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Related Party Transactions | 12 Months Ended
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Dec. 31, 2021
Disclosure Of Transactions Between Related Parties [Abstract] |
Related Party Transactions |
25. | Related Party Transactions
Parties are considered to be related if one party has the ability, directly and indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or corporate entities. Transactions with related parties are on an arm’s length basis, similar to transactions with third parties. Settlement of outstanding balances of related party transactions at year-end are expected to be settled with cash. The following table provides the summary of outstanding balances as at December 31, 2021 and 2020, and transactions for the years ended December 31, 2021, 2020 and 2019 that have been entered into with related parties:
Company Name |  | Particulars |  | Terms |  | Conditions |  | Statement of Financial Position Classification |  | 2021 |  |  | 2020 |  |  | Income Statement Classification |  | 2021 |  |  | 2020 |  |  | 2019 |
|  |  |  |  |  |  |  |  |  | (in million pesos) |  |  |  |  | (in million pesos) |
Indirect investment in joint ventures through PCEV: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manila Electric Company, or Meralco |  | Electricity services to PLDT and certain subsidiaries’ offices within Meralco's franchise area |  | Immediately upon receipt of invoice |  | Unsecured |  | Accounts payable and accrued expenses and other current liabilities (Notes 23 and 24) |  |  | 186 |  |  |  | 418 |  |  | Repairs and maintenance |  |  | 2,519 |  |  |  | 2,231 |  |  |  | 2,689 |
|  | Pole attachment contracts, wherein Meralco leases its pole spaces to accommodate PLDT and Smart’s cable network facilities |  | 45 days upon receipt of billings |  | Unsecured |  | Accrued expenses and other current liabilities (Note 24) |  |  | — |  |  |  | — |  |  | Rent |  |  | 40 |  |  |  | 38 |  |  |  | 29 |
|  |  |  | Upon depreciation or expiration of lease |  | Unsecured |  | ROU assets (Note 10) |  |  | 2,433 |  |  |  | 1,916 |  |  | Depreciation and amortization |  |  | 486 |  |  |  | 473 |  |  |  | 218 |
|  |  |  | 2021 – due after December 31, 2022; 2020 – due after December 31, 2021 |  | Unsecured |  | Lease liabilities - net of current portion (Note 10) |  |  | 1,118 |  |  |  | 1,589 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | 2021 – due on or before December 31, 2022; 2020 – due on or before December 31, 2021 |  | Unsecured |  | Current portion of lease liabilities (Note 10) |  |  | 487 |  |  |  | 437 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Meralco Industrial Engineering Services Corporation, or MIESCOR |  | Customer line installation, repair, rehabilitation and maintenance activities |  | 30 days upon receipt of invoice |  | Unsecured |  | Accrued expenses and other current liabilities (Note 24) |  |  | 1 |  |  |  | 3 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MPIC |  | Notes receivable |  | 2020 – due on or before December 31, 2021; noninterest-bearing |  | Unsecured |  | Current portion of financial assets at FVOCI (Note 11) |  |  | — |  |  |  | 168 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company Name |  | Particulars |  | Terms |  | Conditions |  | Statement of Financial Position Classification |  | 2021 |  |  | 2020 |  |  | Income Statement Classification |  | 2021 |  |  | 2020 |  |  | 2019 |
|  |  |  |  |  |  |  |  |  | (in million pesos) |  |  |  |  | (in million pesos) |
Transactions with major stockholders, directors and officers: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NTT TC Leasing(1) |  | PLDT signed a US$25 million term loan facility agreement on March 22, 2016 |  | Non-amortizing, payable upon maturity on March 30, 2023 |  | Unsecured |  | Interest-bearing financial liabilities (Note 21) |  |  | 1,272 |  |  |  | 1,201 |  |  | Financing costs – net |  |  | 17 |  |  |  | 29 |  |  |  | 52 |
|  | PLDT signed a US$25 million term loan facility agreement on January 31, 2017 |  | Non-amortizing, payable upon maturity on March 27, 2024 |  | Unsecured |  | Interest-bearing financial liabilities (Note 21) |  |  | 1,271 |  |  |  | 1,200 |  |  | Financing costs – net |  |  | 18 |  |  |  | 30 |  |  |  | 52 |
