PLDT - Earnings Call - Q2 2025
August 12, 2025
Transcript
Speaker 6
Good afternoon, everyone, and thank you for joining us today. I'm Jane Basas, Head of Investor Relations here at PLDT, and it's my pleasure to welcome you to our first half financial and operating results briefing. Joining us today to share insights into PLDT's performance and strategic direction are PLDT Chief Operating Officer, Mr. Butch Jimenez Jr., PLDT Chief Financial Officer, Mr. Danny Yu, PLDT Corporate Secretary, Marilyn Victorio-Aquino, PLDT Chief Legal Counsel, Attorney Joan de Venecia Cabral, PLDT Head of Consumer Homes, John Gregory Palanca, PLDT Head of Enterprise, Blums Pineda, PLDT President, Manuel V. Pangilinan, and PLDT Treasurer, Leo Posadas. Later, during the call, we will also be joined by Smart Communications Chief Operating Officer, Boy Martirez. Go ahead, Danny.
Speaker 5
Good afternoon, everyone. Allow me to present PLDT's first half 2024 performance, covering key results and business highlights. Our service revenues net of interconnection costs reached ₱97.1 billion, a touch higher year on year. EBITDA came in at ₱55.5 billion, up 3% last year. EBITDA margin remains steady at 52%. This was supported by steady growth from our fiber and disciplined cost management. Cash OPEX subsidies provisioned by ₱5 billion, 3%, reflecting continued spending discipline. Telco core income landed at ₱6.2 billion, down 4%. We achieved a high appreciation of financing costs from our investment in our network and infra to improve quality of service. Core income, on the other hand, reached ₱17.6 billion, up 1%, lifted by Maya's positive earnings. PLDT share in Maya's core earnings amounted to ₱406 million in the first half, its first profitable semester, marking a ₱1.1 billion turnaround from the ₱693 million last year.
This strong result reflects continued growth in deposits, lending, and payments volume. In summary, we delivered stable core results to maintain our EBITDA margin, driven by careful cost management and ongoing revenue growth in key areas. PLDT service revenues remain stable, driven by sustained demand across key segments: mobile data, fiber, corporate data, and ICT. Starting with home, revenues grew 4% year on year, reaching ₱30.4 billion, led by strong spending fiber demand. Enterprise was slightly lower at ₱23.5 billion, down 1% due to continued declines in legacy businesses. Positively, corporate data and ICT revenues held steady despite last year's closure of above connectivity. Within these segments, ICT stands out, growing 15% year on year, ₱13.2 billion. While our connectivity business is in transition, we continue to build a pipeline of new opportunities powered by emerging tech solutions.
Turning to individual, revenues total ₱42.3 billion, slightly down in part due to recurring legacy offerings. Mobile data with ₱37.4 billion now making up 89% of the segment's revenues. We remain encouraged with the robust adoption of 5G and the continued increase in data usage, supporting future growth and better monetary churn. Overall, mobile data and fiber and corporate data ICT now represent 90% of our total revenues versus 88% last year, more than offsetting legacy declines. Excluding legacy services, total net service revenues rose by 3%. Now, let's take a closer look at the Home segment. Home revenues grew 4% year on year to ₱13.4 billion, driven by strong fiber demand. Fiber revenues reached ₱29.5 billion, up 7% versus last year, and now make up 97% of total Home revenues.
Subscriber momentum remains strong with 169,000 net fiber adds in the first half, over three times higher than last year's 50,000 net adds. This growth reflects the impact of our accelerated foreclosure program. We continue to lead in ARPU and churn. ARPU held steady at ₱1,485 for the semester, the highest in the industry. Churn improved quarter on quarter, a testament to network reliability and brand strength. Our bundling offerings also continue to resonate, with over 80% of new subscribers opting for higher price at ₱1,299 and above. These integrated broadband, mobile, and content bundles help drive customer stickiness and support revenues. Enterprise revenues for the first half reached ₱23.5 billion, slightly down by 1% from last year due to known headwinds. This includes the full impact of loss of connectivity, as well as slower public sector deal closures tied to the May elections and leadership changes in government agencies.
