President takes fresh aim at big business in his annual national address
The Philippines’ leading telecom companies have found themselves on the defensive once again after President Rodrigo Duterte threatened to close them and seize their assets if they do not improve their services.
Duterte zeroed in on the telecom duopoly of PLDT and Globe Telecom as he railed against the country’s business elites — which he often brands “oligarchs” — during his annual congressional address on Monday.
Amid worries that the industry is becoming increasingly politicized, shares in Globe dropped by as much as 3.4% on Tuesday, before closing 0.5% lower, while PLDT fell by 3.6% at one point before settling 0.5% higher. Manila’s benchmark index was up 1.1%.
PLDT’s principal shareholders include Japan’s NTT Group and Hong Kong-listed First Pacific, while Globe is a joint venture between Philippine conglomerate Ayala Corp. and Singapore Telecommunications. PLDT and Globe both belong to the groups that own water and power contacts that Duterte has criticized.
In his address, Duterte told the two telecom companies they had “better improve” or “I might just as well close all of you.” The president said he will “expropriate” their assets.
“Kindly improve the services before December. I want to call Jesus Christ [in] Bethlehem. Better have that line cleared,” Duterte said.
Globe, in a statement, said the company is heeding the call of the president to improve telecom services and is investing $1.2 billion this year. The company said red tape has hobbled its infrastructure buildup. PLDT has yet to issue a comment.
This is not the first time the firebrand president has taken aim at the telecom duopoly. Amid widespread complaints of slow internet speeds in 2016, Duterte told the two service providers to shape up or face competition from China.
Dito Telecommunity, a joint venture between China Telecom and Davao tycoon Dennis Uy, a Duterte campaign backer, has since won a license but has faced difficulties building its network ahead of its commercial launch next year. Shares of DITO CME Holdings, a prospective listing vehicle for Dito, rose 3.4% on Tuesday.