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Financial Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Disclosure Of Financial Assets And Liabilities [Line Items]

Summary of Consolidated Financial Assets and Financial Liabilities

The following table sets forth our consolidated financial assets and financial liabilities as at December 31, 2022 and 2021:


	Financial instruments at amortized cost				Financial instruments at FVPL				Total financial instruments
	(in million pesos)
Assets as at December 31, 2022
Noncurrent:
Financial assets at fair value through profit or loss		—				432				432
Debt instruments at amortized cost – net of current portion		596				—				596
Derivative financial assets – net of current portion		—				81				81
Other financial assets – net of current portion		3,489		(1)		—				3,489
Current:
Cash and cash equivalents		25,211				—				25,211
Short-term investments		129				254		(2)		383
Trade and other receivables		26,255				—				26,255
Current portion of other financial assets		206		(1)		—				206
Total assets		55,886				767				56,653

Liabilities as at December 31, 2022
Noncurrent:
Interest-bearing financial liabilities – net of current portion		217,288				—				217,288
Lease liabilities – net of current portion		31,958				—				31,958
Derivative financial liabilities – net of current portion		—				190				190
Customers' deposits		2,313				—				2,313
Deferred credits and other noncurrent liabilities		363				—				363
Current:
Accounts payable		101,107				—				101,107
Accrued expenses and other current liabilities		74,227				—				74,227
Current portion of interest-bearing financial liabilities		32,292				—				32,292
Current portion of lease liabilities		10,477				—				10,477
Dividends payable		1,821				—				1,821
Current portion of derivative financial liabilities		—				960				960
Liabilities associated with assets classified as held-for-sale		1,668				—				1,668
Total liabilities		473,514				1,150				474,664
Net assets (liabilities)		(417,628	)			(383	)			(418,011	)

(1)

Includes refundable deposits and notes receivables.

(2)

Includes investments in the funds of Credit Suisse and Julius Baer. In 2021, PLDT withdrew US$6.6 million from the Supply Chain Finance fund of Credit Suisse and impaired the remaining fund value of US$3.4 million. In November 2021, Smart invested US$5.0 million in the Focus Fixed Income Asia Defensive fund of Julius Baer. As at December 31, 2022, the fund’s value is US$4.5 million.


	Financial instruments at amortized cost				Financial instruments at FVPL				Total financial instruments
	(in million pesos)
Assets as at December 31, 2021
Noncurrent:
Financial assets at fair value through profit or loss		—				339				339
Debt instruments at amortized cost – net of current portion		400				—				400
Derivative financial assets – net of current portion		—				48				48
Other financial assets – net of current portion		3,099		(1)		—				3,099
Current:
Cash and cash equivalents		23,907				—				23,907
Short-term investments		1,986				255		(2)		2,241
Trade and other receivables		21,790				—				21,790
Current portion of derivative financial assets		—				93				93
Current portion of debt instruments at amortized cost		207				—				207
Current portion of other financial assets		208		(1)		6,856		(3)		7,064
Total assets		51,597				7,591				59,188

Liabilities as at December 31, 2021
Noncurrent:
Interest-bearing financial liabilities – net of current portion		241,075				—				241,075
Lease liabilities – net of current portion		17,131				—				17,131
Derivative financial liabilities – net of current portion		—				100				100
Customers' deposits		2,270				—				2,270
Deferred credits and other noncurrent liabilities		398				—				398
Current:
Accounts payable		97,959				—				97,959
Accrued expenses and other current liabilities		76,377				7,842				84,219
Current portion of interest-bearing financial liabilities		11,482				—				11,482
Current portion of lease liabilities		4,555				—				4,555
Dividends payable		1,708				—				1,708
Current portion of derivative financial liabilities		—				115				115
Total liabilities		452,955				8,057				461,012
Net assets (liabilities)		(401,358	)			(466	)			(401,824	)

(1)

Includes refundable deposits and notes receivables.

(2)

Includes investments in the funds of Credit Suisse and Julius Baer. PLDT withdrew US$6.6 million from the Supply Chain Finance fund of Credit Suisse in 2021. As at December 31, 2021, the fund’s value is US$3.4 million which was fully impaired as at year-end. In November 2021, Smart invested US$5.0 million in the Focus Fixed Income Asia Defensive fund of Julius Baer. As at December 31, 2021, the fund’s value is US$5.02 million.

(3)

Includes RCBC Redemption Trust Account. See Note 20 – Equity – Redemption of Preferred Stock.

