PLDT's P48Billion Over Budget a Case Study

This case study is very important in making decisions in the company relative to the effective and efficient management of the resources and how the organisation increase the value of the funds being entrusted to them

1. PLDT’s P48 Billion Over budget Group 4 FREDDY C. NAVARRO, CMITAP, MBA Presenter

2. RATIONALE PLDT, a leading telecommunications company in the Philippines, experienced a significant budget overrun of P48 billion. The overrun occurred due to a combination of factors, including mismanagement, unexpected expenses, and economic challenges in the telecommunications industry.

3. Q1: GOOD GOVERNANCE AND CAPITAL MARKET ISSUES: 1. Transparency and Accountability: PLDT's failure to promptly disclose the budget overrun raises concerns about transparency and accountability in corporate governance. Shareholders and investors expect accurate and timely financial reporting, but the delay in disclosure may erode trust in the company's leadership.

4. 2. Regulatory Compliance: Regulatory authorities may question whether PLDT complied with financial regulations and standards in managing its finances and reporting financial information to stakeholders. Failure to adhere to regulatory requirements could result in legal and financial repercussions for the company.

5. Q2: HANDLING OF ISSUES: PLDT Management: Initially, PLDT management struggled to effectively communicate the reasons behind the budget overrun and provide a comprehensive plan to address the issue. This lack of transparency may have contributed to uncertainty among shareholders and investors. Regulatory Authorities: Regulatory bodies launched investigations into PLDT's financial management practices and compliance with regulatory requirements. They sought to ensure that the company adhered to industry standards and took appropriate measures to rectify the situation.

6. Q3: RESOLUTION APPROACH: Enhanced Financial Controls: PLDT should implement stricter financial controls and oversight mechanisms to prevent future budget overruns. This includes enhancing budgeting processes, conducting regular audits, and implementing risk management strategies to mitigate financial risks.

7. 2. Improved Communication: PLDT should prioritize transparent communication with shareholders and investors, providing timely updates on financial performance and addressing concerns promptly. Open communication channels will help rebuild trust and confidence in the company.

8. 3. Strengthened Regulatory Oversight: Regulatory authorities should continue to monitor PLDT's compliance with financial regulations and standards, conducting thorough audits and inspections to ensure accountability. They should also impose sanctions or penalties for any violations to deter misconduct.

9. 4. Board Oversights: PLDT's board of directors should play a more active role in overseeing financial management practices and holding management accountable for governance lapses. Board oversight is crucial in ensuring that the company operates with integrity and transparency.

10. CONCLUSION: The PLDT P48 Billion Budget Overrun highlights the importance of good governance and regulatory compliance in corporate finance. By addressing issues related to transparency, accountability, and regulatory oversight, PLDT can rebuild trust with stakeholders and strengthen its position in the telecommunications industry. However, achieving lasting change will require concerted efforts from PLDT management, regulatory authorities, and the board of directors to implement effective governance reforms and prevent similar incidents in the future.

11. Thank you!