By Arjay L. Balinbin, Senior Reporter

SHARES in PLDT, Inc. fell more than 19% on Monday after reporting an estimated P48-billion budget overrun over the past four years, which caused the telecommunications giant to reorganize its management.

PLDT shares closed 19.35% lower at P1,192 apiece. The stock was down 28.54% from the highest close of P1,668 last week.

“This is a 52-week low; lowest for 2021 was during March at P1,195 per share,” Adrian Alexander N. Yu, head of institutional sales at stock brokerage house COL Financial Group, Inc., told BusinessWorld in a Twitter chat.

Mercantile Securities Corp. Analyst Jeff Radley C. See sees “tough times” for the Pangilinan-led telecommunications service provider after its announcement last week regarding a massive budget overrun.

“Investors would see more selling pressure and might dip towards its next support level at P1,083,” Mr. See said in a phone message.

Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio said in a separate phone message: “While the news took the market by surprise, today’s price plunge overshot the actual impact on PLDT’s P&L (profit and loss) and long-term prospects.”

“So far, it looks like the company has more than enough legroom to either take on more leverage if need be, to supplement the gains from its tower sales and make up for the budget overrun,” she added.

“At this rate though, the stock is still overheating from the negative sentiment.”

Price-wise, PLDT must first find and establish support that could catch further drops, Ms. Agravio pointed out. “Expect large and relatively more volatile swings trading-wise in the next few days as investors digest the news.”

BusinessWorld is still awaiting clarification from PLDT on a news report on Saturday that the “anomalous supply deals” were initially estimated to be close to P130 billion before being reduced to P48 billion. “We have nothing to share at this point beyond the disclosure,” the company said when asked for confirmation and clarification.

The company said that it is undertaking a management reorganization process and has initiated improvements in its processes and systems to address weaknesses.

Anabelle L. Chua, PLDT’s chief financial officer, is in charge of overseeing the company’s financial activities. The company has so far announced three major appointments: Danny Y. Yu as group controller effective Nov. 17 and Emmanuel Ramon C. Lorenzana and Joseph Ian G. Gendrano as chief transformation and customer officer and chief technology officer, respectively, effective Jan. 1.

Joey Roxas, president of Eagle Equities, Inc., told BusinessWorld Live on OneNews that the budget overrun may have come in trickles.

“I think… it wasn’t noticed immediately, and that’s why we’re looking now at four years,” he said.

He also said that the budget overrun can be lower than the P48 billion stated in PLDT’s disclosure. “In the press release, it’s a maximum of P48 billion, and that figure… can go down.”

“The other thing also is they’re planning to sell more towers next year,” he added.

The P48-billion budget overrun represents 12.7% of PLDT’s P379-billion capital expenditure over the past four years.

According to the Securities and Exchange Commission (SEC), it is closely monitoring issues that have arisen from the announcement of PLDT regarding the budget overrun as well “selloff in shares” prior to the disclosure on Friday last week.

These are “areas of concern for the commission being the regulator of the securities market and the champion of investor protection in the country,” the SEC said in a statement on Monday,

“In this light, the SEC has immediately commenced an inquiry into the matter,” the regulator said.

At the same time, the SEC said that PLDT needs to clarify its disclosures to the commission and The Philippine Stock Exchange, Inc. (PSE) in relation to statements attributed by the media to the company and its officers, especially with regard to the nature of the P48-billion expenditure.

“The SEC has likewise directed PSE and Capital Markets Integrity Corp. (CMIC) to submit initial reports on their investigation into the trading activities that have resulted in the sudden and sharp decline in the share prices of PLDT before the official disclosure of the ‘budget overruns,’ among others,” the regulator noted.

CMIC serves as the independent audit, surveillance and compliance arm of PSE.

The regulator vowed to closely monitor the investigation.

“[The SEC] will continue to conduct a parallel, independent inquiry into the matter to safeguard the interest of the investing public,” it said.

PLDT’s Ms. Chua also sits on the board of the PSE, which is also conducting an investigation. The PSE  has yet to respond to BusinessWorld’s request for comment.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — with input from Justine Irish D. Tabile