Summary of Consolidated Offsetting of Financial Assets and Liabilities

The following table sets forth our consolidated offsetting of financial assets and liabilities recognized as at December 31, 2022 and 2021:


	Gross amounts of recognized financial assets and liabilities		Gross amounts of recognized financial assets and liabilities set-off in the consolidated statements of financial position		Net amount presented in the consolidated statements of financial position
	(in million pesos)
December 31, 2022
Current Financial Assets
Trade and other receivables
Foreign administrations		5,160		4,236		924
Domestic carriers		492		197		295
Total		5,652		4,433		1,219
Current Financial Liabilities
Accounts payable
Suppliers and contractors		80,769		44		80,725
Carriers and other customers		22,660		2,548		20,112
Total		103,429		2,592		100,837

December 31, 2021
Current Financial Assets
Trade and other receivables
Foreign administrations		6,916		5,696		1,220
Domestic carriers		507		280		227
Total		7,423		5,976		1,447
Current Financial Liabilities
Accounts payable
Suppliers and contractors		85,912		9		85,903
Carriers and other customers		15,349		3,493		11,855
Total		101,261		3,502		97,759

Disclosure Of Carrying Amount And Fair Value Of Financial Instruments Explanatory

The following table sets forth our consolidated carrying values and estimated fair values of our financial assets and liabilities recognized as at December 31, 2022 and 2021 other than those whose carrying amounts are reasonable approximations of fair values:


	Carrying Value				Fair Value
	2022		2021		2022		2021
	(in million pesos)
Noncurrent Financial Assets
Debt instruments at amortized cost		596		400		573		403
Other financial assets – net of current portion		3,489		3,099		3,278		2,664
Total		4,085		3,499		3,851		3,067
Noncurrent Financial Liabilities
Interest-bearing financial liabilities:
Long-term debt – net of current portion		217,288		241,075		201,703		242,545
Customers' deposits		2,313		2,270		1,449		1,619
Deferred credits and other noncurrent liabilities		363		398		307		404
Total		219,964		243,743		203,459		244,568

Summary of Consolidated Financial Assets and Liabilities Carried at Fair Value

Below is the list of our consolidated financial assets and liabilities carried at fair value that are classified using a fair value hierarchy as required for our complete sets of consolidated financial statements as at December 31, 2022 and 2021. This classification provides a reasonable basis to illustrate the nature and extent of risks associated with those financial statements.


	2022								2021
	Level 1(1)		Level 2(2)		Level 3(3)		Total		Level 1(1)		Level 2(2)		Level 3(3)		Total
	(in million pesos)
Noncurrent Financial Assets
Financial assets at FVPL		—		407		25		432		—		315		24		339
Derivative financial assets – net of current portion		—		81		—		81		—		48		—		48
Current Financial Assets
Short-term investments		—		254		—		254		—		255		—		255
Current portion of derivative financial assets		—		—		—		—		—		93		—		93
Current portion of other financial assets		—		—		—		—		—		6,856		—		6,856
Total		—		742		25		767		—		7,567		24		7,591

Noncurrent Financial Liabilities
Derivative financial liabilities – net of current portion		—		190		—		190		—		100		—		100
Current Financial Liabilities
Accrued expenses and other current liabilities		—		—		—		—		—		7,842		—		7,842
Current portion of derivative financial liabilities		—		960		—		960		—		115		—		115
Total		—		1,150		—		1,150		—		8,057		—		8,057

(1)

Fair values determined using observable market inputs that reflect quoted prices in active markets for identical assets or liabilities.

(2)

Fair values determined using inputs other than quoted market prices that are either directly or indirectly observable for the assets or liabilities.

(3)

Fair values determined using discounted values of future cash flows for the assets or liabilities.

Summary of Derivative Financial Instruments

The table below sets out the information about our consolidated derivative financial instruments as at December 31, 2022 and 2021:


									2022					2021
	Original Notional Amount	Trade Date	Underlying Transaction in U.S. Dollar	Termination Date	Weighted Average Hedge Cost		Weighted Average Foreign Exchange Rate		Notional Amount		Net Mark-to- market Gains (Losses) in Php			Notional Amount		Net Mark-to- market Gains (Losses) in Php
	(in millions)		(in millions)						(in millions)
Transactions not designated as hedges:
PLDT
Forward foreign exchange contracts	US$257	Various dates in July to December 2022	U.S. Dollar Liabilities	Various dates in January to May 2023		—	Php57.16		US$257			(353	)	US$69			17
	US$96	Various dates in January 2023	U.S. Dollar Liabilities	Various dates in February to March 2023		—	Php54.97			—		—			—		—
Forward exchange options capped forward	US$6	Various dates in October 2021	U.S. Dollar Liabilities	Various dates in April and May 2022		—	Php50.80			—		—		US$6			(2	)
Foreign exchange options seagull(a)	US$7	June 10, 2022	U.S. Dollar Liabilities	January 9, 2023		—	Php52.64			7		(7	)		4		(1	)
						—	Php52.96			—		—			—		—
						—	Php54.00			—		—			—		—
												(360	)				14
Smart
Forward foreign exchange contracts	US$332	Various dates in 2020 and 2021	U.S. Dollar Liabilities	Various dates in 2021		—	Php49.03			—		—			—		—
	US$369	Various dates in July to December 2022	U.S. Dollar Liabilities	Various dates in January 2022 to June 2023		—	Php57.08		US$369			(481	)	US$116			40
	US$157	Various dates in January and February 2023	U.S. Dollar Liabilities	Various dates in February to July 2023		—	Php54.93			—		—			—		—
Subsidized forwards(b)	US$52	Various dates in November 2021	U.S. Dollar Liabilities	Various dates in April and May 2022		—	Php50.38			—		—			—		—
						—	Php51.65			—		—		US$2			(1	)
Foreign exchange options seagull(c)	US$71	Various dates in June 2022	U.S. Dollar Liabilities	Various dates in October 2022 to February 2023		—	Php52.82			—		—			—		—
						—	Php53.37			—		—			—		—
						—	Php54.46		US$37			(40	)	US$3			(2	)
												(521	)				37
												(881	)				51
Transactions designated as hedges:
PLDT
Interest rate swaps(d)	US$150	April and June 2015	200 Term Loan	February 25, 2022	2.70%			—		—		—		US$11			(5	)
Long-term currency swaps(e)	US$27	November 2018 to August 2020	200 MUFG Bank, Ltd.	February 25, 2022	2.15%		Php50.78			—		—		US$5			2
Long-term foreign currency options(f)	US$290	Various dates in July 2020 and February to March 2021	300M Notes 2031	January 23, 2031	1.20%		Php49.61 Php55.28		US$290			(265	)	US$290			(175	)
												(265	)				(178	)
Smart
Interest rate swaps(g)	US$30	February 2016	100 Mizuho	December 7, 2021	2.03%			—		—		—			—		—
Long-term currency swaps(h)	US$6	February 2019	100 Mizuho	December 7, 2021	2.22%		Php51.83			—		—			—		—
	US$6	August 2020	100 Mizuho	December 7, 2022	1.99%		Php48.64			—		—		US$3			9
							Php48.00
Long-term foreign currency options(i)	US$109	February to April 2021	140 PNB	December 13, 2030	1.63%		Php53.34		US$88			77		US$99			44
												77					53
												(188	)				(125	)
												(1,069	)				(74	)

If the Philippine Peso to U.S. dollar spot exchange rate on fixing date settles between Php52.96 to Php54.00, PLDT will purchase the U.S. Dollar for Php52.96. However, if on maturity, the exchange rate settles above Php54.00, PLDT will purchase the U.S. Dollar for Php52.96 plus the excess above Php54.00, and if the exchange rate is lower than Php52.96, PLDT will purchase the U.S. Dollar at the prevailing Philippine peso to U.S. Dollar spot exchange rate, subject to a floor of Php52.64

(b)

If the Philippine Peso to U.S. Dollar spot exchange rate on fixing date settles above Php51.65, Smart will purchase the U.S. Dollar for Php50.38 plus the excess above Php51.65, and if the exchange rate is at or lower than Php51.65, Smart will purchase the U.S. Dollar at Php50.38.

(c)

If the Philippine Peso to U.S. Dollar spot exchange rate on fixing date settles between Php53.37 to Php54.46, Smart will purchase the U.S. Dollar for Php53.37. However, if on maturity, the exchange rate settles above Php54.46, Smart will purchase the U.S. Dollar for Php53.37 plus the excess above Php54.46, and if the exchange rate is lower than Php53.37, Smart will purchase the U.S. Dollar at the prevailing Philippine Peso to U.S. Dollar spot exchange rate, subject to a floor of Php52.82.

(d)

PLDT’s interest rate swap agreements outstanding as at December 31, 2022 and 2021 were designated as cash flow hedges, wherein the effective portion of the movements in fair value is recognized in our consolidated statements of other comprehensive income, while any ineffective portion is recognized immediately in our consolidated income statements. The mark-to-market losses amounting to nil and Php1 million were recognized in our consolidated statements of other comprehensive income as at December 31, 2022 and 2021, respectively. Interest accrual on the interest rate swaps amounting to nil and Php3 million were recorded as at December 31, 2022 and 2021, respectively. There were no ineffective portion in the fair value recognized in our consolidated income statements for the years ended December 31, 2022, 2021 and 2020.

(e)

PLDT’s long-term principal only-currency swap agreements outstanding as at December 31, 2022 and 2021 were designated as cash flow hedges, wherein effective portion of the movements in the fair value is recognized in our consolidated statements of other comprehensive income, while any ineffective portion is recognized immediately in our consolidated income statements. The mark-to-market gains amounting to nil and Php4 million were recognized in our consolidated statements of other comprehensive income as at December 31, 2022 and 2021, respectively. Hedge cost accrual on the long-term principal only-currency swaps amounting to nil and Php2 million were recognized as at December 31, 2022 and 2021, respectively. The amounts recognized as other comprehensive income are transferred to profit or loss when the hedged loan is revalued for changes in the foreign exchange rate. The hedge cost portion of the movements in the fair value amounting to nil, Php0.5 million and Php2 million were recognized in our consolidated income statements for the years ended December 31, 2022, 2021 and 2020, respectively.