We expect these delayed awards to be brought in the second half. Corporate data and ICT remain stable at ₱17.4 billion and now account for 74% of all Enterprise revenues. ICT continues to be a bright spot with segment revenues up 15% year on year. Data center colocation grew by 36%, while cybersecurity services expanded by 24%. Other growth areas include fiber, up 4% year on year, and SD-WAN up 19% as demand for secure, flexible enterprise connectivity continues to rise. We also saw meaningful traction from Asia Direct Cable, which supported high bandwidth deal closures with hyperscalers and carriers in the second quarter. While connectivity revenues are in a transitional phase, our broader Enterprise business remains resilient, supported by advanced digital solutions and a growing customer pipeline.
In April, PLDT through its data center arm Vitro inaugurated Vitro Santa Rosa, the country's first operational AI-ready hyperscale facility and the largest in our portfolio. This rated pre-certified mega facility delivers 50 megawatts of power capacity and houses over 4,500 racks, built to meet the stringent requirements of enterprises, hyperscalers, the public sector, and AI workloads. The facility now hosts live NVIDIA GPUs powering ePLDT's AI solutions, giving Philippine enterprises access to on-demand, high-performance AI computing without the heavy capital costs of building their own infrastructure. As the country's first true AI enabler, Vitro offers low latency and the computing skills needed for enterprises to innovate and compete. Vitro continues to deliver strong growth with colocation revenues up 36% in the first half, driven by a 19% increase in rack development deployments across our data center network.
With Vitro Santa Rosa and our broader ecosystem, PLDT is building an infrastructure backbone to position the Philippines as a regional hub for digital services and AI innovation. Individual revenues reached ₱42.3 billion for the first half, down 1% from last year, reflecting continued drag from legacy services and a softer second quarter. Mobile data revenues sustained ₱37.4 billion, making up 89% of the segment. While Q2 was slightly slower, we continue to see healthy data usage and stickiness from our customer base. ARPU has remained broadly stable despite competitive pressures, thanks to our hyper-personalized offers that match customer needs while helping us manage marketing costs more efficiently. Total mobile data traffic grew 5% year on year to 2,766 petabytes, supported by the continued rise in 5G adoption.
5G traffic surged 84% versus last year, and 5G LAS devices now make up 17% of our base, up from 11% a year ago. This reflects network improvements and the impact of affordable 5G device offers. Another bright spot is fixed wireless. With the introduction of our new 5G modem, we saw revenues from this segment growing 12% year on year, driven by the strength and reliability of our 5G network, especially in areas where fiber is not yet available. We remain focused on giving customers the best experience, not only in network quality but also in how we design products that master preferences and needs. This approach allows us to maintain ARPU, spur demand, and increase loyalty. Innovations remain a key lever as we shape the next phase of growth.
To share more about our latest digital initiatives targeting younger Filipinos, I'd like to turn it over to our Smart COO, Mr. Boy Martirez.
Speaker 0
Hi. After months of hard work by our internal teams and technology partners, it is my pleasure to present to you the first of a series of innovations that we've embarked on. Mobile service called TIM. TIM is the Philippines' first and only app-based mobile service that offers a personalized digital telco experience. It is also one of the first in the world to offer such a groundbreaking experience. TIM is our code for the Gen Z market. The Gen Z, between 19 to 20 years old, is this young generation redefining how they live, share, and stay connected. They are disruptors, and we've seen their influence and power in the results of our latest Philippine elections. The rebellious yet authentic nature, their ability to know exactly when to swipe left or to double tap, make up a generation that will never compromise freedom and control.
With this in mind, we have built TIM, a mobile experience that gives Gen Z complete freedom and flexibility to personalize and control their mobile journey on their own terms. With a TIM app, users can build their own plan, choose their own data allocation, choose their call address inclusions, choose their numbers, choose their birthday period, and more, unlocking a very personalized experience for Gen Zs. It's my pride to show you our television commercial that was launched last Sunday.
Rule, we make them.
Speaker 3
Limits, go beyond them.
One size fits all, hard pass. Introducing a groundbreaking Digiflex mobile experience, Kick to Mobile. Download the Kick app, choose your number, activate the eSIM, and own the country's first-ever custom-mileful mobile experience. Stay personalized for network priority and customize all you want, because the real flex is when everything is built to your rules. Kick to Mobile, our way, our rules.
Speaker 0
There will be more innovations that we will be introducing. In fact, the ink hasn't even dried up on this innovation that we launched last Sunday. We'll be launching another one this coming Monday. Stay tuned.