NTT World Engineering Marine Corporation |  | On February 1, 2008, PLDT entered into a service agreement, wherein NTT World Engineering Marine Corporation provides offshore submarine cable repair and other allied services for the maintenance of PLDT’s domestic fiber optic network submerged plant. |  | 1st month of each quarter; noninterest-bearing |  | Unsecured |  | Accounts payable and accrued expenses and other current liabilities (Notes 23 and 24) |  |  | 240 |  |  |  | 183 |  |  | Repairs and maintenance |  |  | 97 |  |  |  | 139 |  |  |  | 169 |
NTT Communications |  | On March 24, 2000, PLDT entered into an advisory service agreement (as amended on March 31, 2003, March 31, 2005 and June 16, 2006), under which NTT Communications provides PLDT with technical, marketing and other consulting services for various business areas of PLDT starting April 1, 2000. |  | 30 days upon receipt of invoice; noninterest-bearing |  | Unsecured |  | Accrued expenses and other current liabilities (Note 24) |  |  | 12 |  |  |  | 11 |  |  | Professional and other contracted services |  |  | 68 |  |  |  | 81 |  |  |  | 95 |
|  | On March 24, 2000, PLDT entered into an agreement with NTT Communications under which PLDT and NTT Communications agreed to cooperative arrangements for conventional international telecommunications services to enhance their respective international businesses. |  | 30 days upon receipt of invoice; noninterest-bearing |  | Unsecured |  | Accounts payable (Note 23) |  |  | 3 |  |  |  | 3 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NTT Worldwide Telecommunications Corporation |  | On March 24, 2000, PLDT entered into an agreement under which PLDT markets, and manages data and other services under NTT Communications’ “Arcstar” brand to its corporate customers in the Philippines. PLDT also entered into a Trade Name and Trademark Agreement with NTT Communications under which PLDT has been given the right to use the trade name “Arcstar” and its related trademark, logo and symbols, solely for the purpose of PLDT’s marketing, promotional and sales activities for the Arcstar services within the Philippines. |  | 30 days upon receipt of invoice; noninterest-bearing |  | Unsecured |  | Accounts payable (Note 23) |  |  | 4 |  |  |  | 1 |  |  | Selling and promotions |  |  | 2 |  |  |  | 3 |  |  |  | 5 |
(1) | Effective July 1, 2020, these loans were transferred from NTT Finance Corporation to NTT TC Leasing. See Note 21 – Interest-bearing Financial Liabilities.
Company Name |  | Particulars |  | Terms |  | Conditions |  | Statement of Financial Position Classification |  | 2021 |  |  | 2020 |  |  | Income Statement Classification |  | 2021 |  |  | 2020 |  |  | 2019 |
|  |  |  |  |  |  |  |  |  | (in million pesos) |  |  |  |  | (in million pesos) |
Transactions with major stockholders, directors and officers: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NTT DOCOMO |  | On June 5, 2006, in accordance with the Cooperation Agreement dated January 31, 2006, an Advisory Services Agreement was entered into by NTT DOCOMO and PLDT. Pursuant to the Advisory Services Agreement, NTT DOCOMO will provide the services of certain key personnel in connection with certain aspects of the business of PLDT and Smart. Also, this agreement governs the terms and conditions of the appointments of such key personnel and the corresponding fees related thereto. |  | 30 days upon receipt of invoice; noninterest-bearing |  | Unsecured |  | Accrued expenses and other current liabilities (Note 24) |  |  | 12 |  |  |  | 8 |  |  | Professional and other contracted services |  |  | 80 |  |  |  | 58 |  |  |  | 70 |
JGSHI and Subsidiaries |  | PLDT and certain of its subsidiaries have existing agreements with Universal Robina Corporation and Robinsons Land Corporation for office and business office rental. |  | 1st month of each quarter; 30 days upon receipt of invoice; noninterest-bearing |  | Unsecured |  | Accounts payable and accrued expenses and other current liabilities (Notes 23 and 24) |  |  | 52 |  |  |  | 59 |  |  | Rent |  |  | 232 |  |  |  | 314 |  |  |  | 198 |
|  |  |  | Upon depreciation or expiration of lease |  | Unsecured |  | ROU assets (Note 10) |  |  | 83 |  |  |  | 134 |  |  | Depreciation and amortization |  |  | 29 |  |  |  | 34 |  |  |  | — |
