Research

In

Management 1

Submitted By:

Abegail B. Villaluz

Submitted to:

Frances Belarma

Philippine Long

Distance Telephone Company

History

PLDT was established on November 28, 1928, by an act LORAINE of the Philippine

legislature and approved by then Governor-General Henry L. Stimson by means of a

merger of four telephone companies under operation of the American telephone

companyGTE. Known as Act 3436, the bill granted PLDT a 50-year charter and the right

to establish a Philippine telephone network linking major points nationwide. However,

PLDT had to meet a 40-day deadline to start implementing the network, which would be

implemented over a period of one to four years.

By the 1930s, PLDT had an expansive fixed-line network and for the first time linked the

Philippines to the outside world viaradiotelephone services, connecting the Philippines

to the United States and other parts of the world.

Telephone service in the Philippines was interrupted due to World War II. At the end of

the war, the Philippines' communications infrastructure was in ruins. U.S. military

authorities eventually handed over the remains of the communications infrastructure to

PLDT in 1947, and with the help of massive U.S. aid to the Philippines during the 1940s

and 1950s, PLDT recovered so quickly that its telephone subscribers outpaced that of

pre-war levels by 1953.

On December 20, 1967, a group of Filipino entrepreneurs and businessmen led by

Ramon Cojuangco took control of PLDT after buying its shares from the American

telecommunications company GTE. The group took control of PLDT's management on

January 1, 1968, with the election of Gregorio S. Licaros and Cojuangco as chairman

and president of PLDT respectively. A few months later, PLDT's main office

in Makati (known today as the Ramon Cojuangco Building) was opened, and PLDT's

expansion programs begin, hoping to bring reliable telephone services to the rural

areas.

PLDT was permitted to operate during Martial Law. During the 1970s, PLDT was

nationalized by the government of then President Ferdinand Marcos and in 1981, in

compliance of then existing policy of the Philippine government to integrate the

Philippine telecommunications industry, purchased substantially all of the assets and

liabilities of Republic Telephone Company, becoming the country's telephone monopoly.

Under this monopoly, service expansions were severely curtailed or practically

nonexistent. In the Martial Law years people would apply for phone service only to wait

for years and years on end behind an impossibly long application backlog. It is not

unheard of for people and small businesses back then to barter for a single telephone

line in the black market for tens of thousands of pesos. The incumbent Prime Minister

Lee Kuan Yew of Singapore referred to the situation when visiting the Philippines during

the term of President Fidel V. Ramos. He said, albeit in jest, “In the Philippines 95% of

the population has no telephone, while the remaining 5% are waiting for that dial tone.”

In 1986, after President Marcos was overthrown, the company was re-privatized as

Ramon's son, Antonio "Tonyboy" O. Cojuangco, Jr. assumed post as PLDT chief. By

1995, with the passage of the Telecommunications Act and the subsequent

deregulation of the Philippine telecommunications industry, the company has been de-

monopolized. Later that year, Hong Kong-based First Pacific Company Ltd. acquired a

17.5% stake in PLDT making it the majority owner of the conglomerate. The company's

CEO Manuel V. Pangilinan became the new conglomerate's President replacing

Cojuangco, who assumed post as Chairman until 2004, when Pangilinan became his

successor.[8]

Mission/Vision

PLDT will be the preferred full service provider of voice, video and data at the most attractive levels of price, service quality, content and coverage, thereby bringing maximum benefit to the Company's stakeholders.

Our Objectives

We take full responsibility for our actions and decisions We do the right thing We uphold justice and fair play We disclose accurate and prompt information

Board of Directors

ORGANIZATIONAL CHART

BACKGROUND

PLDT Group Corporate Structure

WIRELESS

Wireless telecommunications services provided by Smart Communications, inc., or Smart, and Pilipino Telephone Corporation, or Piltel, our cellular service providers; Smart Broadband, Inc., or Smart Broadband (formerly known as Meridian Telekoms, Inc., or Meridian), our wireless broadband provider; Wolfpac Mobile, Inc. , or Wolfpac, our wireless content operator ; Mabuhay Satellite Corporation, or Mabuhay Satellite, ACeS Philippines Cellular Satellite Corporation, or ACeS Philippines, and Telesat, Inc., or Telesat, our satellite and very small aperture terminal . or VSAT, operators;

FIXED LINE

Fixed line telecommunications services are primarily provided through PLDT. Fixed line services through PLDT's subsidiaries PLDT Clark Telecom, Inc., Subic Telecommunications Corporation and PLDT-Maratel, Inc., Piltel, Bonifacio Communications Corporation and PLDT Global Corporation, or PLDT Global, which together account for approximately 4% of our consolidated fixed line subscribers.

SUBSIDIARIES AND AFFILIATESWireless Smart Communications, Inc. and SubsidiariesDigitel Mobile Philippines, Inc.Smart Broadband, Inc. and SubsidiariesChikka Holdings Limited and Subsidiaries

Fixed Line PLDT Clark Telecom, Inc.PLDT Subic Telecom, Inc.PLDT Global Corporation and SubsidiariesPLDT-Philcom, Inc. and SubsidiariesPLDT-Maratel, Inc.Digital Telecommunications Philippines, Inc.ePLDT, Inc. and SubsidiariesPilipinas Global Network Limited

OthersPLDT Communications and Energy Ventures, Inc.Philippine Global Investments Holdings, Inc.