Speaker 3
Thanks, Boy. As we continue to innovate on the product side, we're also staying focused on disciplined cost management. Now, let me walk you through our operating expenses. Total cash OPEX, subsidies, and provisions for the first half came in at ₱41.6 billion, down ₱1.4 billion or 3% from the same period last year. Breaking it down, compensation and benefits, excluding MRP, declined by ₱900 million or 8%, helped by ongoing right-sizing efforts. Selling and promotions were down 22%, reflecting better campaign targeting and improved spend efficiency. Subsidies fell 21%, mainly due to lower device issuance and better control on subsidy per unit. On the other hand, repairs and maintenance rose by 4% to ₱15.6 million, driven by network expansion and new site rollouts.
Overall, the 3% year-on-year reduction in cash operating expenses highlights our ongoing efforts to optimize spend while ensuring support for growth areas like fiber, mobile data, enterprise ICT, and digital innovations. For the first half, consolidated EBITDA reached ₱55.5 billion, up 3% year on year, despite lack of top-line growth and known headwinds. This reflects the resilience of our business model, with earnings supported by a stronger mix of fiber, ICT, and personalized mobile offers. This growth was driven mainly by lower OPEX, with total cash OPEX down by ₱1.4 billion or 3% year on year. Our EBITDA margin held steady at 52%, underscoring our ability to defend profitability in a competitive market. This stability gives us a strong platform heading into the second half, where we expect additional upside from enterprise deal closures and traction from new product launches.
Telco core income for the first half came in at ₱17.2 billion, slightly lower year on year as higher depreciation and financing costs weighed on the results. That said, a clear bright spot is Maya, which delivered ₱406 million in core income, its first profitable semester, and a meaningful turnaround from a loss last year. Maya has now cemented its position as the largest digital bank and merchant acquirer in the country. Its gamified all-in-one ecosystem continues to attract, retain, and grow users, creating a profitable and sustainable financial platform that is now materially contributing to PLDT's core income now and moving forward. Including Maya's contribution, consolidated core income rose to ₱17.6 billion, up 1% versus the same period last year. Reported income was slightly lower at $18.1 billion, mainly reflecting lower net forex and derivative gains.
We'll share more on Maya's performance and growth momentum in a dedicated section later in this presentation. Now, let's move on to CAPEX and our net profile. CAPEX for the first half of 2025 stood at $27.4 billion. We're now guiding full-year CAPEX of about $63 billion, lower than our original guidance of $68 to $73 billion. This reduction is not due to scaling back our efforts, but rather the result of more favorable pricing and negotiated terms with vendors and suppliers. We remain focused on network quality and expansion, with continued momentum in new site rollouts, LTE and 5G upgrades, fiber port builds, and investment in submarine cables and AI infra. We're also investing in AI-ready data center and upgrades that improve service quality and long-term efficiency.
CAPEX intensity for the first half declined to 26%, in line with our plan to bring down the ratio and support stronger free cash flow. As of the end of June, our net debt stood at $282.6 billion, with a net debt/EBITDA ratio of 2.57 times. Our interest cover remains healthy at 3.52 times, giving us ample headroom to manage debt service. We have continued to manage maturities proactively, with 55% of our debt maturing beyond 2030 and only 5% maturing in 2025. US dollar denominated debt is modest at 13%, with only 5% unhedged. Our overall debt portfolio remains diversified, with a balanced mix of fixed and floating rates and an average tenor of 6.4 years. We remain investment-grade rated by both S&P and Moody's, underscoring confidence in our fundamentals and risk profile.
We maintain our guidance of returning to positive free cash flow by 2026 and are working toward our target net debt/EBITDA ratio of 2.0 times over a medium term. The board declared an interim cash dividend of 48 pesos per share earlier today, in line with our regular payout policy of 60% of telco core income. This corresponds to a telco core earnings per share of 80 pesos for the first half and reflects our commitment to stable shareholders' return while managing leverage. Based on PLDT's closing share price as of June 30, the 12-month trailing yield stands at about 8%. Now, let me discuss Maya, the number one fintech ecosystem in the Philippines, comprising of Maya, the leading digital bank, and Maya Philippines, the top omnichannel payment processor. What makes Maya unique?
It is a fully integrated platform that unites digital payments, banking, and lending for both consumers and businesses. This creates a powerful flywheel: more user drive, more transaction, generating richer insights, enabling better product adoption, and ultimately delivering scale and profitability. These strong network effects are firmly established across both consumer and business segments. Next, Maya remains the Philippines' number one digital bank and leading payment provider for inbound, meaning MQR merchant payments. As of June 2025, Maya had 8.2 million banking customers, 2.1 million borrowers, ₱50.4 billion in deposits, and ₱150 billion in total loans disbursed since inception. In Q2 2025, Maya posted its second consecutive quarter of sustainable profitability with ₱582 million in net income, a growth of 60% over the first quarter of 2025. Now, let me break down Maya's banking performance.