(f)

PLDT’s long-term foreign currency option agreements outstanding as at December 31, 2022 and 2021 were designated as cash flow hedges, wherein the effective portion of the movements in fair value is recognized in our consolidated statements of other comprehensive income, while any ineffective portion is recognized immediately in our consolidated income statements. Settlement of the foreign currency option agreements will depend on the spot exchange rate on the fixing date. If the Philippine peso to U.S. dollar spot exchange rate on fixing date is between Php49.61 and Php55.28, PLDT will purchase the U.S. dollar at Php49.61. However, if on fixing date, the exchange rate is beyond Php55.28, PLDT will purchase the U.S. dollar at the prevailing Philippine peso to U.S. dollar spot exchange rate minus a subsidy of Php5.67, and if the exchange rate is lower than Php49.61, PLDT will purchase the U.S. dollar at the prevailing Philippine peso to U.S. dollar spot exchange rate. The mark-to-market losses amounting to Php190 million and Php100 million were recognized in our consolidated statement of other comprehensive income as at December 31, 2022 and 2021, respectively. Hedge cost accrual on the long-term foreign currency option agreements amounting to Php75 million each was recognized as at December 31, 2022 and 2021. The intrinsic value of the long-term foreign currency options recognized as other comprehensive income are transferred to profit or loss when the hedged loan is revalued for changes in the foreign exchange rate. The hedge cost portion of the movements in the fair value amounting to Php4 million, Php89 million and Php26 million were recognized in our consolidated income statement for the years ended December 31, 2022, 2021 and 2020, respectively.

(g)

Smart’s interest rate swap agreements outstanding as at December 31, 2022 and 2021 were designated as cash flow hedges, wherein the effective portion of the movements in fair value is recognized in our consolidated statements of other comprehensive income, while any ineffective portion is recognized immediately in our consolidated income statements. The mark-to-market losses amounting to nil was recognized in our consolidated statements of other comprehensive income as at December 31, 2022 and 2021. Interest accrual amounting to nil was recognized as at December 31, 2022 and 2021. There were no ineffective portion in the fair value recognized in our consolidated income statements for the years ended December 31, 2022, 2021 and 2020.

(h)

Smart’s long-term principal only-currency swap agreements outstanding as at December 31, 2022 and 2021 were designated as cash flow hedges, wherein the effective portion of the movements in fair value is recognized in our consolidated statements of other comprehensive income, while any ineffective portion is recognized immediately in our consolidated income statements. The mark-to-market gains amounting to nil and Php8 million were recognized in our consolidated statements of other comprehensive income as at December 31, 2022 and 2021, respectively. Hedge cost accrual on the long-term principal only-currency swaps amounting to nil and Php201 thousand were recognized as at December 31, 2022 and 2021, respectively. The amounts recognized as other comprehensive income are transferred to profit or loss when the hedged loan is revalued for changes in the foreign exchange rate. The hedge cost portions of the movements in the fair value amounting to nil, Php309 thousand and Php1 million were recognized in our consolidated income statements for the years ended December 31, 2022, 2021 and 2020, respectively.

(i)

Smart’s long-term foreign currency option agreements outstanding as at December 31, 2022 and 2021 were designated as cash flow hedges, wherein the effective portion of the movements in fair value is recognized in our consolidated statements of other comprehensive income, while any ineffective portion is recognized immediately in our consolidated income statements. Settlement of the foreign currency option agreements will depend on the spot exchange rate on the fixing date. If the Philippine Peso to U.S. Dollar spot exchange rate on fixing date is between Php48.00 and Php53.34, Smart will purchase the U.S. Dollar at Php48.00. However, if on fixing date the exchange rate is beyond Php53.34, Smart will purchase the U.S. Dollar at the prevailing Philippine Peso to U.S. Dollar spot exchange rate minus a subsidy of Php5.34, and if the exchange rate is lower than Php48.00, Smart will purchase the U.S. Dollar at the prevailing Philippine Peso to U.S. Dollar spot exchange rate. The mark-to-market gains amounting to Php81 million and Php48 million were recognized in our consolidated statement of other comprehensive income as at December 31, 2022 and 2021, respectively. Hedge cost accrual on the long-term foreign currency option agreements amounting to Php3 million and Php4 million were recognized as at December 31, 2022 and 2021, respectively. The intrinsic value of the long-term foreign currency options recognized as other comprehensive income are transferred to profit or loss when the hedged loan is revalued for changes in the foreign exchange rate. The hedge cost portion of the movements in the fair value amounting to Php5 million and Php8 million were recognized in our consolidated income statement for the years ended December 31, 2022 and 2021, respectively.