External and Internal Environment

POLICIES, PROCESSES AND PRACTICES

Corporate Governance Policies

PLDT’s corporate governance principles, structures and processes are established and articulated in two fundamental policies: The CG Manual and the Code of Ethics. These policies are benchmarked against global best practices in corporate governance, yet are applicable and responsive to PLDT’s particular context. As part of Board oversight, the Company’s corporate governance policies and their effectiveness are reviewed every two (2) years to ensure that they continue to be compliant, appropriate and effective.

Manual on Corporate Governance

The PLDT Manual on Corporate Governance or, CG Manual, was approved and adopted on March 26, 2010, and amended on July 8, 2014 by the Board of Directors in accordance with applicable Memorandum Circulars issued by the Philippine Securities and Exchange Commission. The structures and processes set forth in the CG Manual, as well as the Articles of Incorporation and By-Laws, combined with the Company’s commitment to the principles of transparency, accountability, fairness and integrity, form PLDT’s basic framework of governance by which our Board of Directors, officers, executives and employees strive to achieve the Company’s strategic objectives, create value for all its stakeholders, and sustain its long term viability.

Code of Business Conduct and Ethics

The Company’s Code of Business Conduct and Ethics, or Code of Ethics, was adopted to strengthen the implementation of the CG Manual. Approved by the Board on March 30, 2004 and subsequently updated on July 11, 2006, the Code of Ethics sets out the Company’s business principles and values, which aim to promote a culture of good corporate governance. It describes PLDT’s four core values of Accountability, Integrity, Fairness and Transparency and provides standards that govern and guide all business relationships of PLDT.

Internal Disclosure Controls and ProceduresThe Internal Disclosure Controls and Procedures provides the procedures to ensure that all information required to be disclosed in reports to the Philippine Securities and Exchange Commission, Philippine Stock Exchange, U.S. Securities and Exchange Commission and New York Stock Exchange are disclosed in accordance with the applicable rules. These disclosures include the annual reports, quarterly reports, disclosures of material information, events and transactions which could affect the market price and trading of PLDT shares, press releases and materials for stockholders’ meetings. In accordance with the abovementioned policy, major company announcements are reviewed and approved by the Company’s

Disclosure Committee, which is composed of certain members of Senior Management, and by the Board of Directors or the Audit Committee, as applicable.

Restriction on Trading of Shares The Company prohibits directors, officers and employees from dealing in Company shares while in possession of material non-public information. Directors and officers are enjoined to report to the Company their dealings in Company’s shares within 3 trading days from the date of the transaction to enable the filing of the required disclosures to the Securities and Exchange Commission and the Philippine Stock Exchange. During blackout periods, dealing in Company shares by directors, officers, executives and concerned employees is not allowed, and in any exceptional case where any of the foregoing might be required to buy or sell Company shares, prior notice to the Company should be made of any such plan in accordance with the Company’s policy on Blackout Period/Restriction on Trading of Shares.

Conflict of Interest Policy (approved on October 24, 2005)The Conflict of Interest Policy enjoins members of the organization to always act in the best interest of the Company consistent with sound business principles and judgment without bias or partiality. The policy requires directors, officers, employees, and consultants who find themselves in a potential or actual conflict of interest situation to promptly disclose the matter and, as applicable, seek approval from the proper authorities. Unless otherwise authorized by the Company, the person concerned is required to inhibit himself from any action, transaction, discussion, evaluation, or decision involving such conflict of interest. The policy also prohibits the Company from granting personal loans to directors or officers unless allowed by applicable laws and regulations.

The Company’s Guidelines on the Proper Handling of Related Party Transactions provides the procedures and clearly defined thresholds for the review, approval and disclosure of related party transactions in order to ensure that they are fair, on arm’s length terms, and in the best interest of the Company and its shareholders, as a whole. Material related party transactions are reviewed by the Audit Committee, which is composed of the Chairman and two (2) members, all of whom are independent directors, and subject to the approval by the Board and, as applicable, the shareholders. Related party transactions are disclosed in the relevant financial reports of the Company as required under Philippine Accounting Standard 24 on Related Party Disclosuresand other applicable disclosure requirements.

Policy on Gifts, Entertainment and Sponsored Travel (approved on January 31, 2006)This policy provides safeguards so that the custom of giving gifts is handled in accordance with the values of integrity, accountability, fairness and transparency. It aims to prevent the occurrence of situations or actions that could significantly affect objective, independent or effective performance of an employee’s duties. Specifically, it prohibits the solicitation of gifts, sponsored travel, and entertainment from third parties. Receipt and acceptance of gifts voluntarily given by such third parties are handled

according to this policy as well.

Supplier/Contractor Relations Policy (approved on January 31, 2006)

This policy seeks to ensure that the Company upholds the highest professional standards in business practices and ethics in its dealings with suppliers and contractors in the procurement of goods and services. The policy also seeks to maintain PLDT's reputation for equal opportunity and honest treatment of suppliers in all business transactions. It establishes clear rules for arm's length transactions and fair treatment of prospective and existing suppliers with the objectives of always obtaining the best value for the company. The policy specifically adopts the processes of vendor accreditation and competitive bidding as the general rule and establish practices to ensure the contracts are awarded only to qualified and duly-accredited suppliers and vendors who offer the best value for money for PLDT's requirements.

Policy on Employee Disclosure on Violations of the Corporate Governance Rules, Questionable Accounting or Auditing Matters, and Offenses covered by PLDT’s Table of Penalties (or the Expanded Whistleblowing Policy (approved on May 9, 2006)

This policy provides guidelines on handling employee disclosure or complaints of violation of rules pertaining to the aforestated matters, protects whistleblowers from retaliation and ensures confidentiality and fairness in the handling of a disclosure or complaint.