Maya's deposits rose to ₱50.4 billion by the end of June, up 54% year on year, showing sustained growth and stronger customer trust. Loan disbursement hit ₱32 billion in Q2, up 147% year on year, bringing total life-to-date disbursal to ₱152 billion across consumer loans, MSME loans, and partner-led loan channeling. Outstanding loans grew to ₱25 billion, raising loan-to-deposit ratio to 49% and boosting net interest margin to 20.2%. NPL inched up to 5.2% with new products and services, but these remain healthy. Maya also expects this to stabilize as the portfolio matures. In summary, Maya is unlocking the full value of its platform by linking consumer and merchant ecosystems. Maya recently launched the Maya Black credit card, a premium lifestyle card, and the Maya Black Preferred rewards program, giving cardholders up to 10 times rewards within the ecosystem.
Maya remains the only digital bank in the Philippines issuing credit cards with over 230,000 issued since August 2024, many to first-time users. Maya is also expanding credit access to partners like Pepsi, Tanga, and OneLand. It has forged strategic alliances such as the Landers Cobrand Card and PAL Mabuhay Miles integration. With its ecosystem firing on all cylinders, Maya is setting the pace for the future of digital finance in the Philippines. Now, allow me to cite a few sustainability highlights during the quarter. PLDT Inc. and Smart Communications signed agreements with Empower to source additional renewable energy for operations. This will result not only in cost savings but also support our decarbonization roadmap. PLDT's progress in the area of sustainability is manifested in several recognitions.
PLDT was again included in the FTSE Good Index, where our score was higher than the telecom industry, the mobile subsector, and country averages. Its $2 billion social loan was cited as the social infra deal of the year by the ASEP in 2025 in the Asian region category. During the quarter, PLDT submitted its communication on progress, which affirmed its commitment to the United Nations Global Compact's 10 Principles on Human Rights, Labor, Environment, and Anti-Corruption. The PLDT team was named the overall winner of the UNGC Innovation Accelerator for Young Professionals and will be the Philippines' submission to the UNGC Leaders Summit in New York in September. More details of our initiatives can be found in the sustainability section of this presentation. That concludes our prepared remarks for the first half of 2025.
We appreciate your continued interest and support, and we'll be happy to open the floor for your questions. Thank you.
Speaker 6
Thank you, Danny and Boy, for all the valuable insights and growth initiatives, as well as key developments that you've shared across our business units. As you've seen today, despite some near-term challenges, we remain confident in our market position, supported by our strong operational fundamentals, strategic investments in digital infrastructure, and promising growth in Maya. Now, we'd like to open the floor to your questions. You may submit your questions by the Q&A panel, or if you wish, you may also raise your hand and come and unmute your mic. Looks like we have Arthur Pineda of Citigroup Inc. with a question here. Go ahead, Arthur. I'll unmute you right now.
Speaker 8
Hi. Thanks for the opportunity. Yeah, two questions, please. Firstly, on mobile, I'm just wondering what's driving the softness in.
Speaker 6
I'm sorry, Arthur.
Speaker 8
Sorry, can you hear me?
Speaker 6
The volume here in the room. If you can just wait one moment.
Speaker 8
Is this better?
Speaker 6
Yes, we can hear you a little bit better.
Speaker 8
Okay. Sorry. Yeah, two questions, please. Firstly, on mobile, I'm just wondering what's driving the softness in trends for wireless revenues? I mean, you look at the revenues down, and it's down slightly on a few Q basis, but one Q was handled with a lot of work and school outages. Why aren't we seeing the uplift in revenues and any guidance into the third quarter with regard to these trends? The second question I had is with regard to regulation. Can we get an update on the Connectatum Pinedale? Is there a deadline for the president to sign this or amend or return to Congress? How do you see this as playing out? Thank you.
Speaker 6
Thank you, Arthur. I guess we can take the first question on mobile.
Speaker 0
Arthur, may I just ask you to speak a little bit slowly so I can get your first part of your question?
Speaker 6
It's about the softness in mobile trends. Quarter to quarter, it looks like there was some softness. First quarter did have some challenges regarding mobility. He was asking if you had a similar effect and also your outlook for the third quarter.
