Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Changes in Present Value of Defined Benefit Obligations, Fair Value of Plan Assets and Components of Net Periodic Benefit Costs

PLDT’s actuarial valuation is performed every year-end. Based on the latest actuarial valuation, the actual present value of prepaid benefit costs, net periodic benefit costs and average assumptions used in developing the valuation as at and for the years ended December 31, 2017, 2016 and 2015 are as follows:

	2017			2016			2015
	(in million pesos)
Changes in the present value of defined benefit obligations:
Present value of defined benefit obligations at beginning of the year		23,142			21,602			23,072
Interest costs on benefit obligation		1,180			1,071			1,050
Service costs		1,158			1,066			1,113
Actuarial losses – experience		423			369			3
Actuarial gains – economic assumptions		(1,277	)		(694	)		(1,414	)
Actual benefits paid/settlements		(2,723	)		(241	)		(2,112	)
Curtailments and others (Note 5)		(400	)		(31	)		(110	)
Present value of defined benefit obligations at end of the year		21,503			23,142			21,602
Changes in fair value of plan assets:
Fair value of plan assets at beginning of the year		11,960			11,439			9,950
Actual contributions		5,122			5,708			7,086
Interest income on plan assets		641			600			519
Return on plan assets (excluding amount included in net interest)		(2,466	)		(5,546	)		(4,004	)
Actual benefits paid/settlements		(2,723	)		(241	)		(2,112	)
Fair value of plan assets at end of the year		12,534			11,960			11,439
Unfunded status – net		(8,969	)		(11,182	)		(10,163	)
Accrued benefit costs		8,984			11,197			10,178
Prepaid benefit costs (Note 19)		15			15			15
Components of net periodic benefit costs:
Service costs		1,158			1,066			1,113
Interest costs – net		539			471			531
Curtailment/settlement losses and other adjustments		(341	)		—			(29	)
Net periodic benefit costs (Note 5)		1,356			1,537			1,615

Summary of Expected Future Settlements

The following table sets forth the expected future settlements by the Plan of maturing defined benefit obligation as at December 31, 2017:

	(in million pesos)
2018		268
2019		444
2020		423
2021		662
2022		844
2023 to 2060		91,691

Summary of Weighted Average Assumptions Used to Determine Pension Benefits

The weighted average assumptions used to determine pension benefits for the years ended December 31, 2017, 2016 and 2015 are as follows:

	2017		2016		2015
Rate of increase in compensation		6.0%		6.0%		6.0%
Discount rate		5.8%		5.3%		5.0%

Summary of Sensitivity Analysis on Defined Benefit Obligation

The sensitivity analysis below has been determined based on reasonably possible changes of each significant assumption on the defined benefit obligation as at December 31, 2017 and 2016, assuming if all other assumptions were held constant:

	Increase (Decrease)
	(in million pesos)
Discount rate	1	%	(2,262	)
	(1	%)	2,638
Future salary increases	1	%	2,606
	(1	%)	(2,288	)

Summary of Plan Assets

The following table sets forth the fair values, which are equal to the carrying values, of PLDT’s plan assets recognized as at December 31, 2017 and 2016:

	2017		2016
	(in million pesos)
Noncurrent Financial Assets
Investments in:
Unlisted equity investments		9,372		8,898
Shares of stock		2,510		2,426
Corporate bonds		111		106
Government securities		22		23
Investment properties		4		4
Mutual funds		30		3
Total noncurrent financial assets		12,049		11,460
Current Financial Assets
Cash and cash equivalents		396		412
Receivables		4		4
Total current financial assets		400		416
Total PLDT’s Plan Assets		12,449		11,876
Subsidiaries Plan Assets		85		84
Total Plan Assets of Defined Benefit Pension Plans		12,534		11,960

Defined Benefit Pension Plans [member] | Investment Property [member]

Statement [LineItems]

Summary of Allocation of Fair Value of Plan Assets

The allocation of the fair value of the assets for the PLDT pension plan as at December 31, 2017 and 2016 are as follows:

	2017		2016
Investments in listed and unlisted equity securities		95%		95%
Temporary cash investments		3%		4%
Mutual funds		1%		1%
Debt and fixed income securities		1%			—
		100%		100%

Defined Benefit Pension Plans [member] | Unlisted Equity Investments [member]

Statement [LineItems]

Summary of Plan Assets

As at December 31, 2017 and 2016, this account consists of:

	2017		2016		2017		2016
		% of Ownership			(in million pesos)
MediaQuest		100%		100%		8,696		8,267
Tahanan Mutual Building and Loan Association, Inc.or TMBLA, (net of subscriptions payable of Php32 million)		100%		100%		435		400
BTFHI		100%		100%		201		192
Superior Multi Parañaque Homes, Inc.		100%		100%		39		38
Bancholders, Inc.		100%		100%		1		1
						9,372		8,898

Defined Benefit Pension Plans [member] | Shares of stock [Member]

Statement [LineItems]

Summary of Plan Assets

As at December 31, 2017 and 2016, this account consists of:

	2017		2016
	(in million pesos)
Common shares
PSE		1,555		1,590
PLDT		39		36
Others		556		440
Preferred shares		360		360
		2,510		2,426

Defined Contribution Plans [member]

Statement [LineItems]

Summary of Changes in Present Value of Defined Benefit Obligations, Fair Value of Plan Assets and Components of Net Periodic Benefit Costs

Smart’s and certain of its subsidiaries’ actuarial valuation is performed every year-end. Based on the latest actuarial valuation, the actual present value of prepaid benefit costs, net periodic benefit costs and average assumptions used in developing the valuation as at and for the years ended December 31, 2017, 2016 and 2015 are as follows:

	2017			2016			2015
	(in million pesos)
Changes in the present value of defined benefit obligations:
Present value of defined benefit obligations at beginning of the year		2,177			2,116			2,149
Service costs		269			284			289
Interest costs on benefit obligation		113			94			98
Actuarial losses (gains) – economic assumptions		29			1			(67	)
Actuarial gains – experience		(6	)		(77	)		(217	)
Actual benefits paid/settlements		(92	)		(226	)		(96	)
Curtailment and others		—			(15	)		(40	)
Present value of defined benefit obligations at end of the year		2,490			2,177			2,116
Changes in fair value of plan assets:
Fair value of plan assets at beginning of the year		2,414			2,388			2,205
Actual contributions		335			201			227
Interest income on plan assets		131			125			92
Return on plan assets (excluding amount included in net interest)		74			(74	)		(40	)
Actual benefits paid/settlements		(92	)		(226	)		(96	)
Fair value of plan assets at end of the year		2,862			2,414			2,388
Funded status – net		372			237			272
Accrued benefit costs		13			9			19
Prepaid benefit costs (Note 19)		385			246			291
Components of net periodic benefit costs:
Service costs		269			284			289
Interest costs – net		(18	)		(31	)		7
Curtailment/settlement gain		—			(15	)		(23	)
Net periodic benefit costs (Note 5)		251			238			273

Summary of Expected Future Settlements

The following table sets forth the expected future settlements by the Plan of maturing defined benefit obligation as at December 31, 2017:

	(in million pesos)
2018		129
2019		85
2020		135
2021		99
2022		159
2023 to 2060		1,194

Summary of Weighted Average Assumptions Used to Determine Pension Benefits

The weighted average assumptions used to determine pension benefits for the years ended December 31, 2017, 2016 and 2015 are as follows:

	2017		2016		2015
Rate of increase in compensation		5.0%		5.0%		5.0%
Discount rate		5.8%		5.2%		5.0%

Summary of Sensitivity Analysis on Defined Benefit Obligation

The sensitivity analysis below has been determined based on reasonably possible changes of each significant assumption on the defined benefit obligation as at December 31, 2017, assuming if all other assumptions were held constant:

	Increase (Decrease)
	(in million pesos)
Discount rate	(1	%)	(6	)
	1	%	11
Future salary increases	1	%	11
	(1	%)	(6	)

Summary of Plan Assets

The following table sets forth the fair values, which are equal to the carrying values, of Smart’s plan assets recognized as at December 31, 2017 and 2016:

	2017		2016
	(in million pesos)
Noncurrent Financial Assets
Investments in:
Domestic fixed income		1,721		1,390
International equities		557		475
Domestic equities		555		379
Philippine foreign currency bonds		373		478
International fixed income		361		163
Total noncurrent financial assets		3,567		2,885
Current Financial Assets
Cash and cash equivalents		153		237
Receivables		8		1
Total current financial assets		161		238
Total plan assets		3,728		3,123
Employee’s share, forfeitures and mandatory reserve account		866		709
Total Plan Assets of Defined Contribution Plans		2,862		2,414

Summary of Allocation of Fair Value of Plan Assets

The allocation of the fair value of Smart and certain of its subsidiaries pension plan assets as at December 31, 2017 and 2016 is as follows:

	2017		2016
Investments in debt and fixed income securities and others		70%		73%
Investments in listed and unlisted equity securities		30%		27%
		100%		100%