Telcos lose P18 billion to peso’s weakness
The country’s telco providers have piled up almost P18 billion in foreign exchange losses due to the peso’s weakness, adding pressure to efforts to make connectivity affordable.
The Philippine telecommunications industry has incurred a combined P17.6 billion in losses due to the weakening peso in the first half of the year, according to financial reports by PLDT Inc., Globe Telecom Inc., and Dito CME Holdings Corp. These losses are attributed to the company's payment of dollar-based expenses, especially loans.
The losses are putting pressure on telcos to find ways to keep internet prices affordable. However, if they raise prices, they risk losing customers who have seen their purchasing power weaken due to the currency devaluation. PLDT reported a forex loss of P1.37 billion as of June, down from a gain of P1.41 billion the previous year.
Globe also experienced forex losses of P2.36 billion in the same period. Among the three, Dito suffered the most significant losses, amounting to P13.88 billion due to its exposure to several foreign currency-denominated loans, such as those denominated in the Chinese yuan. Roy Ibay, vice president of the Philippine Chamber of Telecommunication Operators, emphasized that forex volatility and currency devaluations heavily impact telcos' expenditures, particularly in emerging markets relying on imported technologies.
He cited letters of credit to secure network hardware and dollar-based subscriptions for bandwidth capacity as examples of inflating costs for telcos.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