Summary of Derivative Financial Instruments by Classification

Our derivative financial instruments as at December 31, 2022 and 2021 are presented in the statements of financial position as follows:


	2022				2021
				(in million pesos)
Noncurrent assets		81				48
Current assets		—				93
Noncurrent liabilities (Note 29)		(190	)			(100	)
Current liabilities (Note 29)		(960	)			(115	)
Net liabilities		(1,069	)			(74	)

Summary of Movements of Consolidated Mark-to-Market Losses

Movements of our consolidated mark-to-market gains (losses) for the years ended December 31, 2022 and 2021 are summarized as follows:


	2022				2021
				(in million pesos)
Net mark-to-market losses at beginning of the year		(74	)			(514	)
Gains on derivative financial instruments (Note 4)		2,572				1,651
Settlements and interest expense		1,135				(169	)
Effective portion recognized in the profit or loss for the cash flow hedges		(77	)			(75	)
Net fair value losses on cash flow hedges charged to other comprehensive income		(3,228	)			(967	)
Others		(1,397	)			—
Net mark-to-market losses at end of the year		(1,069	)			(74	)

Disclosure Of Gains (Losses) On Derivative Financial Instruments Explanatory

Our consolidated analysis of gains on derivative financial instruments for the years ended December 31, 2022, 2021 and 2020 are as follows:


	2022				2021			2020
				(in million pesos)
Gains (losses) on derivative financial instruments (Note 4)		2,572				1,651			(284	)
Hedge costs		(250	)			(251	)		(94	)
Net gains (losses) on derivative financial instruments (Notes 4 and 5)		2,322				1,400			(378	)

Summary of Maturity Profile of Financial Assets Based on Consolidated Undiscounted Claims Outstanding

The following table summarizes the maturity profile of our financial assets based on our consolidated undiscounted claims outstanding as at December 31, 2022 and 2021:


	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(in million pesos)
December 31, 2022
Financial instruments at amortized cost:		53,604		48,929		3,740		852		83
Debt instruments at amortized cost		596		—		225		361		10
Other financial assets		4,285		206		3,515		491		73
Temporary cash investments		8,678		8,678		—		—		—
Short-term investments		129		129		—		—		—
Retail subscribers		17,216		17,216		—		—		—
Corporate subscribers		15,151		15,151		—		—		—
Foreign administrations		1,058		1,058		—		—		—
Domestic carriers		296		296		—		—		—
Dealers, agents and others		6,195		6,195		—		—		—
Financial instruments at FVPL:		860		428		—		—		432
Financial assets at fair value through profit or loss		432		—		—		—		432
Short-term investments		428		428		—		—		—
Total		54,464		49,357		3,740		852		515

December 31, 2021
Financial instruments at amortized cost:		55,428		51,317		2,898		430		783
Debt instruments at amortized cost		607		207		100		—		300
Other financial assets		3,919		208		2,798		430		483
Temporary cash investments		13,291		13,291		—		—		—
Short-term investments		1,986		1,986		—		—		—
Retail subscribers		15,676		15,676		—		—		—
Corporate subscribers		13,079		13,079		—		—		—
Foreign administrations		1,341		1,341		—		—		—
Domestic carriers		241		241		—		—		—
Dealers, agents and others		5,288		5,288		—		—		—
Financial instruments at FVPL:		7,624		7,285		—		—		339
Financial assets at fair value through profit or loss		339		—		—		—		339
Other financial assets		6,856		6,856		—		—		—
Short-term investments		429		429		—		—		—
Total		63,052		58,602		2,898		430		1,122

Summary of Maturity Profile of Financial Liabilities Based on Consolidated Contractual Undiscounted Obligations Outstanding

The following table summarizes the maturity profile of our financial liabilities based on our consolidated contractual undiscounted obligations outstanding as at December 31, 2022 and 2021:


	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(in million pesos)
December 31, 2022
Debt(1):		320,907		30,001		65,159		55,632		170,115
Principal		251,859		29,203		37,885		41,593		143,178
Interest		69,048		798		27,274		14,039		26,937
Lease obligations		62,216		14,658		13,504		10,591		23,463
Various trade and other obligations:		178,219		175,539		610		38		2,032
Suppliers and contractors		81,041		80,725		307		9		—
Utilities and related expenses		63,613		63,609		4		—		—
Employee benefits		6,615		6,615		—		—		—
Customers’ deposits		2,313		—		252		29		2,032
Carriers and other customers		1,745		1,745		—		—		—
Dividends		1,821		1,821		—		—		—
Others		21,071		21,024		47		—		—
Total contractual obligations		561,342		220,198		79,273		66,261		195,610

December 31, 2021
Debt(1):		331,933		7,681		77,865		53,026		193,361
Principal		255,414		7,649		48,404		37,552		161,809
Interest		76,519		32		29,461		15,474		31,552
Lease obligations		30,770		11,609		9,004		4,523		5,634
Various trade and other obligations:		179,484		176,816		667		54		1,947
Suppliers and contractors		86,203		85,903		292		8		—
Utilities and related expenses		62,989		62,988		1		—		—
Employee benefits		9,090		9,090		—		—		—
Liability from redemption of preferred shares		7,842		7,842		—		—		—
Customers’ deposits		2,270		—		277		46		1,947
Dividends		1,708		1,708		—		—		—
Carriers and other customers		1,469		1,469		—		—		—
Others		7,913		7,816		97		—		—
Total contractual obligations		542,187		196,106		87,536		57,603		200,942

(1)

Consists of long-term and short-term debts, including current portion, gross of unamortized debt discount/premium and debt issuance costs.

