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COVER SHEET
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G L O B E T E L E C O M , I N C .
(Company's Full Name)
5 / F G L O B E T E L E C O M P L A Z A
P I O N E E R C O R M A D I S O N S T R E E T S ,
M A N D A L U Y O N G C I T Y
(Business Address: No. Street City / Town / Province)
ALBERTO M. DE LARRAZABAL 730-2742
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Company Telephone Number
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Dept. Requiring this Doc.
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SEC Form 17A 2009 1

SEC Number: 1177
File Number: ____
GLOBE TELECOM, INC.
5th Floor Globe Telecom Plaza
Pioneer corner Madison Streets
Mandaluyong City 1552
(632) 730-2000
SEC Form 17-A
FOR THE FISCAL YEAR ENDED
31 DECEMBER 2009
SEC Form 17A 2009 2

SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-A
ANNUAL REPORT PURSUANT TO SECTION 17 OF THE REVISED SECURITIES ACT AND
SECTION 141 OF CORPORATION CODE OF THE PHILIPPINES
1. For the fiscal year ended: 31 December 2009
2. SEC Identification Number: 1177
3. BIR Tax Identification No. 000-768-480
4. Exact name of registrant as specified in its charter: Globe Telecom, Inc.
5. Province, Country or other jurisdiction of incorporation or organization: Philippines
6. Industry Classification Code: ________(SEC Use Only)
7. Address of principal office: 5 th Floor, Globe Telecom Plaza, Pioneer corner Madison Streets,
Mandaluyong City Postal Code: 1552
8. Registrant's telephone number: (632) 730-2000
9. Former name, former address, and former fiscal year: Not Applicable
10. Securities registered pursuant to Sections 4 and 8 of the RSA
Title of Each Class
Number of Shares Outstanding
Common Stock (P50.00 par value) 132,345,595
Preferred Stock ( P5.00 par value) 158,515,021
11. Are any or all of these securities listed on the Philippine Stock Exchange Yes [ x ] No [ ]
12. Check whether the registrant:
(a) has filed all reports required to be filed by Section 11 of the Revised Securities Act (RSA) and
RSA Rule 11(a)-1 thereunder and Sections 26 and 141 of The Corporation Code of the
Philippines during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports): Yes [ x ] No [ ]
(b) has been subject to such filing requirements for the past 90 days: Yes [ x ] No [ ]
13. Aggregate market value of the voting stock held by non-affiliates of the registrant as of 31 December 2009:
P26.6 billion
SEC Form 17A 2009 3

TABLE OF CONTENTS
PART I – BUSINESS AND GENERAL INFORMATION.........................................................................5
ITEM 1. BUSINESS.........................................................................................................................................5
ITEM 2. PROPERTIES ...................................................................................................................................30
ITEM 3. LEGAL PROCEEDINGS ....................................................................................................................32
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......................................................33
PART II – OPERATIONAL AND FINANCIAL INFORMATION...........................................................34
ITEM 5. ISSUER’S EQUITY, MARKET PRICE, DIVIDENDS AND RELATED STOCKHOLDER MATTERS..............34
ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS.....................................................39
For The Financial Year Ended 2009.................................................................................................39
For the Financial Year Ended 2008 ..................................................................................................73
ITEM 7. FINANCIAL STATEMENTS.............................................................................................................102
PART III- CONTROL AND COMPENSATION INFORMATION........................................................103
ITEM 8. DIRECTORS AND KEY OFFICERS ..................................................................................................103
ITEM 9. EXECUTIVE COMPENSATION........................................................................................................109
ITEM 10. SECURITY OWNERSHIP OF CERTAIN RECORD, BENEFICIAL OWNERS & MANAGEMENT ............115
ITEM 11. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .........................................................116
PART IV – CORPORATE GOVERNANCE...........................................................................................117
SIGNATURES............................................................................................................................................131
PART V – EXHIBITS AND SCHEDULES.............................................................................................132
INDEX TO EXHIBITS ...............................................................................................................................133
SEC Form 17A 2009 4

PART I – BUSINESS AND GENERAL INFORMATION
Any reference in this report to “we”, “us”, “our”, “Company” means the Globe Group including its
wholly-owned subsidiaries and references to “Globe” mean Globe Telecom, Inc., the parent company,
not including its wholly-owned subsidiaries.
Item 1. Business
Globe Telecom, Inc. is a major provider of telecommunications services in the Philippines, supported
by over 5,000 employees and over 700,000 retailers, distributors, suppliers, and business partners
nationwide. The Company operates one of the largest and most technologically-advanced mobile,
fixed line and broadband networks in the country, providing reliable, superior communications services
to individual customers, small and medium-sized businesses, and corporate and enterprise clients.
Globe currently has over 23 million mobile subscribers, over 700,000 broadband customers, and
almost 600,000 landline subscribers.
Globe is also one of the largest and most profitable companies in the country. The Company has
been consistently recognized both locally and internationally for its corporate governance practices. It
is listed on the Philippine Stock Exchange under the ticker symbol GLO with a market capitalization of
US$2.6 billion as of the end of 2009. .
The Company’s principal shareholders are Ayala Corporation and Singapore Telecom, both industry
leaders in the country and in the region. Aside from providing financial support, this partnership has
created various synergies and has enabled the sharing of best practices in the areas of purchasing,
technical operations, and marketing, among others.
Globe is committed to being a responsible corporate citizen. Globe BridgeCom, the company’s
umbrella corporate social responsibility program, leads and supports various initiatives that (1)
promote education and raise the level of computer literacy in the country, (2) support entrepreneurship
and micro-enterprise development particularly in the countryside, and (3) ensures sustainable
development through protection of the environment and excellence in operations. Since its inception in
2003, Globe BridgeCom has made a positive impact on the lives of thousands of public elementary
and high school students, teachers, community leaders, and micro-entrepreneurs throughout the
country.
The Globe Group is composed of the following companies:
• Globe Telecom, Inc. (Globe) provides mobile telecommunications services;
• Innove Communications Inc. (Innove), a wholly-owned subsidiary, provides fixed line
telecommunications and consumer broadband services, high-speed internet and private data
networks for enterprise clients, services for internal applications, internet protocol-based
solutions and multimedia content delivery;
• G-Xchange, Inc. (GXI), a wholly-owned subsidiary, provides mobile commerce services under
the GCash brand;
• Entertainment Gateway Group Corp. and EGGstreme (Hong Kong) Limited (EHL) (collectively
referred here as EGG Group), provides digital media content and applications; and
• GTI Business Holdings, Inc. (GTIBH), a wholly-owned subsidiary, is an investment company.
SEC Form 17A 2009 5

The Company is a grantee of various authorizations and licenses from the National
Telecommunications Commission (NTC) as follows: (1) license to offer and operate facsimile, other
traditional voice and data services and domestic line service using Very Small Aperture Terminal
(VSAT) technology; (2) license for inter-exchange services; and (3) Certificate of Public Convenience
and Necessity (CPCN) for: (a) international digital gateway facility (IGF) in Metro Manila, (b)
nationwide digital cellular mobile telephone system under the GSM standard (CMTS-GSM), and (c)
nationwide local exchange carrier (LEC) services after being granted a provisional authority in June
2005.
A. Business Development and Corporate History
In 1928, Congress passed Act No. 3495 granting the Robert Dollar Company, a corporation organized
and existing under the laws of the State of California, a franchise to operate wireless long distance
message services in the Philippines. Subsequently, Congress passed Act No. 4150 in 1934 to
transfer the franchise and privileges of the Robert Dollar Company to Globe Wireless Limited which
was incorporated in the Philippines on 15 January 1935.
Globe Wireless Limited was later renamed as Globe-Mackay Cable and Radio Corporation (“Globe-
Mackay”). Through Republic Act (“RA”) 4630 enacted in 1965 by Congress, its franchise was further
expanded to allow it to operate international communications systems. Globe-Mackay was granted a
new franchise in 1980 by Batasan Pambansa under Batas Pambansa 95.
In 1974, Globe-Mackay sold 60% of its stock to Ayala Corporation, local investors and its employees.
It offered its shares to the public on 11 August 1975.
In 1992, Globe-Mackay merged with Clavecilla Radio Corporation, a domestic telecommunications
pioneer, to form GMCR, Inc. (“GMCR”). The merger gave GMCR the capability to provide all forms of
telecommunications to address the international and domestic requirements of its customers. GMCR
was subsequently renamed Globe Telecom, Inc. (“Globe”).
In 1993, Globe welcomed a new foreign partner, Singapore Telecom, Inc. (STI), a wholly-owned
subsidiary of Singapore Telecommunications Limited (“SingTel”), after Ayala and STI signed a
Memorandum of Understanding.
In 2001, Globe acquired Isla Communications Company, Inc. (“Islacom”) which became its whollyowned
subsidiary effective 27 June 2001. , In 2003, the National Telecommunications Commission
(“NTC”) granted Globe’s application to transfer its fixed line business assets and subscribers to
Islacom, pursuant to its strategy to integrate all of its fixed line services under Islacom. Subsequently,
Islacom was renamed as Innove Communications, Inc. (“Innove”).
In 2004, Globe invested in G-Xchange, Inc. (“GXI”), a wholly-owned subsidiary, to handle the mobile
payment and remittance service marketed under the GCash brand using Globe’s network as transport
channel. GXI started commercial operations on 16 October 2004.
In November 2004, Globe and seven other leading Asia Pacific mobile operators (‘JV partners’)
signed an agreement (‘JV agreement’) to form Bridge Alliance. The joint venture company operates
through a Singapore-incorporated company, Bridge Mobile Pte. Limited (BMPL) which serves as a
commercial vehicle for the JV partners to build and establish a regional mobile infrastructure and
common service platform to deliver different regional mobile services to their subscribers. The Bridge
Alliance currently has a combined customer base of over 250 million subscribers among its partners in
India, Thailand, Hong Kong, South Korea, Macau, Philippines, Malaysia, Singapore, Australia, Taiwan
and Indonesia.
SEC Form 17A 2009 6

In 2005, Innove was awarded by the NTC with a nationwide franchise for its wireline business,
allowing it to operate a Local Exchange Carrier service nationwide and expand its network coverage.
In December 2005, the NTC approved Globe’s application for third generation (3G) radio frequency
spectra to support the upgrade of its cellular mobile telephone system (“CMTS”) network to be able to
provide 3G services. The Company was assigned with 10-Megahertz (MHz) of the 3G radio frequency
spectrum.
On 19 May 2008, following the approval of the NTC, the subscriber contracts of Touch Mobile or TM
prepaid service were transferred from Innove to Globe which now operates all wireless prepaid
services using its integrated cellular networks.
In August 2008, and to further grow its mobile data segment, Globe acquired 100% ownership of
Entertainment Gateway Group (“EGG”), a leading mobile content provider in the Philippines. EGG
offers a wide array of value-added services covering music, news and information, games, chat and
web-to-mobile messaging.
On 25 November 2008, Globe formed GTI Business Holdings, Inc. (GTIBH) primarily to act as an
investment company.
On October 30, 2008, Globe, the Bank of the Philippine Islands (BPI) and Ayala Corporation (AC)
signed a memorandum of agreement to form a joint venture that would allow rural and low-income
customers’ access to financial products and services. Last October 2009, the Bangko Sentral ng
Pilipinas (BSP) approved the sale and transfer by BPI of its shares of stock in Pilipinas Savings Bank,
Inc. (PSBI), formalizing the creation of the venture. Globe’s and BPI’s ownership stakes in PSBI is at
40% each, while AC’s shareholding is at 20%. The partners plan to transform PSBI (now called BPI
Globe BanKO, Inc.) into the country’s first mobile microfinance bank. The bank’s initial focus will be
on wholesale lending to other microfinance institutions but will eventually expand to include retail
lending, deposit-taking, and micro-insurance.
There was no bankruptcy, receivership or similar proceedings initiated during the past three years.
SEC Form 17A 2009 7

B. Business Segments
1. Mobile Business
Globe provides digital mobile communication services nationwide using a fully digital network based
on the Global System for Mobile Communication (GSM) technology. It provides voice, data and valueadded
services to its mobile subscribers through three major brands: Globe Postpaid, Globe Prepaid
and TM.
Globe Postpaid includes all postpaid plans such as regular G-Plans, consumable G-Flex Plans, Load
Allowance Plans, Time Plans, Apple TM iPhone 3G plans and high-end Platinum Plans. To serve the
needs of specific market segments and promote loyalty, the Company introduced various innovative
postpaid plans including the Load Tipid Plans which allow subscribers to control their spend and set
their plan limits based on their usage profiles. The subscriber can reload their account just like any
prepaid subscriber if their actual consumption exceeds their fixed credits. Meanwhile, for those
subscribers who want to upgrade their mobile internet browsing experience, Globe introduced
Personal Blackberry and Mobile Surfing add-on plans which entails additional monthly fees on top of
their regular monthly postpaid subscription fees.
Globe Prepaid, Globe Tattoo, and TM are the prepaid brands of Globe. The Globe Tattoo brand was
formally launched in February 2009 and is targeted towards the youth segment with its convergent
mobile and broadband offerings, while the TM brand caters to the value-conscious segment of the
market. Globe Prepaid is targeted towards the adult, mainstream market. Its unique brand proposition
revolves around its innovative product and service offerings, superior customer service, and Globe’s
“worldwidest” services and global network reach.
Globe offers various top-up or reloading options and facilities for prepaid subscribers including prepaid
call and text cards, bank channels such as ATMs, credit cards and through internet banking.
Subscribers can also top-up at over 740,000 AutoLoad Max retailers nationwide, all at affordable
denominations and increments. A consumer-to-consumer top-up facility, Share-A-Load, is also
available to enable subscribers to share prepaid load credits via SMS. Globe’s AutoLoad Max and
Share-A-Load services are also available in selected OFW hubs all over the world.
(a) Mobile Voice
Globe’s voice services include local, national and international long distance call services. It has
one of the most extensive local calling options designed for multiple calling profiles. In addition to
its standard, pay-per-use rates, subscribers can choose from bulk and unlimited voice offerings for
all-day or off-peak use, and in several denominations to suit different budgets.
Globe pioneered international roaming in 1995 and now has one of the widest networks with over
500 roaming partners in more than 200 calling destinations worldwide. Globe was the first to offer
international roaming service for its prepaid users in 2002 and now provides international roaming
coverage on-board selected shipping lines, airlines and via satellite. Through its Globe
Kababayan program, Globe also provides an extensive range of international call and text
services to allow OFWs (Overseas Filipino Workers) to stay connected with their friends and
families in the Philippines. This includes prepaid and reloadable call cards and electronic PINs
available in popular OFW destinations worldwide.
SEC Form 17A 2009 8

During the year, Globe and TM sustained their bulk and unlimited voice offerings such as
Tawag236 for a 20-minute call for P20, Globe’s P10 for a 3-minute call, and TM’s TodoTawag P15
for a 15-minute call. Globe also continued to offer its per-second charging promo which allows
subscribers to make on-net voice calls for only P0.10 per second.
To further drive adoption and encourage usage, Globe launched its “Walang Metro” campaign
which includes a slew of unlimited product offers to provide subscribers more value services to
suit their budget and needs. Globe launched the revolutionary DUO and SUPERDUO service, a
two-in-one mobile and landline service, which enables subscribers to make unlimited landline-tolandline
and mobile-to-mobile calls to any Globe and TM subscriber for only P499 per month for
postpaid, and P35/day or P599/month for prepaid subscribers. In addition, Globe introduced
SUPER UNLI which supports 24x7 unlimited call and text services to any Globe/TM subscriber
nationwide for only P150 for 5 days for both postpaid and prepaid subscribers. UNLIcall is also
available in selected areas, providing subscribers with unlimited intra-network voice service for
only P30/day or P100/5 days. Following the launch of its youth-oriented prepaid brand Globe
Tattoo, the Company also introduced IMMORTALCALL+ - a unique bucket call and text service
which includes a 5 minute call and 50 intra-network SMS with no expiry for only P15.
(b) Mobile Data and Value-Added Services
Globe’s data services include local and international SMS offerings, mobile browsing and content
downloads. Globe has introduced various bucket and unlimited SMS packages to cater to the
different needs and lifestyles of its postpaid and prepaid subscribers. Additionally, Globe
subscribers can send and receive Multimedia Messaging Service (MMS) pictures and video, or do
local and international 3G video calling.
Globe’s mobile browsing services allow subscribers to access the internet using their internetcapable
handsets or laptops with USB modems. Data access can be made using various
technologies including 3G with HSDPA, EDGE and GPRS. Browsing subscribers now have
multiple charging options with Globe’s Flexible Mobile Internet Browsing rates which allow
subscribers to choose between time or usage-based rates. They can also choose between daily,
per site or monthly browsing plans.
The Company also offers a full range of downloadable content covering multiple topics including
news, information, and entertainment through its web portal. Subscribers can purchase or
download music, movie pictures and wallpapers, games, receive mobile advertising from partner
brands, download applications or watch clips of popular TV shows, movies and documentaries as
well as participate in interactive TV, mobile chat and play games, among others.
During the year, Globe continued to offer its existing bulk (SuliTxt, EverybodyTxt and TxtOthers)
and unlimited (UnliTxt Dayshift and Nightshift and TodoTxt) SMS promotions. To further drive data
usage, Globe expanded its bucket and unlimited SMS packages by introducing SUPER UNLI and
IMMORTALCALL+, as well as pioneering ImmortalTxt, the first and only SMS offer in the industry
with no expiry period.
Globe also introduced entry-level iPhone plans starting at Plan399 bundled with free Wi-Fi.
Subscribers can also subscribe to add-on plans such as Mobile Surfing and Personal Blackberry
to upgrade their internet browsing experience. Mobile Surfing add-on plans offer free mobile
internet hours or data allocations every month available at plans P149, P399 and P799. On the
other hand, customers with Blackberry handsets can subscribe to Personal Blackberry add-on
plans which include monthly allocations for free instant messaging (IM) or emails available at
plans P700, P850 and P1,100. Subscribers can also enjoy unlimited surfing through Super Surf
which is an unlimited browsing add-on plan for additional fee of P1,200 per month, P220 for 5
days or P50 per day for postpaid subscribers. For prepaid users, subscribers can choose to do
unlimited browsing with Surf All Day for only P20 per day per site (including popular sites such as
Facebook, Wikipedia, Plurk, Friendster, Twitter) or P220 for 5 days.
SEC Form 17A 2009 9

On the mobile commerce front, Globe was first in introducing a cashless and cardless integrated
payments service with the launch of GCash in 2004. Through Globe’s partnership with major
banks and remittance companies, and using Globe’s pioneering GCash platform, subscribers can
perform mobile banking and mobile commerce transactions via SMS. Globe subscribers can
complete international and domestic remittance transactions, pay fees, utility bills and income
taxes, avail of micro-finance transactions, donate to charitable institutions, and buy Globe prepaid
load credits using its GCash-activated SIM. Net registered GCash user base at the end of 2009
totaled 1.04 million.
IOn January 2010, the BSP, through the Monetary Board, approved GXI’s request to utilize
Globe’s distribution network as GCash-enabled outlets, making it the largest remittance network in
the Philippines with 18,000 cash-in and cash-out outlets. Traditionally, subscribers can cash in
and cash-out their GCash only through the Globe business centers. With the BSP approval, cashin
and cash-out transactions can now be performed via accredited rural banks, pawnshops and
remittance partners, as well as loading stations such as sari-sari stores, pharmacies, internet
cafes, food establishments, rice dealers, farm and poultry stores, gas stations, and multi-purpose
cooperatives nationwide.
2. Fixed Line and Broadband Business
Globe offers a full range of fixed line communications services, wired and wireless broadband access,
and end-to-end connectivity solutions customized for consumers, SMEs (Small & Medium Enterprises)
and large enterprises and businesses.
To better serve the various needs of its customers, Globe organized dedicated customer facing units
(CFUs) within the Company to focus on the integrated mobile and fixed line needs of specific market
segments. There are consumer marketing and sales groups to address the needs of retail customers,
and a business CFU focused on the needs of big and small businesses. Globe Business was created
and organized along two main segments – Corporate and SME (CSME) and Enterprise Businesses.
These groups provide end-to-end mobile and fixed line solutions and are equipped with their own
technical and customer relationship teams to cater to the requirements of their specific client base.
(a) Fixed Line Voice
Globe’s fixed line voice services include local, national and international long distance calling
services in postpaid and prepaid packages through its Globelines brand. Subscribers get to enjoy
toll-free rates for national long distance calls with other Globelines subscribers nationwide.
Additionally, postpaid fixed line voice consumers enjoy free unlimited dial-up internet from their
Globelines subscriptions. Low-MSF and fixed line bundled with internet plans are available
nationwide and can be customized with value-added services including multi-calling, call waiting
and forwarding, special numbers and voice mail. For corporate and enterprise customers, Globe
offers voice solutions that include regular and premium conferencing, enhanced voice mail, IP-PBX
solutions and domestic or international toll free services.
(b) Fixed Line Data
Fixed line data services include end-to-end data solutions customized according to the needs of
businesses. Globe’s product offering includes international and domestic data services, wholesale
and corporate internet access, data center services and segment-specific solutions customized to
the needs of targeted industries.
Globe’s international data services provide its corporate and enterprise customers with the most
diverse international connectivity solutions through a variety of dedicated communications
services that allow customers to manage their own virtual private networks (VPN), subscribe to
wholesale internet access via managed international private leased lines (IPL), run various
applications and access networks with integrated voice services over high-speed, redundant and
SEC Form 17A 2009 10

eliable connections. In addition to bandwidth access from multiple international submarine cable
operators, Globe also has two international cable landing stations situated in different locales to
ensure redundancy and network resiliency.
Its domestic data services include data center solutions such as business continuity and data
recovery services, 24x7 monitoring and management, dedicated server hosting, maintenance for
application-hosting, managed space and carrier-class facilities for co-location requirements and
dedicated hardware from leading partner vendors for off-site deployment.
Other fixed line data services include access services that deliver premium-grade access
solutions combining voice, broadband and video offerings designed to address specific
connectivity requirements. These include Broadband Internet Zones (BIZ) for broadband-to-room
internet access for hotels or Internet Exchange (GiX) services for bandwidth-on-demand access
packages based on average usage.
(c) Broadband
Globe offers wired, fixed wireless, and fully mobile internet-on-the-go services across various
technologies and connectivity speeds for its residential and corporate customers. Wired or DSL
broadband packages bundled with voice or broadband data-only services are available at
download speeds ranging from 256 kbps up to 3 mbps. In selected areas where DSL is not yet
available, Globe offers a fixed wireless broadband service using its WiMAX network as a costeffective
alternative to wired broadband. For consumers who require a fully mobile internet-onthe-go
broadband connection, Globe Broadband Tattoo service allows subscribers to access the
internet via 3G with HSDPA, EDGE, GPRS or Wi-Fi at hotspots nationwide using a plug-and-play
USB modem at speeds of up to 2 mbps. This service is available in both postpaid and prepaid
packages. In addition, consumers who require faster connections have the option to subscribe to
Globe’s Hyper Speed broadband plans using leading edge GPON technology with speeds of up to
100 mbps.
During the year, Globe relaunched its fully mobile broadband service as Globe Broadband Tattoo
to position the service towards the more digitally-attuned youth market. Effective brand
positioning, lowered entry costs with its USB prepaid kits, and wider availability of Globe’s wireless
broadband services were the main drivers behind the strong take-up of the Tattoo service. To
augment the take up of its Broadband Tattoo service, Globe lowered the prices of its entry-level
postpaid plans in August from P799 to P499 and increased the mobile browsing hours for its mid
to high plans by 33%. The following month, Globe further lowered the prices of its USB prepaid
kits by 53% to P895 (from P1,895 initially offered in February 2009) and offered additional prepaid
credits upon purchase or reload. To differentiate its USB prepaid kits from the competition, Globe
offered these in multiple styles to suit different lifestyles and added calling capabilities to the kit.
The Company also continued to expand the coverage and capacity of its wired and wireless
broadband network. Globe also upgraded its domestic transmission systems and international
cable connections to increase the capacity and enhance the resiliency of the Company’s data
networks.
SEC Form 17A 2009 11

C. Sales and Distribution
Globe has various sales and distribution channels to address the diverse needs of its subscribers.
1. Independent Dealers
Globe utilizes a number of independent dealers throughout the Philippines such as major distributors
of wireless phone handsets who usually have their own retail networks, direct sales force, and subdealers
to sell and distribute its prepaid wireless services. Dealers are compensated based on the
type, volume and value of reload denominations made in a given period. This takes the form of fixed
discounts for prepaid airtime cards and SIM packs, and discounted selling price for phonekits.
Additionally, Globe also relies on its distribution network of over 740,000 AutoloadMax retailers
nationwide who offer prepaid reloading services to Globe and TM subscribers.
2. Business Centers
The Company has 102 business centers, Hub shops and micro-stores in major cities across the
country. Through the business centers, customers are able to inquire and subscribe to wireless
services, reload prepaid credits, make GCash transactions, purchase handsets and accessories,
request for handset repairs, try out communications devices, and pay bills. Globe’s business centers
are also registered with the Bangko Sentral ng Pilipinas (BSP) as remittance outlets.
3. Globelines Payments and Services (‘GPS’) Centers
To better serve its fixed line subscribers from various service areas, Globe has 40 GPS centers in
strategic locations which allow subscribers to sign up for consumer fixed line services, make GCash
transactions, inquire about services and make bill payments.
4. Corporate Sales Team
Globe has a corporate sales team comprised of account managers based in key cities nationwide.
Sales to large businesses are managed by specialized account managers who are dedicated to
managing large business customers based on identified target segments. They are the single point of
contact for any service or product concern the corporate customer may have, and are backed up by a
strong team of pre-sales engineers, segment marketing managers and project managers. There is
also a dedicated team that handles sales to small and medium-sized enterprises, as well as the
integrated wireless and fixed line communications needs of enterprise clients. The Customer Support
Group and Fault Management Control Center handle all after-sales support for non-technical and
technical concerns, respectively.
5. Reseller Network
Globe, through its corporate arm, Globe Business, intends to grow its fixed line data business by
adopting a strategy of providing value-added solutions to diverse industries. Globe Business created
its Enterprise Channels program to manage its network of business partners, resellers and premium
business partners to help meet the growing demands of businesses requiring end-to-end multiple
solutions in voice, data or video connectivity. Under this program, companies who have sufficient
capabilities in information technology and whose products and services complement Globe were
tapped as business partners and tasked to market and sell services to unserved target segments
while licensed value-added service providers were accredited as resellers of Globe’s services and
could use their own brand name to market their core offerings to selected target segments. In line with
its thrust to offer end-to-end solutions, Globe Business works with its Premium Business Partners to
create service bundles or develop go-to-market strategies to launch new and innovative value-adding
solutions.
6. Others
Globe also distributes its prepaid products SIM packs, prepaid call cards and credits through
consumer distribution channels such as convenience stores, gas stations, drugstores and bookstores.
SEC Form 17A 2009 12

D. Operating Revenues
Net Operating Revenues by Business Segment
Year Ended 31 December
(in Php Mn) 2009 % 2008 % 2007 %
Net Service Revenues
Mobile ………………………………………. 53,321 85% 55,436 88% 56,410 89%
Voice 1 …………………………………….. 26,497 42% 26,971 43% 29,870 47%
Data 2 ……………………………………… 26,824 43% 28,465 45% 26,540 42%
Fixed Line and Broadband………………. 9,122 15% 7,458 12% 6,799 11%
Fixed Line Voice 3 ……………………… 2,795 4% 3,088 5% 3,504 6%
Fixed Line Data 4 ………………………… 3,038 5% 2,478 4% 2,073 3%
Broadband 5 ……………………………… 3,289 6% 1,892 3% 1,222 2%
Net Service Revenues………………………... 62,443 98% 62,894 97% 63,209 96%
Non Service Revenues …………………….... 1,418 2% 1,924 3% 2,300 4%
Net Operating Revenues……………………… 63,861 100% 64,818 100% 65,509 100%
1 Mobile voice service revenues include the following:
a) Monthly service fees on postpaid plans;
b) Charges for intra-network and outbound calls in excess of the consumable minutes for various Globe Postpaid plans,
including currency exchange rate adjustments, or CERA, net of loyalty discounts credited to subscriber billings; and
c) Airtime fees for intra network and outbound calls recognized upon the earlier of actual usage of the airtime value or
expiration of the unused value of the prepaid reload denomination (for Globe Prepaid and TM) which occurs between 3
and 120 days after activation depending on the prepaid value reloaded by the subscriber net of (i) bonus credits and (ii)
prepaid reload discounts; and revenues generated from inbound international and national long distance calls and
international roaming calls.
Revenues from (a) and (c) are reduced by any interconnection or settlement payouts to international and local carriers and
content providers.
2
Mobile data service revenues consist of revenues from value-added services such as inbound and outbound SMS and MMS,
content downloading and infotext, subscription fees on unlimited and bucket prepaid SMS services net of any interconnection
or settlement payouts to international and local carriers and content providers.
3
Fixed Line voice net service revenues consist of the following:
a) Monthly service fees including CERA of voice-only subscriptions;
b) Revenues from local, international and national long distance calls made by postpaid, prepaid fixed line subscribers and
payphone customers, as well as broadband customers who have subscribed to data packages bundled with a voice
service. Revenues are net of prepaid and payphone call card discounts;
c) Revenues from inbound local, international and national long distance calls from other carriers terminating on Globe’s
network;
d) Revenues from additional landline features such as caller ID, call waiting, call forwarding, multi-calling, voice mail, duplex
and hotline numbers and other value-added features;
e) Installation charges and other one-time fees associated with the establishment of the service; and
f) Revenues from DUO and SUPERDUO services consisting of monthly service fees for postpaid and subscription fees for
prepaid subscribers.
Revenues from (a) and (c) are reduced by any interconnection or settlement payments to domestic & international carriers.
4
Fixed Line data net service revenues consist of the following:
a) Monthly service fees from international and domestic leased lines;
b) Other wholesale transport services;
c) Revenues from value-added services; and
d) One-time connection charges associated with the establishment of service.
Revenues from (a) to (c) are net of any interconnection or settlement payments to other carriers.
SEC Form 17A 2009 13

5
Broadband net service revenues consist of the following:
a) Monthly service fees of wired, fixed mobile, and fully mobile broadband data only and bundled voice and data
subscriptions;
b) Browsing revenues from all postpaid and prepaid wired, fixed mobile and fully mobile broadband packages in excess of
allocated free browsing minutes and expiration of unused value of prepaid load credits;
c) Value-added services such as games; and
d) Installation charges and other one-time fees associated with the service.
Globe’s mobile business accounted for 85% of total service revenues, contributing P53.3 billion in
2009. Its mobile voice service revenues amounted to P26.5 billion in 2009, accounting for 50% of
total mobile service revenues compared to 49% in 2008. On the other hand, mobile data business
contributed P26.8 billion in 2009 compared to P28.5 billion in 2008.
Globe’s fixed line and broadband business delivered revenues of P9.1 billion in 2009, accounting for
the remaining 15% of total service revenues with equal contribution from its fixed line voice, fixed line
data and broadband segments.
SEC Form 17A 2009 14

E. Competition
1. Industry, Competitors and Methods of Competition
(a) Mobile Market
The Philippine mobile market has been marked by rapid growth, particularly during the early to
middle part of the decade, and intense competition. The Philippine government liberalized the
communications industry in 1993 after a framework was developed to promote competition within
the industry and accelerate market development. Ten operators were granted licenses to provide
CMTS services and deploy the network technology of their choice – Globe, Innove (previously
Islacom), Bayantel, CURE, Digitel, Extelcom, MultiMedia Telephony, Next Mobile (NEXTEL), Piltel
and SMART. Eight operators continued on to operate commercially except for Bayantel and
MultiMedia which have yet to roll out their CMTS services commercially.
Since 2000, the mobile communications industry experienced a number of consolidations while
new players continued to enter the market. PLDT acquired and consolidated SMART and Piltel in
2000 while Globe Telecom acquired Islacom. In 2003, Digitel formally launched its mobile service
under the brand name, Sun Cellular. In 2008, SMART purchased CURE and subsequently
launched another wireless brand, Red Mobile. During the same year, San Miguel Corporation
partnered with Qatar Telecom and bought interests in Liberty Telecom Holdings, Inc., and
announced plans to enter the mobile and broadband businesses. In 2009, Schutzengel Telecom,
Inc. was granted a congressional CMTS franchise. It recently filed an application with the NTC for
a provisional authority (PA) to construct, install, operate and maintain a nationwide 3G mobile
telecommunications system last February 2010. 2G licensee Extelcom may also re-enter the
mobile market following a fresh injection of capital.
The mobile market continues to grow, albeit at a slower pace, as shown in the table below.
Mobile Subscribers (Mn) Penetration Rates (%) Growth Rate
1995 0.49 0.7 n.a.
1996 0.78 1.4 58%
1997 1.13 1.9 45%
1998 1.62 2.5 43%
1999 2.68 3.8 65%
2000 5.26 8.6 96%
2001 10.53 14.2 100%
2002 15.17 19.0 44%
2003 22.31 27.3 47%
2004 32.87 39.4 47%
2005 34.61 40.6 5%
2006 42.04 48.3 21%
2007 54.86 61.2 30%
2008 68.03 74.6 24%
2009 74.77* 80.4 10%
* Estimated as of December 31, 2009.
Source: National Telecommunications Commission (Statistical Data 2007), publicly available information and Company
estimates
SEC Form 17A 2009 15

In 2009, the mobile industry only grew 10% in subscriber/SIM terms as nominal penetration rates
reached over 80%, ending with a cumulative industry base of 74.7 million. The three key players
ended the year with the following SIM shares:
Mobile
Operators
Year of
Commercial
Launch
Subscribers
(in Mn)
% of
Total
Wireless
System
Wireless
Technology
Globe* 1994 23.2 (1) 31% Digital GSM
Digitel 2003 10.2 (2) 14% Digital GSM
Smart** 1994 41.3 (3) 55% Digital GSM
Total 74.7 100%
* Includes TM subscribers ( previously under Innove) whose contracts were transferred to Globe in 2008.
** Includes subscribers of Piltel and CURE, subsidiaries and affiliates of PLDT.
_______________________________________________
Sources:
1) Globe disclosures for the year ended December 31, 2009.
2) Based on publicly available information and Company estimates
3) PLDT/ Smart/ TNT/CURE disclosures as of December 31, 2009.
With the high penetration level and increasing incidences of multi-SIM usage, competition in the
mobile market remains intense. Sun Cellular entered the market in 2003 with an unlimited call and
text service that has allowed it to increase its subscriber base in the past 6 years. In response to
Sun’s unlimited call and text offers, both Globe and Smart responded by creating a new set of
value propositions for their subscribers in the form of bucket SMS and unlimited call and text
offerings to sustain overall competitiveness in the market.
(b) Fixed Line Voice Market
There are at least eight major local exchange carriers (LEC) in the Philippines with licenses to
provide local and domestic long distance services. Each LEC operator (other than PLDT and
Innove, both of whom are authorized to provide nationwide fixed line services) is assigned service
areas in which it must install the required number of fixed lines and provide service. The NTC has
created 15 such service areas in the Philippines. In order to promote network construction, it has
been the government policy to allow only one or two major operators (in addition to PLDT) in each
service area. Rates for local exchange and domestic long distance services have been
deregulated and operators are allowed to have metered as well as flat monthly fee tariff plans for
the services provided.
Fixed Line Market (in '000s of subscribers)
LEC Operator 2009 % of Total 2008 % of Total
Globe 589 18% 420 14%
Bayantel* 410 13% 395 13%
Digitel* 400 12% 400 13%
PLDT 1,817 56% 1,782 60%
Total 3,216 100% 2,997 100%
* Based on available public disclosures and Company estimates.
SEC Form 17A 2009 16

The Philippine fixed line voice market registered slow growth in recent years due to the continued
preference for mobile services. Total fixed line subscribers grew by only 7% in 2009 to 3.2 million
from 3.0 million the previous year with PLDT and Globe accounting for 56% and 18%, respectively
while Bayantel and Digitel each contributed 13% and 12% to the industry base. Relative to the
mobile market, household penetration for fixed lines continues to remain at the 17% level at the
end of 2009.
Competition in the fixed line voice market intensified over the past 4 years as the major players,
Globe, Bayantel, Digitel and PLDT introduced fixed wireless voice services with limited mobile
phone capabilities to take advantage of the increasing preference for mobile services. Fixed
wireless services were initially offered in postpaid versions in selected areas where there were no
available fixed line facilities but prepaid kits were eventually made available as coverage was
expanded.
(c) Fixed Line Data Market
The fixed line data business is a growing segment of the fixed line industry. As the Philippine
economy grows, businesses are increasingly utilizing new networking technologies and the
internet for critical business needs such as sales and marketing, intercompany communications,
database management and data storage. The expansion of the local IT Enabled Service (ITES)
industry which includes call centers and Business Process Outsourcing (BPO) companies has
also helped drive the growth of the corporate data business.
Dedicated business units have been created and organized within the Company to focus on the
mobile and fixed line needs of specific market segments and customers – be they residential
subscribers, wholesalers and other large corporate clients or smaller scale industries. This
reorganization has also been driven by Globe’s corporate clients’ preferences for integrated
mobile and fixed line communications solutions.
(d) Broadband Market
Broadband continues to be a major growth area for the local telecom industry. Industry
subscribers grew by 77% to 2.5 million in 2009 from 1.4 million the previous year. The availability
of affordable prepaid broadband packages, as well as lower PC and USB internet stick prices
were the main drivers of subscriber growth. While penetration rates remain low, competition in
this space is expected to intensify as operators accelerate the rollout of their broadband network
and introduce more affordable offerings to make internet more accessible to a wider market base.
Broadband Market (in '000s of subscribers)
Operator 2009 % of Total 2008 % of Total
Globe 715 28% 231 16%
Bayantel * 105 4% 105 7%
Digitel * 100 4% 100 7%
PLDT 1,614 64% 996 70%
Total 2,534 100% 1,432 100%
* Based on available public disclosures and Company estimates.
SEC Form 17A 2009 17

As of end 2009, Globe and PLDT accounted for almost 92% of cumulative subscribers of 2.5
million with much of the growth in subscribers coming from the prepaid segment.
In January 2010, Liberty Telecoms Holdings, Inc or Liberty (through its Liberty Broadcasting
Network subsidiary), a partnership between San Miguel Corporation and Qtel Group of Qatar
Telecom, launched its WiMAX broadband service under the brand name Wi-Tribe.
(e) International Long Distance Market
International long distance (ILD) traffic in the Philippines has significantly increased over the years
with the increasing affordability of the service and the continued deployment of Filipinos workers
overseas. International long distance providers in the Philippines generate revenues from both
inbound and outbound international call traffic whereby the pricing of calls is based on agreed
international settlement rates. Similarly, settlement rates for international long distance traffic are
based on bilateral negotiations. Commercial negotiations for these settlement rates are settled
using a termination rate system where the termination rate is determined by the terminating carrier
(e.g. Philippines) in negotiation with the originating foreign correspondent.
To date, there are eleven licensed international long distance operators, nine of which directly
compete with Globe for customers. Both Globe and Innove offer ILD services which cover
international calls between the Philippines and over 200 countries. To drive growth in this
segment, the Company offers discounted call rates to popular calling destinations, sustains its
usage campaigns and marketing efforts for OFW SIM packs, and ensures the availability of
popular prepaid load denominations.
2. Principal Competitive Strengths of the Company
(a) Market Leadership Position
Globe is a major provider of telecommunications services in the Philippines. It is a strong player in
the market and operates one of the largest and most technologically-advanced mobile, fixed line
and broadband networks in the country, providing reliable, superior communications services to
individual customers, small and medium-sized businesses, and corporate and enterprise clients.
Globe’s distinct competitive strengths include its technologically advanced mobile, fixed line and
broadband network, a substantial subscriber base, high quality customer service, a wellestablished
brand identity and a solid track record in the industry.
(b) Strong Brand Identity
The Company has some of the best-recognized brands in the Philippines. This strong brand
recognition is a critical advantage in securing and growing market share, and significantly
enhances Globe’s ability to cross-sell and push other product and service offerings in the market.
(c) Financial Strength and Prudent Leverage Policies
Globe’s financial position remains strong with ample liquidity and debt at conservative levels. At
the end of 2009, Globe had total interest bearing debt of P47.5 billion representing 50% of total
book capitalization. Consolidated gross debt to equity ratio stood at 1:1 and is well within the 2:1
debt to equity limit prescribed by its debt covenants. Additionally, 86% of its debt is in pesos while
the balance of 14% is denominated in US dollars. Expected US dollar inflows from the business
offset any unhedged US dollar liabilities, helping insulate Globe’s balance sheet from any
volatilities in the foreign exchange markets.
Globe intends to maintain its strong financial position through prudent fiscal practices including
close monitoring of its operating expenses and capital expenditures, debt position, investments,
SEC Form 17A 2009 18

and currency exposures. Globe believes that it has sufficient financial flexibility to weather the
current economic downturn and pursue its strategies.
(d) Proven Management Team
Globe has a strong management team with the proven ability to execute on its business plan and
achieve positive results. With its continued expansion, it has been able to attract and retain senior
managers from the telecommunications, consumer products and finance industries with
experience in managing large scale and complex operations.
(e) Strong Shareholder Support
The Company’s principal shareholders are Ayala Corporation (AC) and Singapore Telecom (STI),
both industry leaders in the country and in the region. Apart from providing financial support, this
partnership has created various synergies and has enabled the sharing of best practices in the
areas of purchasing, technical operations, and marketing, among others. Since 1993, they have
invested approximately P23.0 billion in the Company.
F. Suppliers
Globe works with both local and foreign suppliers and contractors. Equipment and technology
required to render telecommunications services are mainly sourced from foreign countries. Its
principal suppliers, among others, are as follows:
For mobile – Nokia/Siemens (Finland); Ericsson Radio Systems AB (Sweden), Ericsson (Sweden),
Alcatel (France) and Microwave Networks Inc. (US).
For fixed line and broadband – Fujitsu Ltd. (Japan), Lucent Technologies (USA), NEC (Japan), Alcatel
(Italy), Motorola (USA), AT&T Global (US), British Telecom (UK), and Singapore Telecom (Singapore)
and Tellabs (USA/Singapore) and NERA (Norway).
The Company’s capital expenditures program includes various phases, with each phase supplied and
serviced by local and international companies who provide equipment and services including planning,
design, construction, and commissioning of various equipment and systems for Globe.
G. Customers
Globe has a large subscriber base dispersed throughout the country. On the mobile front, the
Company ended the year with 23.2 million mobile subscribers/SIMs, comprised of 851 thousand
postpaid and approximately 22.4 million prepaid subscribers. Meanwhile, Globe has around 589
thousand fixed line voice subscribers and over 715 thousand broadband customers.
No single customer and contract accounted for more than 20% of the Company’s total sales in 2009.
SEC Form 17A 2009 19