Speaker 0
Thank you. Thank you. The grid is a normal fluctuation. We perceive it as a normal fluctuation, and we expect it to go right back up. More importantly, in the second half, where our innovations sit, we expect to have a better outlook in the second half. I guess that just outlines our view. The first time around that we met, Arthur, I remember you asked me what I would do differently. The most important thing that I'd like to outline here is, although Smart Communications is a tech company, we are also a consumer-centric company. In a consumer-centric company, we aim to, therefore, delight the customer. Delighting the customer is based on the innovations that we have. Each innovation is going to deliver value for money.
The value for money is going to be the driver of how we will get the revenues up and how we will do market prepared.
Speaker 6
Thank you, sir. Boy, for the second question on Blums Pineda.
Speaker 4
I'll ask that first one. The first question is when you become a law, right?
Speaker 6
Any deadlines for the question?
Speaker 4
By August 24, if the president does not veto the bill, it will become a law by the passage of time. What's the other question? That's it.
Speaker 6
Do you have any follow-up questions on Blums Pineda, Arthur Pineda, or just the deadline?
Speaker 8
I'm just wondering how you see this. Will there be any amendments which could take place? Do you just see this as passing through to law, or do you think it's likely going to stall?
Speaker 4
Our hope is the president will return this, will veto the law, and allow the Congress to enact a law, enact a bill that will replace it in consultation with stakeholders, including the telcos. We were heartened by the fact that the Office of the Deputy Executive Secretary for Legal Affairs sent a letter to Smart requesting an opinion on the position of Smart with respect to the bill, whether or not the president should veto the bill or approve the bill and sign it into law. Arthur, I would not know what will be the end position in this matter. If in the event that the president signs it into law or allows it to last into law, then we have to be a telco. We have to assert our rights and our issues and bring our issues to them before the Supreme Court.
We believe that there are several unconstitutional issues that are contained in them, including the discriminatory treatment in favor of data transmission providers and satellite providers, because the bill allows data transmission providers and satellite providers to use Spectrum without any franchise. In that respect, the bill is also unconstitutional because it contains more than one subject. The rule in the Philippines, in most democratic countries, is a bill can only contain one subject. This bill contains three subjects: one, open access; number two, Spectrum, allocation of Spectrum and recall of Spectrum; and third, enjoyment of Spectrum operating without a franchise. We will raise those issues. The most important point in this is the bill goes against what the world basically has implemented as open access. The standard for open access, for the ability of data transmission providers to access the assets of telcos, is very broad.
As long as it's necessary, then they will have the right to access. Whereas open access as adopted in other countries has a very strict standard, which is the asset must be indispensable and must be essential for the provision of services of the data transmission providers. I liken it to a right-of-way. If the access to the asset is necessary, it's a necessary right-of-way for the provision of the services, and then that is a fair access. If it is an access which allows them to have basically access to all our assets and basically we can conduct a business without building their own infrastructure, then that's almost confiscatory because our assets are being accessed, and the law is requiring us to provide access to our assets that will be used by the private sector. It's not even for public use.
On that score, it is confiscatory, and we're not even allowed to basically negotiate the terms of the access. When you have that situation, when the law was intended to provide for the additional build of infrastructure in the Philippines for data transmission providers, but the law failed to impose an obligation to build infrastructure on the data transmission providers. Instead, they are given the right to access all our assets. It's like a freeloader situation, no. When that happens, who will suffer? Our subscribers will suffer, and there will be a disincentive to build because you know how expensive it is to build. As we build, we are not given the assurance that we will have exclusively a use of the assets that we're building. The signal of the law is the data transmission providers will have access over the assets that we will build.
It's a disincentive to build further, to improve the infrastructure of telcos in the Philippines. The other most important point here is under the Constitution, the state has the ability, has the power, and the right to take over entities or businesses that are engaged in public utilities or engaging or whose business are imbued with public or national interest. That one will not be available for satellite providers because the bill allows satellite providers to get a Spectrum to operate without any franchise. Satellite providers are physically outside of the physical jurisdiction of the Philippine government. In our case, if the Philippine government needs our assets, needs to take over our operations in order to ensure that national security is protected, for example, the black sun communication, they can just knock on our doors and send the police and take over.
In the case of satellite providers that are given Spectrum and are operating without any franchise from the government, that's not possible. That is depriving the state of the power to protect itself. Those are some of the unconstitutional points that we will raise if the bill is passed into law.
Speaker 8
Understood. Thank you very much.