Summary of Future Minimum Lease Commitments Payable with Non-cancellable Operating Leases

Our consolidated future minimum lease commitments payable with non-cancellable leases as at December 31, 2022 and 2021 are as follows:


	2022			2021
			(in million pesos)
Within one year		14,658			11,609
After one year but not more than five years		24,095			13,527
More than five years		23,463			5,634
Total		62,216			30,770

Summary of Impact of Hedging Instruments

The impact of the hedging instruments on our consolidated statements of financial position as at December 31, 2022 and 2021 are as follows:


	Notional Amount		Carrying Amount			Line item in our Consolidated Statements
	(U.S. Dollar)		(Php)			of Financial Position
	(in million pesos)
December 31, 2022
Long-term foreign currency options		378		81		Derivative financial assets – net of current portion
		—		(190	)	Derivative financial liabilities – net of current portion
		378		(109	)

December 31, 2021
Long-term currency swaps		8		—		Derivative financial assets – net of current portion
		—		15		Current portion of derivative financial assets
		—		(2	)	Current portion of derivative financial liabilities
Long-term foreign currency options		389		48		Derivative financial assets – net of current portion
		—		(100	)	Derivative financial liabilities – net of current portion
		397		(39	)

Summary of Impact of Hedging Items on Consolidated Statements of Financial Position

The impact of the hedged items on our consolidated statements of financial position as at December 31, 2022 and 2021 are as follows:


		2022					2021
		Cash flow hedge reserve			Cost of hedging reserve		Cash flow hedge reserve			Cost of hedging reserve
	(in million pesos)
PLDT:
US$300M Term Loan			—			—		(273	)		—
US$100M PNB			—			—		(11	)		—
US$200M MUFG Bank, Ltd.			—			—		(8	)		2
US$300M Notes 2031			(3,288	)		75		(1,011	)		75
			(3,288	)		75		(1,303	)		77

Smart:
US$100M Mizuho			—			—		(9	)		—
US$140M PNB			28			3		(429	)		4
			28			3		(438	)		4

Summary of Effect of the Cash Flow Hedge in Consolidated Statements of Financial Position and Statements of Other Comprehensive Income

The effect of the cash flow hedge on our consolidated statements of financial position as at December 31, 2022 and 2021 are as follows:


	Total hedging loss recognized in OCI			Line item in our Consolidated Statements of Financial Position
	(in million pesos)
December 31, 2022
Long-term foreign currency options		(3,260	)	Other comprehensive loss
		(3,260	)

December 31, 2021
Long-term currency swaps		(301	)	Other comprehensive loss
Long-term foreign currency options		(1,440	)	Other comprehensive loss
		(1,741	)

Summary of Market Risk

The following table shows our consolidated foreign currency-denominated monetary financial assets and liabilities and their Philippine Peso equivalents as at December 31, 2022 and 2021:


	2022				2021
	U.S. Dollar		Php(1)		U.S. Dollar		Php(2)
	(in millions)
Noncurrent Financial Assets
Derivative financial assets – net of current portion		1		81		1		48
Other financial assets – net of current portion		—		1		—		19
Total noncurrent financial assets		1		82		1		67
Current Financial Assets
Cash and cash equivalents		287		16,002		146		7,466
Short-term investments		5		254		5		254
Trade and other receivables – net		132		7,385		142		7,218
Current portion of derivative financial assets		—		—		2		93
Current portion of debt instruments at amortized cost		—		—		4		207
Current portion of other financial assets		—		12		—		—
Total current financial assets		424		23,653		299		15,238
Total Financial Assets		425		23,735		300		15,305
Noncurrent Financial Liabilities
Interest-bearing financial liabilities – net of current portion		719		40,153		758		38,648
Derivative financial liabilities – net of current portion		3		190		2		100
Other noncurrent liabilities		—		27		—		23
Total noncurrent financial liabilities		723		40,370		760		38,771
Current Financial Liabilities
Accounts payable		1,339		74,720		1,150		58,599
Accrued expenses and other current liabilities		218		12,184		239		12,164
Current portion of interest-bearing financial liabilities		39		2,165		44		2,252
Current portion of derivative financial liabilities		17		960		2		115
Total current financial liabilities		1,613		90,029		1,435		73,130
Total Financial Liabilities		2,336		130,399		2,195		111,901

(1)

The exchange rate used to convert the U.S. Dollar amounts into Philippine Peso was Php55.82 to US$1.00, the Philippine Peso-U.S. Dollar exchange rate as quoted through the Bankers Association of the Philippines, or BAP, as at December 31, 2022.

(2)

The exchange rate used to convert the U.S. Dollar amounts into Philippine Peso was Php50.97 to US$1.00, the Philippine Peso-U.S. Dollar exchange rate as quoted through the BAP as at December 31, 2021.