H. Transactions with Related Parties
Globe Telecom and Innove, in their regular conduct of business, enter into transactions with their
major stockholders, AC and STI, and certain related parties. These transactions, which are accounted
for at market prices normally charged to unaffiliated customers for similar goods and services, include
the following:
Entities with joint control over Globe Group
• Globe Telecom has interconnection agreements with STI. The related net traffic settlements
receivable (included in “Receivables” account in the consolidated statements of financial position)
and the interconnection revenues earned (included in “Service revenues” account in the
consolidated statements of comprehensive income) are as follows:
(In Thousand Pesos) 2009 2008 2007
Traffic settlements receivable – net P=34,487 P=216,348 P=63,391
Interconnection revenues 2,097,734 1,817,912 1,573,686
• Globe Telecom and STI have a technical assistance agreement whereby STI will provide
consultancy and advisory services, including those with respect to the construction and operation
of Globe Telecom’s networks and communication services (see Notes 25.6 of attached Notes to
Financial Statements), equipment procurement and personnel services. In addition, Globe
Telecom has software development, supply, license and support arrangements, lease of cable
facilities, maintenance and restoration costs and other transactions with STI.
The details of fees (included in repairs and maintenance under the “General, selling and
administrative expenses” account in the consolidated statements of comprehensive income)
incurred under these agreements are as follows:
(In Thousand Pesos) 2009 2008 2007
Maintenance and restoration
costs and other transactions
P=216,701 P=216,813 P=201,576
Software development, supply,
license and support
26,924 2,637 2,074
Technical assistance fee 99,903 83,514 86,935
The net outstanding balances due to STI (included in the “Accounts payable and accrued
expenses” account in the consolidated statements of financial position) arising from these
transactions are as follows:
(In Thousand Pesos) 2009 2008 2007
Maintenance and restoration
costs and other transactions P=33,555 P=115,243 P=54,047
Software development, supply,
license and support 45,734 28,569 14,218
Technical assistance fee 24,180 23,838 25,080
• Globe Telecom reimburses AC for certain operating expenses. The net outstanding liabilities to
AC related to these transactions amounted to P=31.34 million,P=23.68 million and P=28.47 million as
of December 31, 2009, 2008 and 2007, respectively.
SEC Form 17A 2009 20

• Globe Telecom earns subscriber revenues from AC. The outstanding subscribers receivable from
AC (included in “Receivables” account in the consolidated statements of financial position) and the
amount earned as service revenue (included in the “Service revenues” account in the
consolidated statements of comprehensive income) are as follows:
(In Thousand Pesos) 2009 2008 2007
Subscriber receivables P=59 P=182 P=122
Service revenues 5,245 5,504 5,400
Joint Ventures in which the Globe Group is a venturer
• Globe Telecom has preferred roaming service contract with BMPL. Under this contract, Globe
Telecom will pay BMPL for services rendered by the latter which include, among others,
coordination and facilitation of preferred roaming arrangement among JV partners, and
procurement and maintenance of telecommunications equipment necessary for delivery of
seamless roaming experience to customers. Globe Telecom also earns or incurs commission
from BMPL for regional top-up service provided by the JV partners. As of December 31, 2009,
2008 and 2007, balances related to these transactions amounted to P=1.02 million, P=2.12 million
and P=1.91 million, respectively.
• On October 2009, the Globe Group entered into an agreement with BPI Globe BanKO for the
pursuit of services that will expand the usage of GCash technology. As a result, the Globe Group
recognized revenue of P=9.99 million in 2009.
Transactions with the retirement fund
• On February 1, 2009, the Globe Group entered into a memorandum of agreement (MOA) with
BEAM for the latter to render mobile television broadcast service to Globe subscribers using the
mobile TV service. As a result, the Globe Group recognized an expense (included in
“Professional and other contracted services” in the attached Financial Statements) amounting to P=
245.58 million in 2009.
• On October 1, 2009, the Globe Group entered into a MOA with Altimax Broadcasting Co., Inc.
(Altimax), a subsidiary of BHI, for the Globe Group’s co-use of specific frequencies of Altimax’s for
the rollout of broadband wireless access to the Globe Group’s subscribers. As a result, the Globe
Group recognized an expense (included in “General, selling and administrative Expenses” in the
attached Financial Statements) amounting to P=70.00 million in 2009.
Transactions with other related parties
• Globe Telecom has subscriber receivables (included in “Receivables” account in the consolidated
statements of financial position) and earns service revenues (included in the “Service revenues”
account in the consolidated statements of comprehensive income) from its other related parties
namely, Ayala Land Inc., Ayala Property Management Corporation, BPI, Manila Water Company,
Inc., Integrated Microelectronics, Inc. and eTelecare Global Solutions, Inc. These amounted to:
2009 2008 2007
(In Thousand Pesos)
Subscriber receivables P=46,755 P=48,712 P=57,570
Service revenues 150,233 206,635 186,762
• The total expenses incurred on leases, utilities, customer contact services and other
miscellaneous services provided to the Globe Group by these other related parties (included
under “General, selling and administrative expenses” account in the consolidated statements of
SEC Form 17A 2009 21

comprehensive income) amounted to P=241.75 million,P=205.76 million and P=135.85 million as of
December 31, 2009, 2008 and 2007, respectively. The outstanding balances due related to these
expenses amounted toP=13.68 million and P=1.20 million as of December 1, 2009 and 2008,
respectively. There was no outstanding payable to other related parties as of December 31, 2007.
These related parties are either controlled or significantly influenced by AC.
Transactions with key management personnel of the Globe Group
The Globe Group’s compensation of key management personnel by benefit type are as follows:
2009 2008 2007
(In Thousand Pesos)
Short-term employee benefits P=1,867,128 P=1,833,508 P=1,499,760
Share-based payments 126,437 182,324 129,914
Post-employment benefits 53,290 112,620 65,563
P=2,046,855 P=2,128,452 P=1,695,237
There are no agreements between the Globe Group and any of its directors and key officers
providing for benefits upon termination of employment, except for such benefits to which they may
be entitled under the Globe Group’s retirement plans.
The Globe Group granted short-term loans to its key management personnel amounting to P=33.37
million, P=21.32 million and P=10.56 million as of December 31, 2009, 2008 and 2007, respectively,
included in the “Prepayments and other current assets” in the consolidated statements of financial
position.
The summary of consolidated outstanding balances resulting from transactions with related
parties follows:
2009 2008 2007
(In Thousand Pesos)
Subscriber receivables (included in
“Receivables” account) P=46,814 P=48,894 P=57,692
Traffic settlements receivable - net (included in
“Receivables” account) 34,487 216,348 63,391
Other current assets 1,475 2,602 1,925
Accounts payable and accrued expenses 149,512 194,657 123,731
In May 2008, the NTC approved the assignment of Innove’s prepaid consumer subscriber
contracts in favor of Globe Telecom. The transfer did not result in the recognition of a gain or loss
in the consolidated financial statements.
For additional information on Related Party Transactions, please refer to Notes 11 and 16 of the
attached 2009 Notes to the Financial Statements.
SEC Form 17A 2009 22

I. Licenses, Patents, and Trademarks
Globe Telecom currently holds the following major licenses:
Service
Type of
License
Date Issued or Last
Extended
Expiration Date
Action Being Taken
Globe
Wireless CPCN (1) July 22, 2002 December 24, 2030 No action required
Local Exchange Carrier CPCN (1) July 22, 2002 December 24, 2030 No action required
International Long Distance CPCN (1) July 22, 2002 December 24, 2030 No action required
Interexchange Carrier CPCN (1) February 14, 2003 December 24, 2030 No action required
VSAT CPCN (1) February 6, 1996 February 6, 2021 No action required
International Cable Landing
Station & Submarine Cable
System (Nasugbu,
Batangas)
International Cable Landing
Station & Submarine Cable
System (Ballesteros,
Cagayan)
CPCN (1) October 19, 2007 December 24, 2030 No action required
Provisional
Authority
September 11, 2008 March 10, 2010 Motion for issuance of
CPCN and extension
of P.A. filed last
Feb.15, 2010.
Innove
Type of Date Issued or Last Expiration Date Action Being Taken
License Extended
Wireless CPCN (1) July 22, 2002 April 10, 2017 No action required
Local Fixed line CPCN (1) July 22, 2002 April 10, 2017 No action required
International Long CPCN (1) July 22, 2002 April 10, 2017 No action required
Distance
Interexchange Carrier CPCN (1) April 30, 2004 April 10, 2017 No action required
1
Certificate of Public Convenience and Necessity. The term of a CPCN is co-terminus with the franchise term.
In July 2002, the NTC issued CPCNs to Globe and Innove allowing the Company to operate its
respective services for a term that will be predicated upon and co-terminus with its congressional
franchise under RA 7229 (Globe) and RA 7372 (Innove). The Company was granted its permanent
licenses after having demonstrated its legal, financial and technical capabilities in operating and
maintaining wireless telecommunications systems, local exchange carrier services and international
gateway facilities. Additionally, Globe and Innove have exceeded the 80% minimum roll-out
compliance requirement for coverage of all provincial capitals, including all chartered cities, within a
period of seven years.
Globe also has registered the following brand names with the Intellectual Property Office, the
independent regulatory agency responsible for registration of patents, trademarks and technology
transfers in the Philippines: Globe Telecom, Touch Mobile, Globelines, Globe Handyphone, Innove
Communications, Globe Link, GlobeQuest, Globe Xchange, Globelines Broadband, Globe G-Cash,
Globe AutoLoad, GlobeQuestDSL Broadband Internet, Broadband Mobility and “Hub and Circular
Device” among others for the wireless and fixed line services the Company offers. Globe has also
secured certificates of registration for Globe Telecom, Globe Handyphone, Globe AutoLoad,
GlobeQuest DSL Broadband Internet, Broadband Mobility, “Hub and Other Circular Device” and
Innove Communications.
SEC Form 17A 2009 23

J. Government approvals/regulations
The Globe Group is regulated by the NTC under the provisions of the Public Service Act (CA 146),
Executive Order (EO) 59, EO 109, and RA 7925. Under these laws, Globe is required to do the
following:
(a) To secure a CPCN/PA (Provisional Authority) from the NTC for those services it offers which are
deemed regulated services, as well as for those rates which are still deemed regulated, under
RA 7925.
(b) To observe the regulations of the NTC on interconnection of public telecommunications
networks.
(c) To observe (and has complied with) the provisions of EO 109 and RA 7925 which impose an
obligation to rollout 700,000 fixed lines as a condition to the grant of its provisional authorities for
the cellular and international gateway services.
(d) Globe remains under the supervision of the NTC for other matters stated in CA 146 and RA 7925
and pays annual supervision fees and permit fees to the NTC.
On October 19, 2007, the NTC granted Globe a CPCN to operate and maintain an International Cable
Landing Station and submarine cable system in Nasugbu, Batangas
On May 19, 2008, Globe Telecom, Inc. announced that the NTC has approved the assignment by its
wholly-owned subsidiary Innove Communications (Innove) of its Touch Mobile (TM) consumer prepaid
subscriber contracts in favor of Globe. Globe would be managing all migrated consumer mobile
subscribers of TM, in addition to existing Globe subscribers in its integrated cellular network.
On September 11, 2008, the NTC granted Globe a PA to establish, install, operate and maintain an
International Cable Landing Station in Ballesteros, Cagayan Province. The PA expired last March 10,
2010 and Globe has applied for the issuance of a CPCN/extension of the PA last Feb. 15, 2010.
K. Research and Development
Globe did not incur any research and development costs from 2007 to 2009.
L. Compliance with Environmental Laws
The Globe Group complies with the Environmental Impact Statement (EIS) system of the Department
of Environment and Natural Resources (DENR) and pays nominal filing fees required for the
submission of applications for Environmental Clearance Certificates (ECC) or Certificates of Non-
Coverage (CNC) for its cellsites and certain other facilities, as well as miscellaneous expenses
incurred in the preparation of applications and the related environmental impact studies. The Globe
Group does not consider these amounts material.
SEC Form 17A 2009 24

M. Employees
The Globe Group has 5,451 active regular employees as of December 31, 2009, of which about 10%
are covered by a Collective Bargaining Agreement (CBA) through the Globe Telecom Workers Union
(GTWU).
The Company has a long-standing, healthy, and constructive relationship with the GTWU
characterized by industrial peace. It is a partnership that mutually agrees to focus on shared goals –
one that has in fact allowed the attainment of higher levels of productivity and consistent quality of
service to customers across different segments.
Between 2007 and 2009, there was no major dispute which warranted GTWU to file a notice of strike
against the Company.
On November 2005, the GTWU began its negotiations for another five-year agreement with Globe.
An agreement was promptly reached over the economic and non-economic provisions of the CBA last
December 2005. The CBA is valid until December 31, 2010 with a renegotiation on the economic
aspects in 2008. On 27 November 2008, Globe started the re-negotiation of the economic provisions
of its CBA with the GTWU. The parties have already come to an agreement on the terms of the new
CBA and the same has been ratified and signed by the GTWU last 16 March 2009.
Breakdown of employees by main category of activity from 2007 to 2009 are as follows:
Employee Type 2009 2008 2007
Rank & File, CBU 2,750 3,125 3,132
Supervisory 1,600 1,656 1,450
Managerial 800 773 660
Executives 301 296 269
Total * 5,451 5,850 5,511
*Includes Globe, Innove, & GXI (excluding Secondees)
Globe continues to explore new ways to enhance employee productivity and realize operating
efficiencies. The Company believes that these initiatives will improve corporate agility, enhance
Globe’s overall competitiveness and strengthen its position as a service leader in the telecom industry,
thereby enhancing shareholder value.
N. Risk Factors
1. Foreign Exchange Risk
Globe’s foreign exchange risk results primarily from movements of the Philippine peso (PHP) against
the US dollar (USD) with respect to its USD-denominated financial assets, liabilities, revenues and
expenditures. Approximately 29% of its revenues are in USD while substantially all of its capital
expenditures are in USD. In addition, 14%, 12% and 20% of debt as of December 31, 2009, 2008 and
2007, respectively, are denominated in USD before taking into account any swap and hedges.
Globe’s foreign exchange risk management policy is to maintain a hedged financial position after
taking into account expected USD flows from operations and financing transactions. It enters into
short-term foreign currency forwards and long-term foreign currency swap contracts in order to
achieve this target.
SEC Form 17A 2009 25

The Company mitigates its foreign exchange risk through the following:
First, the Company has foreign currency-linked revenues which include those (a) billed in foreign
currency and settled in foreign currency; (b) billed in pesos at rates linked to a foreign currency tariff
and settled in pesos, or (c) fixed line monthly service fees and the corresponding application of the
Currency Exchange Rate Adjustment (CERA) mechanism under which Globe has the ability to pass
the effects of local currency depreciation to its subscribers.
Second, Globe enters into short-term currency forwards to manage foreign exchange exposure
related to foreign currency denominated monetary assets and liabilities while it enters into long term
foreign currency and interest rate swap contracts to manage foreign exchange and interest rate
exposures of certain long term foreign currency denominated loans.
There are no assurances that declines in the value of the Peso will not occur in the future or that the
availability of foreign exchange will not be limited. Recurrence of these conditions may adversely
affect Globe’s financial condition and results of operations.
2. Industry and Operational Risks
(a) Competitive Industry
Competition remains intense in the Philippine telecommunications industry as current operators
seek to increase market share with aggressive offerings while new entrants serve to further
heighten the competitive dynamics amidst a maturing mobile market. Globe’s principal
competitors are the PLDT/SMART and Digitel groups which offer popular services such as mobile,
fixed line as well as broadband services. Other players licensed to provide mobile services include
Bayantel, which has yet to launch its mobile services and Extelcom.
In 2008, PLDT purchased Connectivity Unlimited Resources Enterprises or CURE, one of the four
recipients of 3G licenses awarded by the NTC in 2005. CURE subsequently launched its own 3G
mobile service under the brand, Red Mobile. During the same year, San Miguel Corporation
(SMC) announced that it has partnered with Qatar Telecom (QTel) and purchased interests in
Liberty Telecom Holdings, Inc. (Liberty). Liberty reportedly plans to offer mobile and broadband
services.
In 2009, Schutzengel Telecom, Inc. was granted a congressional CMTS franchise to offer
nationwide 3G mobile services. Meanwhile, 2G licensee Extelcom has reportedly revived efforts to
re-enter the mobile market. In the fixed line market SMC is reportedly pursuing its acquisition of
BellTell to gain entry to the fixed line market.
The Philippine telecommunications industry continues to be dominated by the mobile segment
which contributed an estimated 68% of total industry revenues in 2009, slightly lower than the
69% it registered in 2008. Industry revenue growth has slowed in recent years with the Globe and
PLDT/SMART groups accounting for more than 90% of industry revenues. With SIM penetration
reaching over 80%, the three major operators – Globe, PLDT/SMART and Digitel – continue to
compete aggressively to acquire subscribers and increase share of spend in a maturing market.
Globe’s mobile revenues in 2009 and 2008 accounted for 85% and 88%, respectively of its total
service revenues. While mobile subscriber growth is expected to continue, it may not continue to
grow at the same rate as in the past. Further reductions in tariffs, deeper penetration into lowerusage
subscriber segments, and the increasing incidence of multi-SIM usage will continue to put
pressure on industry revenues and margins.
Globe relies on the continued growth and development of the mobile industry. However, continued
growth of this significant segment will depend on many factors and any economic, technological or
SEC Form 17A 2009 26

egulatory developments resulting in a slowdown in growth or a reduction in demand for mobile
services may impact our business, revenues and net income.
(b) Highly Regulated Environment
Globe is regulated by the NTC for its telecommunications business, and by the SEC and the BSP
for other aspects of its business. The introduction of, changes in, or the inconsistent or
unpredictable application of laws or regulations from time to time, may materially affect the
operations of Globe, and ultimately the earnings of the Company which could impair its ability to
service debt. There is no assurance that the regulatory environment will support any increase in
business and financial activity for Globe.
The government’s communications policies have been evolving since 1993 when former President
Fidel V. Ramos initiated a more liberalized Philippine communications industry. Changes in
regulations or government policies or differing interpretations of such regulations or policies have
affected, and will continue to affect Globe’s business, financial condition and results of operation.
The NTC was established in 1979 to act as an independent regulatory body to oversee,
administer and implement the policies and procedures governing the communications industry.
The NTC grants licenses for varied terms. It may grant a long-term license, called a certificate of
public convenience and necessity (“CPCN”). Globe has obtained CPCNs for its international
gateway facility (“IGF”), local exchange carrier (“LEC”), cellular mobile telephony service
(“CMTS”), and interexchange carrier (“IXC”) services. Though valid for 25 years, the NTC may
amend certain terms of a CPCN, or revoke it for cause, subject to due process procedures.
Additionally, the exercise of regulatory power by regulators, including monetary regulators, may be
subject to review by the courts on the complaint of affected parties.
No assurance can be given that the regulatory environment in the Philippines will remain
consistent or open and that the current or future policies may affect the business and operations
of Globe.
(c) Philippine Political and Economic Factors
The growth and profitability of Globe may be influenced by the overall political and economic
situation of the Philippines.
(i) Economic Considerations
The Philippines has in the past experienced periods of slow or negative growth, high inflation, and
volatility in its exchange rate.
The impact of the global financial crisis was greatly felt in 2009 with a sharp slowdown in
economic growth, and the government struggling to meet its twin goals of pump-priming the
economy and meeting its fiscal deficit target. Though the domestic nature of the economy
somehow insulates the country from external shocks, the pessimism arising from a bleak global
outlook has dampened consumer demand. The weak consumer sentiment was further
exacerbated by the typhoons and flooding that hit the country towards the second half of the
year. Although the Philippine economy has slowly showed signs of recovery starting in the fourth
quarter of 2009, it continues to face significant challenges such as the dry spell currently affecting
the agriculture sector, the on-going power crisis, and the need to balance the fiscal budget.
The Philippines narrowly escaped a recession in 2009 with Gross Domestic Product (GDP)
growing by 0.9% from 3.8% in 2008. Growth in private consumption, which comprises over 70%
of the country’s total GDP, slowed down to 3.8% in 2009 from an average of about 5% in the past
seven years. Amidst a slower consumer demand, domestic investments declined by 9.9% in
2009. The manufacturing sector contracted by 5.1% during the year, the first time since the Asian
financial crisis 11 years ago. On the other hand, government expenditure expanded by 8.5%
given the stimulus program which included social services and massive infrastructure projects to
SEC Form 17A 2009 27

help spur economic activity. On the positive side, the sustained influx of OFW remittances which
increased from US$16.4 billion in 2008 to US$17.3 billion in 2009 continued to support domestic
consumption as well as help finance the rebuilding and recovery efforts following the typhoons of
the second half of the year. The BSP has likewise adopted an accommodative stance, reducing
its key policy rates to a record low of 4% for overnight borrowing and 6% for overnight lending to
help stimulate bank lending. The benign inflation environment, with price levels dropping to a 22-
year low of 0.1% in August 2009, has allowed the BSP to take on an expansionary policy stance
amidst a generally weak consumer environment.
In 2009 Fitch Ratings (“Fitch”) maintained its long-term foreign currency debt rating of the
Philippines of “BB” (two notches below investment grade), while Standard & Poor’s (“S&P”)
continued with its “BB-“ (three notches below investment grade) rating. On the other hand,
Moody’s Investors Service (“Moody’s”) upgraded its sovereign credit rating of the Philippines to
“Ba3” (three notches below investment grade) from B1 in July 2009. Moody’s cited the “prospects
for the (Philippine) economy remain good, but a number of crucial challenges are apparent.” 1
While the economy is poised to recover given the rebound in exports, sustained government
stimulus spending, and continued OFW remittances inflows, there can be no assurances that
these will result in financial stability or that economic activity will not continue to contract
worldwide. As such, any deterioration of economic conditions in the Philippines as a result of
these and along with other factors, including a significant depreciation of the peso or an increase
in interest rates could materially and adversely affect Globe’s business, financial condition and
results of operations, including Globe’s ability to enhance the growth of its subscriber base,
improve its revenue base and implement its business strategies.
(ii) Political Considerations
The Philippines has from time to time experienced political, social and military instability. In
February 1986, a peaceful civilian and military uprising ended the 21-year rule of President
Ferdinand Marcos and installed Corazon Aquino as President of the Philippines. Between 1986
and 1989, there were a number of attempted coups d’état against the Aquino administration, none
of which was successful. Joseph Estrada, the 13 th President of the Philippines was eventually
ousted from office following impeachment proceedings, mass public protests and the withdrawal
of support by the military on corruption charges. Following President Estrada’s resignation, then
Vice President Gloria Macapagal Arroyo was sworn in as President on January 20, 2001.
President Arroyo has been subjected to various impeachment complaints from time to time.
These impeachment complaints involved various allegations including the manipulation of the
results of the presidential election in 2004, corruption and bribery. These complaints have fueled
mass protests led by various cause-oriented groups calling for the President to resign.
The next presidential elections will be held in May 2010 and various sectors are reportedly fearful
of election-related violence, cheating or the failure of elections that may result in further instability
and security concerns. Additionally, possible glitches in the Comelec’s first attempt at the
computerization of a national election that includes presidential, legislative and local positions only
serve to heighten anxiety.
There can be no assurance that the future political environment in the Philippines will be stable or
future governments will adopt economic policies conducive to sustaining economic growth.
Political instability in the Philippines could negatively affect the country’s general economic
conditions which in turn could adversely affect Globe’s business, financial condition or results of
operations.
1 Moody’s Global Credit Research Announcement – Philippines dated March 29, 2010
SEC Form 17A 2009 28

The growth and profitability of Globe may be influenced by the overall political and economic
situation of the Philippines in that any political or economic instability in the future may have a
negative impact on the Company’s financial results.
O. Management of Risks
Cognizant of the dynamism of the business and the industry and in line with its goal to continuously
enhance value for its stakeholders, Globe Telecom has put in place a robust risk management
approach that is fully integrated in its strategy planning, execution and day to day operations.
As part of its strategy management calendar, senior management and key leaders regularly conduct
an enterprise–wide assessment of risks focused on identifying the key risks that could threaten the
achievement of Globe’s business objectives, both at the corporate and business unit level, as well as
specific plans to mitigate or manage such risks. Risks are prioritized, depending on their impact to the
overall business and the effectiveness by which these are managed. Risk mitigation strategies are
developed, updated and continuously reviewed for effectiveness, and
are also monitored through various control mechanisms.
Globe employs a two-dimensional view of risk monitoring. Senior Management’s scorecard includes
the status of risk mitigation plans as they relate to the attainment of a particular business objective.
Enterprise Risk Owners, on the other hand, regularly monitor and report the status of the approved
mitigation plans meant to address the key risks.
Annually, Globe conducts an Enterprise Risk Management Performance Evaluation which serves as a
basis for continuously improving our Risk Management processes and capabilities.
The Board of Directors, supported by the Executive Committee (Excom) and Audit Committee, has an
oversight role over the Company’s risk management activities and approves Globe’s risk management
policies. The Excom covers specific non-financial (e.g., strategic, operational, human capital,
regulatory) risks, while the Audit Committee provides oversight of financial reporting risks.
The Chief Financial Officer supports the President, as the overall risk executive, in overseeing the risk
management activities of the Company, ensuring that the responsibilities for managing specific risks
are clear, the level of risk accepted by the Company is appropriate, and that an effective control
environment exists for the Company as a whole.
Risk Owners at the senior executive level have been identified and made accountable for managing
specific risks, supported by business process owners who have been designated, trained, and made
responsible for the particular process or activity from which the risk arises. This is consistent with
management’s belief that risks are best understood and managed by the employees who are closest
to the process.
The Enterprise Risk Management unit, under the Office of Strategy Management, facilitates the
enterprise risk management activities, bringing these closer to and more aligned with the Company’s
strategic planning and execution framework. This also supports the integration of enterprise risk
management with the Company’s scorecard processes and more tightly link risk mitigation efforts with
its day-to-day operations.(For additional information on Enterprise Risk Management see Part V -
Corporate Governance section)
P. Debt Issues
For details on Globe Group’s Notes payable and Long Term debt, see Note 14 of the attached
Notes to the 2009 Audited Financial Statements.
SEC Form 17A 2009 29

Item 2. Properties
A. Buildings and Leasehold Improvements
Globe owns several floors of Pioneer Highlands Towers 1 and 2, located at Pioneer Street in
Mandaluyong City, which serves as its corporate headquarters. This building was later renamed as
Globe Telecom Plaza. In addition, the Company also owns host exchanges in the following areas:
Bacoor, Batangas, Ermita, Iligan, Makati, Mandaluyong, Marikina, Vito Cruz, Cubao-Aurora, among
others.
The Company leases office spaces along Sen. Gil Puyat Avenue, EDSA and Ermita for our technical,
administrative and logistics offices and host exchange, respectively. It also leases the space for most
of its102 wireless business centers, 13 microstores, 40 GPS centers, 10,333 base stations and 6,226
cell sites throughout the Philippines.
Globe’s existing business centers and cell sites located in strategic locations all over the country are
generally in good condition and are covered by specific lease agreements with various lease
payments, expiration periods and renewal options. As the Company continue to expand its network in
the next 12 months, Globe intend to lease more spaces for additional cell sites, business and payment
centers and support facilities with lease agreements, payments, expiration periods and renewal
options that are undeterminable at this time. (For additional details on Buildings and Leasehold
Improvements see Note 7 of the attached notes to the 2009 Audited Financial Statements)
B. Telecommunications Equipment
As of 31 December 2009, the Company has mobile switching centers, 2G and 3G mobile switching
systems, transit switching centers and home location registers located in key areas nationwide. It also
utilizes a number of short messaging service centers, multimedia messaging service centers and a
wireless application protocol gateway to handle its SMS and value-added services traffic.
The infrastructure for Innove’s fixed telephone service includes a number of telephone switching
exchanges and remote switching units in key locations in Metro Manila, the National Capital Region,
Visayas and Mindanao. The Company has 1.5 million installed fixed lines.
For its international and domestic long distance telephony business, Globe has a number of toll
switching systems in the National Capital Region, Visayas and Mindanao. It also operates
international gateway facilities to serve its international connectivity requirements.
Globe also has a national transmission network that includes a microwave Synchronous Digital
Hierarchy (‘SDH’) backbone that stretches from the northern part of Luzon to the southern part of
Mindanao, supplemented by leased fiber optic networks in urban areas. Globe also established,
operates and maintains a Fiber Optic Backbone Network (‘FOBN’) linking the Luzon, Visayas and
Mindanao island groups to complement its microwave facilities and which offers flexibility for future
telecommunications technology including broadband, GPRS, 3G and broadband data transmission. In
November 2009, Globe completed work on its 2 nd FOBN which is expected to provide additional
capacity and improve redundancy to its existing FOBN.
SEC Form 17A 2009 30

C. Investments in Cable Systems
Globe has also invested in several submarine cable systems, in which the Company either owns or
lease a share of the systems’ total capacity. Investments in cable systems include the cost of the
Globe Group’s ownership share in the capacity of certain cable systems under Construction &
Maintenance Agreements; or indefeasible rights of use (IRUs) under Capacity Purchase Agreements.
To date, Globe has investments in the following cable systems (shown below with their major
connectivity paths):
APCN1 – Asia Pacific Cable Network-1 (Trans-Asian region);
APCN2 – Asia Pacific Cable Network-2 (Trans-Asian region);
China-U.S. – (connects North Asia, mainly China to the United States);
EAC – East Asia Crossing (Asia);
FLAG – Fiber Optic Link Around the Globe – connects Southeast Asia-Middle East-Western
Europe;
GP - Guam-Philippines - connects Guam to the Philippines;
SEA-ME-W3 – Southeast Asia-Middle East-Western Europe;
SJC – Southeast Asia Japan Cable System – connects Singapore, Malaysia, Thailand, Hong
Kong, Japan and the Philippines
TGN-IA – Tata Global Network – Intra Asia cable system - connects Singapore, Vietnam,
Hong Kong, and the Philippines to the United States; and
TPC5 – Trans-Pacific Cable 5 Network – connects Japan and Hawaii to the United States.
The Company also has an international cable landing station located in Nasugbu, Batangas that lands
the C2C cable network, a 17,000 kilometer long submarine cable network linking the Philippines to
Hong Kong, Taiwan, China, Korea, Japan and Singapore. Globe has separately purchased capacity in
the C2C cable network which it subsequently transferred to its subsidiary, Innove. (For additional
information on C2C, see Note 25 of the attached 2009 Notes to the Financial Statements)
Additionally, Globe has acquired capacities, either through lease or IRU, in selected cable systems
where the Company is not a consortium member or a private cable partner. These include capacities
in Japan US Cable Network (JUCN), Pacific Cable (PC1), TGN-Pacific and Unity Cable, among
others.
On 17 March 2009, Globe formally opened its second international cable landing station in
Ballesteros, Cagayan with the Company being the exclusive landing party in the Philippines to the
Tata Global Network – Intra Asia (TGN-IA) cable system. TGN-IA is a 6,700 kilometer trans-Asian
submarine cable system that links the Ballesteros, Cagayan cable landing station in the Philippines to
Vietnam, Hong Kong and Singapore with onward connectivity via the TGN-Pacific network to Japan,
Guam and the United States.
On December 2009 Globe signed an agreement to be the exclusive landing party in the Philippines of
the Southeast Asia Japan Cable (SJC) cable system, the highest capacity system in the world(with a
design capacity of 17 terabits per second that can be upgraded to 23 tbps). Expected to be completed
by 2012, Globe joins some of the biggest names in the industry including Google, SingTel, KDDI,
Telkom Indonesia and Bharti Airtel in this venture.
For more information on the Company’s properties and equipment, refer to Note 7 of the attached
notes to the consolidated financial statements.
SEC Form 17A 2009 31

Item 3. Legal Proceedings
On 23 July 2009, the NTC issued NTC Memorandum Circular (MC) No. 05-07-2009 (Guidelines on
Unit of Billing of Mobile Voice Service). The MC provides that the maximum unit of billing for the cellular
mobile telephone service (CMTS) whether postpaid or prepaid shall be six (6) seconds per pulse. The
rate for the first two (2) pulses, or equivalent if lower period per pulse is used, may be higher than the
succeeding pulses to recover the cost of the call set-up. Subscribers may still opt to be billed on a one
(1) minute per pulse basis or to subscribe to unlimited service offerings or any service offerings if they
actively and knowingly enroll in the scheme. In compliance with NTC MC 05-07-2009, Globe refreshed
and offered to the general public its existing per-second rates that, it bears emphasizing, comply with
the NTC Memorandum Circular. Globe made per second charging for Globe-Globe/TM-TM/Globe
available for Globe Subscribers dialing prefix 232 (GLOBE) OR 803 plus 10-digit TM or Globe number
for TM subscribers. The NTC, however, contends that Globe’s offering does not comply with the circular
and with the NTC’s Order of 7 December 2009 which imposed a three-tiered rate structure with a
mandated flag-down of P3.00, a rate of P0.4375 for the 13th to the 60th second of the first minute and
P0.65 for every 6-second pulse thereafter. On 9 December 2009, the NTC issued a Cease and Desist
Order requiring the carriers to refrain from charging under the previous billing system or regime and
refund consumers.
Globe maintains that the Order of the NTC of 7 December 2009 and the Cease and Desist Order
are void as being without basis in fact and law and in violation of Globe’s rights to due process. Globe,
Smart, Sun and CURE all filed petitions before the Court of Appeals seeking the nullification of the
questioned orders of the NTC. On 18 February 2010, the Court of Appeals issued a Temporary
Restraining Order preventing the NTC from enforcing the disputed Order.
Globe believes that its legal position is strong and that its offering is compliant with the NTC’s
Memorandum Circular 05-07-2009, and therefore believes that it would not be obligated to make a
refund to its subscribers. If, however, Globe would be held as not being in compliance with the circular,
Globe may be contingently liable to refund to any complaining subscribers any charges it may have
collected in excess of what it could have charged under the NTC’s disputed Order of 7 December 2009,
if indeed it is proven by any complaining party that Globe charged more with its per second scheme
than it could have under the NTC’s 6-second pulse billing scheme stated in the disputed Order.
Management has no estimate of what amount this could be at this time.
On 22 May 2006, Innove received a copy of the Complaint of Subic Telecom Company (“Subictel”),
Inc., a subsidiary of PLDT, seeking an injunction to stop the Subic Bay Metropolitan Authority and
Innove from taking any actions to implement the Certificate of Public Convenience and Necessity
granted by SBMA to Innove. Subictel claimed that the grant of a CPCN allowing Innove to offer certain
telecommunications services within the Subic Bay Freeport Zone would violate the Joint Venture
Agreement (“JVA”) between PLDT and SBMA. The Court of Appeals ordered the reinstatement of the
case and has forwarded it to the NTC-Olongapo for trial.
PLDT and its affiliate, Bonifacio Communications Corporation (BCC) and Innove and Globe are in
litigation over the right of Innove to render services and build telecommunications infrastructure in the
Bonifacio Global City. In the case filed by Innove before the NTC against BCC, PLDT and the Fort
Bonifacio Development Corporation (FBDC), the NTC has issued a Cease and Desist Order preventing
BCC from performing further acts to interfere with Innove’s installations in the Bonifacio Global City.
In the case filed by PLDT against the NTC in Branch 96 of the Regional Trial Court (RTC) of Quezon
City, where PLDT sought to obtain an injunction to prevent the NTC from hearing the case filed by
Innove, the RTC denied the prayer for a preliminary injunction and the case has been set for further
hearings. PLDT has filed a Motion for Reconsideration and Globe has intervened in this case.
In the case filed by BCC against FBDC, Globe Telecom and Innove, Bonifacio Communications Corp.
before the Regional Trial Court of Pasig, which case sought to enjoin Innove from making any further
installations in the BGC and claimed damages from all the parties for the breach of the exclusivity of
SEC Form 17A 2009 32

BCC in the area, the court did not issue a Temporary Restraining Order and has instead scheduled
several hearings on the case.
On 11 November 2008, Bonifacio Communications Corp. (BCC) filed a criminal complaint against the
officers of Innove Communications Inc., the Fort Bonifacio Development Corporation (FBDC) and
Innove contractor Avecs Corporation for malicious mischief and theft arising out of Innove’s
disconnection of BCC’s duct at the Net Square buildings. The accused officers filed their counteraffidavits
and are currently pending before the Prosecutor’s Office of Pasig.
Item 4. Submission of Matters to a Vote of Security Holders
Except for matters taken up during the annual meeting of stockholders, there was no other matter
submitted to a vote of security holders during the period covered by this report.
SEC Form 17A 2009 33

PART II – OPERATIONAL AND FINANCIAL INFORMATION
Item 5. Issuer’s Equity, Market Price, Dividends and Related Stockholder Matters
A. Capital Stock
Globe Telecom’s authorized capital stock consists of:
2009 2008 2007
Shares Amount Shares Amount Shares Amount
(In Thousand Pesos and Number of Shares)
Preferred stock - Series “A” -
P=5 per share 250,000 P=1,250,000 250,000 P=1,250,000 250,000 P=1,250,000
Common stock –
P=50 per share 179,934 8,996,719 179,934 8,996,719 179,934 8,996,719
Globe Telecom’s issued and subscribed capital stock consists of:
2009 2008 2007
Shares Amount Shares Amount Shares Amount
(In Thousand Pesos and Number of Shares)
Preferred stock 158,515 P=792,575 158,515 P=792,575 158,515 P=792,575
Common stock 132,346 6,617,280 132,340 6,617,008 132,334 6,616,677
Subscriptions receivable (776) (1,508) (42,250)
P=7,409,079 P=7,408,075 P=7,367,002
1. Preferred Stock
Preferred stock - Series “A” has the following features:
(a) Convertible to one common share after 10 years from issue date on June 29, 2001 at not less than
the prevailing market price of the common stock less the par value of the preferred shares;
(b) Cumulative and nonparticipating;
(c) Floating rate dividend;
(d) Issued at P=5 par;
(e) With voting rights;
(f) Globe Telecom has the right to redeem the preferred shares at par plus accrued dividends at any
time after 5 years from date of issuance; and
(g) Preferences as to dividend in the event of liquidation.
The dividends for preferred shares are declared upon the sole discretion of the Globe’s BOD. As of
December 31, 2009, the Globe Group has no dividends in arrears to its preferred stockholders.
2. Common Stock
The rollforward of outstanding common shares are as follows:
2009 2008 2007
Shares Amount Shares Amount Shares Amount
(In Thousand Pesos and Number of Shares)
At beginning of year 132,340 P=6,617,008 132,334 P=6,616,677 132,080 P=6,603,989
Exercise of stock options 6 272 6 331 254 12,688
At end of year 132,346 P=6,617,280 132,340 P=6,617,008 132,334 P=6,616,677
SEC Form 17A 2009 34

B. Market Information
The Company’s common equity is traded at the Philippine Stock Exchange (PSE).
The following table shows the high and low prices of Globe’s shares in the PSE for the past 2 years.
COMMON SHARES
Price Per Share (PHP)
Calendar Period High Low
2008
First Quarter 1,567 1,342
Second Quarter 1,466 1,121
Third Quarter 1,174 720
Fourth Quarter 1,060 720
2009
First Quarter 870 760
Second Quarter 995 805
Third Quarter 1,135 925
Fourth Quarter 1,020 890
The price information as of latest practicable trading date: P960 per common share as of April 15, 2010.
C. Holders
There are approximately 4,273 holders of common equity as of 31 December 2009. The following are the top
20 holders of the common equity of the Company:
Stockholder Name
No. of Common
Shares
Percentage
owned out of
total
outstanding
1 Singapore Telecom Int’l. Pte. Ltd. 62,646,486 47.58%
2 Ayala Corporation 40,319,263 30.62%
3 PCD Nominee Corp. (Non-Filipino) 20,561,580 15.62%
4 PCD Nominee Corp. (Filipino) 7,711,405 5.86%
5 Delfin C. Gonzalez, Jr. 30,000 0.02%
6 Mark Anthony N. Javier 25,005 0.02%
7 The First National Co., Inc. 21,001 0.02%
8 Renato O. Marzan 20,000 0.02%
9 Oscar L. Contreras Jr. 17,000 0.01%
10 Insular Life Assurance Co. Ltd. 16,270 0.01%
11 GTESOP2000-02 16,250 0.01%
12 Cedar Commodities 12,900 0.01%
13 Eddie L. Hao 10,250 0.01%
14 GTESOP98056 10,000 0.01%
14 GTESOP98057 10,000 0.01%
14 GTESOP98059 10,000 0.01%
14 GTESOP98060 10,000 0.01%
14 GTESOP98061 10,000 0.01%
14
GTESOP98062
10,000 0.01%
14 GTESOP98064 10,000 0.01%
SEC Form 17A 2009 35

Stockholder Name
No. of Common
Shares
Percentage
owned out of
total
outstanding
14 GTESOP98053 10,000 0.01%
14 GTESOP98055 10,000 0.01%
14 GTESOP98058 10,000 0.01%
14 GTESOP98063 10,000 0.01%
14 GTESOP98054 10,000 0.01%
14 Agaton L.Tiu &/or Remington Tiu 10,000 0.01%
15 Florentino P. Feliciano 9,487 0.01%
16 Bernadette Say Go 9,000 0.01%
16 GT ESOP T96002 – Trust Account 9,000 0.01%
16 GT ESOP T96003 – Trust Account 9,000 0.01%
16 GT ESOP T95005 – Trust Account 9,000 0.01%
16 GT ESOP T96005 – Trust Account 9,000 0.01%
16 GT ESOP T96001 – Trust Account 9,000 0.01%
16 GT ESOP T96004 – Trust Account 9,000 0.01%
17 R Nubla Securities 8,405 0.01%
18 Jose Tan Yan Doo 8,071 0.01%
19 GT ESOP T95004 – Trust Account 7,800 0.01%
20 Ma. Teresa Teng 7,500 0.01%
The following are holders of preferred equity securities of the Company:
Stockholder Name
No. of Preferred
Shares
Percentage
(of Preferred Shares)
1. Asiacom Philippines, Inc. 158,515,018 100.00%
2. Romeo L. Bernardo 1 * 0.00%
3. Guillermo D. Luchangco 1 * 0.00%
4. Ernest L. Cu 1 * 0.00%
* Nominee shares
SEC Form 17A 2009 36

D. Dividends
Dividends declared by the Company on its shares of stocks are payable in cash or in additional shares of
stock. Cash dividends are subject to approval by the Company's Board of Directors (‘BOD’) but no
stockholder approval is required. Property dividends which may come in the form of additional shares of
stock are subject to approval by both the BOD and the Company's stockholders.
On January 29, 2004, the BOD of Globe Telecom approved a dividend policy to declare cash dividends to
its common stockholders on a regular basis as may be determined by the BOD from time to time. The
BOD had set out a dividend payout rate of approximately 50% of prior year’s net income payable semiannually
in March and September of each year. On July 31, 2006, the BOD of Globe Telecom amended
the dividend policy increasing the dividend payout rate to 75% of prior year’s net income and
implemented starting from the second semi-annual cash dividend declaration in 2006. On November 6,
2009, the BOD of Globe Telecom amended the dividend payment rate from 75% to a range of 75% to
90% of prior year’s net income. The dividend policy is reviewed annually, taking into account Globe
Telecom’s operating results, cash flows, debt covenants, capital expenditure levels and liquidity.
1. Stock Dividends
No stock dividends were declared from 2007 to 2009.
2. Cash Dividends
(a) Common shares
AMOUNT/
SHARE(Php)
CASH DIVIDEND (Per Share)
DECLARATION DATE RECORD DATE PAYMENT DATE
33.00 February 5, 2007 February 19, 2007 March 15, 2007
33.00 August 10, 2007 August 29, 2007 September 14, 2007
50.00 November 6, 2007 November 20, 2007 December 17, 2007
37.50 February 4, 2008 February 18, 2008 March 13, 2008
37.50 August 5, 2008 August 21, 2008 September 15, 2008
50.00 August 5, 2008 August 21, 2008 September 15, 2008
32.00 February 3, 2009 February 17, 2009 March 10, 2009
32.00 August 4, 2009 August 19, 2009 September 15, 2009
50.00 November 6, 2009 November 20, 2009 December 15, 2009
(b) Preferred shares
AMOUNT/
SHARE(Php)
CASH DIVIDEND (Per Share)
DECLARATION DATE RECORD DATE PAYMENT DATE
0.31 December 7, 2007 December 18, 2007 March 17, 2008
0.38 December 2, 2008 December 18, 2008 March 17, 2009
0.32 December 4, 2009 December 18, 2009 March 18, 2010
SEC Form 17A 2009 37

i. Cash Dividends Declared After Balance Sheet Date
On February 4, 2010, the BOD approved the declaration of the first semi-annual cash dividend of
P=40 per common share, payable to shareholders on record as of February 19, 2010. Total
dividends of P=5,294 million were paid on March 15, 2010.
3. Restrictions on Retained Earnings
The total unrestricted retained earnings available for dividend declaration amounted to
P=9,604.56 million as of December 31, 2009. This amount excludes the undistributed net earnings of
consolidated subsidiaries, accumulated equity in net earnings of joint ventures accounted for under the
equity method, and unrealized gains recognized on asset and liability currency translations and
unrealized gains on fair value adjustments. The Globe Group is also subject to loan covenants that
restrict its ability to pay dividends. For more information, see Note 14 of the attached Notes to the
Financial Statements).
E. Recent Sale of Unregistered or Exempt Securities, including recent issuance
of securities constituting an exempt transaction
For the past 3 years, the following private placements were undertaken:
Facility Amounts (in Php Mn) Date Signed
SCB 5,000 02/16/2007
SCB 5,000 04/09/2008
FMIC 5,000 05/21/2009
SEC Form 17A 2009 38