|  |  |  | 2021 – due after December 31, 2022; 2020 – due after December 31, 2021 |  | Unsecured |  | Lease liabilities - net of current portion (Note 10) |  |  | 62 |  |  |  | 114 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | 2021 – due on or before December 31, 2022 2020 – due on or before December 31, 2021 |  | Unsecured |  | Current portion of lease liabilities (Note 10) |  |  | 30 |  |  |  | 20 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | PLDT group's other transactions with JGSHI and subsidiaries |  | 30 days upon receipt of invoice; noninterest-bearing |  | Unsecured |  | Accrued expenses and other current liabilities (Note 24) |  |  | 7 |  |  |  | 3 |  |  | Repairs and maintenance |  |  | 25 |  |  |  | 6 |  |  |  | 38 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Professional and other contracted services |  |  | — |  |  |  | 2 |  |  |  | — |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Communication, training and travel |  |  | — |  |  |  | 1 |  |  |  | 10 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Financing costs – net |  |  | 5 |  |  |  | 13 |  |  |  | — |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Miscellaneous expenses |  |  | — |  |  |  | — |  |  |  | 98 |
Company Name |  | Particulars |  | Terms |  | Conditions |  | Statement of Financial Position Classification |  | 2021 |  |  | 2020 |  |  | Income Statement Classification |  | 2021 |  |  | 2020 |  |  | 2019 |
|  |  |  |  |  |  |  |  |  | (in million pesos) |  |  |  |  | (in million pesos) |
Transactions with major stockholders, directors and officers: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Malayan Insurance Co., Inc.or Malayan |  | PLDT and certain of its subsidiaries have insurance policies with Malayan covering directors, officers, liability to employees and material damages for buildings, building improvements, equipment and motor vehicles. The premiums are directly paid to Malayan. |  | Immediately upon receipt of invoice |  | Unsecured |  | Accounts payable and accrued expenses and other current liabilities (Notes 23 and 24) |  |  | 10 |  |  |  | 10 |  |  | Insurance and security services |  |  | 196 |  |  |  | 194 |  |  |  | 295 |
|  |  |  | Immediately upon receipt of invoice |  | Unsecured |  | Prepayments (Note 19) |  |  | 23 |  |  |  | 18 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gotuaco del Rosario and Associates, or Gotuaco |  | Gotuaco acts as the broker for certain insurance companies to cover certain insurable properties of the PLDT Group. Insurance premiums are remitted to Gotuaco and the broker’s fees are settled between Gotuaco and the insurance companies. |  | Immediately upon receipt of invoice |  | Unsecured |  | Accounts payable and accrued expenses and other current liabilities (Notes 23 and 24) |  |  | 1 |  |  |  | 10 |  |  | Insurance and security services |  |  | 179 |  |  |  | 149 |  |  |  | 165 |
|  |  |  | Immediately upon receipt of invoice |  | Unsecured |  | Prepayments (Note 19) |  |  | — |  |  |  | 5 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
First Pacific Investment Management Limited, or FPIML |  | On March 1, 2018, Smart entered into an Advisory Services Agreement with FPIML effective for a period of one-year subject to a 12-month automatic renewal unless either party notifies the other party of its intent not to renew the agreement. FPIML provides advisory and related services in connection with the operation of Smart’s business of providing mobile communications services, high-speed internet connectivity, and access to digital services and content. The agreement provides that Smart shall pay monthly service fee of US$$250 thousand and any additional fee shall be mutually agreed upon by both parties on a monthly basis. On March 26, 2020, Smart and FPIML mutually agreed to reduce the monthly service fee to US$100 thousand in consideration of the services provided under this agreement, effective April 1, 2020. Starting April 2021, the fee has been increased to $220k per month. Smart prepaid the fees for the period April to October 2021 (US$1.54 million). |  | – |  | Unsecured |  | Prepayments (Note 19) |  |  | — |  |  |  | — |  |  | Professional and other contracted services |  |  | 111 |  |  |  | 72 |  |  |  | 156 |
Company Name |  | Particulars |  | Terms |  | Conditions |  | Statement of Financial Position Classification |  | 2021 |  |  | 2020 |  |  | Income Statement Classification |  | 2021 |  |  | 2020 |  |  | 2019 |
|  |  |  |  |  |  |  |  |  | (in million pesos) |  |  |  |  | (in million pesos) |
