously, both the US government and the Philippine government have been in talks, it has yet to trickle down into specific implications to which private sector locators are going to drive the investors, particularly which US companies are going to lead the charge. The last time when we talked to different parties, it's not that clear yet.

That said, I think a lot of the Pax Silica focus is really on advanced manufacturing, mineral and that type of processing. I think data center and other digital infrastructure, particularly connectivity, is much more of servicing those different industries.

We're prepared, as always, to respond to that, as we do in any other type location, special zones, et cetera. I think we're waiting for more details.

In fact, we've had maybe some independent inquiries. They could be considered within the same industries as what Pax Silica is targeting, already asking.

That's just part of our business as usual to engage them and talk to them for both connectivity as well as their data center needs.

Thank you. All right, going back to the Q&A box.

This is from Michael, Michael Fernandez as well from Metrobank. "How much of PLDT's debt can we expect to go down as a result of the VITRO REIT transaction?

Understand that it was previously mentioned that a portion of the proceeds will be used to pay down debt." Sure.

In terms of the debt reduction, from a net debt to EBITDA ratio, we would see a improvement from the 2.6 to approximately 2.4.

Then, for the peso amount, I think it's a little under ₱13 billion, or a little over ₱12 billion, that will be used to pay down debt. All right, this is from Francis Vidal.

This is in regards to costs as well, depreciation and capex. "Would you say that the growth in depreciation despite tempered capex in the past few quarters is related to old 4G investments becoming more outdated as you migrate further to 5G?

How long do you expect depreciation growth to remain elevated?"

Sure. That 2026 figure is assuming moderate increase in depreciation, which reflects some of the prioritized network and digital investments, for instance, fiber and wireless expansion, capacity, resilience, upgrades.

We want to sustain the capex intensity improvement through tighter prioritization and the discipline in terms of the execution. There's also an impact from IFRS 16, some of the step-ups as we use more leaseback network investments.

The depreciation on the right-of-use is also contributing to the increase in the depreciation.

Thank you. All right.

John, I'm going to try to unmute you again. Yeah.

John, can you ask your question now?

Thank you. First question on mobile.

I understand it is macro-linked, though your competitor showed stronger growth. Anything them you think are doing differently?

First there are two major things that we're looking at in comparison to. One is on our network.

We're focusing our rollouts in 5G primarily to the areas. We've seen programs happening on the capex rollout rest of the country.

That's one. The other item that we're seeing in their head is that, I think on the IT side, they have better reach on their hyper-personalization, in particular, because of the reach of GCash.

What we intend to do now is figure a way to actually expand our hyper-personalization capabilities to go beyond the current applications, SMS, and that we can get into more partnerships with the wallets and with the social media OTT providers. That should allow us now to level the playing field with regard to our marketing efforts, in particular, engage our subscribers.

Very clear, thank you. Second question on broadband.

I think one of your competitors also accelerated revenue growth, whereas two of the three slowed this quarter. I guess the question is, how do you characterize the competitive landscape given these factors?

Yes, thank you for that. PLDT remains to be the clear leader in the high-value fiber or premium market.

We have the highest ARPU today, we have the lowest churn, and we have 52% of the postpaid fiber market. A lot of the industry growth headlines have revolved around the growth in the prepaid segment, no?

Very disproportionately. This is driven by, of course, lower-ARPU prepaid fiber, and acquisition by our competitors, no, in that segment.

Now, PLDT Home's underlying fundamentals have been growing, and we turned positive in Q2. Because PLDT is 99% postpaid, there is a certain lag for us to convert those new installations to recurring revenue.

We need to wait for that impact to compound. In our business, the second half is really very straightforward.

We just need to accelerate and ride on this wave of Q2 improved trends while building prepaid as a potential growth engine, as long as we don't sacrifice the economics, which we're looking at very carefully today, then this is a segment that we would like to be active in as well. Thank you.

Very clear. Third question just on the topic of capex.

I think it was mentioned that there are new ROIC targets for new capex. Could we share some of those?

I guess the question is also coming from depreciation has been growing faster than revenue for the past few quarters. I guess the second part of that question is whether we could actually expect capex-to-sales to drop to low 20s or even high teens, as other ASEAN markets have shown this trend?

On the return on invested capital point, when we look at the initiatives, for instance, if we have an initiative around the network, we want to improve the 5G site rollout, for instance, then we would evaluate depending on which locations and opportunities that would generate increases in revenues, weighed against the costs, and therefore, is it accretive to our returns, and what kind of investments and returns and payback and so forth are we going to get. This is one specific example, but as part of our review in terms of our investments in the capital, then that also goes into the allocation in terms of which of the businesses, recognizing that we have the Home, we have the Mobile, as well as Enterprise and key initiatives in ensuring that we have a stronger network, then it's the allocation among that.

It's a measure that we review internally. Can be also specific to projects themselves.

The net effect is that this is what impacts our, not just our top-line growth, we're minded to grow, but also what would be the income and the net margins that would stem from that capital investment. It's a discipline that for us is very high in terms of our priority.

Given our focus to reduce our capital spend overall, in terms of capex reduction from the past, then we have to be more efficient and effective with it. That's really the color around how we approach the returns.

Thank you. All right.

This next question is from Raymond Franco. "Is there scope to increase the dividend payout ratio, I guess with the focus on deleveraging?"

At this point, the focus has been at the 60% core income payout. I think that, for now, that is still the intent of and the plan of the group.

Thank you. Also from Raymond, this is a question on Maya.

"Can you give a peso value for Maya's recurring net income contribution for the second quarter?" I'm not able to comment on the actual recurring net income contribution, but I can tell you how much they contributed to PLDT's core income, and that is ₱559 million for the first half, right?

Again, that does include some of those one-off accounting adjustments that resulted in a lower contribution for the second quarter. Again, that should be non-recurring, there's that little blip that you have in the second quarter.

All right. I think this next question from Raymond was already asked earlier, in regards to the trends that we're seeing in mobile top-ups, as it moved positive to June, how does July show month-to-date?

I'll just get back to you on that, since it was already addressed by Lloyd earlier in the call. Let me just go ahead and go back to the Q&A box.

This is from Paolo Manansala of COL. "With regards to the copper assets, is there an update to the timeline, or are you seeing a more favorable environment to sell these assets?"

We are in discussions and exploring the opportunity to sell copper, which will stem from some of the legacy assets of the business. In terms of the environment and timing of the pricing, as you've seen in the spot prices, the price of copper has increased, even within this year and the past 18 months.

Today the spot is around $6.50 US per pound. It is a commodity that is increasing in value.

Of course, that helps in when we're looking at a sale in terms of the pricing. As I mentioned, discussions are ongoing, and as and when a transaction would be completed, then the appropriate disclosures will be made.

Thank you. This next question is from Michael of Metrobank.

"This is in regards to also asset monetization, but tower sales now. Do we expect any tower sales this year?

How much can we expect?"

The approximate proceeds that we would seek to generate from the sales would be ₱2 billion. That would be the target, but, of course, subject to discussions and finalization of this process.

All right. I think that brings us up to the hour.

Again, thank you so much for joining us today. I know there are quite a number of questions in the Q&A box still, apologies for not being able to get through to all of that.

I'll take these questions in, and then we can answer them offline. In terms of our next earnings announcement, we'll see you all in November.

Thank you again very much for your time today, and we hope to continue to see you in future events. Thank you, have a good day.

Bye-bye.

Thank you.

Thank you. Thank you.