Item 6. Management’s Discussion and Analysis of Operations
For The Financial Year Ended 2009
GROUP FINANCIAL HIGHLIGHTS
Results of Operations (Php Mn)
Globe Group
For the Year Ended
31 Dec 31 Dec
2009 2008
YoY
Change
(%)
Net Operating Revenues …………………………………………… 63,861 64,818 -1%
Service Revenues ………………………………………………. 62,443 62,894 -1%
Mobile………………………………………………………………… 53,321 55,436 -4%
Fixed line Voice……………………………………………………… 2,795 3,088 -9%
Fixed line Data………………………………………………………. 3,038 2,478 23%
Broadband…………………………………………………………… 3,289 1,892 74%
Non-Service Revenues…………………………………………. 1,418 1,924 -26%
Costs and Expenses ………………………………………………… 27,399 27,420 -
Cost of Sales……………………………………………………….. 2,948 3,117 -5%
Operating Expenses ……………………………………………… 24,451 24,303 1%
EBITDA ………………………………………………………………… 36,462 37,398 -3%
EBITDA Margin………………………………………………………. 58% 59%
Depreciation and Amortization…………………………………… 17,388 17,028 2%
EBIT …………………………………………………………………… 19,074 20,370 -6%
EBIT Margin…………………………………………………………… 31% 32%
Financing……………………………………………………………… (2,183) (3,000) -27%
Interest Income……………………………………………………… 272 420 -35%
Others - net…………………………………………………………… 810 56 1346%
Provision for Income Tax…………………………………………… (5,404) (6,570) -18%
Net Income After Tax (NIAT)……………………………………….. 12,569 11,276 11%
Core Net Income 1 …………………………………………………… 12,003 11,765 2%
1
Net income after tax (NIAT) excluding foreign exchange and mark-to-market gains (losses), and non-recurring items.
• Consolidated service revenues for 2009 was at P62.4 billion from P62.9 billion in 2008. Mobile
revenues were down 4% due to intense competition and increasing preference of subscribers for
value offers on the back of weak consumer economy. This was partially offset by a 74% improvement
in broadband revenues driven by robust subscriber growth, and a 23% growth in fixed line data
revenues for the corporate and enterprise sectors. Mobile revenues accounted for 85% of total
service revenues, down from 88% in 2008. Meanwhile fixed line and broadband increased its share of
consolidated revenues from 12% to 15% in 2009.
• Operating expenses and subsidy increased by 2% year on year to P26.0 billion from P25.5 billion in
2008 driven by higher subsidies, rent, and services partially offset by lower marketing costs and
provisions. Network-related charges such as rent, electricity and fuel charges were higher compared
to last year as a result of expanded 2G, 3G and broadband networks. Higher services costs were due
to increases in costs for outsourced customer service and logistics functions. Marketing effectiveness
ratio improved however with total marketing and subsidy expenses at 8% of service revenues
compared to prior year’s 9%.
SEC Form 17A 2009 39

• Consolidated EBITDA and EBIT posted declines of 3% and 6% year on year on the back of softer
revenues coupled with higher operating expenses. EBITDA and EBIT margins for 2009 were at 58%
and 31%, respectively, from 59% and 32% in 2008 given the growing contribution of the lower-margin
fixed line business to consolidated results. On a per-segment basis, mobile EBITDA margins
remained healthy at 65% of service revenues, while broadband and fixed line margins improved to
22% from 17% last year.
• The Company closed the year with net income after tax of P12.6 billion, 11% higher than 2008.
Excluding foreign exchange, and mark-to-market gains and losses and non-recurring items, the
Company’s core net income closed at P12.0 billion or 2% higher than the previous year.
• Capital expenditures amounted to P24.7 billion for the year, a 21% increase from last year’s P20.4
billion. This included carry-over spend related to the Company’s participation in the TGN-IA
international cable system, FOBN2 or Globe’s second fiber optic backbone network, domestic
transmission loops, as well as the expansion and upgrades of the Company’s broadband and mobile
networks. As of end 2009, Globe increased its base stations by 22% to 10,333 and cellsites by 7% to
6,226 to support its 2G, 3G and WiMAX services. Geographical coverage stood at 97% while
population coverage was at 99%. Total capex as a percentage of service revenues registered at 40%
compared to last year’s 32%. Excluding the one-time investments, mobile capex as a percentage of
mobile revenues was at 13%, within regional benchmarks for similarly mature markets.
• For 2010, the Company is allocating about US$500 million in capital expenditures. This includes
US$170 million for the mobile telephony business, and another US$230 million for the broadband
business to augment existing capacities and expand the coverage and footprint of the Company’s
DSL, WiMax, and 3G broadband services. The 2010 capex plan also includes about US$50 million
for Globe’s fixed line data networks which primarily caters to the corporate and enterprise sector.
Finally, the investment plan also includes about US$50 million in additional one-time investments.
This includes costs related to Globe’s participation in the new Southeast Asia Japan Cable (SJC)
System which will link Singapore, Hong Kong, Indonesia, Philippines and Japan, and which will
further increase the capacity and boost the resiliency of Globe’s international network. The SJC
system is expected to be operational by 2012.
• Regular and special cash dividends paid out in 2009 amounted to P15.1 billion. Total dividend
payout of P114 per share translates to a dividend yield of 14% based on beginning of year share
prices. Total shareholder return for 2009 was at 30%. Return on equity was at 26%, up from 2008
level of 21% given the higher net profits and as a result of the Company’s capital management
efforts.
SEC Form 17A 2009 40

GROUP OPERATING REVENUES BY SEGMENT
MOBILE BUSINESS
Mobile Service Revenues (Php Mn)
For the Year Ended
31 Dec
2009
31 Dec
2008
YoY
Change
(%)
Service
Voice 1 ….…………………………………………………………………… 26,497 26,971 -2%
Data 2 ..……………………………………………………………………… 26,824 28,465 -6%
Mobile Service Revenues…………………..……................................... 53,321 55,436 -4%
1 Mobile voice service revenues include the following:
a) Monthly service fees on postpaid plans;
b) Charges for intra-network and outbound calls in excess of the consumable minutes for various Globe Postpaid plans,
including currency exchange rate adjustments, or CERA, net of loyalty discounts credited to subscriber billings.
c) Airtime fees for intra network and outbound calls recognized upon the earlier of actual usage of the airtime value or
expiration of the unused value of the prepaid reload denomination (for Globe Prepaid and TM) which occurs between 3 and
120 days after activation depending on the prepaid value reloaded by the subscriber net of (i) bonus credits and (ii) prepaid
reload discounts; and revenues generated from inbound international and national long distance calls and international
roaming calls;
Revenues from (b) and (c) are net of any interconnection or settlement payouts to international and local carriers and content
providers.
2 Mobile data service revenues consist of revenues from value-added services such as inbound and outbound SMS and MMS,
content downloading and infotext, subscription fees on unlimited and bucket prepaid SMS services net of any interconnection or
settlement payouts to international and local carriers and content providers.
Mobile Voice
For 2009, Globe’s mobile voice service revenues accounted for 50% of total mobile service revenues
compared to 49% in 2008. Mobile voice revenues of P26.5 billion were 2% lower compared to 2008 as
the growth in bulk and unlimited voice subscriptions were unable to fully offset the lower regular and IDD
voice usage.
During the year, Globe and TM sustained their bulk and unlimited voice offerings such as Tawag236 for a
20-minute call for P20, Globe’s P10 for a 3-minute call, and TM’s TodoTawag P15 for a 15-minute call.
Globe also sustained its per-second charging promo which allows subscribers to make on-net voice calls
for only P0.10 per second.
To further drive adoption and encourage usage, Globe launched its “Walang Metro” campaign which
includes a slew of unlimited product offers to provide subscribers more value services to suit their budget
and needs. Globe launched the revolutionary DUO and SUPERDUO service, a two-in-one mobile and
landline service, which enables subscribers to make unlimited landline-to-landline and mobile-to-mobile
calls to any Globe and TM subscriber for only P499 per month for postpaid, and P35/day or P599/month
for prepaid subscribers. In addition, Globe introduced SUPER UNLI which allows 24x7 unlimited call and
text to any Globe/TM subscriber nationwide for only P150 for 5 days for both postpaid and prepaid
subscribers. UNLIcall is also available in selected areas, providing subscribers with unlimited intranetwork
voice service for only P30/day or P100/5 days. Following the launch of its youth-oriented prepaid
brand Globe Tattoo, the Company also introduced IMMORTALCALL+ - a unique bucket call and text
service which includes a 5 minute call and 50 intra-network SMS with no expiry for only P15.
SEC Form 17A 2009 41

Mobile Data
Globe’s mobile data business contributed 50% to total mobile net service revenues. Service revenues for
the year totaled to P26,824 million compared to P28,465 million in 2008. While revenues from bucket,
unlimited SMS subscriptions, and mobile browsing improved year on year, lower regular SMS and core
value-added services usage declined, resulting in mobile data revenues that were 6% lower compared to
2008.
To cater to the growing preference for bucket and unlimited SMS offers, Globe sustained its popular
offerings such as Sulitxt, Everybodytxt, Astigtxt, UnliTxt, UnliTxt Dayshift and Nightshift and TodoText
promotions. In addition, the Company introduced pioneering offerings such as ImmortalTxt, the first and
only SMS offer in the industry with no expiry period. Globe also introduced Immortal Load – a prepaid
load option with no expiry which can be used for voice, SMS or mobile browsing. The SMS allocations
and prepaid load will not expire as long as the subscriber maintains at least P1 in his prepaid wallet.
To keep up with the needs of the growing youth segment, Globe introduced UnliChat+ which provides
subscribers with unlimited intra-SMS and unlimited chat via Yahoo Messenger (YM). In addition,
subscribers can enjoy unlimited intra-SMS, a 15-minute call and 10 off-net SMS with Globe’s UnliTxt Trio.
To further encourage mobile browsing usage, Globe introduced mobile internet add-on plans to provide
postpaid subscribers access to the internet using their Blackberry (starting at Plan700) or using regular
handsets in tiered and affordable plans (starting at Plan149). Subscribers can also enjoy unlimited
surfing through Super Surf which is an unlimited browsing add-on plan for an additional fee of P1,200 per
month, P220 for 5 days or P50 per day for postpaid subscribers. For prepaid users, subscribers can
choose to do unlimited browsing with Surf All Day for only P20 per day per site (including popular sites
such as Facebook, Wikipedia, Plurk, Friendster, Twitter). Globe also launched entry-level iPhone plans
starting at Plan399 following the launch of the new iPhone 3GS.
SEC Form 17A 2009 42

The key drivers for the mobile business are set out in the table below:
For the Year Ended
31 Dec 31 Dec YoY
2009 2008 * Change (%)
Cumulative Subscribers (or SIMs) Net (End of period)…… 23,245,006 24,646,600 -6%
Globe Postpaid . ………………………………………………… 851,368 795,695 7%
Prepaid .…………………………………………………………… 22,393,638 23,850,905 -6%
Globe Prepaid ……………………………………………… 13,048,861 13,293,232 -2%
TM …………………………………………………………… 9,344,777 10,557,673 -11%
Net Subscriber (or SIM) Additions……………………………. (1,401,594) 4,338,251 -132%
Globe Postpaid . ………………………………………………… 55,673 95,125 -41%
Prepaid .…………………………………………………………… (1,457,267) 4,243,126 -134%
Globe Prepaid ……………………………………………… (244,371) 1,175,157 -121%
TM …………………………………………………………… (1,212,896) 3,067,969 -140%
Average Revenue Per Subscriber (ARPU)
Gross ARPU
Globe Postpaid . ……………………………………………… 1,822 1,967 -7%
Prepaid
Globe Prepaid ………………………………………………… 241 279 -14%
TM …………………………………………………………… 124 135 -8%
Net ARPU
Globe Postpaid . ………………………………………………… 1,283 1,394 -8%
Prepaid
Globe Prepaid ………………………………………………… 182 209 -13%
TM …………………………………………………………… 98 103 -5%
Subscriber Acquisition Cost (SAC)
Globe Postpaid . ………………………………………………… 5,382 4,968 8%
Prepaid
Globe Prepaid ………………………………………………… 37 40 -8%
TM …………………………………………………………… 34 34 -
Average Monthly Churn Rate (%)
Globe Postpaid . ………………………………………………… 1.95% 1.64%
Prepaid
Globe Prepaid ………………………………………………… 6.75% 5.74%
TM …………………………………………………………… 8.35% 6.73%
* Prior period figures have been restated to reflect adjustments for mobile broadband and hybrid postpaid plans.
SEC Form 17A 2009 43

Globe ended the year with a cumulative mobile subscriber base of 23.2 million, 6% lower than last year’s
24.6 million SIMs. The Company recalibrated its subscriber acquisition efforts beginning in the second
quarter to focus on better quality subscribers, while deliberately churning out its marginal users. As a
result, full year mobile gross additions were lower by 5% at 19.4 million SIMs from 20.5 million SIMs in
2008. Blended churn rates were also elevated at 7.2% compared to 6.0% last year, resulting in a 1.4
million net reduction in Globe’s SIM base. Subscriber growth resumed in the fourth quarter as Globe
closed the period with net additions of about 117,000 SIMs. Fourth quarter gross additions were up 30%
compared to the prior quarter while churn rates were lower, with the adjustments in the Company’s
acquisition and subscriber retention programs, and the continued clean-up of its SIM base.
The succeeding sections cover the key segments and brands of the mobile business – Globe Postpaid,
Globe Prepaid and TM.
Globe Postpaid
Globe’s postpaid segment comprised about 4% of its total subscriber base. Total postpaid gross and net
subscriber additions for the period were 224,354 and 55,673, respectively compared to the 242,587 and
95,125 registered for the same period last year. Cumulative subscribers as of end 2009 grew 7% to more
than 851,000 on the back of higher subscriptions particularly from hybrid plans.
Postpaid gross and net ARPUs of P1,822 and P1,283, were lower than last year’s P1,967 and P1,394 on
account of lower average voice usage offset by higher take up of SMS and mobile browsing services.
Postpaid SAC increased 8% year on year to P5,382 from P4,968 due to increased handset subsidies for
new postpaid offers, as well as higher advertising and promotion charges.
Prepaid
Globe’s prepaid segment, which includes the Globe Prepaid and TM brands, comprised 96% of its total
subscriber base.
A prepaid subscriber is recognized upon the activation and use of a new SIM card. The subscriber is
provided with 60 days (first expiry) to utilize the preloaded SMS value. If the subscriber does not reload
prepaid credits within the first expiry period, the subscriber retains the use of the mobile number but is
only entitled to receive incoming voice calls and text messages for another 120 days (second expiry). The
second expiry is 120 days from the date of the first expiry. However, if the subscriber does not reload
prepaid credits within the second expiry period, the account is permanently disconnected and considered
part of churn. The first expiry periods of reloads vary depending on the denominations, ranging from 3
days to 120 days after activation. The first expiry is reset based on the longest expiry period among
current and previous reloads. Under this policy, subscribers are included in the subscriber count until
churned.
In 2009, the National Telecommunications Commission (NTC) published Memorandum Circular 03-07-
2009 which promulgates the extension of the validity periods of prepaid reloads effective July 19, 2009.
Under the new pronouncement, the first expiry periods now range from 3 days for P10 or below to 120
days for reloads amounting to P300 and above. The second expiry remains at 120 days from the date of
the new first expiry periods.
SEC Form 17A 2009 44

The succeeding sections discuss the performance of the Globe Prepaid and TM brands in more detail.
a. Globe Prepaid
Globe Prepaid currently accounts for 56% of the total mobile SIM base compared to 54% in 2008. The
brand posted a 2% decline in its SIM base and closed the year with 13.0 million SIMs from 13.3 million in
2008. Gross additions of 10.4 million were 5% higher compared to last year’s 9.9 million. However, higher
churn resulting from intense market competition and deliberate churn out of marginal subscribers resulted
in net reductions of about 244,000 against last year’s net additions of 1.2 million SIMs.
Gross and net ARPUs for Globe Prepaid declined by 14% and 13%, respectively, as revenues continue
to be impacted by intense competition, declining yields, and multi-SIM usage.
The Company re-launched Globe Tattoo as a convergent brand in 2009 to serve both the internet and
telephony needs of today’s digitally-attuned youth. With hip and new SIM card designs, Globe Tattoo
SIMs can be used for both mobile phone use, and through the Globe broadband Tattoo USB stick for
internet browsing using a laptop.
Following the recalibration of its acquisition drives to focus on better-quality subscribers, Globe Prepaid
SAC declined 8% year on year from P40 to P37. SAC continues to be recoverable within a month’s net
ARPU.
b. TM
Globe’s mass market brand TM ended the year with 9.3 million subscribers, 11% lower than last year’s
10.6 million SIMs. TM registered gross additions of 8.8 million, down by 16% from last year as the
Company scaled back on some of its aggressive SIM pack promotions and recalibrated its sales drives to
focus on better quality subscribers. The Company also churned out some of its marginal, lower-quality
subscribers, resulting in a net reduction of 1.2 million SIMs in TM’s subscriber base. TM subscribers now
comprise 40% of Globe’s cumulative subscriber base compared to 43% in 2008.
TM’s net ARPU for 2009 was 5% lower compared to prior year, but showed improvements particularly
during the last two quarters of the year. Total TM revenues also grew by 5% year on year despite the
11% contraction in its SIM base. The “Republika ng TM” brand refresh campaign, the distinct positioning
of the brand, and the sustained efforts to drive usage through affordable voice and text offerings all
contributed to the continued top-line growth of the TM brand.
TM’s SAC remained at P34 and remains recoverable within half a month’s net ARPU.
SEC Form 17A 2009 45

GCash
GCash continues to establish its presence in the mobile commerce industry. GCash’s initial thrust
towards money-transfers, purchase of goods and services from retail outlets, and sending and receiving
domestic and international remittances has spurred alliances in the field of mobile commerce.
Today, GCash allows Globe and TM subscribers to pay or transact for the following using their mobile
phone:
• domestic and international remittances
• utility bills
• interest and amortization of loans
• insurance premiums
• donations to various institutions and organizations
• sales commissions and payroll disbursements
• school tuition fees
• micro tax payments and business registration
• electronic loads and pins
• online purchases
• airline tickets
In addition to the above transactions, GCash is also used as a wholesale payment facility. Net registered
GCash user base at the end of 2009 totaled 1.04 million.
To enable further linkages of GCash’s platform and mobile technology with microfinance activities, Globe,
the Bank of the Philippine Islands (BPI) and Ayala Corporation (AC) signed a memorandum of agreement
in 2008 to form a joint venture that would allow rural and low-income customers’ access to financial
products and services beyond remittances. Last October 2009, the Bangko Sentral ng Pilipinas (BSP)
approved the sale and transfer by BPI of its shares of stock in Pilipinas Savings Bank, Inc. (PSBI),
formalizing the creation of the venture. Globe’s and BPI’s ownership stakes in the company is at 40%
each, while AC’s shareholding is at 20%. The partners plan to transform PSBI (now called BPI GLOBE
BANKO INC.) into the country’s first mobile microfinance bank.
SEC Form 17A 2009 46

FIXED LINE AND BROADBAND BUSINESS
For the Year Ended
31-Dec 31-Dec YoY
2009 2008 Change (%)
Service
Fixed line Voice 1 ….………………………………………………… 2,795 3,088 -9%
Fixed line Data 2 ……………………………………………………… 3,038 2,478 23%
Broadband 3 ..………………………………………………………… 3,289 1,892 74%
Fixed line and Broadband Net Service Revenues……................... 9,122 7,458 22%
1
Fixed line voice net service revenues consist of the following:
a) Monthly service fees including CERA of voice-only subscriptions;
b) Revenues from local, international and national long distance calls made by postpaid, prepaid fixed line
voice subscribers, and payphone customers, as well as broadband customers who have subscribed to data
packages bundled with a voice service. Revenues are net of prepaid and payphone call card discounts;
c) Revenues from inbound local, international and national long distance calls from other carriers terminating
on Globe’s network;
d) Revenues from additional landline features such as caller ID, call waiting, call forwarding, multi-calling, voice
mail, duplex and hotline numbers and other value-added features; and
e) Installation charges and other one-time fees associated with the establishment of the service.
f) Revenues from DUO service consisting of monthly service fees for postpaid and subscription fees for
prepaid
Revenues from (a) to (c) are net of any interconnection or settlement payments to domestic and international
carriers.
2
Fixed line data net service revenues consist of the following:
a) Monthly service fees from international and domestic leased lines;
b) Other wholesale transport services;
c) Revenues from value-added services; and
d) One-time connection charges associated with the establishment of service.
3
Broadband net service revenues consist of the following:
a) Monthly service fees of wired, fixed mobile, and fully mobile broadband data only and bundled voice and
data subscriptions;
b) Browsing revenues from all postpaid and prepaid wired, fixed mobile and fully mobile broadband packages
in excess of allocated free browsing minutes and expiration of unused value of prepaid load credits;
c) Value-added services such as games; and
d) Installation charges and other one-time fees associated with the service.
SEC Form 17A 2009 47

Fixed line Voice
31 Dec
2009
Globe Group
For the Year Ended
31 Dec
2008
YoY
Change
(%)
Cumulative Voice Subscribers – Net (End of period) 1 …………… 589,331 420,270 40%
Average Revenue Per Subscriber (ARPU)
Gross ARPU…………………………………………………………… 543 699 -22%
Net ARPU……………………………………………………………… 476 613 -22%
Average Monthly Churn Rate ..……………………………………… 3.39% 2.21%
1
Includes DUO and SuperDUO subscribers; Prior period figures have been restated for comparability.
Cumulative fixed line voice subscribers grew 40% year on year driven mainly by higher subscriptions to
bundled voice and broadband plans, as well as the DUO and SUPERDUO service. Despite the
expansion in subscriber base, fixed line voice revenues declined by 9% from last year given the higher
proportion of bundled voice and data subscriptions compared to stand-alone, voice-only plans (please
note that the monthly service fees for bundled services are included in “Broadband”).
During the year, Globe launched the DUO service - an innovative product that combines a mobile and
wireless landline service into one handset. For an incremental monthly service fee of P399 on top of the
regular MSF of postpaid plans, DUO subscribers are provided a landline number linked to their current
mobile number which they can use to make unlimited calls to any landline within the same area code and
to other DUO subscribers. Later in the year, Globe also introduced SUPERDUO, an improvement over
the original DUO service to include unlimited mobile-to-mobile calls to any Globe and TM subscriber
(refer to mobile section for more details).
Fixed line Data
Globe Group
For the Year Ended
YoY
Service Revenues (Php Mn)
31 Dec 31 Dec
Change
2009 2008
(%)
Fixed line Data
International …..…………………………………………………… 944 719 31%
Domestic …… ……………………………………………………… 1,362 1,130 21%
Others 1 …………………………………………………………… 732 629 16%
Total Fixed line Data Service Revenues………………………………… 3,038 2,478 23%
1
Includes revenues from value-added services such as internet, data centers and bundled services.
The fixed line data segment continued to post strong revenue gains, ending the year with P3.0 billion in
revenues, up 23% year on year. Growth has been fueled by the company’s expansion of its network of
high-speed data nodes, transmission links, and international bandwidth capacity to serve the
requirements of business and enterprise clients, including those in the offshoring and outsourcing
industries.
SEC Form 17A 2009 48

Broadband
For the Year Ended
31 Dec 31 Dec YoY
2009 2008
Change
(%)
Cumulative Broadband Subscribers
Wireless 1 ……………………………………………………. 499,383 81,293 514%
Wired………………………………………………………….. 216,089 149,675 44%
Total (end of period)……………………………………………. 715,472 230,968 210%
1
Includes fixed wireless and fully mobile broadband subscribers.
Globe’s broadband business sustained strong growth in both revenues and subscribers. Broadband
subscribers grew three-fold from 2008 to close the year with more than 715,000 subscribers, exceeding
full year guidance of half a million subscribers. The business delivered P3.3 billion in service revenues in
2009, up a robust 74% from prior year. The broadband segment now comprises 5% of consolidated
revenues compared to 3% last year.
A key contributor to the growth in the Company’s broadband business is its fully mobile broadband
service sold under the Globe Broadband Tattoo brand. The brand is targeted towards the fast-growing
youth segment, particularly those who require affordable, on-the-go broadband connections. This mobile
internet service is available in prepaid and postpaid variants with download speeds of up to 2 Mbps. New
postpaid Tattoo plans starting from Plan 799 up to Plan 1499 were launched which include free browsing
hours with low per hour charges for usage in excess of the monthly limit.
For the prepaid variant, Globe lowered entry costs for the service by reducing the price of its Globe
Broadband Tattoo prepaid kit from P2,500 to P895. The package comes with a USB modem stick and
free P200 prepaid credit so subscribers can immediately use the service. Tattoo SIMs are also voice,
SMS, international roaming and VAS capable. Reloads can be made through the usual prepaid top-up
channels including over-the-air reload facility through any of its Globe AutoLoad Max retailers.
Globe’s primary fixed wireless broadband offering is based on the WiMax technology, complementing the
company’s existing 3G with HSDPA service which is used for mobile, on-the-go broadband. Following its
commercial launch in 2008, the Company’s WiMAX service is now available in over 190 towns and cities
nationwide. The service has gained good traction with customer satisfaction ratings remaining high.
Globe’s WiMax service is available in data-only plans at 512kbps and 1mbps for P795 and P995 per
month, respectively. WiMax bundled voice and data plans are also offered at 512kbps and 1 mbps for
P995 and P1,295 per month.
Wireless subscribers now account for 70% of cumulative broadband subscribers, up from 35% at the end
of 2008.
SEC Form 17A 2009 49

OTHER GLOBE GROUP REVENUES
International Long Distance (ILD) Services
Globe Group
For the Year Ended
YoY
ILD Revenues and Minutes
31 Dec 31 Dec
Change
2009 2008
(%)
Total ILD Revenues (Php Mn) …………………………………………………… 14,317 14,915 -4%
Average Exchange rates for the period (Php to US$1)………………………… 47.777 43.946 9%
Total ILD Revenues as a percentage of net service revenues………………… 23% 24%
Total ILD Minutes (in million minutes) 1 ………………………………………… 2,388 2,457 -3%
Inbound…………………………………………………………………………… 2,019 2,131 -5%
Outbound.………………………………………………………………………… 369 326 13%
ILD Inbound / Outbound Ratio (x) …………………………………………… 5.47 6.54
1
ILD minutes originating from and terminating to Globe and Innove networks.
Both Globe and Innove offer ILD voice services which cover international call services between the
Philippines to more than 200 destinations with over 500 roaming partners. Globe’s service generates
revenues from both inbound and outbound international call traffic with pricing based on agreed
international termination rates for inbound traffic revenues and NTC-approved ILD rates for outbound
traffic revenues.
On a consolidated basis, ILD voice revenues from the mobile and fixed line businesses decreased by 4%
to P=14,317 million compared to last year’s P=14,915 million following a 3% decline in total ILD traffic.
While outbound traffic grew 13% year on year, inbound traffic declined, driving the net reduction in ILD
minutes.
To grow its international service revenues, Globe sustained its popular TipIDD offers, as well as OFW
SIM packs. The Company also launched IDD Suki – the first and only IDD load (prepaid credit) that can
be purchased from AMAX retailers nationwide. The load is available in P20 and P30 denominations and
which can be used for calls to popular OFW destinations worldwide. Globe also launched its
“Worldwidest” campaign in the last quarter, highlighting the multitude of international services available to
its subscribers. This includes promotional call rates to popular OFW destinations worldwide, low calling
rates via its TipIDD card, and affordable IDD Suki load credits that can be purchased from its extensive
and nationwide AMAX retailer network.
To spur additional outbound IDD voice traffic during the holidays, Globe also announced a P5 per minute
calling rate to selected Bridge Mobile operators, using a specific dialing prefix. Globe also extended its
affordable iTxt rates to selected operators and lowered rates for international SMS to P5, from P15.
Interconnection
Domestically, the Globe Group pays interconnection access charges to other carriers for calls originating
from its network terminating to other carriers’ networks, and hauling charges for calls that pass through
Globe’s network terminating in another network.
Internationally, the Globe Group also incurs payouts for outbound international calls which are based on a
negotiated price per minute, and collects termination fees from foreign carriers for calls terminating in its
SEC Form 17A 2009 50

network. The Globe Group also collects interconnection access charges from local carriers whose calls
and SMS terminate in Globe Group’s network.
GROUP OPERATING EXPENSES
In 2009, the Globe Group’s total costs and expenses, including depreciation, increased by 2% year on
year to P=43,369 million from P=42,524 million in 2008. This growth is mainly driven by higher networkrelated
expenses such as rent, repairs and maintenance as well as outsourced services as the Company
continues to expand and upgrade its mobile, broadband and corporate data networks.
Costs and Expenses (Php Mn)
Globe Group
For the Year Ended
31 Dec
2009
31 Dec
2008
YoY
Change
(%)
Cost of sales………………………………………………………………………. 2,948 3,117 -5%
Non-service revenues……………………………………………………………. (1,418) (1,924) -26%
Subsidy……………………………………………………………………………. 1,530 1,193 28%
Selling, Advertising and Promotions ………………………………………… 3,766 4,494 -16%
Staff Costs ………………………………………………………………………. 4,981 5,077 -2%
Utilities, Supplies & Other Administrative Expenses………………………… 2,693 2,710 -1%
Rent………………………………………………………………………………. 3,469 2,883 20%
Repairs and Maintenance……………………………………………………… 2,582 2,495 3%
Provisions ………………… ……………………………………………………… 725 1,237 -41%
Services and Others……………………………………………………………… 6,235 5,407 15%
Operating Expenses……………………………………………………………. 24,451 24,303 1%
Depreciation and Amortization ……………….……………………………… 17,388 17,028 2%
Total Costs and Expenses…………………………………………………… 43,369 42,524 2%
Subsidy and Marketing
Total subsidy and selling, advertising and promotions for 2009 declined 7% year on year to P5,296 million
from P5,687 million in 2008. Total subsidies increased by 28% year on year to P1,530 million from
P1,193 million last year. This is due to higher mobile postpaid subsidies resulting from the launch of the
iPhone 3GS and good take up of hybrid plans, as well as strong demand for Globe Broadband Tattoo.
On the other hand, selling, advertising and promotion were lower by P728 million or 16% due to the
recalibration of its mobile subscriber acquisition drives and deferment of certain marketing programs
originally planned for the fourth quarter of 2009 following the widespread damage and devastation
caused by typhoons Ondoy and Pepeng which hit the country in late September and early October.
As a percentage of service revenues, total subsidy and selling, advertising and promotions was at 8% in
2009 compared to 9% in 2008.
Staff Costs
Staff costs, which accounted for 19% of total subsidy and operating expenses, decreased by 2% year on
year from P5,077 million to P4,981 million, mainly driven by lower headcount, pension costs and other
employee benefits. Total headcount decreased by 7% year on year to 5,451 from 5,850 as of end 2008
with increased outsourcing.
SEC Form 17A 2009 51

Rent
Rent expenses, which accounted for 13% of total subsidy and operating expenses, increased by P586
million or 20% year on year due to charges from additional interconnection and transmission facilities to
support the Company’s growing broadband and fixed line data business. Cell site leases also grew from
last year with the expansion of Globe’s mobile, broadband and other network facilities.
Provisions
This account includes provisions related to trade, non-trade and traffic receivables and inventory. Overall,
provisions posted a net decrease of 41% year on year or P512 million as a result of lower receivable
provisions resulting from the final settlement of previously provisioned traffic receivables as well as the
write-down of modems for CDMA service in 2008.
Services and Others
Services and Others, which accounted for 24% of total subsidy and operating expenses, increased by
15% or P828 million from P5,407 million to P6,235 million, mainly on higher charges related to various
outsourced functions such as call centers, technical helpdesk, line installation services, as well as other
services related to the Company’s expanded mobile and broadband network.
Depreciation and Amortization
Depreciation and amortization expenses increased by 2% year on year or P360 million to P17,388 million
from P17,028 million due to additional investments resulting from the continued expansion of the
Company’s broadband and mobile networks.
SEC Form 17A 2009 52

Other income statement items include net financing costs, interest income, and net property and
equipment related charges as shown below:
Non-operating Charges (Php Mn)
Globe Group
For the Year Ended
31-Dec 31-Dec YoY
2009 2008 Change (%)
Financing Costs – net
Interest Expense……………………………………………………… (2,097) (2,256) -7%
Gain (Loss) on derivative instruments – net………………………… (47) 2 -2450%
Swap costs and other financing costs……………………………… (39) 13 -400%
Foreign Exchange (loss) – net……………………………………… - (759) -
(2,183) (3,000) -27%
Foreign Exchange gain - net………………………………………… 287 - -
Interest Income ………………………………………………………… 272 420 -35%
Others – net………………………………………………………………. 523 56 834%
Total Other Expenses…………………………………………………… (1,101) (2,524) -56%
As of end 2009, the Globe Group’s non-operating charges posted a 56% year on year decrease of
P1,423 million to close at P1,101 million. This was partly due to a gain in the first quarter of 2009,
reflected under “Others-net”, from an exchange transaction undertaken by Globe with one of its
equipment suppliers to convey and transfer ownership of existing telecommunications equipment in
exchange for a more advanced system. This resulted in an after-tax gain amounting to P398 million,
equivalent to the difference between the value of the new system and carrying amount of the old
equipment.
With the Philippine peso registering a 3% appreciation from January to December 2009 compared to last
year’s 15% depreciation, the Company recorded foreign exchange gains of P287 million during the
current period in contrast to the foreign exchange losses of P759 million booked last year. (See related
discussion on derivative instruments and swap costs in the Foreign Exchange and Interest Rate
Exposure section).
Meanwhile, interest expense decreased by 7% from P2,256 million last year to P2,097 million despite
higher borrowings during the year mainly driven by the decline in average local and foreign interest rates
and higher capitalized interest during the period. Interest income also decreased by 35% from P420
million to P272 million on lower short-term and held-to-maturity investments coupled with the declining
peso and US$ interest rates.
Consolidated basic earnings per common share were P94.59 and P84.75 while consolidated diluted
earnings per common share were P94.31 and P84.61 for the years 2009 and 2008, respectively.
SEC Form 17A 2009 53

LIQUIDITY AND CAPITAL RESOURCES
Globe Group
31 Dec 31 Dec YoY
2009 2008 Change (%)
Balance Sheet Data
Total Assets ………………………………………………………… 127,644 119,751 7%
Total Debt …………………………………………………………… 47,477 40,588 17%
Total Stockholders’ Equity ………………………………………… 47,709 50,092 -5%
Financial Ratios (x)
Total Debt to EBITDA ……………………………………………… 1.30 1.09
Debt Service Coverage…………………………………………… 2.08 4.74
Interest Cover (Gross) …………………………………………… 11.89 13.74
Debt to Equity (Gross) …………………………………………… 1.00 0.81
Debt to Equity (Net) 1 ……………………………………………… 0.87 0.69
Total Debt to Total Capitalization (Book) ……………………… 0.50 0.45
Total Debt to Total Capitalization (Market) ...…………………… 0.28 0.29
Globe Group’s consolidated assets as of 2009 amounted to P=127,644 million compared to P=119,751
million in 2008.
Consolidated cash, cash equivalents and short term investments (including investments in assets
available for sale and held to maturity investments) was at P5,943 million at the end of period compared
to last year’s P=5,782 million. Gross debt to equity ratio reached 1.00:1 on a consolidated basis and is well
within the 2:1 debt to equity limit dictated by Globe’s debt covenants. Meanwhile, net debt to equity ratio
was at 0.87:1 as of the end of 2009 compared to 0.69:1 in 2008.
The financial tests under Globe’s loan agreements include compliance with the following ratios:
• Total debt to equity not exceeding 2:1;
• Total debt to EBITDA not exceeding 3:1;
• Debt service coverage 2 exceeding 1.3 times; and
• Secured debt ratio 3 not exceeding 0.2 times.
As of 31 December 2009, Globe is well within the ratios prescribed under its loan agreements.
1
2
3
Net debt is calculated by subtracting cash, cash equivalents and short term investments from total debt.
Debt service coverage ratio is defined as the ratio of EBITDA to required debt service, where debt service includes subordinated
debt but excludes shareholder loans.
Secured debt ratio is defined as the ratio of the total amount for the period of all present consolidated obligations for payment,
whether actual or contingent which are secured by Permitted Security Interest as defined in the loan agreement to the total
amount of consolidated debt. Globe has no secured debt as of 31 December 2009.
SEC Form 17A 2009 54

Consolidated Net Cash Flows
(Php Mn)
31 Dec
2009
Globe Group
31 Dec
2008
YoY
change
(%)
Net Cash from Operating Activities…………………………… 30,367 22,507 35%
Net Cash from Investing Activities……………………………… (21,829) (16,581) 32%
Net Cash from Financing Activities…………………………… (8,334) (6,365) 31%
Net cash flow from operations increased by 35% year on year to P30,367 million due to higher cashflows
from operations compared to the previous year.
Net cash flow from investing activities increased by 32% year on year to P21,829 million as a result of
higher investments in property and equipment.
Globe Group
(Php Mn)
YoY change
31 Dec 31 Dec
(%)
2009 2008
Capital Expenditures (Cash) ………………………………………………… 22,057 19,417 14%
Increase (decrease) in Liabilities related to Acquisition of PPE………………… 2,645 965 174%
Total Capital Expenditures 1 ………………………………………………… 24,702 20,382 21%
1
Total Capital Expenditures / Service Revenues (%)…………………… 40% 32%
Consolidated capital expenditures include property and equipment, intangibles and capitalized borrowing costs acquired as of
report date regardless of whether payment has been made or not.
Consolidated capital expenditures for 2009 increased by 21% year on year to P=24,702 million from last
year’s P20,382 million as a result of higher investments in one-time international cable facilities and
domestic transmission systems, as well as sustained expenditures to upgrade the Company’s mobile
networks and expand the coverage and capacities of its broadband networks.
For 2010, the Company has earmarked about US$500 million in capital expenditures. This includes
US$170 million for the mobile telephony business, and another US$230 million for the broadband
business to augment existing capacities and expand the coverage and footprint of the Company’s DSL,
WiMax, and 3G broadband services. Globe is also allocating about US$50 million for its fixed line data
networks which primarily caters to the corporate and enterprise sector and another US$50 million in
additional one-time investments. These one-time investments include costs related to Globe’s
participation in the new Southeast Asia Japan Cable (SJC) System which is expected to be operational
by 2012.
Consolidated net cash used in financing increased by 31% to P=8,334 million in 2009 due to increased
repayments and dividends offset by higher borrowings during the current year. Consolidated total debt
increased by 17% from P=40,588 million to P=47,477 million in 2009. Loan repayments of Globe for the
period amounted to P=13,822 million or a 75% increase compared to the P=7,916 million paid in 2008.
Out of total debt of US$1,027 million, 14% are denominated in US$ out of which 2% have been hedged to
pesos. As a result, the amount of US$ debt swapped into pesos and peso-denominated debt accounts for
approximately 86% of consolidated loans as of the end of 2009.
SEC Form 17A 2009 55

Below is the schedule of debt maturities for Globe for the years stated below based on total outstanding
debt as of 31 December 2009:
Year Due
Principal *
(US$ Mn)
2010 …………………………………………………………………………………………………………… 166
2011……………………………………………………………………………………………………………. 172
2012……………………………………………………………………………………………………………. 313
2013 …………………………………………………………………………………………………………… 183
2014……………………………………………………………………………………………………………. 148
2015 through 2016…………………………………………………………………………………………… 45
Total……………………………………………………………………………………………………………. 1,027
* Principal amount before debt issuance costs.
On 10 February 2009, Globe Telecom announced it had signed an Underwriting Agreement with lead
underwriters BPI Capital Corporation, BDO Capital Corporation, and First Metro Investment Corporation
for a P3 Billion Corporate Bond Issuance. RCBC Capital Corporation and Vicsal Investment, Inc. have
been engaged for the issuance as co-lead underwriter and Participating Underwriter, respectively. On 13
February 2009, Globe received approval from the SEC to issue up to P10 Billion in aggregate principal
amount of debt securities, with an initial tranche offer of up to P5 billion comprised of fixed rate bonds due
2012 and 2014. Following the strong investor demand from the initial issue size of P3 billion, Globe
issued the full principal amount of P5.0 billion on 25 February 2009 in 3-year and 5-year bonds. On 27
March 2009, Globe signed a P1.0 billion Term Loan Facility with Land Bank of the Philippines (LBP) as
lender. Proceeds from the bond issue and the LBP facility will be used to fund the Company’s capital
expenditure program.
On 28 April 2009, Globe signed a US$50 million loan agreement with Export Development Canada (EDC)
as lender of which proceeds will be used to fund capital expenditure purchases from Nokia Siemens
Networks.
On 31 July 2009, Globe signed a US$75 million loan agreement with Citibank N.A., Deutsche Investitions
und Entwicklungsgesellschaft, and Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden.
Proceeds will likewise be used to fund capital expenditures.
Stockholders’ equity for the current period was P47,709 million as of end of 2009 compared to the
P50,092 million registered in 2008.
As of 31 December 2009, Globe’s capital stock consists of:
Preferred Shares
Preferred stock Series “A” at a par value of P5 per share of which 158 million shares are outstanding out
of a total authorized of 250 million shares.
Preferred stock “Series A” has the following features:
a. Convertible to one common share after 10 years from issue date at a price which shall not be less
than the prevailing market price of the common stock less the par value of the preferred shares;
b. Cumulative and non-participating;
c. Floating rate dividend;
d. Issued at par;
e. Voting rights;
f. Globe has the right to redeem the preferred shares at par plus accrued dividends at any time after 5
years from date of issuance; and
g. Preferences as to dividend in the event of liquidation.
SEC Form 17A 2009 56

The dividends for preferred shares are declared upon the sole discretion of the Globe Telecom Board of
Directors.
Common Shares
Common shares at par value of P50 per share of which 132 million are issued and outstanding out of a
total authorized of 180 million shares.
Cash Dividends
The dividend policy of Globe Telecom as approved by the Board of Directors is to declare cash dividends
to its common stockholders on a regular basis as may be determined by the Board. The dividend payout
rate starting 2006 is approximately 75% of prior year’s net income payable semi-annually in March and
September of each year. This is reviewed annually, taking into account Globe Telecom’s operating
results, cash flows, debt covenants, capital expenditure levels and liquidity.
On November 6, 2009, the Board of Directors amended the dividend payment rate from 75% to a range
of 75% - 90% and declared a special dividend of P=50.00 per common share based on shareholders on
record as of November 20, 2009 with the payment date of December 15, 2009.
On February 4, 2010, the Board of Directors approved the declaration of the first semi-annual cash
dividend of P=40.00 per common share, payable to shareholders on record as of February 19, 2010. Total
dividends of P=5,293.84 million were paid on March 15, 2010.
Consolidated Return on Average Equity (ROE) registered at the 26% level in 2009 compared to the 21%
in 2008 using net income and based on average equity balances for the year ended.
SEC Form 17A 2009 57