Summary of Trade and Other Receivables

As at December 31, 2022 and 2021, this account consists of receivables from:


	2022			2021
			(in million pesos)
Retail subscribers (Note 28)		17,216			15,676
Corporate subscribers (Note 28)		15,151			13,079
Foreign administrations (Note 28)		1,058			1,341
Domestic carriers (Note 28)		296			241
Dealers, agents and others (Note 28)		6,195			5,288
		39,916			35,625
Less: Allowance for expected credit losses		13,661			13,835
		26,255			21,790

The gross carrying amount of financial assets not subject to impairment also represents our maximum exposure to credit risk as at December 31, 2022 and 2021 are as follows:


	2022			2021
			(in million pesos)
Financial assets at fair value through profit or loss (Note 12)		432			339
Derivative financial assets – net of current portion		81			48
Current portion of derivative financial assets		—			93
Total		513			480

Summary of Maximum Exposure to Credit Risk of Financial Assets Subject to Impairment

For financial assets recognized on our consolidated statements of financial position as at December 31, 2022 and 2021, the gross exposure to credit risk equal their carrying amount.

For financial guarantees granted, the maximum exposure to credit risk is the maximum amount that we would have to pay if the guarantees are called upon. For loan commitments and other credit related commitments that are irrevocable over the life of the respective facilities, the maximum exposure to credit risk is the full amount of the committed facilities.


	December 31, 2022
	Stage 1 12-Month ECL		Stage 2 Lifetime ECL		Stage 3 Lifetime ECL		Total
	(in million pesos)
High grade		29,328		12,380		—		41,708
Standard grade		303		4,445		—		4,748
Substandard grade		—		9,430		—		9,430
Default		764		4,236		9,425		14,425
Gross carrying amount		30,395		30,491		9,425		70,311
Less allowance		764		4,236		9,425		14,425
Carrying amount		29,631		26,255		—		55,886

	December 31, 2021
	Stage 1 12-Month ECL		Stage 2 Lifetime ECL		Stage 3 Lifetime ECL		Total
	(in million pesos)
High grade		29,251		9,180		—		38,431
Standard grade		556		4,116		—		4,672
Substandard grade		—		8,494		—		8,494
Default		786		3,038		10,797		14,621
Gross carrying amount		30,593		24,828		10,797		66,218
Less allowance		786		3,038		10,797		14,621
Carrying amount		29,807		21,790		—		51,597

Summary of Maximum Exposure to Credit Risk

An analysis of the maximum exposure to credit risk for the components of our consolidated statements of financial position, including derivative financial instruments as at December 31, 2022 and 2021:


	2022
	Gross Maximum Exposure		Collateral and Other Credit Enhancements*		Net Maximum Exposure
	(in million pesos)
Financial instruments at amortized cost:		55,886		505		55,381
Debt instruments at amortized cost		596		—		596
Other financial assets		3,695		—		3,695
Cash and cash equivalents		25,211		105		25,106
Short-term investments		129		—		129
Retail subscribers		10,327		46		10,281
Corporate subscribers		10,052		354		9,698
Foreign administrations		924		—		924
Domestic carriers		295		—		295
Dealers, agents and others		4,657		—		4,657
Financial instruments at FVPL:		767		—		767
Financial assets at FVPL		432		—		432
Long-term foreign currency options		81		—		81
Short-term investments		254		—		254
Total		56,653		505		56,148

* Includes bank insurance, security deposits and customer deposits. We have no collateral held as at December 31, 2022.


	2021
	Gross Maximum Exposure		Collateral and Other Credit Enhancements*		Net Maximum Exposure
	(in million pesos)
Financial instruments at amortized cost:		51,597		513		51,084
Debt instruments at amortized cost		607		—		607
Other financial assets		3,307		—		3,307
Cash and cash equivalents		23,907		127		23,780
Short-term investments		1,986		—		1,986
Corporate subscribers		8,371		379		7,992
Retail subscribers		7,637		7		7,630
Foreign administrations		1,220		—		1,220
Domestic carriers		227		—		227
Dealers, agents and others		4,335		—		4,335
Financial instruments at FVPL:		7,591		—		7,591
Financial assets at FVPL		339		—		339
Long-term foreign currency options		48		—		48
Short-term investments		255		—		255
Forward foreign exchange contracts		57		—		57
Interest rate swap		22		—		22
Long-term currency swaps		14		—		14
Other financial assets		6,856		—		6,856
Total		59,188		513		58,675

* Includes bank insurance, security deposits and customer deposits. We have no collateral held as at December 31, 2021.