Speaker 6
Thank you, Attorney. We have another question here from M. Well of Metro Bath. Can you share some guidance regarding what we can expect from refinancing activities for the maturing debt? Do we expect any upticks in our rates? Perhaps Leo or Treasurer can take this.
Speaker 3
Danny, thank you for the question. Currently, interest rates are still at high levels. We compared a few years back with the appeal of our maturing debts. As an indication, as you have joined, the cost of our debt is approximately now 30%. Admittedly, as we refinance them, the interest rates are high, still at higher levels right now than benchmark rates. What we have done is that we've negotiated for the spreads to contract a bit, from a high, which is 75 to 100 basis points, to today's 40 to 60 basis points. Aside from that, Northern has also the high interest rate environment. Are borrowing long-term facilities with floating rates structured price at the shorter end of the curve. This is also to take advantage of declining interest rates followed by easing of central banks.
While they may be a little bit higher now, there is potential in the way we're structured our refinancing facilities of floating rates to the shorter end that will give us the ability to also enjoy as interest rates go down.
Speaker 6
Thank you, Leo. All right. Another question that we have here is in regards to our 5G cities. Any updates on 5G cities after the successful launch in Bonifacio Global City? Are there additional cities slated for this, and what can we expect in this time of year?
Speaker 0
Oh, yes. That was for that. Following the success that we have on 5G cities, we have decided to start to propagate that in the provinces. We have selected Iloilo, the Queen City of the South, as the first beneficiary of that. We're putting 5G in Iloilo, and we're testing it there. So far, I'm glad to announce that there's been some good acceptance, particularly with respect to the fact that we started that with a sunsetting of our 3G spectrum.
Speaker 6
Thank you. As a follow-up to that, since we are talking about 5G, are there any measurable uplifts in terms of ARPU for these 5G cities, also from 5G users moving up from LTE?
Speaker 0
Thank you again for the question. Short answer, ARPU 5G is $300. The ARPU LTE is $100 with coverage. Definitely be assured that there will be a revenue there. We are very focused in really implementing our 5G network.
Speaker 6
Thank you, sir. Boy. This next question I got from quite a number of investors. This is in regards to our asset monetization plans. Are there any updates on the data center sale, as well as asset sales on top of the data center?
Speaker 3
Okay. On the data center, we continue to receive increased interest from parties, and we also considered other options for the data center. Until we have finalized, we will advise you once we have finalized those deals.
Speaker 6
In regards to copper?
Speaker 3
Yeah, I can really mention that.
Speaker 6
Okay. For copper, we will announce a floor as an option.
Speaker 3
It needs to be one of the priorities. Maybe I can give them an update on the asset monetization program on our legacy assets. We've created a robust program to be able to monetize all our legacy assets, beginning with our copper. That is now under negotiations. I don't think I can disclose generally the price and how much we're going to get. Suffice it to say that we believe that we will get a substantial amount for our copper. Over and above that, there is a full program on being able to monetize our other legacy assets. For example, we are starting to shut down 3G. There will be a lot of equipment that is related to 3G, which we will also now start to monetize. Eventually, all our other legacy assets, we will start to monetize. We have a program for that whole ecosystem of monetizing legacy assets.
Speaker 6
Thank you, Boy. Okay. This next question is for our Home business. This is in regards to prepaid. It looks like there was some uplift in the press release regarding take-up on prepaid. Can you give us more color on your plans and how this fits in your portfolio?
Speaker 0
Thank you. Prepaid is our strategic entry point into an emerging market that is of price-sensitive households, as well as first-time fiber users. We do not see prepaid as cannibalizing postpaid. An emerging customer base is there for those households that are hesitant to a monthly commitment or never tried the fiber and are still using older or slower technologies. Prepaid is the perfect way to onboard these customers. Our growth driver in the next six months of the year will come from these emerging—well, it will come from two places. It's from deepening our penetration in areas where we have coverage, and it's entering into these emerging markets consisting of price-sensitive households, as well as first-time fiber users.
Speaker 6
Thank you, John Gregory Palanca.
Speaker 0
Thank you.
Speaker 6
I'd also like to recognize the presence of our Chairman and CEO, Mr. Manuel V. Pangilinan. If you have any questions, please feel free to put them in the queue in the Q&A box here in the King's meeting. You may also send it to me via Viber, or you may raise your hand as well. This next question is for Enterprise. Enterprise revenues declined 1% year on year. That's despite the 15% growth in ICT. You mentioned that there were some delays due to the elections and the POGOs. Did this contribute to growth overall in the second half?