Financial Risk Management
FOREIGN EXCHANGE EXPOSURE
Foreign exchange risks are managed such that USD inflows from operations (transaction exposures) are
balanced or offset by the net USD liability position of the company (translation exposures). Globe
Group’s objective is to maintain a position which results in, as close as possible, a neutral effect to the
P&L relative to movements in the foreign exchange market.
Transaction exposures
Globe has natural net US$ inflows arising from its operations. Consolidated foreign currency-linked
revenues 1 were at 29% of total service revenues for the periods ended 31 December 2009 and 2008,
respectively. In contrast, Globe’s foreign-currency linked expenses were 11% and 13% out of total
operating expenses for the same periods ended, respectively.
The US$ flows are as follows:
2009
US$ and US$ Linked Revenues
US$ Operating Expenses
US$ Net Interest Expense
P17.9 billion
P2.7billion
P0.17 billion
Due to these net US$ inflows, a depreciation of the Peso has a positive impact on Globe’s Peso EBITDA.
Globe occasionally enters into forward contracts to hedge against a peso appreciation. No forward sales
contracts were outstanding as of end December 2009.
Realized losses from forward contracts that matured in 2009 amounted to P42 million. Since these
forwards are economic hedges, there are matching underlying exposures that offset the value of the
forwards.
Translation Exposures
Globe also has US$ assets and liabilities which are revalued at market rates every period. These are as
follows:
US$ Assets
US$ Liabilities
Net US$ Liability Position
December 2009
US$96 million
US$303 million
US$207 million
For accounting purposes, the foreign currency assets and liabilities are revalued at the current exchange
rate at the end of each reporting period. Given the net US$ liability position, a depreciation of the peso
results in a revaluation or forex loss in its P&L. As of December 2009, the Philippine Peso stood at
P46.425 to the US dollar, a 3% appreciation versus the 2008 year-end rate of P47.655.
1 Includes the following revenues:
(1) billed in foreign currency and settled in foreign currency, and
(2) billed in Pesos at rates linked to a foreign currency tariff and settled in Pesos
SEC Form 17A 2009 58

Due to the strengthening of the Peso, the Globe Group charged a total of P287 million in net foreign
exchange gains to current operations for the year ended December 2009.
Prior to 2004, the company entered into long term currency swap agreements to hedge the currency
exposure on its liabilities. As of end-December 2009, the Company has only one such remaining
agreement, with a notional amount of US$2.5 million.
The Company also has US$20 million in forward US$ purchase contracts to cover US$ obligations, with
maturities up to October 2010. The average rate of the forward contract is P47.975. Lastly, Globe has
US$20 million in forward US$ sales contracts to cover a portion of its US$ assets. These contracts will
mature in October 2010 at an average forward rate of P48.208. The swap and forward contracts are not
designated as hedges for accounting purposes (please refer to Notes 28.3 and 28.5 of the attached Notes
to Financial Statements). As such, the MTM of the contracts have flowed through the P&L, and future
changes to the MTM of the contracts will also be charged to P&L every period. The MTM of the
outstanding contracts amounts to a loss of P22 million as of end-December 2009.
INTEREST RATE EXPOSURE
Interest rate exposures are managed via targeted levels of fixed versus floating rate debt that are meant to
achieve a balance between cost and volatility. Globe’s policy is to maintain between 44-88% of its peso
debt in fixed rate, and between 31-62% of its US$ debt in fixed rate.
As of end December 2009, Globe has a total of US$61 million in interest rate swap contracts that were
entered into to achieve these targets (please refer to Notes 28.3 to 28.5 of the attached Notes to the
Financial Statements). US$56 million of the total interest rate swaps are US$ swaps under which the
Company effectively swapped some of its floating US$ denominated loans into fixed rate, with semiannual
payment intervals up to April 2012. We also have US$5 million in notional amount of US$ swaps
under which the Company receives a fixed rate of 9.75% and pays a floating rate based on LIBOR, subject
to a cap. The payments on the swap are subject to the performance of 10 and 30 year US$ interest rates.
As of end of December 2009, 45% of peso debt is fixed, while 34% of USD debt is fixed after swaps.
The MTM of the interest rate swap contracts stood at a loss of P22 million as of end December.
CREDIT EXPOSURES FROM FINANCIAL INSTRUMENTS
Outstanding credit exposures from financial instruments are monitored daily and allowable exposures are
reviewed quarterly.
For investments, the Globe Group does not have investments in foreign securities (bonds, collateralized
debt obligations (CDO), collateralized mortgage obligations (CMO), or any instruments linked to the
mortgage market in the US). Globe’s excess cash is invested in short tem bank and SDA deposits.
The Globe Group also does not have any investments or hedging transactions with investment banks.
Derivative transactions as of end-December are with large, investment grade commercial banks.
Furthermore, the Globe Group does not have instruments in its portfolio which became inactive in the
market nor does the company have any structured notes which require use of judgment for valuation
purposes. (Please refer to Note 28.2.3 of attached Notes to the Financial Statements for additional
information on active and inactive markets)
SEC Form 17A 2009 59

VALUATION OF DERIVATIVE TRANSACTIONS
The company uses valuation techniques that are commonly used by market participants and that have
been demonstrated to provide reliable estimates of prices obtained in actual market transactions. The
company uses readily observable market yield curves to discount future receipts and payments on the
transactions. The net present value of receipts and payments are translated into Peso using the foreign
exchange rate at time of valuation to arrive at the mark to market value. For derivative instruments with
optionality, the company relies on valuation reports of its counterparty banks, which are the company’s
best estimates of the close-out value of the transactions.
Gains (losses) on derivative instruments represent the net mark-to-market (MTM) gains (losses) on
derivative instruments. As of 31 December 2009, the MTM value of the derivatives of the Globe Group
amounted to a loss of P56 million while loss on derivative instruments arising from changes in MTM
reflected in the consolidated income statements amounted to P65.41 million. (Please refer to Note 22 and
Note 28.4 of the attached Notes to Financial Statements for gains/losses of preceding periods).
To measure riskiness, the company provides a sensitivity analysis of its profit and loss from financial
instruments resulting from movements in foreign exchange and interest rates. (Please refer to attached
Notes 28.2.1.1 and 28.2.1.2 of the Financial Statements for the sensitivity analysis results.) The interest
rate sensitivity estimates the changes to the following P&L items, given an indicated movement in interest
rates: (1) interest income, (2) interest expense, (3) mark to market of derivative instruments. The foreign
exchange sensitivity estimates the P&L impact of a change in the USD/PHP rate as it specifically pertains
to the revaluation of the net unhedged liability position of the company, and foreign exchange derivatives.
Legal and Corporate Developments
On 23 July 2009, the NTC issued NTC Memorandum Circular (MC) No. 05-07-2009 (Guidelines On Unit
Of Billing Of Mobile Voice Service). The MC provides that the maximum unit of billing for the cellular
mobile telephone service (CMTS) whether postpaid or prepaid shall be six (6) seconds per pulse. The
rate for the first two (2) pulses, or equivalent if lower period per pulse is used, may be higher than the
succeeding pulses to recover the cost of the call set-up. Subscribers may still opt to be billed on a one (1)
minute per pulse basis or to subscribe to unlimited service offerings or any service offerings if they
actively and knowingly enroll in the scheme
.
In compliance with NTC MC 05-07-2009, Globe refreshed and offered to the general public its existing
per-second rates that, it bears emphasizing, comply with the NTC Memorandum Circular. Globe made
per second charging for Globe-Globe/TM-TM/Globe available for Globe Subscribers dialing prefix 232
(GLOBE) OR 803 plus 10-digit TM or Globe number for TM subscribers. The NTC, however, contends
that Globe’s offering does not comply with the circular and with the NTC’s Order of December 7 which
imposed a three-tiered rate structure with a mandated flag-down of Php 3.00, a rate of Php 0.4375 for the
13th to the 60th second of the first minute and Php 0.65 for every 6-second pulse thereafter. On
December 9 the NTC issued a Cease and Desist Order requiring the carriers to refrain from charging
under the previous billing system or regime and refund consumers. Globe maintains that the Order of the
NTC of December 7, 2009 and the Cease and Desist Order are void as being without basis in fact and
law and in violation of Globe’s rights to due process. Globe, Smart and Sun all filed petitions before the
Court of Appeals seeking the nullification of the questioned orders of the NTC. On 18 February 2010, the
Court of Appeals issued a Temporary Restraining Order preventing the NTC from enforcing the disputed
Order.
Globe believes that its legal position is strong and that its offering is compliant with the NTC’s
Memorandum Circular 05-07-2009, and therefore believes that it would not be obligated to make a refund
to its subscribers. If however, Globe would be held as not being in compliance with the circular, Globe
SEC Form 17A 2009 60

may be contingently liable to refund to any complaining subscribers any charges it may have collected in
excess of what it could have charged under the NTC’s disputed Order of December 7, if indeed it is
proven by any complaining party that Globe charged more with its per second scheme than it could have
under the NTC’s 6-second pulse billing scheme stated in the disputed December 7 Order. Management
has no estimate of what amount this could be at this time.
On 22 May 2006, Innove received a copy of the Complaint of Subic Telecom Company (“Subictel”), Inc.,
a subsidiary of PLDT, seeking an injunction to stop the Subic Bay Metropolitan Authority and Innove from
taking any actions to implement the Certificate of Public Convenience and Necessity granted by SBMA to
Innove. Subictel claimed that the grant of a CPCN allowing Innove to offer certain telecommunications
services within the Subic Bay Freeport Zone would violate the Joint Venture Agreement (“JVA”) between
PLDT and SBMA. The Court of Appeals ordered the reinstatement of the case and has forwarded it to the
NTC-Olongapo for trial.
PLDT and its affiliate, Bonifacio Communications Corporation (BCC) and Innove and Globe are in
litigation over the right of Innove to render services and build telecommunications infrastructure in the
Bonifacio Global City. In the case filed by Innove before the NTC against BCC, PLDT and the Fort
Bonifacio Development Corporation (FBDC), the NTC has issued a Cease and Desist Order preventing
BCC from performing further acts to interfere with Innove’s installations in the Bonifacio Global City.
In the case filed by PLDT against the NTC in Branch 96 of the Regional Trial Court (RTC) of Quezon City,
where PLDT sought to obtain an injunction to prevent the NTC from hearing the case filed by Innove, the
RTC denied the prayer for a preliminary injunction and the case has been set for further hearings. PLDT
has filed a Motion for Reconsideration and Globe has intervened in this case.
In the case filed by BCC against FBDC, Globe Telecom and Innove, Bonifacio Communications Corp.
before the Regional Trial Court of Pasig, which case sought to enjoin Innove from making any further
installations in the BGC and claimed damages from all the parties for the breach of the exclusivity of BCC
in the area, the court did not issue a Temporary Restraining Order and has instead scheduled several
hearings on the case.
On 11 November 2008, Bonifacio Communications Corp. (BCC) filed a criminal complaint against the
officers of Innove Communications Inc., the Fort Bonifacio Development Corporation (FBDC) and Innove
contractor Avecs Corporation for malicious mischief and theft arising out of Innove’s disconnection of
BCC’s duct at the Net Square buildings. The accused officers filed their counter-affidavits and are
currently pending before the Prosecutor’s Office of Pasig.
SEC Form 17A 2009 61

ANNEX TO THE 2009 MD&A SECTION
1. Events that will trigger direct or contingent financial obligations that are material to the
Company including any default or acceleration of an obligation:
Changes in Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year except
for the adoption of the following new and amended PFRS and Philippine Interpretations of
International Financial Reporting Interpretations Committee (IFRIC) which became effective on
January 1, 2009. Except as otherwise indicated, the adoption of the new and amended
Standards and Interpretations did not have a significant impact on the consolidated financial
statements.
• Amendments to PAS 1, Presentation of Financial Statements
In accordance with the Amendments to PAS 1, the statement of changes in equity shall
include only transactions with owners, while all non-owner changes will be presented in
equity as a single line with details included in a separate statement. Owners are defined as
holders of instruments classified as equity.
In addition, the Amendments to PAS 1 provide for the introduction of a new statement of
comprehensive income that combines all items of income and expenses recognized in the
profit or loss together with “Other comprehensive income”. Entities may choose to present all
items in one statement, or to present two linked statements, a separate statement of income
and a statement of comprehensive income. These Amendments also require enhancements
in the presentation of the consolidated statements of financial position and owner’s equity as
well as additional disclosures to be included in the financial statements. Adoption of these
Amendments resulted in the following: (a) change in the title from consolidated balance sheet
to consolidated statements of financial position; (b) change in the presentation of changes in
equity and of comprehensive income, i.e., non-owner changes in equity are now presented in
one consolidated statement of comprehensive income; and (c) additional disclosures in the
notes to the consolidated financial statements relating to the movement in and income tax
effects of other reserves (see Note 17 of the 2009 Financial Statements).
• Amendment to PAS 23, Borrowing Costs
This Amendment requires the capitalization of borrowing costs when such costs relate to a
qualifying asset. A qualifying asset is an asset that necessarily takes a substantial period of
time to get ready for its intended use or sale. Accordingly, borrowing costs are capitalized on
qualifying assets with a commencement date after January 1, 2009. No changes will be
made for borrowing costs incurred to this date that have been expensed.
• PFRS 8, Operating Segments
It replaces PAS 14, Segment Reporting, and adopts a full management approach to
identifying, measuring and disclosing the results of an entity’s operating segments. The
information reported would be that which management uses internally for evaluating the
performance of operating segments and allocating resources to those segments. Such
information may be different from that reported in the consolidated statements of financial
position and consolidated statements of comprehensive income and the Globe Group will
provide explanations and reconciliations of the differences. This Standard is only applicable
to an entity that has debt or equity instruments that are traded in a public market or that files
(or is in the process of filing) its financial statements with a securities commission or similar
party. The Globe Group has enhanced its current manner of reporting segment information
SEC Form 17A 2009 62

to include additional information used by management internally (see Note 29 of the 2009
Financial Statements). Segment information for prior years was restated to include the
additional information.
• Philippine Interpretation IFRIC 16, Hedges of a Net Investment in a Foreign Operation
This Interpretation provides guidance on identifying foreign currency risks that qualify for
hedge accounting in the hedge of net investment; where within the group the hedging
instrument can be held as a hedge of a net investment; and how an entity should determine
the amount of foreign currency gains or losses, relating to both the net investment and the
hedging instrument, to be recycled on disposal of the net investment.
• PFRS 1, First-time Adoption of Philippine Financial Reporting Standards - Cost of an
Investment in a Subsidiary, Jointly Controlled Entity or Associate
The amended PFRS 1 allows an entity to determine the ‘cost’ of investments in subsidiaries,
jointly controlled entities or associates in its opening PFRS financial statements in
accordance with PAS 27, Consolidated and Separate Financial Statements, or using a
deemed cost method. The amendment to PAS 27 required all dividends from a subsidiary,
jointly controlled entity or associate to be recognized in the statements of comprehensive
income in the separate financial statement.
• PFRS 2, Share-based Payment - Vesting Condition and Cancellations
This Standard has been revised to clarify the definition of a vesting condition and prescribes
the treatment for an award that is effectively cancelled. It defines a vesting condition as a
condition that includes an explicit or implicit requirement to provide services. It further
requires non-vesting conditions to be treated in a similar fashion to market conditions.
Failure to satisfy a non-vesting condition that is within the control of either the entity or the
counterparty is accounted for as cancellation. However, failure to satisfy a non-vesting
condition that is beyond the control of either party does not give rise to a cancellation.
• Amendments to PFRS 7, Financial Instruments: Disclosures - Improving Disclosures about
Financial Instruments
The amendments to PFRS 7 introduce enhanced disclosures about fair value measurement
and liquidity risk. The amendments to PFRS 7 require fair value measurements for each
class of financial instruments to be disclosed by the source of inputs, using the following
three-level hierarchy: (a) quoted prices (unadjusted) in active markets for identical assets or
liabilities (Level 1); (b) inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2);
and (c) inputs for the asset or liability that are not based on observable market data
(unobservable inputs) (Level 3). The level within which the fair value measurement is
categorized must be based on the lowest level of input to the instrument’s valuation that is
significant to the fair value measurement in its entirety.
Additional disclosures required in the amendments to PFRS 7 are shown in Note 28 - Capital
and Risk Management and Financial Instruments of the attached 2009 Financial Statements.
The amendments to PFRS 7 also introduce two major changes in liquidity risk disclosures as
follows: (a) exclusion of derivative liabilities from maturity analysis unless the contractual
maturities are essential for an understanding of the timing of the cash flows and (b) inclusion
of financial guarantee contracts in the contractual maturity analysis based on the maximum
amount guaranteed.
• Amendments to PAS 32, Financial Instruments: Presentation, and PAS 1, Presentation of
Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation
SEC Form 17A 2009 63

These Amendments specify, among others, that puttable financial instruments will be
classified as equity if they have all of the following specified features: (a) the instrument
entitles the holder to require the entity to repurchase or redeem the instrument (either on an
ongoing basis or on liquidation) for a pro rata share of the entity’s net assets; (b) the
instrument is in the most subordinate class of instruments, with no priority over other claims
to the assets of the entity on liquidation; (c) all instruments in the subordinate class have
identical features; (d) the instrument does not include any contractual obligation to pay cash
or financial assets other than the holder’s right to a pro rata share of the entity’s net assets;
and (e) the total expected cash flows attributable to the instrument over its life are based
substantially on the profit or loss, a change in recognized net assets, or a change in the fair
value of the recognized and unrecognized net assets of the entity over the life of the
instrument.
• Philippine Interpretation IFRIC-9 and PAS 39 Amendments - Embedded Derivatives
This Amendment to Philippine Interpretation IFRIC-9, Reassessment of Embedded
Derivatives, requires an entity to assess whether an embedded derivative must be separated
from a host contract when the entity reclassifies a hybrid financial asset out of the fair value
through profit or loss category. This assessment is to be made based on circumstances that
existed on the later of the date the entity first became a party to the contract and the date of
any contract amendments that significantly change the cash flows of the contract. PAS 39,
Financial Instruments: Recognition and Measurement, now states that if an embedded
derivative cannot be reliably measured, the entire hybrid instrument must remain classified as
at fair value through profit or loss.
Improvements to PFRS
In May 2008 and April 2009, the International Accounting Standards Board (IASB) issued
omnibus amendments to certain standards, primarily with a view to removing inconsistencies
and clarifying wordings. There are separate transitional provisions for each standard. The
adoption of these amended standards did not have any significant impact on the consolidated
financial statements of the Globe Group, unless otherwise indicated.
• PAS 18, Revenue
The Amendment adds guidance (which accompanies the Standard) to determine
whether an entity is acting as a principal or as an agent. The features to consider are
whether the entity (a) has primary responsibility for providing the goods or service; (b)
has inventory risk; (c) has discretion in establishing prices; and (d) bears the credit risk.
The Group assessed its revenue arrangements against these criteria and concluded
that it is acting as principal in some arrangements and as an agent in other
arrangements.
• PAS 1, Presentation of Financial Statements
Assets and liabilities classified as held for trading are not automatically classified as
current in the consolidated statements of financial position.
• PAS 16, Property, Plant and Equipment
The Amendment replaces the term ‘net selling price’ with ‘fair value less costs to sell’, to
be consistent with PFRS 5, Non-current Assets Held for Sale and Discontinued
Operations, and PAS 36, Impairment of Asset.
In addition, items of property, plant and equipment held for rental that are routinely sold
in the ordinary course of business after rental, are transferred to inventory when rental
ceases and they are held for sale. Proceeds of such sales are subsequently shown as
SEC Form 17A 2009 64

evenue. Cash payments on initial recognition of such items, the cash receipts from
rents and subsequent sales are all shown as cash flows from operating activities.
• PAS 19, Employee Benefits
It revises the definition of: (a) “past service costs” to include reductions in benefits
related to past services (“negative past service costs”) and to exclude reductions in
benefits related to future services that arise from plan amendments. Amendments to
plans that result in a reduction in benefits related to future services are accounted for as
a curtailment, (b) “return on plan assets” to exclude plan administration costs if they
have already been included in the actuarial assumptions used to measure the defined
benefit obligation, and (c) “short-term” and “other long-term” employee benefits to focus
on the point in time at which the liability is due to be settled. Also, it deletes the
reference to the recognition of contingent liabilities to ensure consistency with PAS 37,
Provisions, Contingent Liabilities and Contingent Assets.
• PAS 23, Borrowing Costs
This revises the definition of borrowing costs to consolidate the types of items that are
considered components of ‘borrowing costs’, i.e., components of the interest expense
calculated using the effective interest rate method.
• PAS 28, Investment in Associates
If an associate is accounted for at fair value in accordance with PAS 39, only the
requirement of PAS 28 to disclose the nature and extent of any significant restrictions
on the ability of the associate to transfer funds to the entity in the form of cash or
repayment of loans applies. Also, an investment in an associate is a single asset for
the purpose of conducting the impairment test. Therefore, there is no separate
allocation to the goodwill included in the investment balance.
• PAS 31, Interests in Joint Ventures
If a joint venture is accounted for at fair value in accordance with PAS 39, only the
requirements of PAS 31 to disclose the commitments of the venturer and the joint
venture, as well as summary of financial information about the assets, liabilities, income
and expenses will apply.
• PAS 36, Impairment of Assets
When discounted cash flows are used to estimate “fair value less cost to sell” additional
disclosure is required about the discount rate, consistent with disclosures required when
the discounted cash flows are used to estimate “value in use”.
• PAS 38, Intangible Assets
Expenditure on advertising and promotional activities is recognized as an expense
when the Group either has the right to access the goods or has received the services.
• PAS 39, Financial Instruments: Recognition and Measurement
Improvements to PAS 39 are: (a) changes in circumstances relating to derivatives -
specifically derivatives designated or de-designated as hedging instruments after initial
recognition - are not reclassifications; (b) when financial assets are reclassified as a
result of an insurance company changing its accounting policy in accordance with
paragraph 45 of PFRS 4, Insurance Contracts, this is a change in circumstance, not a
reclassification; (c) removes the reference to a “segment” when determining whether an
instrument qualifies as a hedge; and (d) requires use of the revised effective interest
rate (rather than the original effective interest rate) when re-measuring a debt
instrument on the cessation of fair value hedge accounting.
SEC Form 17A 2009 65

• PAS 40, Investment Properties
It revises the scope (and the scope of PAS 16) to include property that is being
constructed or developed for future use as an investment property. Where an entity is
unable to determine the fair value of an investment property under construction, but
expects to be able to determine its fair value on completion, the investment under
construction will be measured at cost until such time as fair value can be determined or
construction is complete.
Future Changes in Accounting Policies
The Globe Group will adopt the following standards and interpretations enumerated below
when these become effective. Except as otherwise indicated, the Globe Group does not
expect the adoption of these new and amended PFRS and Philippine Interpretations to have
significant impact on the consolidated financial statements.
• Revised PFRS 3, Business Combinations and PAS 27, Consolidated and Separate
Financial Statements
The revised standards are effective for annual periods beginning on or after July 1,
2009. The revised PFRS 3 introduces a number of changes in the accounting for
business combinations that will impact the amount of goodwill recognized, the reported
results in the period that an acquisition occurs, and future reported results. The
revised PAS 27 requires, among others, that (a) change in ownership interests of a
subsidiary (that do not result in loss of control) will be accounted for as an equity
transaction and will have no impact on goodwill nor will it give rise to a gain or loss; (b)
losses incurred by the subsidiary will be allocated between the controlling and noncontrolling
interests (previously referred to as ‘minority interests’), even if the losses
exceed the non-controlling equity investment in the subsidiary; and (c) on loss of
control of a subsidiary, any retained interest will be remeasured to fair value and this
will impact the gain or loss recognized on disposal.
The changes introduced by the revised PFRS 3 must be applied prospectively, while
changes introduced by the revised PAS 27 must be applied retrospectively with a few
exceptions. The changes will affect future acquisitions and transactions with noncontrolling
interests.
• Philippine Interpretation IFRIC 15, Agreement for Construction of Real Estate
This Interpretation, which will be effective January 1, 2012, covers accounting for
revenue and associated expenses by entities that undertake the construction of real
estate directly or through subcontractors. This Interpretation requires that revenue on
construction of real estate be recognized only upon completion, except when such
contract qualifies as construction contract to be accounted for under PAS 11,
Construction Contracts, or involves rendering of services in which case revenue is
recognized based on stage of completion. Contracts involving provision of services
with the construction materials and where the risks and reward of ownership are
transferred to the buyer on a continuous basis, will also be accounted for based on
stage of completion. This Interpretation will not be applicable to the Globe Group.
• Philippine Interpretation IFRIC 17, Distributions of Non-cash Assets to Owners
This Interpretation provides guidance on non-reciprocal distribution of assets by an
entity to its owners acting in their capacity as owners, including distributions of noncash
assets and those giving the shareholders a choice of receiving non-cash assets
or cash, provided that: (a) all owners of the same class of equity instruments are
SEC Form 17A 2009 66

treated equally; and (b) the non-cash assets distributed are not ultimately controlled by
the same party or parties both before and after the distribution, and as such, excluding
transactions under common control. This Interpretation is applied prospectively and is
applicable for annual periods beginning on or after July 1, 2009 with early application
permitted.
• Amendment to PAS 39, Financial Instruments: Recognition and Measurement Eligible
Hedged Items
This Amendment, which will be effective for annual periods beginning on or after
July 1, 2009, addresses only the designation of a one-sided risk in a hedged item, and
the designation of inflation as a hedged risk or portion in particular situations. The
Amendment clarifies that an entity is permitted to designate a portion of the fair value
changes or cash flow variability of a financial instrument as a hedged item. The Globe
Group will assess the impact of this Amendment on its current manner of accounting
for hedged items.
• Amendments to PFRS 2, Share-based Payment: Group Cash-settled Transactions
The IASB amended the IFRS 2 to clarify its scope and the accounting for group cashsettled
share-based payment transactions in the separate or individual financial
statement of the entity receiving the goods or services when that entity has no
obligation to settle the share-based payment transaction. This Amendment is effective
January 1, 2010. It supersedes IFRIC 8, Scope of IFRS 2 and IFRIC 11, IFRIC 2 -
Group and Treasury Share Transactions.
• Philippine Interpretation IFRIC 18, Transfer of Assets from Customers
This Interpretation is to be applied prospectively to transfers of assets from customers
received on or after July 1, 2009. The Interpretation provides guidance on how to
account for items of property, plant and equipment received from customers or cash
that is received and used to acquire or construct assets that are used to connect the
customer to a network or to provide ongoing access to a supply of goods or services or
both. When the transferred item meets the definition of an asset, the asset is measured
at fair value on initial recognition as part of an exchange transaction. The service(s)
delivered are identified and the consideration received (the fair value of the asset)
allocated to each identifiable service. Revenue is recognized as each service is
delivered by the entity.
Improvements to PFRS
The omnibus amendments to PFRSs issued in 2009 were issued primarily with a view to
removing inconsistencies and clarifying wordings. There are separate transitional
provisions for each standard and will become effective January 1, 2010. Except
otherwise stated, the Globe Group does not except the adoption of these new standards
to have significant impact on the consolidated financial statements.
• PFRS 2, Share-based Payment
This Amendment clarifies that the contribution of a business on formation of a joint
venture and combinations under common control are not within the scope of PFRS 2
even though they are out of scope of PFRS 3. The amendment is effective for
financial years on or after July 1, 2009.
• PFRS 5, Non-current Assets Held for Sale and Discontinued Operations
This Amendment clarifies that the disclosures required in respect of non-current
assets and disposal groups classified as held for sale or discontinued operations are
SEC Form 17A 2009 67

only those set out in PFRS 5. The disclosure requirements of other PFRSs only
apply if specifically required for such non-current assets or discontinued operations.
• PFRS 8, Operating Segments
The Amendment clarifies that segment assets and liabilities need only be reported
when those assets and liabilities are included in measures that are used by the chief
operating decision maker.
• PAS 1, Presentation of Financial Statements
The Amendment clarifies that the terms of a liability that could result, at anytime, in
its settlement by the issuance of equity instruments at the option of the counterparty
do not affect its classification.
• PAS 7, Statement of Cash Flows
This Amendment explicitly states that only expenditure that results in a recognized
asset can be classified as a cash flow from investing activities.
• PAS 17, Leases
Removes the specific guidance on classifying land as a lease. Prior to the
amendment, leases of land were classified as operating leases. The Amendment
now requires that leases of land are classified as either ‘finance’ or ‘operating’ in
accordance with the general principles of PAS 17. The amendments will be applied
retrospectively.
• PAS 36, Impairment of Assets
This Amendment clarifies that the largest unit permitted for allocating goodwill,
acquired in a business combination, is the operating segment as defined in PFRS 8
before aggregation for reporting purposes.
• PAS 38, Intangible Assets
This Amendment clarifies that if an intangible asset acquired in a business
combination is identifiable only with another intangible asset, the acquirer may
recognize the group of intangible assets as a single asset provided the individual
assets have similar useful lives. Also clarifies that the valuation techniques presented
for determining the fair value of intangible assets acquired in a business combination
that are not traded in active markets are only examples and are not restrictive on the
methods that can be used.
• PAS 39, Financial Instruments: Recognition and Measurement
This Amendment clarifies the following: 1) that a prepayment option is considered
closely related to the host contract when the exercise price of a prepayment option
reimburses the lender up to the approximate present value of lost interest for the
remaining term of the host contract; 2) that the scope exemption for contracts
between an acquirer and a vendor in a business combination to buy or sell an
acquiree at a future date applies only to binding forward contracts, and not derivative
contracts where further actions by either party are still to be taken and 3) that gains
or losses on cash flow hedges of a forecast transaction that subsequently results in
the recognition of a financial instrument or on cash flow hedges of recognized
financial instruments should be reclassified in the period that the hedged forecast
cash flows affect profit or loss.
• Philippine Interpretation IFRIC 9, Reassessment of Embedded Derivatives
SEC Form 17A 2009 68

This Interpretation clarifies that it does not apply to possible reassessment, at the
date of acquisition, to embedded derivatives in contracts acquired in a combination
between entities or businesses under common control or the formation of a joint
venture.
• Philippine Interpretation IFRIC 16, Hedges of a Net Investment in a Foreign
Operation
This Interpretation states that, in a hedge of a net investment in a foreign operation,
qualifying hedging instruments may be held by any entity or entities within the group,
including the foreign operation itself, as long as the designation, documentation and
effectiveness requirements of PAS 39 that relate to a net investment hedge are
satisfied.
SEC Form 17A 2009 69

2. Causes of any material change from period to period of FS: (As of December 31, 2009)
Assets
Current
a) Cash and Cash Equivalents – Increased by P157.70 million mainly due to higher cash provided
by operating activities.
b) Short term investments and Held to maturity investments – Increased by P2.78 million due to
investments in special and time deposit accounts coming from excess operating cash flows.
c) Receivables-net – Decreased by P890.12 million primarily due to lower traffic settlements
receivable from various carriers and collections on aged accounts during the intervening period.
d) Inventories and Supplies - Increased by P529.43 million due to higher inventory of devices,
modem and other accessories as of December 31, 2009.
e) Derivative Assets – Decreased by P132.71 million due to maturities of forward contracts during
the intervening period.
f) Prepayments and other current assets - Decreased by 18% or P907.11 million significantly due to
the application of advances of various contractors and suppliers to progress billings and the
maturity of a short term loan receivable.
Noncurrent
a) Property and Equipment – net - Increased by P8.15 billion due to the additional costs incurred for
the expansion of network assets reduced partly by depreciation of assets during the intervening
period.
b) Investment Property – net - Down by P22.48 million due to depreciation of investment properties.
c) Intangible assets and goodwill – net - Down by P355.94 million due to amortization, partly
cushioned by additional costs incurred for telecommunication equipment software licenses and
other VAS software applications.
d) Investments in Joint Venture – Up by P160.27 million due largely to the additional investment in
BPI Globe BanKO amounting to P141.3 million and translation gains on the investment in BMPL.
e) Deferred Income Tax - net – Up by P218.82 million mainly due to deferred tax on NOLCO and
MCIT of subsidiaries.
f) Other Noncurrent Assets – Up by P978.21 million due to long term loan receivables from Globe
retirement fund and Bethlehem Holdings totaling to P1.26 billion.
Liabilities
Current
a) Accounts payable and Accrued Expenses – Increased by 22% or P3.81 billion primarily due to
higher project accruals relative to the network expansion, higher traffic settlement payable and
final withholding taxes payable.
b) Provisions – Decreased by P113.11 million due to the reversal of provisions for probable
regulatory claims and assessments resulting from favorable developments.
c) Derivative Liabilities – Net decrease of P78.12 million mainly due to maturities of hedged revenue
forwards as it matured during the intervening period.
d) Income Taxes Payable – Down by 11% or P130.25 million mainly due to the favorable impact of
lower corporate tax rate by 5% in 2009.
e) Unearned Revenues – Down by 8% or P265.83 million primarily due to faster conversion of
prepaid credits sold to dealers to usage revenues.
f) Notes Payable – availment of short term loans to finance working capital requirements.
SEC Form 17A 2009 70

Noncurrent
a) Deferred Tax Liabilities – Increased by P36.87 million attributed to higher deferred tax liability
from unrealized forex gain.
b) Long-term Debt (current and noncurrent) – Increased by P8.89 billion due to various borrowings
to finance capital expenditures offset by repayments to foreign and local creditors during the
intervening period.
c) Derivative Liabilities – Down by P15.08 million due to lower MTM loss values of cash flow hedge
interest rate swaps designated as cash flow hedges.
d) Other Long-term Liabilities (current and noncurrent) – Increased by P145.54 million primarily due
to asset retirement obligation (ARO) accretion net of adjustments and new ARO incurred during
the intervening period
Equity
a) Paid-up Capital – Up by P50.76 million attributed to the issuance of Globe shares due to
exercised stock options during the intervening period.
b) Cost of Share-Based Payments – Increased by P81.46 million due to additional compensation
expense partly reduced by the value of the stock options exercised during the intervening period.
c) Cumulative Translation Adjustment – Changes due to maturity of forwards designated as
revenue hedges and exchange differences arising from translation of foreign investments during
the intervening period.
d) Retained Earnings – Decreased by 16% or P2.57 billion due to dividends declared to common
and preferred shareholders amounting to P15.14 billion over net income of P12.57 billion during
the intervening period.
SEC Form 17A 2009 71

3. Description of material commitments and general purpose of such commitments. Material
off-balance sheet transactions, arrangements, obligations and other relationships with
unconsolidated entities or other persons created during the period.
For details on material commitments and arrangements, see Notes 10 and 11 in the attached
2009 Notes to the Financial Statements.
Globe Telecom and Innove, in their regular conduct of business, enter into transactions with their
major stockholders, AC and STI, joints ventures and certain related parties. These transactions,
which are accounted for at market prices are normally charged to unaffiliated customers for
similar goods and services.
Globe Telecom also has investments in joint ventures including:
• Investment in BPI Globe BanKO Inc., A Savings Bank (BPI Globe BanKO) - On July 17,
2009, Globe acquired a 40% stake in BPI Globe BanKO (formerly Pilipinas Savings Bank,
Inc. or PS Bank) for P=141.33 million, pursuant to a Shareholder Agreement with Bank of the
Philippine Islands (BPI), AC and PS Bank, and a Deed of Absolute Sale with BPI. BPI Globe
BanKO will have the capability to provide services to micro-finance institutions and retail
clients through mobile and related technology.
• Investment in Bridge Mobile Pte. Ltd. (BMPL) - Globe Telecom and other leading Asia Pacific
mobile operators (JV partners) signed an Agreement in 2004 (JV Agreement) to form a
regional mobile alliance, which will operate through a Singapore-incorporated company,
BMPL. The joint venture company is a commercial vehicle for the JV partners to build and
establish a regional mobile infrastructure and common service platform and deliver different
regional mobile services to their subscribers. The other joint venture partners with equal
stake in the alliance include Bharti Tele-Ventures Limited, Maxis Communications Berhad,
Optus Mobile Pty. Limited, Singapore Telecom Mobile Pte. Ltd., Taiwan Cellular Corporation,
PT Telekomunikasi Selular and Hongkong CSL Ltd. Under the JV Agreement, each partner
shall contribute USD4.00 million based on an agreed schedule of contribution. Globe
Telecom may be called upon to contribute on dates to be determined by the JV. As of
December 31, 2009, Globe Telecom has invested a total of USD2.20 million in the joint
venture.
• In 2008 and 2009, the Globe Group granted loans to the Globe Telecom retirement fund and
BHI (Bethlehem Holdings, Inc.). The Globe Telecom retirement fund established BHI in 2009
to invest in media ventures. For details, please refer to Note 11 of the 2009 Notes to the
Financial Statements.
4. Seasonal Aspects that have a material effect on the FS
No seasonal aspects that have a material effect on the financial statements.
SEC Form 17A 2009 72

Management’s Discussion and Analysis of Operations
For the Financial Year Ended 2008
GROUP RESULTS OF OPERATIONS
The following table details the consolidated results of operations for the Globe Group:
Results of Operations (Php Mn)
Globe Group
For the Year Ended
31 Dec 31 Dec
2008 2007
YoY
Change
(%)
Net Operating Revenues …………………………………………… 64,818 65,509 -1%
Service Revenues …………………………………………………… 62,894 63,209 -
Non-Service Revenues………………………………………………… 1,924 2,300 -16%
Costs and Expenses ………………………………………………… 27,420 25,289 8%
Cost of Sales………………………………………………………... 3,117 3,323 -6%
Operating Expenses ……………………………………………… 24,303 21,966 11%
EBITDA ………………………………………………………………… 37,398 40,220 -7%
EBITDA Margin………………………………………………………. 59% 64%
Depreciation and Amortization……………………………………. 17,028 17,189 -1%
EBIT …………………………………………………………………… 20,370 23,031 -12%
EBIT Margin…………………………………………………………… 32% 36%
Financing………………………………………………………………….. (3,000) (5,225) -43%
Interest Income………………………………………………………… 420 728 -42%
Others - net…………………………………………………………… 56 1,516 -96%
Provision for Income Tax…………………………………………… (6,570) (6,773) -3%
Net Income After Tax (NIAT)………………………………………… 11,276 13,277 -15%
Core Net Income 1 …………………………………………………… 11,765 13,725 -14%
______________________________________________________
1 Core net income is net income after tax (NIAT) before forex/MTM gains (losses) and charges related to the 2007 redemption of
the Group’s 2012 Senior Notes.
• Consolidated service revenues for 2008 was at P62.9 billion compared to P63.2 billion of 2007.
Lower wireless revenues were offset by growth in the wireline data and broadband businesses.
Wireless revenues, which comprised 88% of total service revenues, declined by 1% year on year to
P55.6 billion, driven by lower activity levels due to the weaker consumer environment, more intense
competition, and increasing incidence of multi-SIM use. The relative strength of the peso also
negatively impacted dollar-linked revenues which comprised about 29% of the company’s total
service revenues. Meanwhile, robust growth in the Company’s broadband subscriber base as well as
higher corporate data revenues boosted wireline service revenues by 7% year on year from P6.8
billion to P7.3 billion in 2008.
• Total operating expenses and subsidy showed an 11% year on year increase to P25.5 billion in 2008
from P23.0 billion in 2007 with increased operating charges associated with maintaining a larger
broadband and cellular network and subscriber base. Network-related charges such as electricity
and fuel charges, rent, repairs and maintenance were higher compared to last year as a result of an
expanded 2G, 3G and broadband network. Meanwhile, staff costs were higher by 12% due to a 6%
increase in headcount, merit-based increases, and the full year impact of structural pay adjustments
implemented in the second half of 2007. Total headcount rose from 5,511 as of the end of 2007 to
5,850 as of the end of 2008. Additionally, increased security charges, professional and consultancy
fees, and the costs of outsourced customer service and logistics functions increased total services
SEC Form 17A 2009 73

costs by 10% from 2007 levels. Total marketing and subsidy expenses, which remained the
company’s largest expense item, were steady at 9% service revenues for 2007 and 2008.
• Consolidated EBITDA and EBIT posted declines of 7% and 12% year on year, driven by flat revenue
performance and higher operating expenses and subsidy. The continued upfront spend for
broadband ahead of revenue growth also diluted consolidated margins. While wireless EBITDA
margins remained healthy at 65% of service revenues, wireline margins were slim at 16%, bringing
consolidated margins to 59% from last year’s 64%. Depreciation held steady at last year’s level.
EBIT margin for 2008 was at 32% compared to 36% of the previous year.
• The Company closed the year with net income after tax of P11.3 billion, 15% lower than 2007.
Excluding the impact of the bond redemption costs and foreign exchange, and mark-to-market gains
and losses, the Company’s core net income closed at P11.8 billion or 14% lower than the previous
year.
• Capital expenditures totaled P20.4 billion for the year, a 46% increase from the 2007 level of P13.9
billion. Capital expenditures for 2008 include amounts to expand the Company’s DSL and wireless
broadband networks, additional investments in its 2G service to enhance network coverage in
selected areas, as well as redundancy investments and amounts related to Globe’s participation in
the TGN-Intra Asia international cable system. By the end of 2008, Globe increased its 2G cellsites
by 4% to 6,446 from 6,217 in 2007. Geographical coverage stood at 97% while population coverage
was at 99%.
• For 2009, the Company is allocating about US$350 to 400 million in capital expenditures. These
amounts are lower than 2008 spending, but are still in excess of the annual capex reinvested in the
business since 2005. The 2009 capex plan includes sustained investments in wired and wireless
broadband capacities for the residential markets, network enhancements and maintenance spend for
its core 2G business, as well as amounts to support Globe’s enterprise and corporate wireline data
business.
GROUP OPERATING REVENUES
Globe Group
For the Year Ended
Operating Revenues By Segments (Php Mn)
31 Dec
2008
31 Dec
2007
YoY
Change
(%)
Wireless 57,360 58,673 -2%
Service Revenues………………………………………………………… 55,635 56,410 -1%
Non-Service Revenues…………………………………………………… 1,725 2,263 -24%
Wireline 7,458 6,836 9%
Service Revenues………………………………………………………… 7,259 6,799 7%
Non-Service Revenues…………………………………………………… 199 37 438%
Total Net Operating Revenues…………………………………………… 64,818 65,509 -1%
Year on year, Globe Group’s net operating revenues of P64,818 million was 1% lower from last year’s
P65,509 million as a result of lower wireless service revenues which accounts for 88% of total service
revenues. Improved wireline operating revenues which grew 9% during the year from the continued
expansion of the broadband and corporate data businesses helped offset some of the softness in
wireless service revenues.
SEC Form 17A 2009 74

