PLDT faces succession challenge as CEO prepares to retire

Philippine telco operator PLDT yesterday announced that its president and CEO, Alfredo Panlilio, is stepping down at the end of the year, with company chairman Manuel Pangilinan taking his place effective January 1, 2024.

In a stock exchange disclosure, PLDT said Panlilio is retiring for health reasons and that Pangilinan will hold the post "until such time as a new president and chief executive officer is appointed."

While taking over Panlilio's post, Pangilinan will also remain as chairman of PLDT.

Panlilio has been instrumental in spearheading major infrastructure projects, including data centers and subsea cable systems, as PLDT gears up for the country's rapid digitization. During his nearly three-year tenure, the operator's mobile communications arm Smart was able to take back market leadership from rival Globe Telecom in terms of customer base after seven years.

"Mr. Panlilio has been instrumental in steering the PLDT Group during the challenging times of the COVID-19 pandemic and enabling PLDT to sustain profitability and industry leadership in that difficult period," the company said.

Succession challenge

Panlilio's departure raises concerns over PLDT's leadership succession as the operator just completed a major shake-up in its senior management this year, which saw several key executives leave in the aftermath of the massive multi-billion-peso budget overrun discovered in December 2022.

Related:Capex scandal slashes PLDT earnings by 60%

The operator uncovered 48 billion Philippines pesos (US$884.6 million) in previously unknown capital spending over the previous three years. But it says an external audit team had found "no evidence of fraud, intentional concealment, or bad faith conduct."

It is reported that the budget overrun was caused by overspending on 5G technology.

Talking to local news outlet Inquirer, China Bank Capital Managing Director Juan Paolo said that Panlilio's retirement was "unfortunate as this comes at a critical time and again raises a question on PLDT's succession plan."

"While there is no doubt that Mr. Pangilinan is a highly capable steward, the company needs to reassure investors that there will be an expeditious process to appoint a new CEO who can drive innovation and growth in a quickly evolving competitive landscape," he added.

Pangilinan, widely known by his initials "MVP," is no stranger to running the show at PLDT. He served as president and CEO of the company before handing over the baton to Panlilio in 2021.

Regina Capital Development Head of Sales Luis Limlingan told the Inquirer that Pangilinan taking over the role himself was a welcome development for investors.

"MVP has a long history already with PLDT so that already makes him well-equipped to hold the position as its CEO. I believe that investors would take this news positively," he explained.

Meanwhile, Pangilinan thanked Panlilio for his service and his loyalty and wished him the very best.

"'I also enjoin everyone to support a smooth transition within the PLDT Group at this critical juncture of its corporate life," said Pangilinan.