PLDT Inc. said it has identified a material weakness in its internal controls over financial reporting as of December 31, 2025, after a reassessment of deficiencies tied to the accounting of certain structured hedge arrangements.
The telecommunications giant said the deficiencies initially resulted in errors involving the classification and recycling of “Net fair value losses on cash flow hedges” into gains or losses on derivative financial instruments.
Management, in consultation with independent auditor SyCip Gorres Velayo & Co. (SGV) and accounting experts, concluded that the control deficiencies, individually or collectively, constituted a material weakness.
PLDT said it also plans to revise certain line items in its 2025 consolidated financial statements and amend the description of prior-period revisions in its financial statements.
The company said the revisions are not expected to materially affect reported net income, earnings per share, or cash flows.
The adjustments are also not expected to materially change key operating measures, including EBITDA, EBIT, Telco Core Income, and Core Income.
However, the disclosure adds another layer of scrutiny to PLDT’s financial reporting after the company found that certain other adjustments made while correcting the hedge-related errors had been incorrectly classified under “Other Expenses-net.”
These amounts are expected to be moved to the appropriate financial statement line items.
PLDT’s Audit Committee has launched an independent review, assisted by independent counsel and accounting experts, into the discovery, analysis, and reporting of the errors and the related control weakness.
SGV said its previous opinions on PLDT’s internal controls and 2025 financial statements can no longer be relied upon and have been withdrawn.
PLDT said it has begun remediation measures, although their effectiveness remains subject to evaluation.