Wireless service revenues declined by 1% year on year to P55,635 million from P56,410 million
registered in 2007 driven by the considerably weaker macroeconomic environment and more intense
competition. Subscriber growth continued to be healthy as the wireless business added 4.4 million new
subscribers, bringing cumulative SIM base to 24.7 million SIMs by the end of the year. However, lower
subscriber activity levels negatively impacted usage, resulting in softer wireless revenues despite the
double-digit growth in the Company’s total SIM base.
The continued strength of the peso relative to last year’s levels also affected revenue growth. With 29%
of our net service revenues linked to the dollar, the impact on revenues of the 6% year on year peso
appreciation amounted to approximately P1.2 billion. Therefore, had exchange rates been steady,
Globe’s service revenues would have grown by over 1% year on year instead of declining.
Wireless non-service revenues decreased by 24% to P1,725 million from last year’s P2,263 million as
acquisition campaigns continued to focus on offering lower priced SIMs and phonekits to attract new
subscribers.
Meanwhile, wireline service revenues registered a 7% increase to P7,259 million driven by strong
broadband subscriber take up and growth in corporate wireline data revenues. By the end of 2008,
Globe’s cumulative broadband subscriber base, including our fully-mobile Visibility subscribers, reached
over 234,000 from about 128,000 in 2007. Meanwhile, continued improvements in corporate leased line
businesses and value-added services boosted wireline data revenues compared to the previous year.
Higher wireline non-service revenues are primarily due to higher equipment sales resulting from more
aggressive broadband acquisition campaigns beginning the second quarter of the year.
WIRELESS BUSINESS
Wireless Service Revenues (Php Mn)
Globe
For the Year Ended
31 Dec
2008
31 Dec
2007
YoY
Change
(%)
Service
Voice 1 ….…………………………………………………………………… 29,240 29,870 -2%
Data 2 ..……………………………………………………………………… 26,395 26,540 -1%
Wireless Service Revenues…………………..……................................... 55,635 56,410 -1%
____________________________________________________________________________________________________
1 Wireless voice service revenues include the following:
a) Monthly service fees on postpaid plans;
b) Charges for intra-network and outbound calls in excess of the consumable minutes for various Globe Postpaid plans,
including currency exchange rate adjustments, or CERA, net of loyalty discounts credited to subscriber billings.
c) Airtime fees for intra network and outbound calls recognized upon the earlier of actual usage of the airtime value or
expiration of the unused value of the prepaid reload denomination (for Globe Prepaid and TM) which occurs between 1
and 60 days after activation depending on the prepaid value reloaded by the subscriber net of (i) bonus credits and (ii)
prepaid reload discounts; and revenues generated from inbound international and national long distance calls and
international roaming calls;
Revenues from (b) and (c) are net of any interconnection or settlement payouts to international and local carriers and content
providers.
2
Wireless data service revenues consist of revenues from value-added services such as inbound and outbound SMS and MMS,
content downloading and infotext, subscription fees on unlimited and bucket prepaid SMS services net of any interconnection or
settlement payouts to international and local carriers and content providers.
SEC Form 17A 2009 75

Wireless Voice
The wireless voice segment continued to account for 53% of total wireless service revenues year on year,
closing the year at P29.2 billion in service revenues or 2% lower than 2007. The softness in revenues is
driven by lower activity levels due to the weaker consumer environment and more intense competition
resulting in increasing incidence of multi-SIM use. The strength of the peso also negatively impacted
dollar-linked revenues, including inbound and outbound IDD calls.
To stimulate local wireless voice usage, Globe and TM launched their Unlicalls Nyt and Todo Tawag
Magdamag promotions to allow unlimited voice calls during off-peak hours (11pm to 6am) at P20 for
Globe Prepaid and P15 for TM subscribers. These promotions were complemented by our Tawag236
promotion which offers 20 minutes of all-day voice calls for Globe postpaid and Globe prepaid
subscribers for only P20. Additionally Globe and TM extended their popular bulk and per second voice
promotions such as the P10 for a 3-minute call for Globe subscribers, P15 for a 15-minute call, and P10
for a 5-minute call (single or multiple calls totaling 5 minutes) for TM subscribers. For the per-second
voice offers, Globe and TM sustained its P0.10 per second offer and the discounted P0.05 per second
promo for calls made on Sundays.
To encourage international wireless voice traffic, Globe launched its TipIDD card, a prepaid card which
offers discounted IDD rates to selected, popular calling destinations. With the TipIDD card, subscribers
are charged P2.50 per minute for calls to the US, Hong Kong and Canada, and between P5 to P10 for
other major Asian, European and Middle East calling destinations. In the fourth quarter of 2008, Globe
also introduced a more affordable P25 denomination in addition to the regular P100 card, and a limited
edition P50 denomination found in selected outlets.
The new TipidIDD card is complemented by various IDD offerings including our P0.15 per second call to
the top 15 IDD calling destinations, and the P8 per minute calling rate to popular OFW destinations such
as the US, Canada, Hawaii, Saudi Arabia and Japan. International roaming postpaid subscribers can also
use the G-Webcall service to make VoIP calls at P7.50 per minute to other Globe or TM subscribers, or
make free VoIP calls to other G-Webcall users.
Wireless Data
Our wireless data business contributed 47% to total wireless net service revenues. Service revenues for
the year totaled to P26,395 million compared to P26,540 million in 2007. Regular, bucket, and unlimited
SMS promotions including SuliTxt, TodoText and EverybodyTxt continued to account for the bulk of data
revenues.
During the year, Globe increased its line up of SMS products with Txt to Others 20 which allows Globe
and TM subscribers to send up to 40 inter-network SMS messages for only P20, equivalent to P0.50 per
SMS. To improve customer experience and increase activation of its popular SMS promotions Globe
made it possible for its prepaid subscribers to purchase bucket SMS offers like SuliTxt and EverybodyTxt
directly from its more than 672,000 AutoloadMax retailers nationwide, similar to purchasing electronic
prepaid credits. This innovation provides a convenient way for subscribers to avail of these bucket offers
from retailers foregoing the usual subscriber-driven registration process. Additionally, Globe continued its
international SMS bucket promotion with the iTXT (International Text) service where Globe Prepaid
subscribers can send international SMS to SingTel subscribers for as low as P0.50 per SMS. The iTXT
packages can be availed through SMS registration and are available in two packages, P25 for 25
international SMS, or P50 for 100 international SMS.
To encourage increased usage of its value-added services (VAS), Globe embarked on an integrated
mobile and internet campaign called Connected 24Ever, targeted at the youth segment. The campaign
included ‘barkada’ or group phonekit deals, broadband service packages, and supported by all-day chat
offers via Yahoo Messenger, and unlimited updates to popular social networking sites such as Friendster,
SEC Form 17A 2009 76

and Facebook. To ensure high awareness and adoption among the youth market the campaign was
promoted in youth-oriented events in schools and malls nationwide.
Last August 2008, the Company introduced Apple’s iPhone 3G to the country. Prepaid and postpaid
subscriber take-up has been strong and the Company has seen a notable increase in mobile browsing
revenues following its introduction. Wireless data revenues have also been helped by the strong take-up
for our fully-mobile Visibility broadband service which has seen its subscriber base grow to almost 59,000
from just over 7,000 subscribers at the end of 2007. Flexible and affordable browsing rates, lowered
entry costs with Visibility modem prices reduced to P2,500 from P4,500 previously, and the availability of
prepaid offers all contributed to the significant uptake in subscribers.
SEC Form 17A 2009 77

The key drivers for the wireless business are set out in the table below:
For the Year Ended
31 Dec 31 Dec YoY
2008 2007 Change (%)
Cumulative Subscribers (or SIMs) Net (End of period)…… 24,701,820 20,317,596 22%
Globe Postpaid . ………………………………………………… 753,775 709,817 6%
Prepaid .…………………………………………………………… 23,948,045 19,607,779 22%
Globe Prepaid ……………………………………………… 13,390,372 12,118,075 10%
TM …………………………………………………………… 10,557,673 7,489,704 41%
Net Subscriber (or SIM) Additions…………………………… 4,384,224 4,657,854 -6%
Globe Postpaid . ………………………………………………… 43,958 65,916 -33%
Prepaid .…………………………………………………………… 4,340,266 4,591,938 -5%
Globe Prepaid ……………………………………………… 1,272,297 1,999,178 -36%
TM …………………………………………………………… 3,067,969 2,592,760 18%
Average Revenue Per Subscriber (ARPU)
Gross ARPU
Globe Postpaid . ………………………………………………… 2,031 2,150 -6%
Prepaid
Globe Prepaid ………………………………………………… 279 331 -16%
TM …………………………………………………………… 135 199 -32%
Net ARPU
Globe Postpaid . ………………………………………………… 1,440 1,588 -9%
Prepaid
Globe Prepaid ………………………………………………… 208 244 -15%
TM …………………………………………………………… 103 148 -30%
Subscriber Acquisition Cost (SAC)
Globe Postpaid . ………………………………………………… 6,312 5,863 8%
Prepaid
Globe Prepaid ………………………………………………… 41 71 -42%
TM …………………………………………………………… 34 87 -61%
Average Monthly Churn Rate (%)
Globe Postpaid . ………………………………………………… 1.70% 1.51%
Prepaid
Globe Prepaid ………………………………………………… 5.72% 4.57%
TM …………………………………………………………… 6.73% 5.58%
SEC Form 17A 2009 78

Globe’s cumulative wireless subscriber base grew 22% year on year to 24.7 million from 20.3 million in
2007 driven by aggressive acquisition drives and effective marketing and retention campaigns. Total
wireless gross additions for the year were higher by 37% at 20.6 million from the 15.0 million acquired in
2007. However, cumulative net additions lagged by 6% compared to the previous year due to higher
churn. TM continued to lead in subscriber growth, accounting for 70% of full year net additions as a result
of efforts to re-invigorate the brand through localized sales and advertising efforts in the rural areas. TM
now accounts for 43% of total wireless subscribers from 37% in 2007.
The succeeding sections cover the key segments and brands of the wireless business – Globe Postpaid,
Globe Prepaid and TM.
Globe Postpaid
Our postpaid segment comprises about 3% of our total subscriber base. Total postpaid gross and net
additions on a year on year basis closed at 193,375 and 43,958, respectively compared to the 188,434
and 65,916 registered for the same period last year. Cumulative subscribers as of the end of the period
stood at 753,775, growing 6% from 709,817 the previous year due to innovative service offerings.
During the year Globe introduced various innovative group and individual postpaid plans targeted at
different segments of the market. The Load Allowance Plan is a group plan that allows a postpaid
subscriber to have a maximum of four extension plans with fixed monthly reloads at set dates within the
month. The plans come with free handsets and are available in P250, P500, P800, P1000 and P1500
plan variants. Meanwhile, the Phone Fanatics promo offers subscribers a group plan comprising of a G-
Text (P500 MSF) plan and two P250 extension plans which comes with three new handsets for only
P1,000.
For the tech-savvy subscribers in the ABC segments, Globe offered the Apple iPhone 3G handsets
with new iPhone 3G postpaid plans ranging from Plan 1599 to Plan 4999 customized to include local
mobile internet hours and free wi-fi access, all at affordable payment terms. For subscribers with unique
calling and texting needs, Globe also launched its Time Plans in P1000 and P2000 variants which
features unlimited intra-network texting and lower call rates at night time and during weekends, as well as
discounted on and off-net text rates. Meanwhile, for subscribers who require both wireless and wireline
connectivity, Globe pioneered its PowerBundle Plans which offer a wireless postpaid plan packaged with
landline and broadband services.
Our postpaid business registered gross and net ARPUs of P2,031 and P1,440, lower than last year’s
P2,150 and P1,588 on account of lower average voice usage offset by higher take up of data services
resulting from increased browsing activities. IDD voice revenues were also affected by the impact of the
stronger peso. As discussed in greater detail in the International Long Distance (ILD) Services section,
the Company’s total IDD voice traffic was up 10% compared to the previous year and despite the
increasing availability of lower-priced IDD alternatives such as VoIP and instant messaging. However,
IDD revenues were up by a smaller 4% compared to 2007 given the relative strength of the peso.
Postpaid SAC increased 8% year on year to P6,312 from P5,863 due to increased handset subsidies for
new postpaid offers, as well as higher advertising and promotion charges to counter aggressive
acquisition offers by our competitors.
Prepaid
Our prepaid segment, which includes the Globe Prepaid and TM brands, comprised 97% of our total
subscriber base.
With affordable and superior product offers and strengthened regional sales programs, our consolidated
prepaid subscribers increased year on year by 22% from 19.6 million to 23.9 million.
SEC Form 17A 2009 79

A prepaid subscriber is recognized upon the activation and use of a new SIM card. The subscriber is
provided with 60 days (first expiry) to utilize the preloaded SMS value. If the subscriber does not reload
prepaid credits within the first expiry period, the subscriber retains the use of the wireless number but is
only entitled to receive incoming voice calls and text messages for another 120 days (second expiry).
However, if the subscriber does not reload prepaid credits within the second expiry period, the account is
permanently disconnected and considered part of churn. The first expiry periods of reloads vary
depending on the denominations, ranging from 1 day for P10 to 60 days for P300 to P500 reloads. The
second expiry is 120 days from the date of the first expiry. The first expiry is reset based on the longest
expiry period among current and previous reloads. Under this policy, subscribers are included in the
subscriber count until churned.
The succeeding sections discuss the performance of the Globe Prepaid and TM brands in more detail.
Globe Prepaid
Globe Prepaid currently accounts for 54% of the total wireless SIM base compared to 60% in 2007. The
brand posted a 10% year on year improvement in its SIM base to reach 13.4 million SIMs from 12.1
million in 2007. Gross additions of 10.0 million were 24% higher compared to the previous year’s 8.1
million. However, higher churn resulting from intense market competition brought net additions down by
36% to 1.3 million against last year’s 2.0 million.
Year on year, gross and net ARPUs for Globe Prepaid declined by 16% and 15%, respectively, as
revenues continue to be impacted by multi-SIM usage, lower activity levels, as well as the impact of
stronger peso on dollar-linked ILD revenues.
SAC continued to decline by 42% year on year from P71 to P41 due to more focused spending on
advertising and promotions. For 2008, advertising and promotions contributed most of the subscriber
acquisition costs for the period. For 2007, subsidies accounted for 4% while advertising and promotions
and commissions comprised 90% and 6%, respectively.
TM
Our mass market brand TM continued to lead in subscriber growth, expanding its SIM base by 41% to
close the period with 10.6 million SIMs from the 7.5 million of 2007. TM’s gross additions of 10.4 million,
comprising 50% of total wireless acquisitions, were 54% higher than last year’s level of 6.7 million as a
result of its efforts to re-energize the brand and intensified regional acquisition campaigns. Net additions
were also higher by 18% at 3.1 million from the 2.6 million posted in 2007. TM comprised 70% of total
net additions for the year.
Churn rates are higher compared to 2007 with the more challenging competitive and consumer
environment, and with the increasing propensity of a certain segment of prepaid subscribers, particularly
at the mass market levels, to use their SIMs for a short period of time only. Churn rates thus settled at a
higher 6.73% compared to 5.58% in 2007. The churn rates for the third and fourth quarters of the year
were also impacted by the network disruptions that our Visayas and Mindanao subscribers experienced
in the early part of 2008. .
TM’s net ARPU decreased by 30% year on year to P103 with our continued expansion into the lowerincome
segments and as a result of increasing incidence of multi-SIM usage.
Year on year TM’s SAC decreased by 61% to P34 from P87 due to significant reductions in SIM-costs
during the current period. For 2008, advertising and promotions made up the bulk of SAC at 58%
followed by handset and SIM subsidies at 41% with the balance going to commissions. In 2007,
advertising and promotions accounted for 67%, subsidies made up 31% and the balance of 2% were
brought about by commissions.
SEC Form 17A 2009 80

GCash
GCash continues to establish its presence in the mobile commerce industry. GCash’s initial thrust
towards money-transfers, purchase of goods and services from retail outlets, and sending and receiving
domestic and international remittances has spurred alliances in the field of mobile commerce.
Today, GCash allows Globe and TM subscribers to pay or transact for the following using their mobile
phone:
• domestic and international remittances
• utility bills
• interest and amortization of loans
• insurance premiums
• donations to various institutions and organizations
• sales commissions and payroll disbursements
• school tuition fees
• micro tax payments and business registration
• electronic loads and pins
• online purchases
• airline tickets
In addition to the above transactions, GCash is also used as a wholesale payment facility. Net registered
GCash user base at the end of 2008 totaled 1.4 million.
GXI continues to align with local and international institutions to expand opportunities for the brand and its
platform while increasing pervasiveness and usage for GCash. During the year, GXI partnered with
Western Union (WU) to offer the Globe/WU Mobile Money Transfer program that allows OFWs in Hawaii
to send money directly to Globe and TM subscribers in the Philippines at lower transfer fees compared to
pure cash transactions.
The Company, together with the Bank of the Philippine Islands and Ayala Corporation, is also taking the
lead in launching the country’s first mobile microfinance bank. The three partners signed a Memorandum
of Agreement (MOA) in the second half of 2008 towards forming a joint venture that would provide a wide
array of financial products and services to rural and low-income sectors. GCash’s tested platform and
mobile technology will be utilized to expand the reach and lower the cost of delivering micro-banking
services. The venture will initially focus on wholesale lending to micro-finance institutions such as NGOs
(non-government organizations) and thrift banks, but will eventually expand into the retail segment,
providing credit and financial services to the entrepreneurial poor.
On February 11, 2009 GXI announced that it had partnered with the popular social networking site
Friendster to launch money transfer capability on its website. GXI’s role will include developing and
hosting an application that enables Friendster members to initiate GCash transfers in real-time. The
service was also launched in February 2009, making Globe the first mobile company to introduce money
transfer functionalities through the Friendster website. Friendster is estimated to have a membership of 3
million in the Philippines.
SEC Form 17A 2009 81

WIRELINE BUSINESS
For the Year Ended
31-Dec 31-Dec YoY
2008 2007 Change (%)
Service
Voice 1 ….…………………………………………………………… 3,088 3,504 -12%
Broadband 2 …………………………………………………………… 1,692 1,222 38%
Data 3 ..………………………………………………………………… 2,479 2,073 20%
Wireline Net Service Revenues……............................................... 7,259 6,799 7%
_________________________________________________________
1
Wireline voice net service revenues consist of the following:
a) Monthly service fees including CERA of voice-only subscriptions;
b) Revenues from local, international and national long distance calls made by postpaid, prepaid wireline subscribers and
payphone customers, as well as broadband customers who have subscribed to data packages bundled with a voice
service. Revenues are net of prepaid and payphone call card discounts;
c) Revenues from inbound local, international and national long distance calls from other carriers terminating on our
network;
d) Revenues from additional landline features such as caller ID, call waiting, call forwarding, multi-calling, voice mail, duplex
and hotline numbers and other value-added features; and
e) Installation charges and other one-time fees associated with the establishment of the service.
Revenues from (a) and (c) are reduced by any interconnection or settlement payments to domestic and international
carriers.
2
Broadband net service revenues consist of the following:
a) Monthly service fees of broadband data only and bundled voice and data subscriptions;
b) Value-added services such as games; and
c) Installation charges and other one-time fees associated with the service.
3
Wireline data net service revenues consist of the following:
a) Monthly service fees from international and domestic leased lines;
b) Other wholesale transport services;
c) Revenues from value-added services; and
d) One-time connection charges associated with the establishment of service.
Revenues from (a) to (c) are net of any interconnection or settlement payments to other carriers.
SEC Form 17A 2009 82

Wireline Voice
31 Dec
2008
Globe Group
For the Year Ended
31 Dec
2007
YoY
Change
(%)
Cumulative Voice Subscribers – Net (End of period) 1 …………… 422,859 420,182 1%
Average Revenue Per Subscriber (ARPU)
Gross ARPU…………………………………………………………… 730 834 -12%
Net ARPU……………………………………………………………… 612 713 -14%
Average Monthly Churn Rate ..……………………………………… 2.19% 1.50%
______________________________________________________________________
1
Starting from the first quarter of 2008, broadband revenues and subscribers are shown separately from wireline voice revenues
and subscribers. Wireline voice gross and net ARPUs for prior periods have been adjusted to exclude broadband-related MSF and
revenues to ensure comparability. For more details, please see notes related to wireline voice net service revenues shown on the
table in the preceding page.
Wireline voice revenues declined by 12% year on year from P3,504 million to P3,088 million as a result of
declining ARPUs given the continued shift of traffic from fixed to mobile, the impact of the strong peso on
ILD revenues as well as increasing competition particularly from fixed wireless service operators.
Cumulative voice subscribers increased slightly to 422,859 from the 420,182 registered in 2007 as a
result of improved take up of our bundled packages. Meanwhile, higher churn rates of 2.19% during the
year compared to 1.50% the previous year resulted mainly from terminations in our CDMA voice service.
To drive acquisition, Globe continued its Globe Super Sulit Internet and Landline service which offers a
free landline and a 30-hour internet plan, all for a monthly fee of only P710. Internet usage in excess of
the 30-hour monthly limit is charged at P10 per hour. Globe also extended its Wireless Landline service
offer which entitles subscribers to free Globelines to Globelines local calls, as well as other various call
features and SMS capabilities for a fixed monthly fee of only P599.
Broadband
For the Year Ended
31 Dec 31 Dec YoY
2008 2007 Change (%)
Cumulative Broadband Subscribers 1
Fixed Wireless………………………………………………… 26,073 19,050 37%
Wired…………………………………………………………… 149,614 100,970 48%
Fully Mobile Broadband……………………………………… 58,724 7,652 667%
Total (end of period)……………………………………………… 234,411 127,672 84%
1
Revenues from mobile internet browsing as well as voice, SMS and VAS usage from our mobile broadband service (marketed
under the Visibility brand) are currently reflected under wireless revenues. Subscribers from previous periods have been restated for
comparability.
The broadband business posted significant year on year growth with revenues increasing 38% from
P1,222 million to P1,692 million as a result of a 46% growth in its fixed wireless and DSL subscriber
base. If we include the 58,724 subscribers to our fully mobile broadband service (currently marketed
under the brand name Visibility), cumulative broadband subscribers would reach 234,411 up 84% year on
year.
SEC Form 17A 2009 83

The robust growth in our broadband subscriber base is a result of our aggressive acquisition campaigns,
affordable pricing offers and product bundles, as well as our continued efforts to optimize and improve the
robustness of our broadband network to enhance over-all service quality. For our broadband-on-the-go
service Visibility, the strong uptake in subscribers was driven by the introduction of a prepaid variant in
the third quarter, and as we lowered customer entry costs by reducing the price of the modem from
P4,500 to P2,500.
During the year we expanded our broadband offerings with differentiated and value-priced products using
wired and wireless delivery options. Among the wired options offered was the Globe Broadband Plan 256
kbps Wired Internet service, an entry level broadband subscription plan that provides 30 hours of internet
access at speeds of up to 256 kbps for only P595 a month. Excess hours beyond the fixed limit can be
charged at P0.16 per-minute or P10 per-hour. The service can also be used with a WorldPass account
through a WiZ hotspot or dial-up. For small home and office businesses we customized an SME PC
Bundle and packaged a Sulit Computer Bundle for first time home broadband users. The SME PC Bundle
includes a Globe Broadband connection, a landline, and multiple PC options at speeds starting from 384
kbps up to 3 mbps on five different subscription plans starting at P1,995. New dial-up or transient internet
users can also apply for the Sulit Computer Bundle that includes a 384 kbps broadband connection,
landline and a laptop for only P1,495 a month.
During the second quarter, the Company introduced a prepaid version of our nomadic broadband service
Visibility. Prepaid Visibility kits, priced at P2,500 from P4,500 previously, allow subscribers to easily
connect to the internet at 3G/HSDPA, GPRS, or EDGE speeds using a USB modem. The prepaid kit
comes with 1.5 hours of free mobile internet with usage in excess of the free hours priced at an affordable
P5 for every 15 minutes. Visibility SIMs are also voice, SMS, international roaming and VAS capable.
Reloads can be made through our usual channels including over-the-air reload facility through any of our
Globe AutoLoad Max retailers.
Wireline Data
Service Revenues (Php Mn)
Globe Group
For the Year Ended
31 Dec
2008
31 Dec
2007
YoY
Change
(%)
Wireline Data
International …..…………………………………………………… 720 647 11%
Domestic …… ……………………………………………………… 1,131 921 23%
Others 1 …………………………………………………………… 628 505 24%
Total Wireline Data Service Revenues…………………………………… 2,479 2,073 20%
____________________________________________________________________________________________________
1
Includes revenues from value-added services and corporate internet services.
Our wireline data revenues rose by 20% to P2,479 million from P2,073 million in 2007 due to improved
domestic leased line revenues from an expanded circuit base and higher corporate internet revenues.
These gains have been achieved despite the appreciation of the peso during the current year which
brought on lower peso revenues from US$-linked subscriber billings.
SEC Form 17A 2009 84

OTHER GLOBE GROUP REVENUES
International Long Distance (ILD) Services
Globe Group
For the Year Ended
YoY
ILD Revenues and Minutes
31 Dec 31 Dec
Change
2008 2007
(%)
Total ILD Revenues (Php Mn) 1 …………………………………………………… 14,960 14,434 4%
Average Exchange rates for the period (Php to US$1)………………………… 43.950 46.790 -6%
Total ILD Revenues as a percentage of net service revenues………………… 24% 23%
Total ILD Minutes (in million minutes) 2 ………………………………………… 2,466 2,235 10%
Inbound………………………………………………………………………… 2,130 1,960 9%
Outbound.………………………………………………………………………… 336 275 22%
ILD Inbound / Outbound Ratio (x) …………………………………………… 6.34 7.13
_________________________________________________________________________________________________________________________________
1
Prior period ILD revenues have been restated for comparability.
2
ILD minutes originating from and terminating to Globe and Innove networks. Prior period minutes have been restated for
comparability.
Both Globe and Innove offer ILD voice services which cover international call services between the
Philippines to more than 200 destinations with over 500 roaming partners. Our service generates
revenues from both inbound and outbound international call traffic with pricing based on agreed
international termination rates for inbound traffic revenues and NTC-approved ILD rates for outbound
traffic revenues.
On a consolidated basis, ILD voice revenues from the wireless and wireline businesses improved by 4%
to P=14,960 million compared to last year’s P=14,434 million despite the 6% year on year appreciation of
the peso and the related collection rates. Continued improved penetration of ILD inbound and outbound
promotions resulted in a 10% year on year increase in total ILD minutes.
Promotions to further grow the Company’s revenues from international services involve discounted call
rates, sustained marketing efforts for OFW SIM packs, improved accessibility to popular prepaid credit
load denominations, and OFW usage campaigns.
Single SIM OFW SIM packs have been made available in selected outlets in targeted OFW destinations.
The OFW Family SIM packs include an OFW SIM that has been pre-activated with international roaming
capability and carries a zero daily maintaining balance feature for as long as it continues to be linked to a
local SIM. For non-OFW SIMs, and to ensure that our subscribers enjoy continuous roaming service, the
minimum maintaining balance has been reduced to a promotional rate of P50 from P100. Meanwhile,
roaming coverage has been enhanced to include On-the-Ship, Airline Roaming and Satellite roaming
services to its subscribers.
To promote international outbound usage, Globe sustained its per-second IDD offerings and launched
innovative service offers. Under our IDD Sakto Call promotion, Globe and TM subscribers can call 15
popular destinations including the U.S., Hawaii, Saudi Arabia, Singapore, South Korea, Malaysia, and
other popular destinations for only P0.15 per second. During the third quarter of 2008, Globe offered its
IDD sampler for Globe Prepaid subscribers which allowed a free 2-minute IDD call to popular OFW
destinations such as the United States, Middle East, and Japan after a subscriber buys a Globe Prepaid
SIM and loads at least P25 of prepaid credits. TM also sustained its P8 per minute rate to US, Canada,
Hawaii, Saudi Arabia, and Japan, available anytime to its subscribers.
SEC Form 17A 2009 85

In 2008, Globe launched its TipIDD card – a prepaid card which allows its wireless subscribers to call
friends and families overseas at discounted call rates. The TipIDD card is available in P50 denomination
at SM Malls and P100 denominations in major dealers nationwide. A lower denomination P25 card was
also introduced towards the latter part of 2008 in time for the Christmas holiday season.
Interconnection
Domestically, the Globe Group pays interconnection access charges to other carriers for calls originating
from its network terminating to other carriers’ networks, and hauling charges for calls that pass through
Globe’s network terminating in another network.
Internationally, the Globe Group also incurs payouts for outbound international calls which are based on a
negotiated price per minute and collects termination fees from foreign carriers for calls terminating in our
network. The Globe Group also collects interconnection access charges from local carriers whose calls
and SMS terminate in Globe Group’s network.
SEC Form 17A 2009 86

GROUP OPERATING EXPENSES
In 2008, the Globe Group’s total costs and expenses, including depreciation, increased by 6% to
P=42,524 million from P=40,178 million in 2007, mainly driven by network-related expenses, staff costs, and
services.
Costs and Expenses (Php Mn)
Globe Group
For the Year Ended
31 Dec
2008
31 Dec
2007
YoY
Change
(%)
Cost of sales…………………………………………………………………… 3,117 3,323 -6%
Less: Non-service revenues…………………………………………………… 1,924 2,300 -16%
Subsidy 1,193 1,023 17%
Selling, Advertising and Promotions ……………………………………… 4,494 4,469 1%
Staff Costs ………………………………………………………………………. 5,077 4,536 12%
Utilities, Supplies & Other Administrative Expenses……………………… 2,710 2,243 21%
Rent………………………………………………………………………………. 2,883 2,570 12%
Repairs and Maintenance……………………………………………………… 2,495 2,205 13%
Provisions ………………… ………………………………………………………… 1,237 1,012 22%
Services and Others…………………………………………………………… 5,407 4,931 10%
Operating Expenses………………………………………………………… 24,303 21,966 11%
Depreciation and Amortization ……………….…………………………… 17,028 17,189 -1%
Total Costs and Expenses…………………………………………………… 42,524 40,178 6%
Subsidy
Year on year, total subsidy increased by 17% to P1,193 million from P1,023 million in 2007 with higher
gross wireless acquisitions in 2008 and the attendant SIM and handset subsidies provided to new
subscribers. Gross acquisitions increased by 37% to 20.6 million from 15.0 million year on year with
prepaid subscribers accounting for bulk of the new subscribers.
Staff Costs
Staff costs, which accounted for 21% of the total operating expenses, increased by 12% to P5,077 million
from P4,536 million in 2007 due to (1) a 6% increase in headcount from 5,511 to 5,850, (2) full year
impact of structural adjustments implemented in the second half of 2007 to align rates to current market
levels and (3) increased cost of employee benefits given the higher annual salary base.
Selling, Advertising and Promotions
Total marketing expenses, which comprised 18% of total operating expenses, increased slightly by 1% to
P4,494 million due to increased acquisition, retention and loyalty programs to help drive acquisitions,
improve retention, and stimulate usage.
As a percentage of total service revenues, total marketing expenses and subsidy remained at the 9%
level for 2008, same as 2007 spending.
Rent
Rent expenses accounted for 12% of the total operating expenses. Rent posted a 12% year on year
increase of P313 million due mainly to higher leases of international wireline cable facilities arising from
SEC Form 17A 2009 87

activation of new links and increased facility rentals as Globe continued to expand its wireless and
broadband networks.
Utilities, Supplies and Other Administrative Expenses
Utilities, Supplies and Other Administrative expenses accounted for 11% of total operating expenses and
increased by 21% year on year due to higher electricity and fuel consumption arising from an expanded
cellular and broadband network and due to higher power rates.
Repairs and Maintenance
Repairs and Maintenance expenses accounted for 10% of total operating expenses and increased by
13% year on year due mainly to additional technical support and maintenance costs for the Globe
Group’s expanded network facilities and information systems infrastructure.
Provisions
This account includes provisions related to trade, non-trade and traffic receivables and inventory. Overall,
provisions posted a net increase of P225 million or 22% from P1,012 million in 2007 to P1,237 million by
the end of 2008. However, as a percentage of service revenues, provisions remained within 2%.
Services and Others
Services and Others, which accounted for 22% of total operating expenses, increased by 10% or P476
million from P4,931 million in 2007 to P5,407 million in 2008 as a result of costs related to servicing an
expanded broadband and cellular subscriber base and network. These include costs for various
outsourced administrative and operational functions such as security for our network facilities, freight and
logistics costs, third party agents for subscriber line installation, call center and customer service facilities.
Depreciation and Amortization
Depreciation and amortization expenses declined by 1% year on year to P17,028 million from P17,189
million in 2007 as a result of certain assets being fully depreciated as of the end of 2007 as well as the
continuing review of the assigned EUL (estimated useful life) of various telecommunications equipment
and infrastructure which resulted in longer useful lives for certain building and network infrastructure.
Depreciation is computed using the straight-line method over the EUL of the assets, where the weighted
EUL of all depreciable assets is 10.00 years.
SEC Form 17A 2009 88

Other Income Statement Items
Other income statement items include net financing costs, interest income, and net property and
equipment related charges as shown below:
Globe Group
For the Year Ended
31-Dec 31-Dec YoY
Non-operating Income/Expense (Php Mn) 2008 2007 Change (%)
Financing Costs – net
Interest Expense……………………………………………………… (2,256) (2,996) -25%
Gain (Loss) on derivative instruments – net………………………… 2 (802) -100%
Swap costs and other financing costs……………………………… 13 (1,427) -101%
Foreign Exchange (loss) – net……………………………………… (759) - -
(3,000) (5,225) -43%
Foreign Exchange gain - net………………………………………… - 1,431 -100%
Interest Income ………………………………………………………… 420 728 -42%
Others – net……………………………………………………………… 56 85 -34%
Total Other Expenses…………………………………………………… (2,524) (2,981) -15%
During the year, the Globe Group registered a 15% year on year decrease of P=457 million in total Other
Expenses to close at P2,524 million. The higher financing costs in 2007 was brought about by the early
redemption of the US$294 million Senior Notes (originally due in 2012) which brought about nonrecurring
bond redemption charges (included under interest expense, swap cost and other financing
costs) of P1,302 million. This included P687 million in bond redemption costs and P615 million in noncash
expenses representing net reversal of MTM values related to the bond call option, net of
accelerated amortization of the bond premium. Globe fully redeemed its 2012 Senior Notes on 16 April
2007. Consequently, the mark-to-market losses of P264 million on the Company’s cross currency swaps
entered into to hedge the Senior Notes and deferred under “Cumulative translation adjustment” account
was charged to profit and loss in April 2007.
For 2008, the Philippine peso depreciated by 15% from P41.411 to P47.655 compared to the 16%
appreciation the previous year from P49.045 to P41.411. As a result, the Company registered P=759
million net foreign exchange loss for the period compared to last year’s P=1,431 million gain. (See related
discussion on derivative instruments and swap costs in the Foreign Exchange and Interest Rate
Exposure section)
Interest expense posted a 25% decline of P740 million from P2,996 million to P2,256 million for 2008.
The decrease is mainly due to the lower total debt balance after the repayment of loans to foreign and
local banks during the period, coupled with decrease in peso and US$ interest rates. Interest income
likewise decreased by 42% from P728 million in 2007 to P420 million in 2008 due to lower peso and US$
interest rates during the period, as well as lower levels of cash.
The consolidated provisions for current and deferred income tax for the Globe Group registered a 3%
decline of P203 million from P6,773 million to P6,570 million in 2008. Consolidated effective income tax
rates for the period registered at 37% after a review of our realizable deferred tax assets. Excluding the
one-time revaluation adjustment, year to date effective tax rate would be 35% while consolidated effective
tax rate for 2007 was 34%.
The Globe Group registered net income after tax of P=11,276 million or 15% lower to last year’s P=13,277
million. Excluding bond redemption costs, foreign exchange and mark-to-market gains and losses, core
SEC Form 17A 2009 89

earnings would be P=11,765 million, a 14% decline from last year’s P=13,725 million. (See related
discussion in the Operating Expenses section)
Accordingly, consolidated basic earnings per common share were P84.75 and P100.07 and consolidated
diluted earnings per common share were P84.61 and P99.58 for the years 2008 and 2007, respectively.
Liquidity and Capital Resources
Globe Group
31-Dec 31-Dec YoY
2008 2007 Change (%)
Balance Sheet Data
Total Assets ………………………………………………………… 119,743 116,621 3%
Total Debt …………………………………………………………… 40,588 30,373 34%
Total Stockholders’ Equity ………………………………………… 50,092 55,417 -10%
Financial Ratios (x)
Total Debt to EBITDA ……………………………………………… 1.09 0.76
Debt Service Coverage…………………………………………… 4.74 1.62
Interest Cover (Gross) …………………………………………… 13.74 13.08
Debt to Equity (Gross) …………………………………………… 0.81 0.55
Debt to Equity (Net) ……………………………………………… 0.69 0.38
Total Debt to Total Capitalization (Book) ……………………… 0.45 0.35
Total Debt to Total Capitalization (Market) ...…………………… 0.29 0.13
_____________________________________________________________________________________________
1
Net debt is calculated by subtracting cash, cash equivalents and short term investments from total debt.
Globe Group’s consolidated assets as of 2008 amounted to P=119,743 million compared to P=116,621
million in 2007.
Consolidated cash, cash equivalents and short term investments (including investments in assets
available for sale and held to maturity investments) was at P=5,782 million at the end of the period
compared to last year’s P9,041 million. Gross debt to equity ratio was at 0.81:1 on a consolidated basis
and is well within the 2:1 debt to equity limit dictated by Globe’s debt covenants. Meanwhile net debt to
equity ratio was at 0.69:1 as of the end of 2008 and 0.38:1 in 2007.
The financial tests under Globe’s loan agreements include compliance with the following ratios:
• Total debt to equity not exceeding 2:1;
• Total debt to EBITDA not exceeding 3:1;
• Debt service coverage 1 exceeding 1.3 times; and
• Secured debt ratio 2 not exceeding 0.2 times.
As of 31 December 2008 Globe is well within the ratios prescribed under its loan agreements.
1
Debt service coverage ratio is defined as the ratio of EBITDA to required debt service, where debt service includes subordinated
debt but excludes shareholder loans.
2
Secured debt ratio is defined as the ratio of the total amount for the period of all present consolidated obligations for payment,
whether actual or contingent which are secured by Permitted Security Interest as defined in the loan agreement to the total amount
of consolidated debt. Globe has no secured debt as of 31 December2008.
SEC Form 17A 2009 90

Consolidated Net Cash Flows
(Php Mn)
31 Dec
2008
Globe Group
31 Dec
2007
YoY
change (%)
Net Cash from Operating Activities……………………………… 23,516 32,269 -27%
Net Cash from Investing Activities……………………………… (17,560) (9,765) 80%
Net Cash from Financing Activities……………………………… (6,365) (23,818) -73%
Net cash flow from operations decreased by P8,753 million to P23,516 million with lower income,
increased payments for various traffic and other trade liabilities and higher income taxes.
Consolidated net cash used in investing activities amounted to P=17,560 million compared to last year’s P=
9,765 million due to increased acquisition of equipment, software and licenses.
Globe Group
For the Year Ended (Php Mn)
31 Dec
2008
31 Dec
2007
YoY
change
(%)
Capital Expenditures (Cash) ……………………………………………………. 19,417 14,116 38%
Increase (decrease) in Liabilities related to Acquisition of PPE & capitalized ARO 937 (194) -583%
Total Capital Expenditures 1 …………………………………………………… 20,354 13,922 46%
Total Capital Expenditures / Service Revenues (%)…………………… 32% 22%
1.
Consolidated capital expenditures include property and equipment, intangibles and capitalized borrowing costs acquired as of
report date regardless of whether payment has been made or not.
For the period ended, consolidated capital expenditures of P=20,354 million in 2008 was 46% higher than
last year’s level of P13,922 million. Capital investments for 2008 include sustained investments in
Globe’s wired and wireless broadband networks, capex to support our core wireless business, as well as
one-time investments related to the Company’s participation in the TGN-Intra Asia international
submarine cable facility where Globe is the exclusive landing party in the Philippines.
For 2009, we have earmarked approximately US$350 to 400 million in capital investments. Of this total,
about US$150 million are to expand the coverage and capacity of our broadband network for the
residential and consumer markets. Another US$130 million in capex are to grow and sustain our mobile
business, including amounts needed to ensure the continued robustness of the network. The 2009
programmed capex also include US$25 million for Globe’s corporate and enterprise data business which
delivered double-digit growth in 2008, as well as US$25 million allocation for additional investments in
international cable facilities.
Consolidated net cash used in financing amounted to P=6,365 million in 2008 73% lower than the P23,818
million the previous year as 2007 included the redemption of our 2012 Senior Notes. Consolidated total
debt increased by 34% from P=30,373 million to P=40,588 million. Loan repayments of Globe for the period
amounted to P=7,916 million or a 64% decrease compared to the P=22,108 million paid in 2007 due mainly
to the redemption of Globe’s 2012 Senior Notes.
Out of total debt of US$853 million, 12% are denominated in US$ out of which 2% have been hedged to
pesos. As a result, the amount of US$ debt swapped into pesos and peso-denominated debt accounts for
approximately 88% of consolidated loans as of the end of 2008.
SEC Form 17A 2009 91

Below is the schedule of debt maturities for Globe for the years stated below based on total outstanding
debt as of 31 December 2008:
Year Due Principal *
(US$ Mn)
2009 …………………………………………………………………………………………………………… 247
2010……………………………………………………………………………………………………………. 85
2011……………………………………………………………………………………………………………. 112
2012 through 2013 ………………………………………………………………………………………… 409
Total……………………………………………………………………………………………………………. 853
* Principal amount before debt issuance costs.
On 12 January 2007, the Company announced its plans to redeem its US$294 million 9.75% Senior
Notes (the Senior Notes) due 2012 in April 2007 after receiving the Bangko Sentral ng Pilipinas (BSP)
approval. On 23 February 2007, Globe Telecom exercised its option to call its Senior Notes via an
irrevocable notice issued to its Agent, the Bank of New York. On 16 April 2007, Globe fully settled and
redeemed its Senior Notes at 104.875% of its face value.
During the year, the Company availed of short term loans amounting to P2.6 billion from Metrobank,
Allied Banking Corporation and Banco de Oro. We also availed of a P2.5 billion bilateral loan facility with
Metrobank and a P5 billion Fixed Rate Notes Facility Agreement with Standard Chartered Bank as Issue
Manager and Underwriter. The P5 billion Fixed Rate Notes were issued on 11 April 2008 with maturities
of 3 years and 5 years. On 23 July 2008, we signed a P4 billion 5-year floating-rate term loan facility with
Banco de Oro Unibank as Lender and BDO Capital and Investment Corporation as arranger.
In its 7 November 2008 meeting, the Board of Directors likewise approved management’s proposal to
undertake a P10 billion Retail Bond program to enable it to diversify its funding sources in 2009. The
Retail Bond program is expected to provide the Company with the option to tap the retail market over the
next 12 months, side by side with its other traditional funding sources. On 10 February 2009 Globe
announced that it had signed an underwriting agreement with BPI Capital Corporation, BDO Capital
Corporation and First Metro Investment for a P3 billion Corporate bond issue. Proceeds of the bond will
be used to fund the Company’s capital expenditures program.
Stockholders’ equity for the current period was P50,092 million as of end of 2008, an 10% decrease from
the P55,417 million in 2007 due mainly to reduced retained earnings as a result of higher dividends.
As of 31 December 2008, Globe’s capital stock consists of:
Preferred Shares
Preferred stock Series “A” at a par value of P5 per share of which 158 million shares are
outstanding out of a total authorized of 250 million shares.
Preferred stock “Series A” has the following features:
a. Convertible to one common share after 10 years from issue date at a price which shall not be
less than the prevailing market price of the common stock less the par value of the preferred
shares;
b. Cumulative and non-participating;
c. Floating rate dividend;
d. Issued at par;
e. Voting rights;
f. Globe has the right to redeem the preferred shares at par plus accrued dividends at any time
after 5 years from date of issuance; and
g. Preferences as to dividend in the event of liquidation.
SEC Form 17A 2009 92