Speaker 0
Yes. Thanks for the question. Yes, there were definitely, on the public sector side especially, as you can imagine, in local governments, some of those deals were sliding because of the May elections and waiting for any new elected officials to be announced. On the national government agencies as well, as you will remember, there was a loyalty check, etc. While we had some closed deals, substantially on the national government agency side in the first half, some of them did slide. I think it was reported in the news that PLDT Inc. won an award for the emergency 911 services, a national program announced by the president in Luzon. We're waiting for the notice to proceed on that. We're pleased. I think that's a marker of things to come on that sector.
Similarly, with private sector things, I think, we're pushing hard on these things and hoping that it will impact the results positively in the second half.
Speaker 6
Thank you, Blums. As a follow-up to that, regarding the new services from Vitro Santa Rosa regarding GPU as a service, any color regarding how early demand is shaping up?
Speaker 3
Thank you for that question. Vitro Santa Rosa remains the premier data center hub of the Philippines today. A five-hectare site, 50 megawatts in terms of capacity, 4,500 racks. This is the only AI-ready data center in the Philippines today. We are taking full advantage of that. We are the first company in the Philippines to actually bring in NVIDIA GPU servers. This is meant to address the growing AI demand that we see in the enterprise space today. Customers now are moving from using access to actual deployment of AI, and we're capitalizing on that demand that's coming in. We're happy to be the digital infra provider for AI in the Philippines today.
Speaker 6
Thank you, B-Boy. Also, I'd like to let everyone know that we also have Aayush Jhunjhunwala of Maya. He is the CIO of Maya. If there are any Maya-related questions from the group, you may also pose those questions. Again, if there are any questions, you may post them in the Q&A box, or you may raise your hand. It looks like we have a question from Derek of CLSA. Go ahead, Derek.
Hi. Thanks, everyone, for the call. I do have questions on Maya. I noticed that NIMS increased to 20%. Is it fair to say that the credit card rates have been driving this improvement? If that's the case, is it also driving the uptick in NPLs for the period? What could be the normalized NPLs? Still in Maya, is it possible for you to share the split in net income between banking and merchant acquiring?
Speaker 2
Hi. Hi, Derek. Thanks for those questions. Partly correct. The overall growth in NIMS has not just been because of increasing NIMS for credit card. Of course, that's a factor. We have launched credit card very recently. We have scaled up personal loans, which was launched late last year. The continued growth of these two businesses, in particular, as their longer tenor products, will continue to have some near-term adverse impact on NPLs, but we expect those to stabilize relatively quickly. I think NIMS continued to increase as we increased our LDRs, and we'll continue to drive those up. LDRs are driving up. Individual product NIMS are improving. These two factors are going to continue to drive the NIMS up. I think for NPLs, if you see, we are quite focused on managing the risk of the business, the risk of the portfolio.
We take great measures in making sure that the risk profile is acceptable. You can see that NIMS have only inched up slightly. I think we should expect these levels, maybe marginally up from these levels, but within the year or so, it should start to stabilize a bit more. That's what I can sort of talk about NIMS and NPLs. I don't think we can split out at this stage much more on the P&L. You do get to see more robust financials on the Maya Bank, which should come out soon. It's effectively, we do announce, we do release the consolidated net income. You'll be able to see the difference between the two businesses. Just to remind you that the payments business is not just acquiring. It includes all payment-related services.
That will include acquiring, which is obviously one of the largest businesses, but also consumer payments, which is consumer wallet and any other transactional revenue on the wallet. Thank you.
Speaker 6
Thank you, Aayush. We have a question from Ziwei of Mafari. Is there going to be any guidance on revenue and margins for the second half of 2025?
Speaker 3
Guidance on the revenues? I'm not aware.
Speaker 6
Perhaps you can share something else, maybe on core income?
Speaker 3
We're still trying to hit the core income of last year. We're slightly behind right now, but we're trying to hit the core income that we had last year.
Speaker 6
Thank you. We can't, we won't be able to provide more than that at this time as we continue to navigate the business. We do wish to maintain our profitability, of course, and then hopefully shoot for higher. Okay. Any other questions for the group as well as for Maya? This question here is for home regarding innovation. There are some innovations coming from the mobile side of things. Can you talk about innovations that you are pursuing for the home fiber business?