Summary of Information Regarding Credit Quality by Class of Financial Assets

The table below provides information regarding the credit quality by class of our financial assets according to our credit ratings of counterparties as at December 31, 2022 and 2021:


			Neither past due nor credit impaired				Past due but not
	Total		Class A(1)		Class B(2)		credit impaired		Impaired
	(in million pesos)
December 31, 2022
Financial instruments at amortized cost:		70,137		41,708		4,748		9,430		14,251
Debt instruments at amortized cost		596		596		—		—		—
Other financial assets		4,285		3,694		1		—		590
Cash and cash equivalents		25,211		24,909		302		—		—
Short-term investments		129		129		—		—		—
Retail subscribers		17,216		7,782		458		2,087		6,889
Corporate subscribers		15,151		3,959		1,543		4,550		5,099
Foreign administrations		1,058		289		210		425		134
Domestic carriers		296		111		30		154		1
Dealers, agents and others		6,195		239		2,204		2,214		1,538
Financial instruments at FVPL:		941		604		163		—		174
Financial assets at FVPL		432		269		163		—		—
Long-term foreign currency options		81		81		—		—		—
Short-term investments		428		254		—		—		174
Total		71,078		42,312		4,911		9,430		14,425

(1)

This includes low risk and good paying customer accounts with no history of account treatment for a defined period and no overdue accounts as at report date; and deposits or placements to counterparties with good credit rating or bank standing financial review.

(2)

This includes medium risk and average paying customer accounts with no overdue accounts as at report date, and new customer accounts for which sufficient credit history has not been established; and deposits or placements to counterparties not classified as Class A.


			Neither past due nor credit impaired				Past due but not
	Total		Class A(1)		Class B(2)		credit impaired		Impaired
	(in million pesos)
December 31, 2021
Financial instruments at amortized cost:		66,044		38,431		4,672		8,494		14,447
Debt instruments at amortized cost		607		607		—		—		—
Other financial assets		3,919		3,020		287		—		612
Cash and cash equivalents		23,907		23,638		269		—		—
Short-term investments		1,986		1,986		—		—		—
Retail subscribers		15,676		5,411		297		1,929		8,039
Corporate subscribers		13,079		2,650		1,044		4,677		4,708
Foreign administrations		1,341		193		486		541		121
Domestic carriers		241		78		46		103		14
Dealers, agents and others		5,288		848		2,243		1,244		953
Financial instruments at FVPL:		7,765		7,467		124		—		174
Financial assets at FVPL		339		215		124		—		—
Long-term foreign currency options		48		48		—		—		—
Short-term investments		429		255		—		—		174
Forward foreign exchange contracts		57		57		—		—		—
Interest rate swap		22		22		—		—		—
Long-term currency swaps		14		14		—		—		—
Other financial assets		6,856		6,856		—		—		—
Total		73,809		45,898		4,796		8,494		14,621

(1)

(2)

Summary of Aging Analysis of Past Due But not Impaired Class of Financial Assets

The aging analysis of past due but not impaired class of financial assets as at December 31, 2022 and 2021 are as follows:


					Past due but not credit impaired
	Total		Neither past due nor credit impaired		1-60 days		61-90 days		Over 91 days		Impaired
	(in million pesos)
December 31, 2022
Financial instruments at amortized cost:		70,137		46,456		3,289		1,709		4,432		14,251
Debt instruments at amortized cost		596		596		—		—		—		—
Other financial assets		4,285		3,695		—		—		—		590
Cash and cash equivalents		25,211		25,211		—		—		—		—
Short-term investments		129		129		—		—		—		—
Retail subscribers		17,216		8,240		1,439		372		276		6,889
Corporate subscribers		15,151		5,502		1,615		1,214		1,721		5,099
Foreign administrations		1,058		499		37		14		374		134
Domestic carriers		296		141		72		26		56		1
Dealers, agents and others		6,195		2,443		126		83		2,005		1,538
Financial instruments at FVPL:		941		767		—		—		—		174
Financial assets at FVPL		432		432		—		—		—		—
Long-term foreign currency options		81		81		—		—		—		—
Short-term investments		428		254		—		—		—		174
Total		71,078		47,223		3,289		1,709		4,432		14,425

December 31, 2021
Financial instruments at amortized cost:		66,044		43,103		4,200		1,278		3,016		14,447
Debt instruments at amortized cost		607		607		—		—		—		—
Other financial assets		3,919		3,307		—		—		—		612
Cash and cash equivalents		23,907		23,907		—		—		—		—
Short-term investments		1,986		1,986		—		—		—		—
Retail subscribers		15,676		5,708		1,484		171		274		8,039
Corporate subscribers		13,079		3,694		2,420		926		1,331		4,708
Foreign administrations		1,341		679		119		55		367		121
Domestic carriers		241		124		47		17		39		14
Dealers, agents and others		5,288		3,091		130		109		1,005		953
Financial instruments at FVPL:		7,765		7,591		—		—		—		174
Financial assets at FVPL		339		339		—		—		—		—
Long-term foreign currency options		48		48		—		—		—		—
Short-term investments		429		255		—		—		—		174
Forward foreign exchange contracts		57		57		—		—		—		—
Interest rate swap		22		22		—		—		—		—
Long-term currency swaps		14		14		—		—		—		—
Other financial assets		6,856		6,856		—		—		—		—
Total		73,809		50,694		4,200		1,278		3,016		14,621

Interest rate risk [member]