The dividends for preferred shares are declared upon the sole discretion of the Globe Telecom
BOD. As of December 31, 2009, the Globe Group has no dividends in arrears to its preferred
stockholders.
On December 11, 2006, the BOD approved the declaration of cash dividends to preferred
shareholders “Series A” as of record date December 31, 2006 amounting to P64.67 million. On
December 7, 2007, the BOD approved the declaration of cash dividends to preferred
shareholders “Series A” as of record date December 18, 2007 amounting to P49.45 million. As of
31 December 2008, the Globe Group has no dividends in arrears to its preferred stockholders.
Common Shares
Common shares at par value of P50 per share of which 132 million are issued and outstanding
out of a total authorized of 180 million shares.
Cash Dividends
On January 29, 2004, the BOD of Globe Telecom approved a dividend policy to declare cash
dividends to its common stockholders on a regular basis as may be determined by the BOD from
time to time. The BOD had set out a dividend payout rate of approximately 50% of prior year’s
net income payable semi-annually in March and September of each year. On July 31, 2006, the
BOD of Globe Telecom amended the dividend policy increasing the dividend payout rate to 75%
of prior year’s net income in 2006. This policy is reviewed annually, taking into account Globe
Telecom’s operating results, cash flows, debt covenants, capital expenditure levels and liquidity.
On February 5, 2007, the BOD declared the first semi-annual cash dividend in 2007 of P33 per
common share, an increase of 10% over the previous year’s semi-annual rate. The first semiannual
cash dividend had a record date of February 19, 2007 and was paid on March 15, 2007.
On August 10, 2007, the BOD declared the second semi-annual cash dividend of P33 per
common share with a record date of August 29, 2007 which was paid on September 14, 2007.
On November 6, 2007, the BOD declared a special cash dividend of P50 per common share
based on shareholders on record as of November 20, 2007 while payment was made last
December 17, 2007. This special dividend brought cumulative dividends paid to common
shareholders to P15.3 billion, 132% higher than the P6.6 billion paid in 2006. The special
dividend was in consideration of the strong profitability and operating cash flows and to optimize
Globe’s capital structure.
On February 4, 2008, the BOD approved the declaration of the first semi-annual cash dividend in
2008 of P=4.9 billion (P=37.50 per common share) to common stockholders of record as of
February 18, 2008 payable on March 13, 2008. On August 5, 2008, the BOD approved the
declaration of the second semi-annual cash dividend in 2008 of P4.9 billion (P=37.50 per common
share) to common stockholders of record as of August 21, 2008 and payable on September 15,
2008. Additionally, the BOD declared a special dividend of P50 per share to common
shareholders of record as of August 21, 2008 and payable on September 15, 2008. A total of
P11.6 billion in dividends were paid on September 15, 2008.
On its February 3, 2009 meeting, the BOD approved the declaration of the first semi-annual cash
dividend of P32 per common share payable to shareholders of record as of February 17, 2009. A
total of P4.2 billion in dividends will be paid on March 10, 2009.
Consolidated Return on Average Equity (ROE) registered at the 21% level in 2008 compared to the 24%
in 2007 using net income and based on average equity balances for the year ended.
SEC Form 17A 2009 93

FINANCIAL RISK MANAGEMENT
FOREIGN EXCHANGE EXPOSURE
Foreign exchange risks are managed such that USD inflows from operations (transaction exposures) are
balanced or offset by the net USD liability position of the company (translation exposures). Globe
Group’s objective is to maintain a position which results in, as close as possible, a neutral effect to the
P&L relative to movements in the foreign exchange market.
Transaction exposures
Globe has natural net US$ inflows arising from its operations. Consolidated foreign currencylinked
revenues 2 were at 29% and 26% of total service revenues for the periods ended 31
December 2008 and 2007, respectively. Foreign currency-linked revenues comprised 28% of net
wireless revenues and 33% of net wireline revenues. In contrast, our foreign-currency linked
expenses were at the 13% level (as a percentage of total operating expenses) for the periods
ended 31 December 2008 and 2007, respectively.
The US$ flows are as follows:
US$ and US$ Linked Revenues
US$ Operating Expenses
US$ Net Interest Expense
December 2008
P18.2 billion
P3.2 billion
P0.2 billion
Due to these net US$ inflows a depreciation of the Peso has a positive impact on Globe’s Peso
EBITDA. To hedge against a peso appreciation, US$144.50 million of January to December
2008 revenues were hedged via forward contracts at an average forward rate of P43.664.
As of end-December, the Company has remaining on its books US$22 million of forward sales of
US$ at an average rate of P44.54 to hedge anticipated US$ inflows for 2009.
As of end-2008, US$10 million of the outstanding forward contracts are designated as cashflow
hedges while the balances are not designated as hedges (see Notes 28.3 of the attached Notes
to Financial Statements). For forwards that are designated as hedges, fair values are recognized
in equity until the revenue is recognized in the P&L or the hedging instrument expires. Upon
maturity of the hedge contract, any realized gain or loss on the instrument are booked against the
hedged revenues. For contracts that are not designated as hedges, both the realized and
unrealized gains and losses on the contracts are booked to P&L every reporting period.
Realized losses from these forward contracts as of the end of December amount to P145 million.
The MTM (or unrealized gains/losses) as of end-December amounts to a loss of P18 million.
Since these forwards are economic hedges, there are matching underlying exposures that are
gaining in value.
1 Includes the following revenues:
(1) billed in foreign currency and settled in foreign currency, and
(2) billed in Pesos at rates linked to a foreign currency tariff and settled in Pesos
SEC Form 17A 2009 94

Translation Exposures
Globe also has US$ assets and liabilities which are revalued at market rates every period. These
are as follows:
US$ Assets
US$ Liabilities
Net US$ Liability Position
December 2008
US$109 million
US$194 million
US$85 million
For accounting purposes, at the end of each reporting period, the foreign currency assets and
liabilities are revalued at the current exchange rate. Given the net US$ liability position, a
depreciation of the peso results in a revaluation or forex loss in our P&L. As of December 2008,
the Philippine Peso stood at P47.655 to the US dollar a 15% depreciation versus the year-end
rate of P41.411. Due to this weakening of the Peso, the Globe Group charged a total of P759
million in net foreign exchange losses to current operations for 2008. This compares to the net
foreign exchange gains of P1,431 million in 2007.
Prior to 2004, the company entered into long term currency swap agreements to hedge the
currency exposure on its liabilities. As of end-December, the company has only one such
remaining agreement, with a notional amount of US$2.5 million.
The company also has US$32 million in forward US$ purchase contracts to cover US$ debts,
with maturities until July 2009. The average rate of the forward contracts is at P45.91.
Lastly, the company has US$32 million in forward US$ sales contracts to cover a portion of its
US$ assets. These contracts also extend until July 2009, and have an average forward rate of
P47.12.
The swap and forward contracts are not designated as hedges for accounting purpose (please
refer to Note 28.3 and 28.5 of the attached Notes to Financial Statements). As such, the MTM of
the contracts have flowed through the P&L, and future changes to the MTM of the contracts will
also be charged to P&L every period. A depreciation of the Peso or a widening of the differential
between USD and PHP interest rates would generally result in a net improvement of the MTM of
these forwards and swap contract. The MTM of these outstanding contracts amounts to a gain of
P7.6 million as of end-December.
INTEREST RATE EXPOSURE
Interest rate exposures are managed via targeted levels of fixed versus floating rate debt that are meant
to achieve a balance between cost and volatility. Our policy is to maintain between 44-88% of our peso
debt in fixed rate, and between 31-62% of our US$ debt in fixed rate.
As of end-December, Globe has a total of US$80 million in interest rate swap contracts that were entered
into to achieve these targets (please refer to Notes 28.3 to 28.5 of the attached Notes to the Financial
Statements). US$33 million of the total interest rate swaps are US$ swaps under which the Company
effectively swapped some of its floating US$ denominated loans into fixed rate, with semi-annual
payment intervals up to January 2011. We also have US$5 million in notional amount of US$ swaps
under which the Company receives a fixed rate of 9.75% and pays a floating rate based on LIBOR,
subject to a cap. The payments on the swap are subject to the performance of 10 and 30 year US$
interest rates. In addition, our Company has a fixed to floating interest rate swap contract with a notional
amount of P1 billion, in which it effectively swapped a fixed rate Philippine peso denominated bond into
floating rate with quarterly payment intervals up to February 2009 and float to fixed interest rate swap
contracts with a notional amount of P1 billion which converts the floating rate back to fixed rate.
SEC Form 17A 2009 95

As of end of December, 55% of peso debt is fixed, while 35% of USD debt is fixed after swaps.
The MTM of the interest rate swap contracts stood at a loss of P44.47 million as of end-December. The
MTM has deteriorated since the beginning of the year due to the realization of gains on Peso interest rate
swap contracts (booked as swap income).
CREDIT EXPOSURES FROM FINANCIAL INSTRUMENTS
Outstanding credit exposures from financial instruments are monitored daily and allowable exposures are
reviewed quarterly.
For investments, the Globe Group does not have investments in foreign securities (bonds, collateralized
debt obligations (CDO), collateralized mortgage obligations (CMO), or any instruments linked to the
mortgage market in the US). Globe’s excess cash is invested in short tem bank and SDA deposits.
The Globe Group also does not have any investments or hedging transactions with investment banks.
Derivative transactions as of end-December are with large, investment grade commercial banks.
Furthermore, the Globe Group does not have instruments in its portfolio which became inactive in the
market nor does the company have any structured notes which require use of judgment for valuation
purposes. (Please refer to Note 28.2.3 of attached Notes to the Financial Statements for additional
information on active and inactive markets)
VALUATION OF DERIVATIVE TRANSACTIONS
The company uses valuation techniques that are commonly used by market participants and that have
been demonstrated to provide reliable estimates of prices obtained in actual market transactions. The
company uses readily observable market yield curves to discount future receipts and payments on the
transactions. The net present value of receipts and payments are translated into Peso using the foreign
exchange rate at time of valuation to arrive at the mark to market value. For derivative instruments with
optionality, the company relies on valuation reports of its counterparty banks, which are the company’s
best estimates of the close-out value of the transactions.
Gains (losses) on derivative instruments represent the net mark-to-market (MTM) gains (losses) on
derivative instruments. As of 31 December 2008, the MTM value of the derivatives of the Globe Group
amounted to a loss of P16.6 million while gains on derivative instruments arising from changes in MTM
reflected in the consolidated income statements amounted to P1.7 million. (Please refer to Note 22 of the
attached Notes to Financial Statements for gains/losses of preceding periods).
To measure riskiness, the company provides a sensitivity analysis of its profit and loss from financial
instruments resulting from movements in foreign exchange and interest rates. (Please refer to attached
Notes 28.2.1 and 28.2.2 of the Financial Statements for the sensitivity analysis results.) The interest rate
sensitivity estimates the changes to the following P&L items, given an indicated movement in interest
rates: (1) interest income, (2) interest expense, (3)mark to market of derivative instruments. The foreign
exchange sensitivity estimates the P&L impact of a change in the USD/PHP rate as it specifically pertains
to the revaluation of the net unhedged liability position of the company, and foreign exchange derivatives.
SEC Form 17A 2009 96

LEGAL AND CORPORATE DEVELOPMENTS
On 10 February 2009, Globe Telecom, Inc. announced it had signed an Underwriting Agreement with
Lead Underwriters BPI Capital Corporation, BDO Capital Corporation, and First Metro Investment
Corporation for a P3 Billion Corporate Bond Issuance. RCBC Capital Corporation and Vicsal Investment,
Inc. have been engaged for the issuance as Co-Lead Underwriter and Participating Underwriter,
respectively. On 13 February Globe received approval from the SEC to issue up to P10 Billion in
aggregate principal amount of debt securities, with an initial tranche offer of up to P5 billion comprised of
fixed rate bonds due 2012 and 2014. The proceeds of the Retail Bond will be used to fund Globe’s
various capital expenditures.
The corporate bonds had the following key terms:
ISSUE SIZE
P 3 Billion in 3-Year and 5- Year Bonds
OVER SUBSCRIPTION OPTION
Up to P 2 Billion Pesos
INTEREST RATE 3-Year Bonds- 7.5%
5-Year Bonds- 8.0%
INTEREST PAYMENT
Quarterly
MATURITY 3-Year Bonds- February 2012
5-Year Bonds- February 2014
Following strong investor demand, its offer of fixed rate bonds closed on 19 February 2009. On 25
February 2009, Globe issued the full principal amount of P5.0 billion. This amount is comprised of
P1,974,450,000 7.5% Fixed Rate Bonds due in 2012; and P3,025,550,000 8.0% Fixed Rate Bonds due in
2014.
On 27 November 2008 Globe Telecom, Inc. started the re-negotiation of the economic provisions of its
Collective Bargaining Agreement (CBA) with the Globe Telecom Workers Union (GTWU). The parties
have come to an agreement on the terms of the new CBA which was ratified and signed by GTWU last
16 March 2009.
On 2 March 2009, Globe Telecom announced that its Board of Directors approved the appointment of
Ernest L. Cu as President and Chief Executive Officer to take effect after the Company's Annual
Stockholders' Meeting on 2 April 2009. Mr. Cu succeeds Gerardo C. Ablaza, Jr. who will return to Ayala
Corporation to help oversee the Ayala Group's business interests in telecommunications, banking, and
allied fields. At the 2 April 2009 Annual Stockholders’ Meeting of Globe Telecom, Mr. Ablaza was elected
as a member of the Board of Directors for the ensuing year.
SEC Form 17A 2009 97

ANNEX TO THE 2008 MD&A
1. Events that will trigger direct or contingent financial obligations that are material including
any default or acceleration of an obligation (as of December 31, 2008):
Changes in Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year except
for the adoption of the following Philippine Interpretations of International Financial Reporting
Interpretations Committee (IFRIC) which became effective on January 1, 2008, and Amendments
to an existing standard that became effective on July 1, 2008.
• Amendments to Philippine Accounting Standards (PAS) 39, Financial Instruments:
Recognition and Measurement, and PFRS 7, Financial Instruments: Disclosure, are effective
beginning July 1, 2008. The Amendments to PAS 39 introduce the possibility of
reclassification of securities out of the held for trading category in rare circumstances and
reclassification to the loans and receivable category if there is intent and ability to hold the
securities for the foreseeable future or to held-to-maturity if there is intent and ability to hold
the securities until maturity. The Amendments to PFRS 7 introduce the disclosures relating
to these reclassifications. These Amendments have no impact on the consolidated financial
statements since the Globe Group does not have financial assets classified as held for
trading.
• Philippine Interpretation IFRIC11, PFRS 2 Group and Treasury Share Transactions, requires
arrangements whereby an employee is granted rights to an entity’s equity instruments to be
accounted for as an equity-settled scheme by the entity even if (a) the entity chooses or is
required to buy those equity instruments (e.g., treasury shares) from another party, or (b) the
shareholder(s) of the entity provide the equity instruments needed. It also provides guidance
on how subsidiaries, in their separate financial statements, account for such schemes when
their employees receive rights to the equity instruments of the parent. Adoption of this
Interpretation has no impact on the consolidated financial statements.
• Philippine Interpretation IFRIC 12, Service Concession Arrangement, covers contractual
arrangements arising from public-to-private service concession arrangements if control of the
assets remains in public hands but the private sector operator is responsible for construction
activities as well as for operating and maintaining the public sector infrastructure. Adoption of
this Interpretation has no impact on the consolidated financial statements.
• Philippine Interpretation IFRIC 14, PAS 19, The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction, provides guidance on how to assess the limit on
the amount of surplus in a defined benefit plan that can be recognized as an asset under
PAS 19, Employee Benefits. Adoption of this Interpretation has no impact on the
consolidated financial statements.
In addition, the Globe Group early adopted Philippine Interpretation IFRIC 13, Customer Loyalty
Programmes, beginning January 1, 2008. This Interpretation requires customer loyalty award
credits to be accounted for as a separate component of the sales transaction in which they are
granted and therefore form part of the fair value of the consideration received which is allocated
to the award credits and realized in consolidated statements of income over the period that the
award credits are redeemed or expire.
SEC Form 17A 2009 98

In the third quarter of 2008, the Globe Group implemented new loyalty programmes which are
within the scope of the Interpretation. Accordingly, the Globe Group accounted for these
transactions by allocating the consideration received or receivable between the sale of services
and award credits. The portion of the consideration allocated to the award credits, which
amounted to P=8.05 million as of December 31, 2008, is accounted for as deferred revenues
(included under the “Unearned revenues” account). This will be recognized as revenue upon the
award redemption. The adoption of this Interpretation did not result in a restatement of prior year
consolidated financial statements.
Future Changes in Accounting Policies
The Globe Group will adopt the additional standards and interpretations when these become
effective and as enumerated in Note 2.5 of the attached 2008 Notes to the Financial Statements.
Except as otherwise indicated, the Globe Group does not expect the adoption of these new and
amended PFRS and Philippine Interpretations to have significant impact on the consolidated
financial statements.
Improvements to PFRSs
In May 2008, the International Accounting Standards Board issued its first omnibus of
amendments to certain standards, primarily with a view to removing inconsistencies and clarifying
wording. There are separate transitional provisions for each standard and will become effective
January 1, 2009. (Please refer to Note 2.5.1 of the attached 2008 Notes to the Financial
Statements) Except as otherwise indicated, the Globe Group does not expect the adoption of
these new standards to have significant impact on the consolidated financial statements.
2. Causes of any material change from period to period (as of December 31, 2008):
Assets
Current
a) Cash and Cash Equivalents – Decreased by P408.78 million primarily due to higher cash
used for additional capital expenditures, higher dividend payout and lower cash generated
from operations during the intervening period.
b) Short term investments and Held to maturity investments – Decreased by P2.85 billion due to
maturity of investments in special and time deposit accounts.
c) Receivables-net – Increased by P1.09 billion mainly due to higher inbound traffic settlement
receivables from foreign carriers.
d) Inventories and Supplies - Slightly increased by P12.18 million due to the purchase of
phonekits, spare parts and telephone sets net of sales during the period.
e) Derivative Assets – Decreased by P359.63 million due to maturity of cash flow hedge forward
contracts acquired in 2007 and decrease in MTM value gain of non-hedge forwards, interest
rate swaps and embedded derivatives.
f) Prepayments and other current assets - Increased by 79% or P1.32 billion due to loans
receivable from Globe Retirement Plan, higher input VAT and other prepaid items.
Noncurrent
a) Property and Equipment – net - Increased by P2.01 billion due to the additional network
assets being constructed and put into service net of depreciation and adjustments on
capitalized asset retirement obligations (ARO) during the intervening period.
b) Investment Property – net - Down by P31.98 million due to depreciation of investment
properties pertaining to the portion of the building leased to third parties.
c) Intangible Assets - Up by P548.69 million due to the additional acquisitions of
telecommunication equipment software licenses and other VAS software applications, net of
the related depreciation.
SEC Form 17A 2009 99

d) Investments in Joint Venture – Down by P9.73 million arising from Globe’s share in net
losses in Bridge Mobile Alliance during the year.
e) Deferred Income Tax - net – Down by P114 million due to Innove’s reversal of certain
deferred tax items which have been realized during the intervening period.
f) Goodwill – Represents excess of purchase price of Entertainment Gateway Group over
provisional fair values of the assets acquired and liabilities assumed as of date of acquisition.
The goodwill is attributable to the workforce of the acquired business and the significant
synergies expected to arise after the Group’s acquisition of the EGG Group.
g) Other Noncurrent Assets – Up by 54% or P1.57 billion mainly due to the increase in
advances to contractors as a result of the acquisition of equipment and services in relation to
the network expansion and contributions to pension fund.
Liabilities
Current
a) Accounts payable and Accrued Expenses – Down by 8% or P1.40 billion primarily due to
improved negotiations and shorter settlement periods with carriers and lower withholding
taxes.
b) Provisions – Decreased slightly by 8% or P17.17 million due to the reversal of provisions for
probable regulatory claims and assessments in light of favorable rulings.
c) Derivative Liabilities - Net decrease of P162.73 million mainly due pre-termination of principal
only swaps during the first quarter of 2008.
d) Income Taxes Payable – Down by 9% or P123.45 million due to lower taxable operating
income during the intervening period.
e) Unearned Revenues – Increased by 74% or P1.38 billion due to higher over the air load
balances sold during the intervening period with the increase in number of subscribers.
f) Notes Payable – up by P3.5 billion due to short term loans of P6.6 billion acquired for working
capital requirements less repayments of P3.1 billion.
Noncurrent
a) Deferred Tax Liabilities - Decreased by P920.98 million due to higher deferred tax asset on
deferred revenue and reversal of deferred tax liability on unrealized forex gain and
undepreciated capitalized borrowing costs.
b) Long-term Debt (current and noncurrent) – Increased by P6.71 billion due to various loan
borrowings totaling P11.5 billion to finance capital expenditures offset by repayments of P4.8
billion to foreign and local creditors during the intervening period.
c) Derivative Liabilities – Up by P7.55 million due to additional losses on MTM value of cash
flow hedge interest rate swaps for long term debt maturing 2011.
d) Other Long-term Liabilities (current and noncurrent) – Decreased by P529.59 million
primarily due to net ARO adjustments as a result of change in assumptions on timing of
settlements and estimates of dismantling costs for equipment and facilities on leased
properties.
Equity
a) Paid-up Capital – Up by P141.02 million attributed to the issuance of Globe shares due to
exercised stock options during the intervening period.
b) Cost of Share-Based Payments – Increased by P80.55 million due to additional
compensation expense net of the value of the stock options exercised during the intervening
period.
c) Cumulative Translation Adjustment – Changes due to maturities of various cash flow hedge
forward contracts acquired in 2007 designated to hedge changes in cash flows of USD
revenues.
d) Retained Earnings – Decreased by 26% or P5.33 billion due to dividends declared to
common and preferred shareholders amounting to P16.61 billion over the net income of
P11.28 billion during the intervening period.
SEC Form 17A 2009 100

3. Description of material commitments and general purpose of such commitments. Material
off-balance sheet transactions, arrangements, obligations and other relationships with
unconsolidated entities or other persons created during the period (as of December 31,
2008):
Investment in Bridge Mobile Pte. Ltd (BMPL)
Globe Telecom and other leading Asia Pacific mobile operators (JV partners) signed an
Agreement in 2004 (JV Agreement) to form a regional mobile alliance, which will operate through
a Singapore-incorporated company, Bridge Mobile Pte. Ltd. (BMPL). The joint venture company
is a commercial vehicle for the JV partners to build and establish a regional mobile infrastructure
and common service platform and deliver different regional mobile services to their subscribers.
The other joint venture partners with equal stake in the alliance include Bharti Tele-Ventures
Limited (India), Maxis Communications Berhad (Malaysia), Optus Mobile Pty. Limited (Australia),
Singapore Telecom Mobile Pte. Ltd. (Singapore), Taiwan Cellular Corporation (Taiwan), PT
Telekomunikasi Selular (Indonesia) and Hongkong CSL Ltd. (Hongkong). Under the JV
Agreement, each partner shall contribute USD4.00 million based on an agreed schedule of
contribution. Globe Telecom may be called upon to contribute on dates to be determined by the
JV. As of December 31, 2008, Globe Telecom has invested a total of USD2.20 million in a joint
venture.
This account consists of:
2008 2007 2006
(In Thou
Acquisition cost P=111,280 P=111,280 P=56,332
Accumulated equity in net losses
At January 1 (28,023) (19,000) (13,166)
Add equity in net losses: (9,728) (9,023) (5,834)
At December 31 P=73,529 P=83,257 P=37,332
The Globe Group’s interest in the JV is accounted for as follows:
Assets:
2008 2007 2006
(In Thousand Pesos)
Current P=79,110 P=93,088 P=46,160
Non-current 13,014 13,319 9,423
Liabilities:
Current (8,867) (10,927) (11,262)
Non-current – (3,344) (1,300)
Income 18,083 21,465 15,180
Expenses (27,811) (30,344) (20,869)
Business Combination with EGG Group
On June 26, 2008, the Globe Group signed an agreement with the shareholders of EGG Group
for the purchase of 100% of the share capital of the three companies. EGG Group is jointly in the
business of development and provision of wireless products and services accessible through
telephones or other forms of communication devices. The business revenues and profit and loss
of the EGG Group from June 26, 2008 to June 30, 2008 are insignificant. If the acquisition had
occurred on January 1, 2008, the Group’s unaudited service revenues and net income would
have been P=62,948.16 million and P=11,260.38 million, respectively. Since acquisition date, the
EGG Group’s unaudited service revenues and net loss amounted to P=45.31 million and P=18.29
million, respectively.
SEC Form 17A 2009 101

The purchase price allocation has been prepared on a preliminary basis, and reasonable
changes are expected as additional information becomes available. The following is a summary
of the provisional fair values of the assets acquired and liabilities assumed as of the date of
acquisition:
Fair value recognized on acquisition
(In Thousand Pesos)
Receivables - net
P=35,308
Prepayments and other current assets – net 8,842
Property and equipment - net 8,306
52,456
Accounts payable and accrued expenses 47,949
Net assets 4,507
Goodwill arising from acquisition 346,992
Total consideration, satisfied by cash
P=351,499
The business combination was fully consummated on August 1, 2008 upon release of the
purchase consideration held in escrow pending fulfillment of certain conditions.
4. Seasonal Aspects that have a material effect on the FS
No seasonal aspects that have a material effect on the financial statements.
Item 7. Financial Statements
The consolidated financial statements and supplementary schedules of the Company are incorporated
herein in the accompanying Index to Exhibits on page 133 of this Form 17 A.
SEC Form 17A 2009 102

PART III- CONTROL AND COMPENSATION INFORMATION
Item 8. Directors and Key Officers
A. Board of Directors as of 31 December 2009
Name
Position
Jaime Augusto Zobel de Ayala Chairman
Gerardo C. Ablaza, Jr.
Co-Vice Chairman & Chairman of the Executive Committee
Mark Chong Chin Kok 1
Co-Vice Chairman
Romeo L. Bernardo
Director
Ernest L. Cu
Director, President and Chief Executive Officer
Roberto F. de Ocampo
Director
Koh Kah Sek
Director
Delfin L. Lazaro
Director
Xavier P. Loinaz *
Director
Guillermo D. Luchangco*
Director
Fernando Zobel de Ayala
Director
1
Replaced Chang York Chye after being elected by the Board during its 6 October 2009 meeting.
* Independent Directors
Jaime Augusto Zobel de Ayala. Mr. Ayala, 50, Filipino, has served as Chairman of the Board
since 1997 (and has been a Director since 1989). He also serves as the Chairman of the Board
of Directors and Chief Executive Officer of Ayala Corporation. He is also Chairman of the Board
of Directors of Bank of the Philippine Islands and Integrated Micro-Electronics, Inc., Azalea
Technology Investment, Inc., World Wildlife Fund Philippine Advisory Council, and AI North
America. He is Vice Chairman of Ayala Land, Inc. and Manila Water Co., Inc., and Asia Society
Philippines Foundation, Inc.; and Co-Vice Chairman of Mermac, Inc., Ayala Foundation, Inc., and
Makati Business Club; Director of BPI PHILAM Life Assurance Corporation, Alabang
Commercial Corporation, Ayala Hotels, Inc. He is also a member of various international and
local business and socio-civic organizations including the JP Morgan International Council,
Mitsubishi Corporation International Advisory Committee, Toshiba International Advisory Group,
Harvard University Asia Center Advisory Committee, Harvard Business School Asia-Pacific
Advisory Board, The Asia Society, The Singapore Management University, The Conference
Board, Pacific Basin Economic Council, Children’s Hour Philippines, Inc., Asian Institute of
Management and Philippine Economic Society; Board of Trustee of Ramon Magsaysay Awards
Foundation and a national council member of the World Wildlife Fund (US). He was also a
TOYM (Ten Outstanding Young Men) Awardee in 1999 and was named Management Man of the
Year in 2006 by the Management Association of the Philippines for his important role in the
transformation of Ayala Corporation into a highly diversified forward-looking conglomerate. He
was also recognized as the Emerging Markets CEO of the Year (1998); Harvard Business
School Alumni Achievement Awardee (2007); Presidential Medal of Merit (2009); and
Outstanding Manilan (2009).
Gerardo C. Ablaza, Jr. Mr. Ablaza, 56, Filipino, has served as Director since 1998. Mr. Ablaza
is a senior managing director of Ayala Corporation and a member of the Ayala Group
management committee, a post he has held since 1998. He is currently Co-Vice Chairman of the
Board of Directors Globe Telecom, Inc. and a board director of Bank of the Philippine Islands,
BPI Family Savings Bank, BPI Card Finance Corporation, Azalea Technology Investments, Inc.
and Asiacom Philippines, Inc., Manila Water Company, Integrated Microelectronic Inc. He is also
the Chief Executive Officer of AC Capital with directorship positions in HRMall Holdings Limited,
LiveIT Investments Limited, Integreon, Inc., Affinity Express Holdings Limited, NewBridge
International Investments Ltd., Stream Global Services., RETC Renewable Energy Test Center.
He was president and Chief Executive Officer of Globe Telecom, Inc. from 1998 to April 2009.
Mr. Ablaza was previously vice-president and country business manager for the Philippines and
Guam of Citibank, N.A. for its global consumer banking business. Prior to this position, he was
SEC Form 17A 2009 103

vice-president for consumer banking of Citibank, N.A. Singapore. Attendant to his last position in
Citibank, N.A., he was the bank’s representative to the board of directors of City Trust Banking
Corporation and its various subsidiaries. Mr. Ablaza graduated summa cum laude from De La
Salle University in 1974 with an AB degree major in Mathematics (Honors Program). In 2004 he
was recognized by CNBC as the Asia Business Leader of the Year, making him the first Filipino
CEO to win the award. In the same year, he was awarded by Telecom Asia as the Best Asian
Telecom CEO.
Mr. Mark Chong Chin Kok. Mr Chong, 45, Singaporean, was appointed as Director on 6
October 2009. Mr. Chong has been with Singapore Telecom since 1997 and has held various
management roles in various positions including Chief Executive Officer(SingTel Global Offices),
VP (Global Accounts) and a stint in Thailand as Managing Director of Shinawatra Paging. He is
currently Executive Vice President (Networks) of the SingTel Singapore Telco since 1st January
2008. He is also a Director of International Cableship Pte Ltd, OpenNet Pte Ltd. Southern Cross
Cables Holdings Limited, Cable Management Limited, SCCL Australia Limited, SCCL Fiji Limited
and SCCL New Zealand. Mr. Chong is also a Senior Fellow of the Singapore Computer Society.
Romeo L. Bernardo. Mr. Bernardo, 55, Filipino, has served as Director since 2001. He is
President of Lazaro Bernardo Tiu & Associates, Inc., a boutique financial advisory firm and
Advisor of Global Source Partners, a New York-based network of independent analysts. He also
serves as the Global Source economist in the Philippines. Mr. Bernardo currently sits on the
Board of Directors of Bank of the Philippine Islands, RFM Corporation, Philippine Investment
Management (PHINMA), Inc., Ayala Life Assurance Inc./Ayala Plans, Inc., National Reinsurance
Corporation of the Philippines, Aboitiz Power and the Philippine Institute for Development
Studies. His other significant affiliations include He is also the Chairman of the ALFM Peso,
Dollar and Euro Bond Funds and the Philippine Stock Index Fund. Mr. Bernardo previously
served as Undersecretary of Finance of the Republic of the Philippines and was Executive
Director at the Asian Development Bank. He was also an Advisor at the World Bank and the IMF
(Washington D.C.) and served as Deputy Chief of the Philippine Delegation to the GATT (WTO),
Geneva. Mr. Bernardo currently does World Bank and Asian Development Bank-funded policy
advisory work. He was formerly the President of the Philippine Economics Society and Chairman
of the Federation of ASEAN Economic Societies and was a member of the faculty of the College
of Business Administration of the University of the Philippines.
Ernest L. Cu. Mr. Cu, 49, Filipino, is currently the President and Chief Executive Officer of
Globe Telecom. Mr. Cu has served as Director since 2009. He joined the Company on 1 October
2008. He brings with him over two decades of general management and business development
experience spanning multi-country operations. He is also a Director of Systems Technology
Institute, Inc., Rockwell Residential Condominium, ATR KimEng Capital Partners, Inc., ATR
KimEng Financial Corporation, Game Services Group, Encash and a Trustee for De La Salle
College of St. Benilde. Prior to joining Globe, he was the President and Chief Executive Officer of
SPI Technologies, Inc. He also served as Director of Digital Media Exchange, Inc. and a Trustee
of the International School Manila.
Roberto F. de Ocampo. Dr. de Ocampo, 63, Filipino, has served as Director since 2003. He is
currently the President of Philam Asset Management, Inc. Funds, and the Chairman of DFNN
International, Eastbay Resorts,Inc., Stradcom Corporation and Stradcom International Holdings,
Inc., Tollways Association of the Philippines, MoneyTree Publishing Corporation and Centennial
Asia Advisors Pte. Ltd. He also serves as Vice Chairman of Seaboard Eastern Insurance
Company, Universal LRT Corporation, Ltd., Tranzen Group and a Member of the Board of
Trustees of Montalban Methane Power Corporation, Agus 3 Hydro Power Corporation and La
Costa Development Corporation. Mr. de Ocampo is also a member of the Board of Directors of
several companies including - Bacnotan Consolidated, Benlife-PNB Life Insurance, Philippine
Phosphate Fertilizer Corp., Thunderbird Resorts, AB Capital and Investment Corporation, Alaska
Milk, Bankard, EEI Corporation, House of Investments, PSi Technologies, Rizal Commercial
Banking Corporation, Robinsons Land Corporation, Salcon Power and United Overseas Bank.
SEC Form 17A 2009 104

He is also on the Board of Advisers of ARGOSY Fund, Inc., NAVIS Capital Partners and AES
Corporation (Philippines) and is a member of the Board of Trustees of Asian Institute of
Management and Angeles University Foundation. His other significant positions in civic
organizations include being the Founding Director of the Centennial Group Policy & Strategic
Advisors (Washington, DC) and had been an Advisory Board member of a number of important
global institutions including The Conference Board, the Trilateral Commission, the BOAO Forum
for Asia and the Emerging Markets Forum. He currently serves as Chairman of the RFO Center
for Public Finance and Regional Economic Cooperation (an ADB Regional Knowledge Hub),
Public Finance Institute of the Philippines and the British Alumni Association. He was a former
Secretary of Finance of the Republic of the Philippines; Former Chairman and Chief Executive
Officer of the Development Bank of the Philippines; Recipient of Finance Minister of the Year,
Philippine Legion of Honor, Chevalier of the Legion of Honor of France, ADFIAP Man of the
Year, Ten Outstanding Young Men Award (TOYM), several Who’s Who Awards, and the 2006
Asian HRD Award for Outstanding Contribution to Society. Dr. de Ocampo graduated from De
La Salle College and Ateneo de Manila University in Manila, received an MBA from the
University of Michigan, holds a post-graduate diploma from the London School of Economics,
and has four doctorate degrees (Honoris Causa).
Koh Kah Sek. Ms. Koh, Malaysian, 38, has served as Director since 2006. She is currently the
Group Treasurer of SingTel. She joined SingTel in March 2005 as Group Financial Controller.
Prior to joining SingTel, she was with Far East Organisation – Yeo Hiap Seng Limited as Vice
President (Finance) responsible for the financial functions of the Singapore and US operations.
Prior to joining Far East Organisation, she had spent a number of years in
PricewaterhouseCoopers and Goldman Sachs.
Delfin L. Lazaro. Mr. Lazaro, 63, Filipino, has served as Director since January 1997. He is a
member of the Management Committee of Ayala Corporation. His other significant positions
include: Chairman of Philwater Holdings Company, Inc., Atlas Fertilizer & Chemicals Inc.,
Chairman and President of Michigan Power, Inc., Purefoods International, Ltd. and A.C.S.T.
Business Holdings, Inc.; President of Azalea Technology Investments, Inc.; Director of Ayala
Land, Inc., Integrated Micro-Electronics, Inc., Manila Water Co., Inc., Ayala DBS Holdings, Inc.,
AYC Holdings, Ltd., Ayala International Holdings, Ltd., Bestfull Holdings Limited, AG Holdings, AI
North America, Inc., Probe Productions, Inc. and Empire Insurance Company; and Trustee of
Insular Life Assurance Co., Ltd. He was named Management Man of the Year 1999 by the
Management Association of the Philippines for his contribution to the conceptualization and
implementation of the Philippine Energy Development Plan and to the passage of the law
creating the Department of Energy. He was also cited for stabilizing the power situation that
helped the country achieve successively high growth levels up to the Asian crisis in 1997.
Xavier P. Loinaz. Mr. Loinaz, 66, Filipino, has served as Independent Director since 2009. He
was formerly the President of the Bank of the Philippine Islands (BPI). He currently holds the
following positions: Independent Director of BPI, BPI Capital Corporation, BPI Direct Savings
Bank, Inc., BPI/MS Insurance Corporation, BPI Family Savings Bank, Inc. and Ayala
Corporation; Vice Chairman of the Board of Directors of FGU Insurance Corporation; and
Member of the Board of Trustees of BPI Foundation, Inc, E. Zobel Foundation and is Chairman
of the Board of Directors of Alay Kapwa Kilusan Pangkalusugan.
Guillermo D. Luchangco. Mr. Luchangco, 70, Filipino, has served as Independent Director
since 2001. He is also Chairman and Chief Executive Officer of various companies of the ICCP
Group, including Investment & Capital Corporation of the Philippines, Cebu Light Industrial Park,
Inc., Pueblo de Oro Development Corp., Regatta Properties, Inc, and RFM-Science Park of the
Philippines, Inc.; Chairman and President of Beacon Property Ventures, Inc. and Manila
Exposition Complex, Inc; Chairman of ICCP Venture Partners, Inc. and Director of Bacnotan
Consolidated Industries, Inc., Phinma Property Holdings Corp., Roxas & Co., Inc., Ionics, Inc.,
Ionics EMS, Inc., and Science Park of the Philippines, Inc.
SEC Form 17A 2009 105

Fernando Zobel de Ayala. Mr. Ayala, 49, Filipino, has served as Director since 1995. He is
currently the Vice Chairman, President and Chief Operating Officer of Ayala Corporation. His
other significant positions include: Chairman of Ayala Land, Inc., Manila Water Co., Inc., Ayala
Automotive Holdings, Inc., Ayala DBS Holdings, Inc. and Alabang Commercial Corporation; Vice
Chairman of Aurora Properties, Inc., Azalea Tehnology Investments, Inc., Ceci Realty, Inc. and
Vesta Property Holdings, Inc.; Co-Vice Chairman of Ayala Foundation, Inc. and Mermac, Inc.;
Director of Bank of the Philippine Islands, Integrated Micro-Electronics, Inc., Asiacom Philippines,
Inc., Ayala Hotels, Inc., AC International Finance Limited, Ayala International Pte, Ltd., and
Caritas Manila; and Member of INSEAD, East Asia Council; World Economic Forum, Habitat for
Humanity International Asia-Pacific Steering Committee. He is also trustee of the International
Council of Shopping Centers.
B. Key Officers as of 31 December 2009
The key officers and consultants of the Company are appointed by the Board of Directors and
their appointment as officers may be terminated at will by the Board of Directors.
Key Officers – Globe
Name
Ernest L. Cu 1
Catherine Hufana-Ang
Ferdinand M. dela Cruz
Rebecca V. Eclipse
Rodell A. Garcia
Gil B. Genio
Caridad D. Gonzales
Delfin C. Gonzalez, Jr.
Susan Rivera-Manalo
Carmencita T. Orlina
Greg L. Romero
Position
President and Chief Executive Officer
Head – Internal Audit
Head – Consumer Sales and After Sales
Head – Office of Strategy Management
Chief Technical Officer
Head – Business CFU and President – Innove Communications, Inc.
Corporate Secretary and Head - Corporate and Regulatory Affairs Group
Chief Financial Officer
Head – Human Resources
Head – Consumer Marketing
Head – Information Systems Group
Consultants
Name
Lee Han Kheng
Rodolfo A. Salalima
1 Member, Board of Directors
Chief Operating Adviser
Chief Legal Counsel
Position
Ernest L. Cu. Mr. Cu, 49, Filipino, is currently the President and Chief Executive Officer of
Globe Telecom. Mr. Cu has served as Director since 2009. He joined the Company on 1 October
2008. He brings with him over two decades of general management and business development
experience spanning multi-country operations. He is also a Director of Systems Technology
Institute, Inc., Rockwell Residential Condominium, ATR KimEng Capital Partners, Inc., ATR
KimEng Financial Corporation, Game Services Group, Encash and a Trustee for De La Salle
College of St. Benilde. Prior to joining Globe, he was the President and Chief Executive Officer of
SPI Technologies, Inc. He also served as Director of Digital Media Exchange, Inc. and a Trustee
of the International School Manila.
Catherine Hufana-Ang. Ms. Ang, 39, Filipino, is currently the Head of Internal Audit. Prior to
joining Globe in May 2000, Ms. Ang served as Manager for Operational & Systems Risk
Management at PricewaterhouseCoopers-Singapore.
SEC Form 17A 2009 106

Ferdinand M. de la Cruz. Mr. de la Cruz, 43, Filipino, is currently the Head of the Consumer
Sales and After Sales Group. He is a licensed Mechanical Engineer. He brings with him solid
work experience in the sales and marketing departments of multinational companies such as
Kraft Foods and Unilever Philippines. Before joining Globe, he was the President and General
Manager of Kraft Foods Philippines. He also served as Senior Vice-President for the Marketing
& Sales Division of Ayala Land, as well as National Sales Manager for San Miguel Brewing. Mr.
de la Cruz joined the Company in October 2002.
Rebecca V. Eclipse. Ms. Eclipse, 47, Filipino, is the Head of Office of Strategy Management.
She has more than 15 years experience in technology and telecom risk management, financial
management and auditing, drawn from SGV & Co, as well as Eastern Telecoms and Oceanic
Wireless Network. Ms. Eclipse joined Globe in March 1995.
Rodell A. Garcia. Mr. Garcia, 53, Filipino, is the Chief Technical Officer. Prior to this
appointment, Mr. Garcia served as Chief Information Officer of the Company. Before joining
Globe in 2000, he was Executive Vice President for the Information Technology Group of DBS
Bank Philippines, Inc. He also held several management positions in Citytrust Banking
Corporation.
Gil B. Genio. Mr. Genio, 50, Filipino, is Head of Globe Business and concurrently the President
of Innove Communications, Inc. Before his appointment to Innove, Mr. Genio was Globe’s Senior
Vice President and Chief Financial Officer from 1997. He is also currently a Managing Director of
Ayala Corporation. Prior to joining Globe, he served as Vice-President for Citibank, N.A.,
managing audit operations in Japan, Hong Kong and the People’s Republic of China.
Ma. Caridad D. Gonzales. Ms. Gonzales, 45, Filipino, is the Head of the Corporate and
Regulatory Affairs Group. She joined Globe in 1994 and first served as Director for the Legal
Services department. Prior to joining Globe, she worked with the law firm of Ponce Enrile,
Cayetano, Reyes & Manalastas. Ms. Gonzales received her Bachelor of Laws from the Ateneo
Law School and graduated with a degree in Management from the Ateneo de Manila.
Delfin C. Gonzalez, Jr. Mr. Gonzalez, 60, Filipino, is the Chief Financial Officer. He joined Globe
in November 16, 2000 as Head of the Finance Group. He had worked previously with San Miguel
Corporation, first with the Strategic Planning and Finance Group and then as Executive Vice
President, CFO and Treasurer until 1999.
Susan Grace Rivera-Manalo. Ms. Manalo, 50, Filipino, is the Head of Human Resources. She
joined Globe in March 2006. A seasoned HR practitioner, Susan brings with her 20 years of solid
HR experience spanning numerous industries which includes Hewitt Associates, PT&T, CAVEL
Group of Companies, the Pioneer Group of Insurance Companies and PLDT. She has led
mission-critical functions such as logistics & materials management and was executive sponsor
for strategic processes for HR & customer relations management.
Carmencita T. Orlina. Ms. Orlina, 48, Filipino, is the Head of Consumer Marketing. She joined
Globe in September 2008. She comes with solid business grounding with strengths in consumer
marketing, sales and operations. Prior to joining Globe, Ms. Orlina served as Sales and
Marketing Director of Pfizer, Inc., Vice President for Asia-Pacific operations of Western Union
and Chief Marketing Officer of ABS-CBN Global.
Greg L. Romero. Mr. Romero, 42, Filipino, is the Head of the Information Systems Group. He
joined Globe in November 2001. Prior to joining Globe Telecom, Mr. Romero served as the
Information Technology Head of DBS Bank Philippines, Inc. and before that as IT Head of
Bankard, Inc. His work experience also includes managerial stints in the IT departments of
CityTrust Banking Corporation and Citibank, N.A.
SEC Form 17A 2009 107