Speaker 0
Thank you, Jane. Yes, we have been looking at a lot of, I guess, value-added content. The initial mission for innovation is to make PLDT the digital hub of every home. What does that mean? Aside from connectivity, we are looking at, we already have partnered with the big names in entertainment like Netflix, Max. We've partnered with the smart home vendors like TP-Link and the UC. Very soon, we will be partnering with a big name in the electronic gaming industry and eSports and console gaming. That will be launched very shortly. We are also looking at partnering with MWell in order to provide the health from the home. These are the few things. We are creating the smart home and IoT platform for every home to ensure that we are able to provide this integrated service to the home.
Furthermore, there is still a market for connectivity, and you will be seeing in the market very soon a no-frills brand that we have launched. This should also help bring in or break into the emerging markets. We hope to capture this incrementally. We do not see these emerging markets of price-sensitive households or first-time users to cannibalize postpaid. Our postpaid proposition remains very strong. Our ARPU has held up despite the fact that we have entered these markets beginning in the last quarter of last year and booming in the first and second quarter of this year. This is a very strong indication that even lower ARPU subscribers, once they're in and they determine their data usage, do tend to come back and upgrade their subscriptions to faster speeds or add more content, which is helping us preserve our ARPU.
In short, it's very important that making the home, each and every home in the Philippines, a digital hub from PLDT is our mission. We intend to do that through IoT, through smart home, through entertainment, and health, among other things. Thank you.
Speaker 6
Thank you, John. We have a question here for Maya from Nikki. Is there a target or optimal loan-to-deposit ratio for Maya Bank? The second question, any plans for further capital raising or perhaps even an IPO? What's the timeline looking for that?
Speaker 2
I think for the loan-to-deposit ratio, we are still reasonably below the industry standards. We'll continue to drive those up. I don't think we have a very fixed target at this point in time, but we are still less than 50%. There's ample room to continue to grow. We also have an ability to dial up or dial down the deposit growth, and it really depends on the scaling of the lending book that will enable us to maintain healthy LDR ratios. I think in terms of capital raise or IPO, we at the company continue to remain focused on scaling the business. We are solidly cash-generative. We are profitable. We don't need to raise external capital to continue to drive growth. That's a good thing.
I think as far as any IPO or any other strategic alternatives are concerned, we'll let the shareholders decide and take appropriate action at the right time.
Speaker 6
Thank you, Aayush. Okay. Looks like we have just a minute or so left. There are some questions here in the queue. This is a question from Ziwei on Maya. How do you see loan disbursement continuing to grow in the second half of 2025? You're tracking about the same amount of loans made with GCash in the second quarter, Maya ₱32 billion, GCash ₱34 billion. Curious to understand where you're driving the loan growth from and whether you are in direct competition with the same market as GCash.
Speaker 2
Yeah, you know, we have a very strong suite of products that we offer now between both consumer and businesses, starting with a Maya Easy Credit, which favors a consumer who has never taken a loan before. First-to-credit customers, these are very short-term, small-ticket loans. Then we have personal loans where we graduate consumers for longer duration, larger ticket sizes. We have just launched a credit card. We launched a Landa's credit card last year, and we've just launched our own personal, self-branded credit card last week. It's a very robust set of products, credit products for the consumers. Similarly, we have a working capital product for businesses, both for fixed duration as well as for installment loan. There is no one particular product that is driving all the disbursal. It's a fairly diversified book. It's a fairly diversified disbursal.
We'll continue to see escalation across the board and growth across the board. We do focus, just in terms of our customer segmentation, we do focus on mass affluent and above customers. We have a very, very millennials, Gen Z-focused customer base, and that's our continued focus. There are many, many products that we offer. We are the only ones, for example, amongst the digital banks or lenders who have a credit card. We do continue to differentiate and offer products suitable to our customer base.
Speaker 6
Thank you, Aayush. Okay. It looks like that's about all the time that we have for today. That concludes today's briefing. I'd like to thank everybody for their time and continued support of PLDT. Before we end the meeting, perhaps I'd like to invite our Chairman and VP if he has any closing remarks.
Speaker 0
I can lead, you guys. Thank you for joining us this afternoon. When you announced it, it was September, right? We should see you in September, which is very far away as well. Thank you.
Speaker 6
See you in November. All right. Thank you, everyone. If you have any other questions that you wanted to ask today, please feel free to send them over. I'd be happy to get them by email. Thank you. Have a great day. Bye.
Speaker 0
Take care, everyone.