Other related parties: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cignal Cable Corporation, or Cignal Cable |  | PLDT and Smart entered into a two-year agreement with Cignal Cable to resell and distribute the iflix service to their respective subscribers effective June 18, 2019. The agreement stipulates that PLDT and Smart will each pay a minimum guarantee of US$1,500 thousand annually, which is committed for the Advertising Spend Guarantee. iflix shall pay PLDT and Smart 30% each of the monthly marketing costs subject to a monthly cap of US$500 thousand each. This agreement was pre- terminated of March 2021. |  | 30 days upon receipt of invoice |  | Unsecured |  | Accrued expenses and other current liabilities (Note 24) |  |  | — |  |  |  | 102 |  |  | Cost of services |  |  | — |  |  |  | 22 |  |  |  | 306 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Selling and promotions |  |  | — |  |  |  | 23 |  |  |  | 82 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Other income – net |  |  | — |  |  |  | 51 |  |  |  | 166 |
Various |  | PLDT and certain of its subsidiaries provide telephone, data communication and other services to various related parties. |  | 30 days upon receipt of invoice |  | Unsecured |  | Trade and other receivables (Note 17) |  |  | 1,892 |  |  |  | 2,036 |  |  | Revenues |  |  | 2,368 |  |  |  | 2,145 |  |  |  | 2,401 |
|  |  |  | 2021 – due after December 31, 2022; 2020 – due after the December 31, 2021 |  | Unsecured |  | Lease liabilities - net of current portion (Note 10) |  |  | 386 |  |  |  | 413 |  |  | Expenses |  |  | 2,386 |  |  |  | 1,582 |  |  |  | 1,908 |
|  |  |  | 2021 – due on or before December 31, 2022; 2020 – due on or before December 31, 2021 |  | Unsecured |  | Current portion of lease liabilities (Note 10) |  |  | 234 |  |  |  | 156 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Upon depreciation or expiration of lease |  | Unsecured |  | ROU assets (Note 10) |  |  | 750 |  |  |  | 598 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | 30 days upon receipt of billing; noninterest-bearing |  | Unsecured |  | Accounts payable (Note 23) |  |  | 1,314 |  |  |  | 1,049 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Immediately upon receipt of billing |  | Unsecured |  | Accrued expenses and other current liabilities (Note 24) |  |  | 11 |  |  |  | 63 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Material Related Party Transactions, or MRPT, Policy On September 24, 2019, the Board of Directors approved and adopted the MRPT Policy in compliance with the Philippine SEC Memorandum Circular No. 10, Series of 2019, or the Rules on MRPT for Publicly-Listed Companies. This MRPT Policy applies to the PLDT Group and covers related party transactions that meet the Materiality Threshold of 10% of PLDT’s total consolidated assets. It defines the processes, controls and safeguards for the proper handling, including review, approval and disclosure, of such related party transactions in accordance with applicable laws and regulations. Related party transactions involving an amount below the Materiality Threshold shall be covered by our Guidelines on the Proper Handling of Related Party Transactions. Compensation of Key Officers of the PLDT Group The compensation of key officers of the PLDT Group by benefit type for the years ended December 31, 2021, 2020 and 2019 are as follows:
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | (in million pesos) |
Short-term employee benefits |  |  | 311 |  |  |  | 327 |  |  |  | 311 |
Share-based payments (Note 26) |  |  | 115 |  |  |  | 297 |  |  |  | 138 |
Post-employment benefits (Note 26) |  |  | 21 |  |  |  | 22 |  |  |  | 58 |
Total compensation paid to key officers of the PLDT Group |  |  | 447 |  |  |  | 646 |  |  |  | 507 |
The amounts disclosed in the table above are the amounts recognized as expenses during the period related to key management personnel. Effective January 2014, each of the directors, including the members of the advisory board of PLDT, was entitled to a director’s fee in the amount of Php250 thousand for each board meeting attended. Each of the members or advisors of the audit, governance, nomination and sustainability, executive compensation, technology strategy, and risk and data privacy and information security committees was entitled to a fee in the amount of Php125 thousand for each committee meeting attended. Total fees paid for board meetings and board committee meetings amounted to Php85 million, Php72 million and Php68 million for the years ended December 31, 2021, 2020 and 2019, respectively. Except for the fees mentioned above, the directors are not compensated, directly or indirectly, for their services as such directors. There are no agreements between PLDT Group and any of its key management personnel providing for benefits upon termination of employment, except for such benefits to which they may be entitled under PLDT Group’s retirement and incentive plans.

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