Lee Han Kheng. Mr. Lee, 41, Singaporean, joined Globe as Chief Operating Adviser in 2007. He
is concurrently Managing Director of Singapore Telecom International (Philippines) Pte. Ltd. Prior
to joining Globe, Mr. Lee was SingTel’s Vice President for Business Products.
Rodolfo A. Salalima. Mr. Salalima, 62, Filipino, is the Chief Legal Counsel. He joined Globe in
1993. Before his current appointment, Mr. Salalima was the Head of Globe’s Corporate and
Regulatory Affairs Group and served as its Assistant Corporate Secretary. He had previously
worked as a Managing Director of the Ayala Corporation. From 1992 to 1996, he served as the
first President and Founding Director of the Telecommunications and Broadcast Attorneys of the
Philippines, Inc. (TELEBAP). Mr. Salalima is currently the President of the Philippine Chamber of
Telecommunications Operators, Inc. (PCTO) and a Director in the Telecoms Infrastructure
Corporation of the Philippines (TELICPHIL).
C. Family Relationships
The Chairman of our Board of Directors, Jaime Augusto Zobel de Ayala, and a Director,
Fernando Zobel de Ayala, are brothers.
D. Significant Employee
Globe Telecom is cognizant of the invaluable role that its employees play in making our mission
and vision a reality, and is committed to building a strong performance-oriented culture. The
Company’s rewards philosophy is aligned with Globe’s business strategy and encompasses
continuous learning and development, competitive and market-driven compensation, and flexible
and innovative benefits contribution (Please refer to Item 9 - Executive Compensation section for
details)
E. Involvement in Certain Legal Proceedings
None of the directors, officers or members of the Company’s senior management had during the
last five years been subject to any of the following:
(a)
(b)
(c)
(d)
any bankruptcy, petition filed by or against any business of which such person was a
general partner or executive officer either at the time of the bankruptcy or within two (2)
years prior to the time;
any conviction by final judgment of any offense in any pending criminal proceeding,
domestic or foreign, excluding traffic violations and other minor offenses;
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, domestic or foreign, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any type of business,
securities, commodities, or banking activities; and
found by a domestic or foreign court of competent jurisdiction (in a civil action), the
Commission or comparable foreign body, or a domestic or foreign exchange or electronic
marketplace or self regulatory organization, to have violated a securities or commodities
law, and the judgment has not been reversed, suspended or vacated.
SEC Form 17A 2009 108

Item 9. Executive Compensation
A. Standard Arrangements
Directors
Article II Section 6 of the Company’s By-Laws provides:
“SECTION 6.COMPENSATION OF DIRECTORS - Directors as such shall not receive any stated
salary for their services, but, by resolution of the stockholders, a specific sum fixed by the
stockholders may be allowed for attendance at each regular or special meeting of the Board;
provided that nothing herein contained shall preclude any director from serving in any other
capacity and receiving compensation thereof.”
The stockholders have ratified a resolution in 2003 fixing the per-diem remuneration of P100,000
for non-executive Directors per Board meeting actually attended. Additionally, executive directors
do not receive per-diem remuneration.
The Company has no other arrangement with regard to the remuneration of its existing directors
and officers aside from the compensation received as herein stated.
Key Officers
The total annual compensation (salary and other variable pay) of the CEO and other senior
officers of the Company (excluding its subsidiaries) amounted to P213 million in 2009 and P149
million in 2008. The projected total annual compensation for 2010 is P170 million.
The total annual compensation paid to all senior personnel from Manager and up of the
Company (excluding its subsidiaries) amounted to P1,856 million in 2009 and P2,013 million in
2008. The projected total annual compensation for 2010 is P2,201 million.
The total annual compensation for key officers and managers of the Company includes basic
salaries, guaranteed bonuses, fixed allowances and variable pay (performance-based annual
incentive) are shown below.
Name and Principal Position
Gerardo C. Ablaza, Jr. *
President & Chief Executive Officer
Ernest L. Cu *
President & Chief Executive Officer
Catherine Hufana-Ang
Head – Internal Audit
Ferdinand M. dela Cruz
Head – Consumer Sales and After Sales
Rebecca V. Eclipse
Head – Office of Strategy Management
Rodell A. Garcia
Chief Technical Officer
Gil B. Genio
Head – Business CFU and President – Innove
Communications, Inc.
Caridad D. Gonzales
Corporate Secretary and Head – Corporate
and Regulatory Affairs Group
Year
Salary
(in Php Mn)
Other Variable Pay
(in Php Mn)
SEC Form 17A 2009 109

Delfin C. Gonzalez, Jr.
Chief Financial Officer
Susan Rivera-Manalo
Head – Human Resources
Carmencita T. Orlina
Head – Consumer Marketing
Greg L. Romero
Head – Information Systems Group
Actual 2008 96 53
CEO & Most Highly Compensated Executive
Actual 2009 117 96
Officers
Projected 2010 110 60
Actual 2008 1,273 740
All other officers ** as a group unnamed
Actual 2009 1,398 458
Projected 2010 1,478 723
* Mr. Cu was Deputy Chief Executive Officer prior to April 2, 2009 when he assumed the position of President & Chief
Executive Officer, vice Mr. Ablaza.
** Managers and up
The Company has no other arrangement with regard to the remuneration of its existing directors
and officers aside from the compensation received as herein stated.
The above named executive officers are covered by Letters of Appointment with the Company
stating therein their respective job functionalities, among others.
B. Other Arrangements
The Globe Group also has stock-based compensation, pension and benefit plans.
Stock Option Plans
The Globe Group has a share-based compensation plan called the Executive Stock Option
Plan (ESOP). The number of shares allocated under the ESOP shall not exceed the aggregate
equivalent of 6% of the authorized capital stock.
On October 1, 2009, the Globe Group granted additional stock options to key executives and
senior management personnel under the ESOP. The grant requires the grantees to pay a
nonrefundable option purchase price of P=1,000.00 until October 30, 2009, which is the closing
date for the acceptance of the offer. In order to avail of the privilege, the grantees must remain
with Globe Telecom or its affiliates from grant date up to the beginning of the exercise period of
the corresponding shares.
The following are the stock option grants to key executives and senior management personnel
of the Globe Group under the ESOP from 2003 to 2009:
Date of Grant
Number of
Options
Granted
April 4, 2003 680,200
July 1, 2004 803,800
Exercise Price
P=547.00 per
share
P=840.75 per
share
Exercise Dates
50% of options exercisable
from April 4, 2005 to April 14,
2013; the remaining 50%
exercisable from April 4, 2006
to April 14, 2013
50% of options exercisable
from July 1, 2006 to June 30,
2014; the remaining 50% from
July 1, 2007 to June 30, 2014
Fair Value
of each
Option
P=283.11
P=357.94
Fair Value
Measurement
Black-Scholes
option pricing
model
Black-Scholes
option pricing
model
March 24, 2006 749,500 P=854.75 per 50% of the options become P=292.12 Trinomial
SEC Form 17A 2009 110

May 17, 2007 604,000
August 1, 2008 635,750
October 1,
2009
298,950
P=1,270.50 per
share
P=1,064.00 per
share
share exercisable from March 24,
2008 to March 23, 2016; the
remaining 50% become
exercisable from March 24,
2009 to March 23, 2016
P=993.75 per
share
50% of the options become
exercisable from May 17,
2009 to May 16, 2017, the
remaining 50% become
exercisable from May 17,
2010 to May 16, 2017
50% of the options become
exercisable from August 1,
2010 to July 31, 2018, the
remaining 50% become
exercisable from August 1,
2011 to July 31, 2018
50% of the options become
exercisable from October 1,
2011 to September 30, 2019,
the remaining 50% become
exercisable from October 1,
2012 to
September 30, 2019
P=375.89
P=305.03
P=346.79
option pricing
model
Trinomial
option pricing
model
Trinomial
option pricing
model
Trinomial
option pricing
model
The exercise price is based on the average quoted market price for the last 20 trading days preceding the approval date
of the stock option grant.
Of the below named directors and officers, there were 2,500 common shares exercised in 2009.
Ave Price
Balance of
Name and Principal Position
at date of Ave Price outstanding &
No. of Date of
grant (Exercise exercisable
Shares Grant
(Offer Price) options at end
Price)
of period
Ernest L. Cu
President & Chief Executive Officer
Catherine Hufana-Ang
Head – Internal Audit
Ferdinand M. dela Cruz
Head – Consumer Sales & After Sales
Rebecca V. Eclipse
Head – Office of Strategy Management
Rodell A. Garcia
Chief Technical Officer
Gil B. Genio
Head – Business CFU and President –
Innove Communications, Inc.
Caridad D. Gonzales
Corporate Secretary and Head –
Corporate and Regulatory Affairs Group
Delfin C. Gonzalez, Jr.
Chief Financial Officer
Susan Rivera-Manalo
Head – Human Resources
Carmencita T. Orlina
Head – Consumer Marketing
Greg L. Romero
Head – Information Systems Group
All above-named Officers as a Group 2,500 03/24/2006 854.75 1,005 109,600
The Company has not adjusted nor amended the exercise price of the options previously awarded to the above named
officers.
SEC Form 17A 2009 111

A summary of the Globe Group’s ESOP activity and related information follows:
Number of
Shares
2009 2008 2007
Weighted
Weighted
Average
Average
Exercise Number of Exercise Number of
Price Shares Price Shares
Weighted
Average
Exercise
Price
(In Thousands and Per Share Figures)
Outstanding, at beginning of
year 1,929,732 P=1,035.76 1,617,114 P=994.57 1,590,940 P=811.62
Granted 298,950 993.75 650,450 1,052.32 604,000 1,270.50
Exercised (137,626) 843.22 (247,332) 846.80 (465,776) 782.32
Expired/forfeited (52,950) 1,073.58 (90,500) 935.02 (112,050) 766.69
P=
Outstanding, at end of year 2,038,106 P=1,041.62 1,929,732 1,035.76 1,617,114 P=994.57
Exercisable, at end of year 828,281 P=962.78 363,032 P=792.12 309,614 P=785.65
The average share prices at dates of exercise of stock options as of December 31, 2009, 2008
and 2007 amounted to P=975.26, P=1,461.82 and P=1,242.57, respectively.
As of December 31, 2009, 2008 and 2007, the weighted average remaining contractual life of
options outstanding is 7.59 years, 8.13 years and 8.29 years, respectively.
The following assumptions were used to determine the fair value of the stock options at effective
grant dates:
Oct 1, 2009 Aug 1, 2008 May 17, 2007 Jun 30, 2006 July 1, 2004 April 4, 2003
Share price P=995.00 P=1,130.00 P=1,340.00 P=930.00 P=835.00 P=580.00
Exercise price P=993.75 P=1,064.00 P=1,270.50 P=854.75 P=840.75 P=547.00
Expected volatility 48.49% 31.73% 38.14% 29.51% 39.50% 34.64%
Option life 10 years 10 years 10 years 10 years 10 years 10 years
Expected dividends 6.43% 6.64% 4.93% 5.38% 4.31% 2.70%
Risk-free interest
rate
8.08% 9.62% 7.04% 10.30% 12.91% 11.46%
The expected volatility measured at the standard deviation of expected share price returns was
based on analysis of share prices for the past 365 days.
Cost of share-based payments for the years ended December 31, 2009, 2008 and 2007
amounted to P=126.44 million, P=182.32 million and P=129.91 million, respectively.
SEC Form 17A 2009 112

Pension Plan
The Globe Group has a funded, noncontributory, defined benefit pension plan covering
substantially all of its regular employees. The benefits are based on years of service and
compensation on the last year of employment.
The components of pension expense (included in staff costs under “General, selling and
administrative expenses”) in the consolidated statements of comprehensive income are as
follows:
2009 2008 2007
(In Thousand Pesos)
Current service cost P=163,382 P=221,289 P=168,374
Interest cost on benefit obligation 156,182 136,160 80,224
Expected return on plan assets (234,018) (138,301) (127,872)
Net actuarial losses (41) 28,314 11,157
Total pension expense P=85,505 P=247,462 P=131,883
Actual return (loss) on plan assets P=181,051 (P=184,599) P=96,495
The funded status for the pension plan of Globe Group is as follows:
2009 2008 2007
(In Thousand Pesos)
Benefit obligation P=2,079,316 P=1,319,742 P=1,690,615
Plan assets (2,334,772) (2,344,764) (1,341,568)
(255,456) (1,025,022) 349,047
Unrecognized net actuarial losses (799,539) (115,403) (511,801)
Asset recognized in the
consolidated statements of financial
position* (P=1,054,995) (P=1,140,425) (P=162,754)
*Of this amount, P=1,055.44 million is included in “Other noncurrent assets” account, while the P=0.45 million is
included in “Accrued expenses” under “Accounts payable and accrued expenses” account as of December 31, 2009.
The following tables present the changes in the present value of defined benefit obligation and
fair value of plan assets:
Present value of defined benefit obligation
2009 2008 2007
(In Thousand Pesos)
Balance at beginning of year P=1,319,742 P=1,690,615 P=1,267,209
Interest cost 156,182 136,160 80,224
Current service cost 163,382 221,289 168,374
Benefits paid (129,761) (87,941) (58,635)
Actuarial losses (gains) 569,770 (640,381) 233,443
Balance at end of year P=2,079,315 P=1,319,742 P=1,690,615
Fair value of plan assets
2009 2008 2007
(In Thousand Pesos)
Balance at beginning of year P=2,344,764 P=1,341,568 P=1,254,906
Expected return 234,018 138,301 127,872
Contributions 104 1,225,345 47,200
Benefits paid (129,761) (87,941) (58,635)
Actuarial losses (114,353) (272,509) (29,775)
Balance at end of year P=2,334,772 P=2,344,764 P=1,341,568
The Globe Group does not expect to make additional contributions to its retirement fund in 2010.
SEC Form 17A 2009 113

As of December 31, 2009 and 2008, the allocation of the fair value of the plan assets of the
Globe Group follows:
2009 2008
Investments in fixed income securities:
Corporate 60.43% 69.38%
Government 18.71% 12.80%
Investments in equity securities 18.78% 15.76%
Others 2.08% 2.06%
In 2008, Globe, Innove and GXI pooled its plan assets for single administration by the fund
managers. The EGG Group’s retirement fund is being managed separately and the amount of
defined benefit obligation is immaterial.
The allocation of the fair value of the plan assets of December 31, 2007 for Globe Telecom and
Innove follows:
Globe Telecom
Innove
Investments in debt securities 68.00% 66.00%
Investments in equity securities 30.00% 32.00%
Others 2.00% 2.00%
As of December 31, 2009, the pension plan assets of the Globe Group include shares of stock of
Globe Telecom with total fair value of P=50.15 million, and shares of stock of other related parties
with total fair value of P=72.03 million.
The assumptions used to determine pension benefits of Globe Group are as follows:
2009 2008 2007
Discount rate 9.00% 12.33% 8.25%
Expected rate of return on plan assets 10.00% 10.00% 10.00%
Salary rate increase 7.00% 7.00% 7.00%
In 2009 and 2008, the Globe Group applied a single weighted average discount rate that reflects
the estimated timing and amount of benefit payments and the currency in which the benefits are
to be paid. In 2007, the Globe Group used risk-free interest rates of government securities that
have terms to maturity approximating the terms of the related pension liabilities.
The overall expected rate of return on plan assets is determined based on the market prices
prevailing on that date, applicable to the period over which the obligation is to be settled.
Amounts for the current and previous four years are as follows:
2009 2008 2007 2006 2005
(In Thousand Pesos)
Defined benefit
obligation P=2,079,316 P=1,319,742 P=1,690,615 P=1,267,209 P=648,825
Plan assets 2,334,772 2,344,764 1,341,568 1,254,906 1,066,441
Deficit (surplus) (255,456) (1,025,022) 349,047 12,303 (417,616)
2009 2008 2007 2006
(In Thousand Pesos)
Experience adjustments:
Gain (loss) on plan liabilities P=18,390 (P=51,340) (P=170,819) (P=72,950)
Gain (loss) on plan assets (114,327) (272,539) 29,780 102,010
There are no agreements between the Globe Group and any of its directors and key officers
providing for benefits upon termination of employment, except for such benefits to which they
may be entitled under the Globe Group’s retirement plans.
SEC Form 17A 2009 114

Item 10. Security Ownership of Certain Record, Beneficial Owners &
Management
A. Security Ownership of Certain Record and Beneficial Owners (of more than 5%) as of
31 December 2009
Title of
Class
Preferred
Common
Common
Common
Name, address of
Record Owner and
Relationship with
Issuer
Asiacom Philippines,
Inc. 1
34/F Tower One
Bldg., Ayala Ave.,
Makati City
Singapore Telecom
Int’l. Pte. Ltd. (STI) 2
31 Exeter Road,
Comcentre,
Singapore 0923
Ayala Corporation 4
34/F Tower One
Bldg. Ayala Ave.,
Makati City
PCD Nominee Corp.
(Non-Filipino) 5
G/F Makati Stock
Exch. Bldg., Ayala
Avenue, Makati City
Name of Beneficial
Owner and
Relationship with
Record Owner
Asiacom Philippines,
Inc. (Asiacom)
Singapore Telecom Int’l.
Pte. Ltd.
Citizenship
No. of
Shares Held
%
Filipino 158,515,021 54.50%
Singaporean 62,646,486 21.54%
Ayala Corporation (AC) Filipino 40,319,263 13.86%
Hongkong and
Shanghai Banking
Corporation (HSBC)
and Standard Chartered
Bank (SCB)
Various 20,561,580 7.07%
1 Asiacom Philippines, Inc. (“Asiacom”) is a significant shareholder of the Company. As per By-laws and the
Corporation Code, the Board of Directors of Asiacom has the power to decide how the Asiacom shares in Globe
are to be voted.
2 STI, a wholly-owned subsidiary of SingTel (Singapore Telecom), is a significant shareholder of the Company. As
per its By laws, STI, through its appointed corporate representatives, has the power to decide how the STI shares
in Globe are to be voted.
3 Ayala Corporation is a significant shareholder of the Company. As per By-laws and the Corporation Code, the
Board of Directors of AC has the power to decide how the AC shares in Globe are to be voted.
4 The PCD is not related to the Company.
5 HSBC and SCB are participants of PCD. The 11,413,756 and 7,120,569 shares beneficially owned by HSBC and
SCB, respectively, form part of the 20,561,580 shares registered in the name of the PCD. The clients of HSBC
and SCB have the power to decide how their shares are to be voted.
SEC Form 17A 2009 115

B. Security Ownership of Directors and Management (Corporate Officers) as of
31 December 2009
Title of
Class
Directors
Common
Name of Beneficial Owner
Jaime Augusto Zobel de Ayala
Amount and Nature of
Beneficial Ownership
2 (direct)
1 (indirect)
Citizenship
Percent
of
Class
Filipino 0.00%
Common Delfin L. Lazaro 1 (direct) Filipino 0.00%
Common Mark Chong Chin Kok 2 (direct) Singaporean 0.00%
Common Fernando Zobel de Ayala 1 (direct) Filipino 0.00%
Common Gerardo C. Ablaza, Jr. 117,645 (direct and indirect) Filipino 0.09%
Preferred 1 (indirect) 0.00%
Romeo L. Bernardo
Filipino
Common
1,834 (direct)
0.00%
Common Koh Kah Sek 2 (direct) Malaysian 0.00%
Common Roberto F. de Ocampo 1 (direct) Filipino 0.00%
Common Xavier P. Loinaz 10 (direct) Filipino 0.00%
Preferred 1 (indirect) 0.00%
Guillermo D. Luchangco
Filipino
Common
11,000 (direct)
0.01%
Preferred Ernest L. Cu 1 (direct) Filipino 0.00%
CHIEF EXECUTIVE OFFICER and Most Highly Compensated Executive Officers
Preferred Ernest L. Cu 1 (direct) Filipino 0.00%
Common Ferdinand M. de la Cruz 3,488 (direct) Filipino 0.00%
Common Rebecca V. Eclipse 9,254 (indirect) Filipino 0.01%
Common Rodell A. Garcia 7,790 (direct) Filipino 0.01%
Common Gil B. Genio 46,203 (indirect) Filipino 0.03%
Common Ma. Caridad D. Gonzales 5,415 (indirect) Filipino 0.00%
Common Delfin C. Gonzalez, Jr. 30,000 (direct) Filipino 0.02%
Common Catherine Hufana-Ang 948 (direct) Filipino 0.00%
Common Susan Rivera-Manalo 975 (direct) Filipino 0.00%
Common Carmencita T. Orlina - Filipino 0.00%
Common Greg L. Romero 647 (direct) Filipino 0.00%
All directors and Officers as a group 235,222 0.08%
None of the members of the Company’s directors and management own 0.1% or more of the
outstanding capital stock of the Company.
Item 11. Certain Relationships and Related Transactions
For more information on refer to Note 16 of the attached 2009 Notes to the Consolidated
Financial Statements.
SEC Form 17A 2009 116

PART IV – CORPORATE GOVERNANCE
We strive to adhere to the highest standards of ethics and governance in all that we do. Globe
recognizes the importance of good governance in realizing its vision, carrying out its mission, and
living out its values to create and sustain increased value for all its stakeholders. The impact of
global conditions and challenges further underscores the need to uphold the Company’s high
standards of corporate governance to strengthen its structures and processes.
As strong advocates of accountability, transparency and integrity in all aspects of the business,
the Board of Directors (“Board”), management, officers, and employees of Globe commit
themselves to the principles and best practices of governance in the attainment of its corporate
goals.
The basic mechanisms for corporate governance are principally contained in the Company’s
Articles of Incorporation and By-Laws. These documents lay down, among others, the basic
structure of governance, minimum qualifications of directors, and the principal duties of the Board
and officers of the Company.
The Company’s Manual of Corporate Governance supplements and complements the Articles
of Incorporation and By-Laws by setting forth the principles of good and transparent governance.
In 2009, the Company commissioned a review of the manual to update and improve it. This
review was completed in February 2010 and new provisions have been incorporated in the
manual.
The Company has likewise adopted a Code of Conduct, Conflict of Interest, and a
Whistleblower Policy for its employees, and has existing formal policies concerning Unethical,
Corrupt and Other Prohibited Practices covering both its employees and the members of the
Board. These policies serve as guide to matters involving work performance, dealings with
employees, customers and suppliers, handling of assets, records and information, avoidance of
conflict of interest situations and corrupt practices, as well as the reporting and handling of
complaints from whistleblowers, including reports of fraudulent reporting practices.
Moreover, the Company adopted an expanded corporate governance approach in managing
business risks. An Enterprise Risk Management Policy was developed to provide a better
understanding of the different risks that could threaten the achievement of the Company’s vision,
mission, strategies and goals. The policy also highlights the vital role that each individual plays in
the organization – from the Senior Executive Group (SEG) to the staff –in managing risks and in
ensuring that the Company’s business objectives are attained.
New initiatives are regularly pursued to develop and adopt corporate governance best practices,
and to build the right corporate culture across the organization. In 2009, Globe participated in
various activities of the Institute of Corporate Directors (ICD) and the Philippine Securities and
Exchange Commission (SEC) to improve corporate governance practices and refine the
corporate governance self-rating system and scorecard used by publicly listed companies to
assure good corporate governance.
SEC Form 17A 2009 117

The following sections summarize the key corporate governance structures, processes and
practices adopted by Globe.
Board of Directors
Key Roles
The Board of Directors is the supreme authority in matters of governance. The Board establishes
the vision, mission, and strategic direction of the Company, monitors over-all corporate
performance, and protects the long-term interests of the various stakeholders by ensuring
transparency, accountability, and fairness. The Board exercises an oversight role over the risk
management function while ensuring the adequacy of internal control mechanisms, reliability of
financial reporting, and compliance with applicable laws and regulations.
In addition, certain matters are reserved specifically for the Board’s disposition, including the
approval of corporate operating and capital budgets, major acquisitions and disposals of assets,
major investments, and changes in authority and approval limits.
Board Composition
The Board is composed of eleven (11) members, elected by stockholders entitled to vote during
the Annual Stockholders Meeting (ASM). The Board members hold office for one year and until
their successors are elected and qualified in accordance with the By-laws of the Company.
The roles of the Chairman of the Board and the Chief Executive Officer (CEO) are clearly
delineated and are held by two individuals to ensure balance of power and authority and to
promote independent decision-making. Of the eleven members of the Board, only the President
& CEO is an executive director; the rest are non-executive directors who are not involved in the
day-to-day management of the business.
The Board includes two independent directors of the caliber necessary to effectively weigh in on
Board discussions and decisions. Globe defines an independent director as a person who is
independent from management and free from any business or other relationship which could
materially interfere with his exercise of independent judgment in carrying out his responsibilities
as a director.
All board members have the expertise, professional experience, and background that allow for a
thorough examination and deliberation of the various issues and matters affecting the Company.
The members of the Board have likewise attended trainings on corporate governance prior to
assuming office.
In accordance with the Securities & Exchange Commission (SEC) Memorandum No. 16 Series
of 2002, the qualifications of all board nominees are reviewed by the Nominations Committee,
which is chaired by an independent director. The profiles of the directors are found in the “Board
of Directors” section of this annual report.
SEC Form 17A 2009 118

As of December 31, 2009, the Board is comprised of the following members:
Name Position Nature of Appointment
Jaime Augusto Zobel de Ayala * Chairman Non-executive
Gerardo C. Ablaza, Jr. Co-Vice Chairman Non-executive
Mark Chong Chin Kok Co-Vice Chairman Non-executive
Romeo L. Bernardo Director Non-executive
Ernest L. Cu
Director, President & Chief
Executive Officer
Executive
Roberto F. de Ocampo Director Non-executive
Koh Kah Sek Director Non-executive
Delfin L. Lazaro Director Non-executive
Xavier P. Loinaz Director Non-executive/Independent
Guillermo D. Luchangco Director Non-executive/Independent
Fernando Zobel de Ayala Director Non-executive
* Mr. Jaime Augusto Zobel de Ayala and Mr. Fernando Zobel de Ayala are brothers.
Board Remuneration
In accordance with the Company’s By-Laws, the Board members receive stock options and
remuneration in the form of a specific sum for attendance at each regular or special meeting of
the Board. A per diem of P100,000 per Board or committee meeting was agreed and approved
by the shareholders during the ASM held last April 1, 2003. The remuneration is intended to
provide a reasonable compensation to the directors in recognition of their responsibilities and the
potential liability they assume as a consequence of the high standard of best practices required
of the Board as a body, and of the directors individually, under the SEC-promulgated Code of
Corporate Governance. Also, the level of per diem is in line with standards currently practiced
among publicly listed companies similar to Globe.
SEC Form 17A 2009 119

Board Performance
Directors attend regular meetings of the Board, which are normally held on a monthly basis, as
well as special meetings of the Board, and the ASM. A director must have attended at least 50%
of all meetings held in a year in order to be qualified for re-election in the following year.
The Board met eleven (11) times in 2009, including the ASM. The attendance of the individual
directors at these meetings is duly recorded, as follows:
Regular and
Special Meetings
2008 2009
Annual
Stockholders'
Meeting
Regular and
Special Meetings
Annual
Stockholders'
Meeting
Present Absent Present Absent Present Absent Present Absent
Jaime Augusto Zobel de Ayala 8 2 1 0 8 2 1 0
Gerardo C. Ablaza, Jr. 9 1 1 0 9 1 1 0
Mark Chong Chin Kok * 3 - - - - - - -
Chang York Chye * 7 3 1 0 7 0 1 0
Romeo L. Bernardo 10 0 1 0 10 0 1 0
Ernest L. Cu ** 10 0 1 0 - - - -
Roberto F. de Ocampo 9 1 1 0 8 2 1 0
Koh Kah Sek 9 1 1 0 8 2 1 0
Delfin L. Lazaro 10 0 1 0 9 1 1 0
Xavier P. Loinaz 8 2 1 0 8 2 1 0
Guillermo D. Luchangco 9 1 1 0 10 0 1 0
Jesus P. Tambunting ** 8 2 1 0 3 0 1 0
Fernando Zobel de Ayala 7 3 1 0 7 3 1 0
*Mark Chong Chin Kok was appointed Director & Co-Vice Chairman in place of Chang York Chye at the Oct. 6 Board Meeting.
** Ernest L. Cu was appointed Director while Ambassador Jesus P. Tambunting did not stand for re-election at the April 2, 2009 ASM.
The average attendance rate of members of the Board was at 85% for 2008 and 90% for 2009.
All directors have individually complied with the SEC’s minimum attendance requirement of 50%.
Prior to the Board meetings, all of the directors are provided with board papers which include
reports on the Company’s strategic, operational, and financial performance and other regulatory
matters. The Board also has access to the Corporate Secretary who, among other functions,
oversees the flow of information to the Board prior to the meetings and who serves as adviser to
the directors on their responsibilities and obligations. The members of the Board also have
access to management should they need to clarify matters concerning items submitted for their
consideration.
The Board conducts an annual self-assessment to ensure the continuing effectiveness of its
processes and to identify areas for improvement. During the last meeting of every year, the
Board meets in executive session to evaluate and discuss various matters concerning the Board,
including that of its own performance and that of the Company’s management team.
SEC Form 17A 2009 120

Board Committees
To further support the Board in the performance of its functions and to aid in good governance,
the Board has established five (5) committees. The role and function of each Board Committee is
described in detail below.
1. Executive Committee
The Executive Committee (ExCom) is comprised of five (5) members appointed by the Board. At
least three of the Excom members are members of the Board. The ExCom acts by majority vote
and in accordance with the authority granted by the Board. All actions of the ExCom are reported
to the Board at the meeting following such action and are subject to ratification or revision and
alteration by the Board.
2. Audit Committee
The Audit Committee’s roles and responsibilities are clearly defined in the Audit Committee
Charter approved by the Board. The Committee supports the corporate governance process by
fulfilling its oversight responsibility relating to a) the integrity of the financial statements and the
financial reporting process, b) internal controls and financial reporting principles, policies, and
systems, c) the qualifications, independence and remuneration of the independent auditors; d)
internal audit function and independent auditors’ performance, e) risk management systems, and
f) compliance with legal and regulatory matters. Management however has the primary
responsibility for the financial statements and the reporting process, including the system of
internal controls and risk management.
The Committee is composed of three members, at least one of whom is an independent director.
An independent director chairs the Audit Committee. All members of the Audit Committee are
appointed by the Board.
The Committee conducts tenders for independent audit services, reviews audit fees, and
recommends the appointment and fees of the independent auditors to the Board. The Board, in
turn, submits the appointment of the independent auditors and their fees for approval of the
shareholders at the ASM. The amount of audit fees is disclosed in the annual report.
The Audit Committee also approves the work plan of the Company’s Internal Audit Group, as
well as the overall scope and work plan of the independent auditors.
The Audit Committee meets at least once every quarter and invites non-members, including the
President & CEO, Chief Finance Officer, independent and internal auditors, and other key
persons involved in company governance, to attend meetings where necessary. During these
meetings:
• The Committee reviews the financial statements and all related disclosures and reports
certified by the Chief Finance Officer, and released to the public and/or submitted to the
Philippine SEC for compliance with both the internal financial management handbook and
pertinent accounting standards, including regulatory requirements. The Committee, after its
review of the quarterly unaudited and annual audited financial statements of Globe
Telecom and its subsidiaries, endorses these to the Board for approval.
• The Committee meets with the internal and independent auditors, and discusses the
results of their audits, ensuring that management is taking appropriate corrective actions in
a timely manner, including addressing internal controls and compliance issues.
• The Committee reviews the performance and recommends the appointment, retention or
discharge of the independent auditors, including the fixing of their remuneration, to the full
SEC Form 17A 2009 121

Board. On an annual basis, the Committee also assesses the independent auditor’s
qualifications, skills, resources, effectiveness and independence. The Committee also
reviews and approves the proportion of audit and non-audit work both in relation to their
significance to the auditor and in relation to the Company’s total expenditure on
consultancy, to ensure that non-audit work will not be inc conflict with the audit functions of
the independent auditor.
• The Committee reviews the plans, activities, staffing and organizational structure and
assesses the effectiveness of the internal audit function, including conformance with the
International Standards for the Professional Practice of Internal Auditing (ISPPIA).
• The Committee provides oversight of the financial reporting and operational risks,
specifically on financial statements, internal controls, legal or regulatory compliance,
corporate governance, risk management and fraud risks. The Committee also reviews the
results of management’s annual risk assessment exercise.
The Audit Committee reports after each meeting and provides a copy of the minutes of its
meetings to the full Board.
To ensure compliance with regulatory requirements and assess the appropriateness of the
existing Charter for enabling good corporate governance, the Committee also reviews and
assesses the adequacy of its Charter annually, seeking Board approval for any amendments.
The Committee conducts an annual assessment of its performance to benchmark its practices
against the expectations set out in the approved Charter, and to ensure that it continues to fulfill
its responsibilities in accordance with global best practices and in compliance with the Manual of
Corporate Governance and other relevant regulatory requirements. The results of the selfassessment
and any ensuing action plans formulated to improve the Committee’s performance
are reported to the Board.
3. Compensation Committee
The Compensation Committee’s roles and responsibilities are clearly defined in the
Compensation Committee Charter approved by the Board. The Committee is composed of four
(4) members, one of whom is an independent director. All members of the Compensation
Committee are appointed by the Board.
The Committee is tasked to review the compensation philosophy and structure of the Company
and the reasonableness of its compensation and incentive plans and structures. The Committee
also reviews and approves the Company’s annual compensation plan and annual incentive plan.
In reviewing the plans, the Committee considers relevant industry and multi-industry benchmarks
in order to assess the reasonableness of management’s recommendations. The compensation
plan also includes retention structures for key positions. The Compensation Committee usually
meets at least twice a year, or more often as required.
The Stock Options Committee is a sub-committee of the Compensation Committee and has two
(2) members. The Stock Options Committee considers the framework for the award of stock
options to managers and executives, to the directors, and to certain key consultants.
4. Nominations Committee
The Nominations Committee’s roles and responsibilities are clearly defined in the Nominations
Committee Charter approved by the Board. The Committee is composed of three (3) members,
including one independent director. An independent director chairs the Committee. All members
of the Nominations Committee are appointed by the Board.
SEC Form 17A 2009 122

The Nominations Committee reviews the qualifications of the members of the Board to ensure
that they have all the qualifications and none of the disqualifications stated in the By-Laws and
the Manual of Corporate Governance of the Company. The Committee also reviews the
qualifications of candidates for the SEG – consisting of the President & CEO and his direct
reports – and endorses them to the Board.
The Committee meets at least once in the first quarter of the year to review the qualifications and
attendance of the nominees to the Board prior to the list of nominees being submitted to the
stockholders at the ASM. Thereafter, it meets as often as required to review specific nominations
of key hires and promotions to key positions as they come up in the ordinary course of business.
5. Finance Committee
The Finance Committee is responsible for reviewing and evaluating the financial affairs of the
Company, including conducting an annual review of all financial activities during the immediately
preceding year prior to each ASM. The Committee is composed of three (3) members. All
members of the Finance Committee are appointed by the Board.
The members of each Board committee are set forth below:
Executive Committee
Compensation
Committee Finance Committee Audit Committee
Nominations
Committee
Gerardo C. Ablaza, Jr. * Gerardo C. Ablaza, Jr.* Delfin L. Lazaro* Xavier P. Loinaz* Guillermo D. Luchangco*
Mark Chong Chin Kok Guillermo D. Luchangco Koh Kah Sek Romeo L. Bernardo Gerardo C. Ablaza, Jr.
Ernest L. Cu Mark Chong Chin Kok Delfin C. Gonzalez, Jr. Koh Kah Sek Mark Chong Chin Kok
Ferdinand M. Dela Cruz Ernest L. Cu
* Chairman
Management
The President & CEO, guided by the Company’s vision, mission, and values statements, is
accountable to the Board for the development and recommendation of strategies, and the
execution of the defined strategic imperatives. The President & CEO is assisted by the heads of
each of the major business units and support groups.
The Office of Strategy Management (OSM) reports to the President & CEO and oversees the
Company’s strategy management processes from strategy formulation, translation to executable
plans, horizontal alignment of business objectives across the organization, to execution and
performance tracking linked to the Company’s rewards system.
Every year, the Company reviews and formulates its strategic priorities which then guide the
formulation of the key business strategies and goals for the year. Using the balanced scorecard
framework, each business group identifies financial and non-financial objectives, and sets targets
and initiatives to achieve them. This is captured in what is called the groups’ Terms of Reference
(TOR). To ensure line of sight, the group TORs are cascaded to all employees, making sure that
everyone understands and appreciates their contribution to the group goals. This helps in
developing individual performance plans that are aligned with the key strategies. Rewards and
incentives are given based on the achievement of the committed group and individual targets.
Key programs, projects, and major organizational initiatives are taken up at the SEG, composed
of the President and CEO, as well as the heads of each of the major business units and support
groups. All budgets and major capital expenditures must be approved by the SEG prior to
endorsement to the Board for approval. The Chief Operating Adviser and Chief Legal Adviser
also provide inputs to the SEG as required. The SEG meets at least once a week.
SEC Form 17A 2009 123

Management is mandated to provide complete and accurate information on the operations and
affairs of the Company in a timely manner. Management is also required to prepare financial
statements for each preceding financial year in accordance with Philippine Financial Reporting
Standards (PFRS). Management’s statement of responsibility with regards to the Company’s
financial statements is included in the annual report.
The annual compensation of the ten (10) top officers of the Company, including the President &
CEO, is disclosed in the Definitive Information Statement distributed to the shareholders. The
total annual compensation includes the basic salary, guaranteed bonuses, fixed allowances, and
variable pay (performance-based annual incentive).
Recognition for Excellence in Corporate Governance
The efforts of Globe in instituting good governance practices were cited among Asia's best at the
5th Corporate Governance Asia Recognition Awards in Hong Kong. This is the third citation for
corporate governance that Ayala and its companies received in 2009, following top rankings in a
separate poll by Finance Asia and the Institute of Corporate Directors’ Corporate Governance
Scorecard Project.
We were also featured for our internal audit practices in the Asian Confederation of Institutes of
Internal Auditors (ACIIA) publication entitled "Governance, Risk Management and Control:
Internal Audit Leading Practices, Case Studies in Asia."
Enterprise Risk Management
Cognizant of the dynamism of the business and the industry and in line with its goal to
continuously enhance value for its stakeholders, Globe Telecom has put in place a robust risk
management approach that is fully integrated in its strategy planning, execution and day to day
operations.
As part of its strategy management calendar, senior management and key leaders regularly
conduct an enterprise-wide assessment of risks focused on identifying the key risks that could
threaten the achievement of Globe’s business objectives, both at the corporate and business unit
level, as well as specific plans to mitigate or manage such risks.
Risks are prioritized, depending on the impact to the overall business and the effectiveness by
which these are managed. Risk mitigation strategies are developed, updated and continuously
reviewed for effectiveness, and are also monitored through various control mechanisms.
Globe employs a two-dimensional view of risk monitoring. Senior management’s scorecard
includes the status of risk mitigation plans as they relate to the attainment of a particular
business objective. Enterprise Risk Owners, on the other hand, regularly monitor and report the
status of the approved mitigation plans meant to address the key risks.
Annually, Globe conducts an Enterprise Risk Management Performance Evaluation which serves
as a basis for continuously improving our Risk Management processes and capabilities.
The Board of Directors, supported by the Executive Committee (Excom) and Audit Committee,
has an oversight role over the Company’s risk management activities and approves Globe’s risk
management policies. The Excom covers specific non-financial (e.g. strategic, operational,
human capital, regulatory) risks, while the Audit Committee provides oversight of financial
reporting risks.
The Chief Financial Officer supports the President, as the overall risk executive, in overseeing
the risk management activities of the Company, ensuring that the responsibilities for managing
SEC Form 17A 2009 124

specific risks are clear, the level of risk accepted by the Company is appropriate, and that an
effective control environment exists for the Company as a whole.
Risk Owners at the senior executive level have been identified and made accountable for
managing specific risk, supported by business process owners who have been designated,
trained and made responsible for the particular process or activity from which the risk arises. This
is consistent with management’s belief that risks are best understood and managed by the
employees who are closest to the process.
The Enterprise Risk Management unit, under the Office of Strategy Management, facilitates the
enterprise risk management activities, bringing these closer to and more aligned with the
Company’s strategic planning and execution framework. This also supports the integration of
enterprise risk management with the Company’s scorecard processes and more tightly link risk
mitigation efforts with its day-to-day operations.
Audit and Internal Controls
It is the policy of Globe Telecom to establish and support an Internal Audit function as a
fundamental part of its corporate governance practices. Internal audit is a service, providing an
independent, objective assurance and consulting function within Globe Telecom, and sharing the
organization’s common goal of creating and enhancing value for its stakeholders through a
systematic approach in evaluating the effectiveness of the Company’s risk management, internal
control and governance processes. The Audit Committee regards its relationship with Globe
Internal Audit having a vital role in supporting the Committee in the effective discharge of its
oversight role and responsibilities.
The Internal Audit Group performs its auditing functions faithfully by maintaining independence
from management and controlling shareholders as it reports functionally to the Board, through
the Audit Committee, and administratively, to the President & CEO.
The Internal Audit Group maintains, reviews and assesses the adequacy of its Charter annually
to ensure compliance with regulatory requirements and appropriateness for enabling good
corporate governance. Any amendments to the Charter are submitted for Audit Committee and
Board approval.
Globe Internal Audit adopts a risk-based audit approach in developing its annual work plan, reassessed
quarterly to consider emerging risks and the changing dynamics of the
telecommunications industry. The Audit Committee reviews and approves the annual work plan
and all deviations therefrom, and ensures that internal audit examinations cover at least the
evaluation of adequacy and effectiveness of controls encompassing the Company’s governance
processes, information systems, reliability and integrity of financial and operational information,
effectiveness and efficiency of operations, safeguarding of assets, and compliance with laws,
rules, and regulations. The Audit Committee also ensures that audit resources are reasonably
allocated to and focused on the areas of highest risk.
The Committee meets with the internal auditors, and discusses the results of their audits,
ensuring that management is taking appropriate corrective actions in a timely manner, including
addressing internal controls and compliance issues. The Committee also receives periodic
reports on the status of internal audit activities, key performance indicators, accomplishments
and quality assurance and improvement programs.
Globe Internal Audit governs its activities in conformance with the International Standards for the
Professional Practice of Internal Auditing (the “Standards”), the Institute of Internal Auditor’s
Code of Ethics and the Company’s Code of Conduct. In 2007, the group subjected its activities to
an external Quality Assurance Review (QAR) which resulted to a ”Generally Conforms” rating,
SEC Form 17A 2009 125

the highest rating that can be achieved in a QAR process, confirming that internal audit activities
are conducted in conformance with the Standards.
In 2009, Globe was featured in the first project of the Asian Confederation of IIA (ACIIA) entitled
“Governance, Risk Management and Control: Internal Audit leading Practices, Case Studies in
Asia”, the first book published by ACIIA ( a confederation of 14 IIA affiliates in the Asia Pacific
region). Aligned with the resolve of the company to uphold the principles of good governance,
Globe Internal Audit shares its practices on corporate governance and internal auditing.
Geared towards excellence, the Internal Audit Group provides for continuing personal and
professional development of all auditors to equip them in the conduct of reviews, with focus on
acquiring familiarity with Globe internal processes and telecom technology, new accounting and
auditing standards, fraud investigation skills and regulatory updates.
The Company engages the services of independent auditors to conduct an audit and obtain
reasonable assurance on whether the financial statements and relevant disclosures are free from
material misstatements. The independent auditors are directly responsible to the Audit
Committee in helping ensure the integrity of the Company’s financial statements and reporting
process.
The appointment of the independent auditors is submitted to the shareholders for approval at the
ASM. The representatives of the independent auditors are expected to be present at the ASM
and have the opportunity to make a statement on the Company’s financial statements and results
of operations if they desire to do so. The auditors are also expected to be available to respond to
appropriate questions during the meeting.
SyCip, Gorres, Velayo & Company (SGV & Co.) is the appointed principal accountant and
external auditor for Globe Telecom, Inc. in accordance with regulations issued by the SEC, the
audit partner principally handling the Company’s account is rotated every five (5) years or
sooner. The most recent rotation occurred in 2007.
There were no disagreements with the Company’s independent auditors on any matter of
accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
Fees approved in connection with the audit and audit-related services rendered by SGV & Co.,
pursuant to the regulatory and statutory requirements amounted to P15.95 million for the year
ended 31 December 2009 as compared to P19.17 million for 2008.
In addition to performing the audit of Globe Group’s financial statements, SGV & Co. was also
selected, in accordance with established procurement policies, to provide other services in 2009
and 2008.
The Audit Committee has an existing policy to review and to pre-approve the audit and non-audit
services rendered by the Company’s independent auditors. It does not allow the Globe Group to
engage the independent auditors for certain non-audit services expressly prohibited by SEC
regulations to be performed by an independent auditor for its audit clients. This is to ensure that
the independent auditors maintain the highest level of independence from the Company, both in
fact and appearance.
The Audit Committee has reviewed the nature of non-audit services rendered by SGV & Co. and
the corresponding fees and concluded that these are not significant to impair the independence
of the auditors.
SEC Form 17A 2009 126

