Philippine telco PLDT announced on Wednesday it has a secured a PHP2 billion (US$34.4 million) social loan facility from HSBC Philippines to finance its fibre infrastructure rollouts to underserved and unserved communities.
Social loans are financing solutions where the proceeds are invested in ways that generate “positive social outcomes”, which can include things like “increasing access to affordable basic infrastructure and essential services”.
In a filing with the Philippine Stock Exchange yesterday, PLDT said its social loan will support further expansion of its fibre network infrastructure to reach fourth to sixth class municipalities in the Philippines, including so-called geographically isolated and disadvantaged areas (GIDAs) where internet connectivity has not yet reached.
The Philippine Statistics Authority has designated 729 municipalities as fourth to sixth class as of June 2024, which means their average annual income is less than PHP35 million (for sixth-class municipalities, it’s less than PHP15 million).
PLDT says its fibre network currently covers 59% of those municipalities. However, of the over 7,000 GIDAs in the country, PLDT has rolled out fibre to just 767.
PLDT said it has outlined plans to extend fibre services to more municipalities in the coming years, prioritizing areas most in need of connectivity.
President Ferdinand R. Marcos Jr has called on the telecoms sector to focus on connecting GIDAs as part of a broader plan to support the government’s digitalization goals. Much of that work has focused on wireless connectivity. In April 2024, the Private Sector Advisory Council (PSAC) – which Marcos Jr established two years ago to foster public-private sector collaboration – recommended that the government set aside at least PHP240 billion to help build out 35,000 new tower sites for GIDAs.
However, those towers will also need fibre. And in any case, said PLDT’s chief sustainability officer Melissa Vergel de Dios, fibre will complement wireless as an access option, and will also be critical to providing inclusive access to education, healthcare, and economic opportunities for underserved and unserved areas.
“By expanding our presence in GIDAs and low-income municipalities, we are helping to foster inclusive growth and development in some of the most remote parts of the country,” Vergel de Dios said in a statement.
HSBC Philippines head of wholesale banking Mimi Concha added that the deal marks the first time the bank has approved a social loan facility to a telco in the Philippines.
“This project will help support the improvement of access to the internet for Filipinos in these underserved areas so that they can actively participate and compete in the digital economy,” Concha said.
It’s also the second financing deal PLDT has secured from HSBC this year, the first being a PHP1 billion green loan facility approved in March 2024 to support the upgrade of its network from copper to fiber (the rationale being that fibre networks are more ‘green’ than copper because they use less electricity).
In May 2024, PLDT obtained another green loan from Metrobank valued at PHP4 billion to expand its fibre reach.