The aggregate fees billed by SGV & Co. are shown below (with comparative figures for 2008):
(in millions of pesos)
2009 2008
Audit and Audit-Related Fees 15.95 19.17
Tax Fees - 0.20
All Other Fees 0.05 5.26
Total P16.00 P24.63
Audit and Audit-Related Fees. This includes audit of Globe Group’s annual financial statements
and review of quarterly financial statements in connection with the statutory and regulatory filings
or engagements for the years ended 2009 and 2008. This also includes assurance and other
services that are reasonably related to the performance of the audit or review of Globe Group’s
financial statements pursuant to regulatory requirements.
Tax fees. This includes tax consultancy and advisory services outside the scope of financial audits
and reviews.
All Other Fees. This includes one-time, non-recurring special projects/consulting services and
seminars.
The fees presented above include out-of-pocket expenses incidental to the independent auditor’s
services.
Financial Reporting
The consolidated financial statements of Globe Telecom and its subsidiaries have been prepared
in accordance with PFRS, which are aligned with International Financial Reporting Standards.
Management has the primary responsibility for the financial statements and financial reporting
process. The independent auditors are directly responsible to the Audit Committee in helping
ensure the integrity of the Company’s financial statements and relevant disclosures, and for
expressing an opinion on Globe Group’s annual audited consolidated financial statements. As part
of its oversight responsibility, the Audit Committee, with the assistance of the internal auditors,
reviews the financial statements and all related disclosures and endorses these to the Board for
approval.
The financial statements comprise of the consolidated statements of financial position,
consolidated statements of comprehensive income, consolidated statements of changes in equity,
and consolidated statements of cash flows. Information showing the performance of the wireless
and wireline segments is also disclosed to show their respective contributions to total corporate
performance. Finally, the financial statements also include a detailed discussion of the Company’s
significant accounting policies and other explanatory notes.
Dealings in Securities
Globe has adopted strict policies and guidelines for trades involving the Company’s shares made
by key officers and those with access to material non-public information. Key officers and those
with access to the quarterly results in the course of its review are prohibited from trading in
Globe’s shares starting from the time when quarterly results are internally reviewed until after
Globe publicly discloses its results. Notices of trading blackouts are regularly issued to the officers
concerned and compliance is monitored by the Corporate and Regulatory Affairs Group. Also, all
key officers are required to submit a report on their trades to a designated compliance officer, for
submission to the SEC in accordance with the Securities Regulation Code.
SEC Form 17A 2009 127

Ownership Structure
Globe Telecom regularly discloses the top 20 shareholders of the common and preferred equity
securities of the Company. Disclosure is also made of the security ownership of certain record
and beneficial owners who hold more than 5% of the Company’s common and preferred shares.
Finally, the shareholdings and percentage ownership of the directors and key officers are
disclosed in the Definitive Information Statement sent to the shareholders prior to the ASM.
The following are the major shareholders of Globe Telecom as of December 31, 2009:
Stockholders
Common
Shares
% of
Common
Preferred
Shares
% of
Preferred
shares
Total
% of
Total
Ayala Corp. 40,319,263 30.47% 0 - 40,319,263 13.86%
SingTel 62,646,486 47.34% 0 - 62,646,486 21.54%
Asiacom 0 0 158,515,021 100% 158,515,021 54.50%
Public 29,379,846 22.20% 0 - 29,379,846 10.10%
Total 132,345,595 100% 158,515,021 100% 290,860,616 100%
Shareholder Relations
Globe Telecom recognizes the importance of regular communication with its investors, and is
committed to high standards of disclosure, transparency, and accountability. The Company aims
to provide a fair, accurate, and meaningful assessment of the Company’s financial performance
and prospects through the annual report, quarterly financial reports, and analyst presentations.
The Company’s quarterly financial results are disclosed to the SEC and Philippine Stock
Exchange (PSE) within 24 hours from their approval by the Board. The Company also files its
quarterly and year-end financial statements and the detailed management’s discussion and
analysis within forty-five (45) and one hundred and five (105) calendar days respectively from the
end of the financial period covered by the report, in compliance with the financial reporting and
disclosure requirements of the SEC and the PSE. These reports are also made available to the
analysts immediately upon confirmation by the SEC of receipt of disclosure, and are posted on
the Company’s website.
Additionally, any material, market-sensitive information such as dividend declarations are also
disclosed to the SEC and PSE, as well as released through various media including press
releases and Company website posting. The Company regularly holds analysts and media
briefings to discuss the quarterly financial results. A conference call facility is set up during these
briefings to enable wider participation. The company also participates in both local and
international investor conferences as part of its investor communications program.
The Company likewise holds an annual stockholders’ meeting where shareholders are given the
opportunity to raise questions and clarify issues relevant to the Company. The Board, President
& CEO, members of management, and external auditors are present to address any questions
raised at these meetings. Enquiries by shareholders, whether by telephone, mail, or electronic
mail, are dealt with as promptly as possible. Shareholders, investors, and the public may also
access the Company’s website (http://www.globe.com.ph) to obtain information on the Company.
SEC Form 17A 2009 128

Employee Relations
Life in Globe is as dynamic as the industry we are in. We are each one’s Ka-Globe, striving to
constantly deliver superior and quality service to our customers. Whether we are serving our
subscribers in our stores, delivering customized solutions to our enterprise and corporate clients,
or ensuring quality of our network and information technology systems, we believe that our
business lies at the heart of transforming and enriching lives.
a. Building and Sustaining Talent Capability
We deliver results through our people. We bring this thrust to life by providing opportunities
that enhance talent and by constantly improving on talent management and development
practices. We have put in place structures, systems and initiatives that enable high
performance at all levels, all aimed at building and sustaining our people’s productivity,
effectiveness and positive experience in the workplace.
In 2009, we strengthened our drive towards becoming a learning organization by making
our people more accountable for their own career growth and development within Globe.
Through synergistic efforts, we shared best management practices and leveraged on
strategic partnerships and alliances with the Singtel and Ayala communities. Through the
Game for Global Growth (GGG), Regional Leadership in Action (RLA) and Ayala
Leadership Excellence Acceleration Program (LEAP), our executives received worldclass
training in business and entrepreneurship to make them better tooled and effective
managers of the business and their people. During this year, we also launched the Globe
Emerging Leaders’ (GEL) Program, a Senior Executive Group-led development program
in partnership with the Harvard Business School, to support our Leader-as-Teacher culture
in Globe. The program engaged our senior executives and key successors as teachers
and students respectively for an eight-month combined instructor-led and online training
curriculum.
Given the unrelenting war for attracting and developing talents, we have also been
steadfast in keeping our Pipeline Management Programs for defined talent segments in the
field of Sales, Marketing, and Information Technology. For 2009, a total of 47 participants
finished our Globe Management Development Program, Globe Sales Development
Program, IT Cadetship Program and Business Management Associate Program. This is in
line with proactively growing and developing the next generation of leaders who will drive
the business of the future.
As we nurture a strong performance-oriented culture in the organization, we also ensure a
holistic approach in developing our talent by providing internal career opportunities
consistent with our employees’ aspirations. In 2009, we introduced key changes in our
Internal Hiring Program which empowered 151 of our employees to explore and fill out
vacant positions in the Company. The change in policy also strengthened communication
and performance conversations between people managers and their direct reports.
b. Employee Engagement Through Volunteerism
While our people keep up with the rapid pace of their daily endeavors in the Company, we
take pride in our collective and relentless efforts to be of service not only to the customer
but to the larger society and community. In 2009, a total of 1,727 man-days were spent by
Globe employees taking active part in various outreach and volunteer activities that
included building homes and schools, teaching out-of-school youth, reforestation and
cleanup initiatives, and other socially-relevant programs in partnership with our flagship
corporate social responsibility arm, Globe BridgeCom.
SEC Form 17A 2009 129

The men and women of Globe also quickly rose to the occasion during Typhoons Ondoy
and Pepeng with the launch of Tulong Ka-Globe and Bangon Pinoy programs, where a
total of 886 employee volunteers participated in the relief and rescue operations that
include packing of and distribution of relief goods to affected Globe colleagues and the
general public, manning hotlines and taking calls for assistance and help, communityrebuilding
activities and other country-wide restoration efforts.
This year also launched the collaborative efforts of Globe, Technical Education and Skills
Development Authority (TESDA) and National College of Science and Technology (NCST)
with the Dual Training System (DTS) program, a first of its kind in the telco industry which
will allow select NCST faculty and out-of-school youth students to undergo an intensive
Telecommunications and Broadband Certification Program. These undertakings show that
our people have made nation-building a personal responsibility and commitment.
c. Forging Healthy Labor Relations
Globe employs 5,451 active regular employees as of December 31, 2009, of which 520 or
9.5% are covered by a Collective Bargaining Agreement (CBA) with the Globe Telecom
Employees’ Union – Federation of Free Workers (GTEU-FFW). The Company maintains a
mutually supportive relationship with the GTEU-FFW as demonstrated in joint projects and
initiatives that affect its members at large.
In March 2009, we have seen the strong partnership come to play with the conclusion of
the CBA Negotiations for 2009-2010. The partnership, centered on industrial peace and
harmony, is focused on shared goals and commitment to quality service, growth and
productivity.
SEC Form 17A 2009 130

PART V – EXHIBITS AND SCHEDULES
A. Exhibits – Please see accompanying Index to Exhibits in the following pages
B. Reports on SEC Form 17-C - The Company regularly files various reports on SEC
Form 17-C relative to various company disclosures. Of these, the more significant ones
are as follows:
Date
Feb 3, 2009
Mar 27, 2009
April 29, 2009
May 22, 2009
June 9, 2009
Aug 3, 2009
Aug 4, 2009
Oct 6, 2009
Oct 9, 2009
Nov 6, 2009
Nov. 26, 2009
Dec 10, 2009
Dec 14, 2009
Title
Declaration of first semi-annual cash dividend
P1 Billion Term Loan Facility with Land Bank of the Philippines
US$50 Million Loan Agreement with Export Development Canada
P5 Billion Fixed and Floating Rate Notes Facility with First Metro
Investment Corp
Globe Telecom’s Retail Bonds to list at PDEX
US$75 Million Credit Facility arranged by Citibank N.A.
Declaration of 2 nd semi-annual cash dividend
Changes in Globe Telecom, Inc.’s Board of Directors
BSP approval on the sale and transfer by BPI of its shares in PSBI
Declaration of special cash dividend
P3 Billion Term Loan Facility with Union Bank of the Philippines
Globe Links Philippines to Southeast Asia Japan Cable System
Non-renewal of credit rating review agreement with Standard and Poors
SEC Form 17A 2009 132

INDEX TO EXHIBITS
Description of Exhibit
Remarks/Attachment
Statement of Management’s Responsibility
√
Report of Auditors and Consolidated Financial Statements and
√
Notes to Consolidated Financial Statements
Independent Auditors’ Report on the Supplementary Schedules
√
Short Term Investments *
Amounts Receivable from Directors, Officers, Employees, Related
√
Parties and Principal Stockholders Other Than Affiliates
Long-Term Investments in Securities (Non-current Marketable
*
Securities, Other Long Term Investments in Stocks and Other
Investments)
Deferred Charges and Others
√
Long Term Debt
√
Indebtedness to Related Parties (Other Long term Liabilities) *
Capital Stock (Specimen of stock certificate)
√
Plan of Acquisition, Reorganization, Arrangements, Liquidation or
*
Succession
Instruments Defining the Rights of Security Holders, Including
*
Indentures
Voting Trust Agreement *
Material Contracts *
Schedule of Unappropriated Retained Earnings as of 12/31/2009
√
Annual Report to Security Holders
√
Letter re: Director Resignation *
Report Furnished to Security Holders *
Subsidiaries to Registrant *
Published Report Regarding Matters Submitted to a Vote of
*
Security Holders
Consent of Experts and Independent Counsel *
Power of Attorney *
Note: * The exhibits are either Not Applicable to the Company or require No Answer.
SEC Form 17A 2009 133

Globe Telecom, Inc. and Subsidiaries
Consolidated Financial Statements
December 31, 2009, 2008 and 2007
and
Independent Auditors’ Report
SyCip Gorres Velayo & Co.

SyCip Gorres Velayo & Co.
6760 Ayala Avenue
1226 Makati City
Philippines
Phone: (632) 891 0307
Fax: (632) 819 0872
www.sgv.com.ph
BOA/PRC Reg. No. 0001
SEC Accreditation No. 0012-FR-2
INDEPENDENT AUDITORS’ REPORT
The Stockholders and the Board of Directors
Globe Telecom, Inc.
We have audited the accompanying consolidated financial statements of Globe Telecom, Inc. and
Subsidiaries, which comprise the consolidated statement of financial position as at
December 31, 2009, 2008 and 2007, and the consolidated statements of comprehensive income,
consolidated statements of changes in equity and consolidated statements of cash flows for the years
then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with Philippine Financial Reporting Standards. This responsibility includes: designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error; selecting
and applying appropriate accounting policies; and making accounting estimates that are reasonable in
the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with Philippine Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
A member firm of Ernst & Young Global Limited

- 2 -
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the
financial position of Globe Telecom, Inc. and Subsidiaries as of December 31, 2009, 2008 and 2007,
and its financial performance and its cash flows for the years then ended in accordance with
Philippine Financial Reporting Standards.
SYCIP GORRES VELAYO & CO.
Arnel F. de Jesus
Partner
CPA Certificate No. 43285
SEC Accreditation No. 0075-AR-1
Tax Identification No. 152-884-385
PTR No. 2087528, January 04, 2010, Makati City
February 4, 2010
*SGVMC113950*

GLOBE TELECOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
December 31
Notes 2009
2008
(As restated) 2007
(In Thousand Pesos)
ASSETS
Current Assets
Cash and cash equivalents 28, 30 P=5,939,927 P=5,782,224 P=6,191,004
Short-term investments 28 2,784 – 500,000
Held-to-maturity investments 28 – – 2,350,032
Receivables - net 4, 28 6,583,228 7,473,346 6,383,541
Inventories and supplies 5 1,653,750 1,124,322 1,112,146
Derivative assets 28 36,305 169,012 528,646
Prepayments and other current assets - net 6, 28 4,199,320 5,106,429 2,667,216
Total Current Assets 18,415,314 19,655,333 19,732,585
Noncurrent Assets
Property and equipment - net 7 101,693,868 93,540,390 91,527,820
Investment property - net 8 236,739 259,223 291,207
Intangible assets and goodwill - net 9 2,982,856 3,338,796 2,434,623
Investments in joint ventures 10 233,800 73,529 83,257
Deferred income tax - net 24 742,538 523,722 637,721
Other noncurrent assets - net 11 3,338,410 2,360,195 1,913,639
Total Noncurrent Assets 109,228,211 100,095,855 96,888,267
P=127,643,525 P=119,751,188 P=116,620,852
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses 12, 28 P=20,838,681 P=17,032,474 P=18,435,453
Provisions 13 89,404 202,514 219,687
Derivative liabilities 28 85,867 163,989 326,721
Income tax payable 24 1,107,721 1,237,969 1,361,420
Unearned revenues 4 2,981,880 3,247,711 1,866,531
Notes payable 14, 28 2,000,829 4,002,160 500,000
Current portion of:
Long-term debt 14, 28 5,667,965 7,742,227 4,803,341
Other long-term liabilities 15, 28 803,617 99,145 86,416
Total Current Liabilities 33,575,964 33,728,189 27,599,569
Noncurrent Liabilities
Deferred income tax - net 24 4,627,294 4,590,429 5,502,890
Long-term debt - net of current portion 14, 28 39,808,057 28,843,711 25,069,511
Derivative liabilities 28 6,589 21,665 14,110
Other long-term liabilities - net of current portion 15, 28 1,916,707 2,475,639 3,017,962
Total Noncurrent Liabilities 46,358,647 35,931,444 33,604,473
Total Liabilities 79,934,611 69,659,633 61,204,042
Equity
Paid-up capital 17 33,912,158 33,861,398 33,720,380
Cost of share-based payments 16, 18 468,367 386,905 306,358
Other reserves 17, 28 18,518 (35,382) 184,408
Retained earnings 17 13,309,871 15,878,634 21,205,664
Total Equity 47,708,914 50,091,555 55,416,810
P=127,643,525 P=119,751,188 P=116,620,852
See accompanying Notes to Consolidated Financial Statements.
*SGVMC113950*

GLOBE TELECOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31
Notes 2009 2008 2007
(In Thousand Pesos, Except Per Share Figures)
REVENUES
Service revenues 16 P=62,443,518 P=62,894,488 P=63,208,652
Nonservice revenues 1,418,614 1,923,560 2,300,064
Interest income 19 271,806 420,425 728,621
Others - net 20 1,064,476 700,874 1,789,571
65,198,414 65,939,347 68,026,908
Gain on disposal of property
and equipment - net 7 608,400 24,837 14,910
65,806,814 65,964,184 68,041,818
COSTS AND EXPENSES
General, selling and administrative 21 24,496,882 23,757,126 21,304,473
Depreciation and amortization 7, 8, 9 17,388,430 17,028,068 17,188,998
Cost of sales 5 2,947,950 3,117,172 3,322,777
Financing costs 22 2,182,881 3,000,391 5,224,939
Impairment losses and others 23 810,960 1,205,679 941,260
Equity in net losses of joint ventures 10 7,009 9,728 9,023
47,834,112 48,118,164 47,991,470
INCOME BEFORE INCOME TAX 17,972,702 17,846,020 20,050,348
PROVISION FOR (BENEFIT FROM)
INCOME TAX 24
Current 5,583,809 7,268,584 6,841,240
Deferred (179,980) (698,442) (67,911)
5,403,829 6,570,142 6,773,329
NET INCOME 12,568,873 11,275,878 13,277,019
OTHER COMPREHENSIVE INCOME
(EXPENSE) 17
Transactions on cash flow hedges - net 25,040 (310,099) 167,096
Changes in fair value of available-for-sale investment
in equity securities 14,553 (19,734) 16,158
Exchange differences arising from translations of
foreign investments 24,682 1,508 –
Tax effect relating to components of other
comprehensive income (10,375) 108,535 194,944
53,900 (219,790) 378,198
TOTAL COMPREHENSIVE INCOME P=12,622,773 P=11,056,088 P=13,655,217
Earnings Per Share 27
Basic P=94.59 P=84.75 P=100.07
Diluted P=94.31 P=84.61 P=99.58
Cash dividends declared per common share 17 P=114.00 P=125.00 P=116.00
See accompanying Notes to Consolidated Financial Statements.
*SGVMC113950*

GLOBE TELECOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Notes
Capital
Stock
(Note 17)
Additional
Paid-in
Capital
Cost of
Share-Based
Payments
Other
Reserves
(Note 17)
Retained
Earnings
Total
For the Year Ended December 31, 2009 (In Thousand Pesos)
As of January 1, 2009 P=7,408,075 P=26,453,323 P=386,905 (P=35,382) P=15,878,634 P=50,091,555
Total comprehensive income for the year – – – 53,900 12,568,873 12,622,773
Dividends on: 17.3
Common stock – – – – (15,087,144) (15,087,144)
Preferred stock – – – – (50,492) (50,492)
Cost of share-based payments 18.1 – – 126,437 – – 126,437
Collection of subscriptions receivable 732 – – – – 732
Exercise of stock options 272 49,756 (44,975) – – 5,053
As of December 31, 2009 P=7,409,079 P=26,503,079 P=468,367 P=18,518 P=13,309,871 P=47,708,914
For the Year Ended December 31, 2008 (In Thousand Pesos)
As of January 1, 2008 P=7,367,002 P=26,353,378 P=306,358 P=184,408 P=21,205,664 P=55,416,810
Total comprehensive income (expense)
for the year – – – (219,790) 11,275,878 11,056,088
Dividends on: 17.3
Common stock – – – – (16,542,271) (16,542,271)
Preferred stock – – – – (60,637) (60,637)
Cost of share-based payments 18.1 – – 182,324 – – 182,324
Collection of subscriptions receivable 40,742 – – – – 40,742
Exercise of stock options 331 99,945 (101,777) – – (1,501)
As of December 31, 2008 P=7,408,075 P=26,453,323 P=386,905 (P=35,382) P=15,878,634 P=50,091,555
For the Year Ended December 31, 2007 (In Thousand Pesos)
As of January 1, 2007 P=7,349,654 P=26,134,707 P=340,743 (P=193,790) P=23,316,837 P=56,948,151
Total comprehensive income for the year – – – 378,198 13,277,019 13,655,217
Dividends on: 17.3
Common stock – – – – (15,338,743) (15,338,743)
Preferred stock – – – – (49,449) (49,449)
Cost of share-based payments 18.1 – – 129,914 – – 129,914
Collection of subscriptions receivable 4,660 – – – – 4,660
Exercise of stock options 12,688 218,671 (164,299) – – 67,060
As of December 31, 2007 P=7,367,002 P=26,353,378 P=306,358 P=184,408 P=21,205,664 P=55,416,810
See accompanying Notes to Consolidated Financial Statements.
*SGVMC113950*

GLOBE TELECOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31
Notes 2009 2008 2007
(In Thousand Pesos)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax P=17,972,702 P=17,846,020 P=20,050,348
Adjustments for:
Depreciation and amortization 7, 8, 9 17,388,430 17,028,068 17,188,998
Interest expense 22 2,096,945 2,255,878 2,996,347
Bond redemption cost 14, 22 – – 614,697
Cost of share-based payments 16, 18 126,437 182,324 129,914
Gain on disposal of property and equipment 7 (608,400) (24,837) (14,910)
Equity in net losses of a joint venture 10 7,009 9,728 9,023
Provisions for (reversals of) other probable losses 23 (88,047) (5,031) 3,179
Loss (gain) on derivative instruments 22 64,547 (105,642) (61,463)
Impairment losses (reversal of impairment losses) on
property and equipment 23 85,631 (31,172) (71,431)
Foreign exchange losses (gains) - net 20, 22 (286,530) 759,299 (1,431,214)
Interest income 19 (271,806) (420,425) (728,621)
Dividend income (592) (27) –
Operating income before working capital changes 36,486,326 37,494,183 38,684,867
Changes in operating assets and liabilities:
Decrease (increase) in:
Receivables 833,760 (751,361) (1,095,336)
Inventories and supplies (529,428) (12,176) (118,652)
Prepayments and other current assets 754,837 (2,482,801) (1,332,436)
Increase (decrease) in:
Accounts payable and accrued expenses 1,617,432 (2,778,052) 3,229,966
Unearned revenues (265,831) 1,381,180 596,456
Other long-term liabilities 68,345 (818,774) 1,463,490
Cash generated from operations 38,965,441 32,032,199 41,428,355
Interest paid (3,009,233) (2,407,243) (3,231,924)
Income tax paid (5,589,227) (7,117,556) (6,193,383)
Net cash flows provided by operating activities 30,366,981 22,507,400 32,003,048
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to:
Property and equipment 7 (20,988,768) (18,754,502) (13,824,879)
Intangible assets 9 (99,164) (196,052) (191,738)
Proceeds from sale of property and equipment 58,145 137,124 36,979
Decrease (increase) in:
Short-term investments (2,784) 500,000 5,655,349
Available-for-sale investments – – 293,567
Held-to-maturity investments – 2,350,032 (1,492,469)
Other noncurrent assets (863,889) (619,397) (273,333)
Acquisition of subsidiaries 9 (141,330) (351,499) –
Dividend received 592 27 –
Interest received 208,094 352,990 696,015
Net cash flows used in investing activities (21,829,104) (16,581,277) (9,100,509)
(Forward)
*SGVMC113950*

- 2 -
Years Ended December 31
Notes 2009 2008 2007
(In Thousand Pesos)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings: 14
Long-term P=18,629,170 P=11,500,000 P=13,121,044
Short-term 2,000,000 6,603,375 500,000
Repayments of borrowings: 14
Long-term (9,820,330) (4,814,990) (22,107,813)
Short-term (4,001,330) (3,100,540) –
Payments of dividends to stockholders: 17
Common (15,087,144) (16,542,271) (15,338,743)
Preferred (60,637) (49,449) (64,669)
Collection of subscriptions receivable and exercise of
stock options 5,785 39,241 71,720
Net cash flows used in financing activities (8,334,486) (6,364,634) (23,818,461)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 203,391 (438,511) (915,922)
NET FOREIGN EXCHANGE DIFFERENCE (45,688) 29,731 (398,789)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE YEAR 5,782,224 6,191,004 7,505,715
CASH AND CASH EQUIVALENTS AT
END OF YEAR 28, 30 P=5,939,927 P=5,782,224 P=6,191,004
See accompanying Notes to Consolidated Financial Statements.
*SGVMC113950*

GLOBE TELECOM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
Globe Telecom, Inc. (hereafter referred to as “Globe Telecom”) is a stock corporation organized
under the laws of the Philippines, and enfranchised under Republic Act (RA) No. 7229 and its
related laws to render any and all types of domestic and international telecommunications
services. Globe Telecom is one of the leading providers of digital wireless communications
services in the Philippines under the Globe and Touch Mobile (TM) brand using a fully digital
network. It also offers domestic and international long distance communication services or carrier
services. Globe Telecom’s principal executive offices are located at 5th Floor, Globe Telecom
Plaza, Pioneer Highlands, Pioneer corner Madison Streets, Mandaluyong City, Metropolitan
Manila, Philippines. Globe Telecom is listed in the Philippine Stock Exchange (PSE) and has
been included in the PSE composite index since September 17, 2001. Major stockholders of
Globe Telecom include Ayala Corporation (AC), Singapore Telecom, Inc. (STI) and Asiacom
Philippines, Inc. None of these companies exercise control over Globe Telecom.
Globe Telecom owns 100% of Innove Communications, Inc. (Innove). Innove is a stock
corporation organized under the laws of the Philippines and enfranchised under RA No. 7372 and
its related laws to render any and all types of domestic and international telecommunications
services. Innove holds a license to provide digital wireless communication services in the
Philippines. Innove also offers a broad range of wireline voice and data communication services,
including domestic and international long distance communication services or carrier services as
well as broadband internet services. Innove also has a license to establish, install, operate and
maintain a nationwide local exchange carrier (LEC) service, particularly integrated local
telephone service with public payphone facilities and public calling stations, and to render and
provide international and domestic carrier and leased line services.
Globe Telecom owns 100% of G-Xchange, Inc. (GXI), a corporation formed for the purpose of
developing, designing, administering, managing and operating software applications and systems,
including systems designed for the operations of bill payment and money remittance, payment and
delivery facilities through various telecommunications systems operated by telecommunications
carriers in the Philippines and throughout the world and to supply software and hardware facilities
for such purposes. GXI is registered with the Bangko Sentral ng Pilipinas (BSP) as a remittance
agent. GXI handles the mobile payment and remittance service using Globe Telecom’s network
as transport channel under the GCash brand. The service, which is integrated into the cellular
services of Globe Telecom and Innove, enables easy and convenient person-to-person fund
transfers via short messaging services (SMS) and allows Globe Telecom and Innove subscribers
to easily and conveniently put cash into and get cash out of the GCash system.
Globe Telecom acquired 100% of Entertainment Gateway Group Corporation (EGGC) and
EGGstreme (Hong Kong) Limited (EHL) (collectively referred here as “EGG Group”) on
June 26, 2008 (see Note 9). EGG Group is engaged in the development and creation of wireless
products and services accessible through telephones or other forms of communication devices.
EGGC is registered with the Department of Transportation and Communication (DOTC) as a
content provider.

- 2 -
Globe Telecom owns 100% of GTI Business Holdings, Inc. (GTI). The primary purpose of this
company is to invest, purchase, subscribe for or otherwise acquire and own, hold, sell or
otherwise dispose of real and personal property of every kind and description. GTI was
incorporated on November 25, 2008. In July 2009, GTI incorporated its wholly owned
subsidiary, GTI Corporation (GTIC), a company organized under the General Corporation Law of
the State of Delaware for the purpose of engaging in any lawful act or activity for which
corporations may be organized under the Delaware General Corporation Law. GTIC has not yet
started commercial operations as of December 31, 2009.
2. Summary of Significant Accounting Policies
2.1 Basis of Financial Statement Preparation
The accompanying consolidated financial statements of Globe Telecom and its wholly-owned
subsidiaries, collectively referred to as the “Globe Group”, have been prepared under the
historical cost convention method, except for derivative financial instruments and availablefor-sale
(AFS) investments that are measured at fair value.
The consolidated financial statements of the Globe Group are presented in Philippine Peso
(PHP), Globe Telecom’s functional currency, and rounded to the nearest thousands except
when otherwise indicated.
On February 4, 2010, the Board of Directors (BOD) approved and authorized the release of
the consolidated financial statements of Globe Telecom, Inc. and Subsidiaries as of and for
the years ended December 31, 2009, 2008 and 2007.
2.2 Statement of Compliance
The consolidated financial statements of the Globe Group have been prepared in compliance
with Philippine Financial Reporting Standards (PFRS).
2.3 Basis of Consolidation
The accompanying consolidated financial statements include the accounts of Globe Telecom
and its subsidiaries as of and for the years ended December 31, 2009, 2008 and 2007. The
subsidiaries, are as follows:
Percentage of
Ownership
Name of Subsidiary Place of Incorporation Principal Activity
Innove Philippines Wireless and wireline voice and data
communication services 100%
GXI Philippines Software development for
telecommunications applications
and money remittance services 100%
EGG Group
EGGC Philippines Mobile content and application
EHL
Hong Kong
development services
Mobile content and application
development services
100%
100%
GTI Philippines Investment and holding company 100%
GTIC United States No operations 100%
*SGVMC113950*

- 3 -
Subsidiaries are consolidated from the date on which control is transferred to the Globe
Group and cease to be consolidated from the date on which control is transferred out of the
Globe Group. The financial statements of the subsidiaries are prepared for the same reporting
year as Globe Telecom using uniform accounting policies for like transactions and other
events in similar circumstances. All significant intercompany balances and transactions,
including intercompany profits and losses, were eliminated during consolidation in
accordance with the accounting policy on consolidation.
2.4 Changes in Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year
except for the adoption of the following new and amended PFRS and Philippine
Interpretations of International Financial Reporting Interpretations Committee (IFRIC) which
became effective on January 1, 2009. Except as otherwise indicated, the adoption of the new
and amended Standards and Interpretations did not have a significant impact on the
consolidated financial statements.
• Amendments to PAS 1, Presentation of Financial Statements
In accordance with the Amendments to PAS 1, the statement of changes in equity shall
include only transactions with owners, while all non-owner changes will be presented in
equity as a single line with details included in a separate statement. Owners are defined
as holders of instruments classified as equity.
In addition, the Amendments to PAS 1 provide for the introduction of a new statement of
comprehensive income that combines all items of income and expenses recognized in the
profit or loss together with “Other comprehensive income”. Entities may choose to
present all items in one statement, or to present two linked statements, a separate
statement of income and a statement of comprehensive income. These Amendments also
require enhancements in the presentation of the consolidated statements of financial
position and owner’s equity as well as additional disclosures to be included in the
financial statements. Adoption of these Amendments resulted in the following:
(a) change in the title from consolidated balance sheet to consolidated statements of
financial position; (b) change in the presentation of changes in equity and of
comprehensive income, i.e., non-owner changes in equity are now presented in one
consolidated statement of comprehensive income; and (c) additional disclosures in the
notes to the consolidated financial statements relating to the movement in and income tax
effects of other reserves (see Note 17).
• Amendment to PAS 23, Borrowing Costs
This Amendment requires the capitalization of borrowing costs when such costs relate to
a qualifying asset. A qualifying asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale. Accordingly, borrowing costs are
capitalized on qualifying assets with a commencement date after January 1, 2009. No
changes will be made for borrowing costs incurred to this date that have been expensed.
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• PFRS 8, Operating Segments
It replaces PAS 14, Segment Reporting, and adopts a full management approach to
identifying, measuring and disclosing the results of an entity’s operating segments. The
information reported would be that which management uses internally for evaluating the
performance of operating segments and allocating resources to those segments. Such
information may be different from that reported in the consolidated statements of
financial position and consolidated statements of comprehensive income and the Globe
Group will provide explanations and reconciliations of the differences. This Standard is
only applicable to an entity that has debt or equity instruments that are traded in a public
market or that files (or is in the process of filing) its financial statements with a securities
commission or similar party. The Globe Group has enhanced its current manner of
reporting segment information to include additional information used by management
internally (see Note 29). Segment information for prior years was restated to include the
additional information.
• Philippine Interpretation IFRIC 16, Hedges of a Net Investment in a Foreign Operation
This Interpretation provides guidance on identifying foreign currency risks that qualify
for hedge accounting in the hedge of net investment; where within the group the hedging
instrument can be held as a hedge of a net investment; and how an entity should
determine the amount of foreign currency gains or losses, relating to both the net
investment and the hedging instrument, to be recycled on disposal of the net investment.
• PFRS 1, First-time Adoption of Philippine Financial Reporting Standards - Cost of an
Investment in a Subsidiary, Jointly Controlled Entity or Associate
The amended PFRS 1 allows an entity to determine the ‘cost’ of investments in
subsidiaries, jointly controlled entities or associates in its opening PFRS financial
statements in accordance with PAS 27, Consolidated and Separate Financial Statements,
or using a deemed cost method. The amendment to PAS 27 required all dividends from a
subsidiary, jointly controlled entity or associate to be recognized in the statements of
comprehensive income in the separate financial statement.
• PFRS 2, Share-based Payment - Vesting Condition and Cancellations
This Standard has been revised to clarify the definition of a vesting condition and
prescribes the treatment for an award that is effectively cancelled. It defines a vesting
condition as a condition that includes an explicit or implicit requirement to provide
services. It further requires non-vesting conditions to be treated in a similar fashion to
market conditions. Failure to satisfy a non-vesting condition that is within the control of
either the entity or the counterparty is accounted for as cancellation. However, failure to
satisfy a non-vesting condition that is beyond the control of either party does not give rise
to a cancellation.
• Amendments to PFRS 7, Financial Instruments: Disclosures - Improving Disclosures
about Financial Instruments
The amendments to PFRS 7 introduce enhanced disclosures about fair value measurement
and liquidity risk. The amendments to PFRS 7 require fair value measurements for each
class of financial instruments to be disclosed by the source of inputs, using the following
three-level hierarchy: (a) quoted prices (unadjusted) in active markets for identical assets
*SGVMC113950*

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or liabilities (Level 1); (b) inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from
prices) (Level 2); and (c) inputs for the asset or liability that are not based on observable
market data (unobservable inputs) (Level 3). The level within which the fair value
measurement is categorized must be based on the lowest level of input to the instrument’s
valuation that is significant to the fair value measurement in its entirety.
Additional disclosures required in the amendments to PFRS 7 are shown in Note 28 -
Capital and Risk Management and Financial Instruments. The amendments to PFRS 7
also introduce two major changes in liquidity risk disclosures as follows: (a) exclusion of
derivative liabilities from maturity analysis unless the contractual maturities are essential
for an understanding of the timing of the cash flows and (b) inclusion of financial
guarantee contracts in the contractual maturity analysis based on the maximum amount
guaranteed.
• Amendments to PAS 32, Financial Instruments: Presentation, and PAS 1, Presentation
of Financial Statements - Puttable Financial Instruments and Obligations Arising on
Liquidation
These Amendments specify, among others, that puttable financial instruments will be
classified as equity if they have all of the following specified features: (a) the instrument
entitles the holder to require the entity to repurchase or redeem the instrument (either on
an ongoing basis or on liquidation) for a pro rata share of the entity’s net assets; (b) the
instrument is in the most subordinate class of instruments, with no priority over other
claims to the assets of the entity on liquidation; (c) all instruments in the subordinate
class have identical features; (d) the instrument does not include any contractual
obligation to pay cash or financial assets other than the holder’s right to a pro rata share
of the entity’s net assets; and (e) the total expected cash flows attributable to the
instrument over its life are based substantially on the profit or loss, a change in
recognized net assets, or a change in the fair value of the recognized and unrecognized
net assets of the entity over the life of the instrument.
• Philippine Interpretation IFRIC-9 and PAS 39 Amendments - Embedded Derivatives
This Amendment to Philippine Interpretation IFRIC-9, Reassessment of Embedded
Derivatives, requires an entity to assess whether an embedded derivative must be
separated from a host contract when the entity reclassifies a hybrid financial asset out of
the fair value through profit or loss category. This assessment is to be made based on
circumstances that existed on the later of the date the entity first became a party to the
contract and the date of any contract amendments that significantly change the cash flows
of the contract. PAS 39, Financial Instruments: Recognition and Measurement, now
states that if an embedded derivative cannot be reliably measured, the entire hybrid
instrument must remain classified as at fair value through profit or loss.
2.4.1 Improvements to PFRSs
In May 2008 and April 2009, the International Accounting Standards Board (IASB)
issued omnibus amendments to certain standards, primarily with a view to removing
inconsistencies and clarifying wordings. There are separate transitional provisions for
each standard. The adoption of these amended standards did not have any significant
impact on the consolidated financial statements of the Globe Group, unless otherwise
indicated.
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• PAS 18, Revenue
The Amendment adds guidance (which accompanies the Standard) to determine
whether an entity is acting as a principal or as an agent. The features to consider are
whether the entity (a) has primary responsibility for providing the goods or service;
(b) has inventory risk; (c) has discretion in establishing prices; and (d) bears the
credit risk. The Group assessed its revenue arrangements against these criteria and
concluded that it is acting as principal in some arrangements and as an agent in other
arrangements.
• PAS 1, Presentation of Financial Statements
Assets and liabilities classified as held for trading are not automatically classified
as current in the consolidated statements of financial position.
• PAS 16, Property, Plant and Equipment
The Amendment replaces the term ‘net selling price’ with ‘fair value less costs to
sell’, to be consistent with PFRS 5, Non-current Assets Held for Sale and
Discontinued Operations, and PAS 36, Impairment of Asset.
In addition, items of property, plant and equipment held for rental that are routinely
sold in the ordinary course of business after rental, are transferred to inventory when
rental ceases and they are held for sale. Proceeds of such sales are subsequently
shown as revenue. Cash payments on initial recognition of such items, the cash
receipts from rents and subsequent sales are all shown as cash flows from operating
activities.
• PAS 19, Employee Benefits
It revises the definition of: (a) “past service costs” to include reductions in benefits
related to past services (“negative past service costs”) and to exclude reductions in
benefits related to future services that arise from plan amendments. Amendments to
plans that result in a reduction in benefits related to future services are accounted for
as a curtailment, (b) “return on plan assets” to exclude plan administration costs if
they have already been included in the actuarial assumptions used to measure the
defined benefit obligation, and (c) “short-term” and “other long-term” employee
benefits to focus on the point in time at which the liability is due to be settled. Also,
it deletes the reference to the recognition of contingent liabilities to ensure
consistency with PAS 37, Provisions, Contingent Liabilities and Contingent Assets.
• PAS 23, Borrowing Costs
This revises the definition of borrowing costs to consolidate the types of items that
are considered components of ‘borrowing costs’, i.e., components of the interest
expense calculated using the effective interest rate method.
• PAS 28, Investment in Associates
If an associate is accounted for at fair value in accordance with PAS 39, only the
requirement of PAS 28 to disclose the nature and extent of any significant
restrictions on the ability of the associate to transfer funds to the entity in the form
of cash or repayment of loans applies. Also, an investment in an associate is a
single asset for the purpose of conducting the impairment test. Therefore, there is
no separate allocation to the goodwill included in the investment balance.
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• PAS 31, Interests in Joint Ventures
If a joint venture is accounted for at fair value in accordance with PAS 39, only the
requirements of PAS 31 to disclose the commitments of the venturer and the joint
venture, as well as summary of financial information about the assets, liabilities,
income and expenses will apply.
• PAS 36, Impairment of Assets
When discounted cash flows are used to estimate “fair value less cost to sell”
additional disclosure is required about the discount rate, consistent with disclosures
required when the discounted cash flows are used to estimate “value in use”.
• PAS 38, Intangible Assets
Expenditure on advertising and promotional activities is recognized as an expense
when the Group either has the right to access the goods or has received the services.
• PAS 39, Financial Instruments: Recognition and Measurement
Improvements to PAS 39 are: (a) changes in circumstances relating to derivatives -
specifically derivatives designated or de-designated as hedging instruments after
initial recognition - are not reclassifications; (b) when financial assets are
reclassified as a result of an insurance company changing its accounting policy in
accordance with paragraph 45 of PFRS 4, Insurance Contracts, this is a change in
circumstance, not a reclassification; (c) removes the reference to a “segment” when
determining whether an instrument qualifies as a hedge; and (d) requires use of the
revised effective interest rate (rather than the original effective interest rate) when
re-measuring a debt instrument on the cessation of fair value hedge accounting.
• PAS 40, Investment Properties
It revises the scope (and the scope of PAS 16) to include property that is being
constructed or developed for future use as an investment property. Where an entity
is unable to determine the fair value of an investment property under construction,
but expects to be able to determine its fair value on completion, the investment
under construction will be measured at cost until such time as fair value can be
determined or construction is complete.
2.5 Future Changes in Accounting Policies
The Globe Group will adopt the following standards and interpretations enumerated below
when these become effective. Except as otherwise indicated, the Globe Group does not
expect the adoption of these new and amended PFRS and Philippine Interpretations to have
significant impact on the consolidated financial statements.
• Revised PFRS 3, Business Combinations and PAS 27, Consolidated and Separate
Financial Statements
The revised standards are effective for annual periods beginning on or after July 1, 2009.
The revised PFRS 3 introduces a number of changes in the accounting for business
combinations that will impact the amount of goodwill recognized, the reported results in
the period that an acquisition occurs, and future reported results. The revised PAS 27
requires, among others, that (a) change in ownership interests of a subsidiary (that do not
result in loss of control) will be accounted for as an equity transaction and will have no
impact on goodwill nor will it give rise to a gain or loss; (b) losses incurred by the
subsidiary will be allocated between the controlling and non-controlling interests
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(previously referred to as ‘minority interests’), even if the losses exceed the noncontrolling
equity investment in the subsidiary; and (c) on loss of control of a subsidiary,
any retained interest will be remeasured to fair value and this will impact the gain or loss
recognized on disposal.
The changes introduced by the revised PFRS 3 must be applied prospectively, while
changes introduced by the revised PAS 27 must be applied retrospectively with a few
exceptions. The changes will affect future acquisitions and transactions with noncontrolling
interests.
• Philippine Interpretation IFRIC 15, Agreement for Construction of Real Estate
This Interpretation, which will be effective January 1, 2012, covers accounting for revenue
and associated expenses by entities that undertake the construction of real estate directly or
through subcontractors. This Interpretation requires that revenue on construction of real
estate be recognized only upon completion, except when such contract qualifies as
construction contract to be accounted for under PAS 11, Construction Contracts, or
involves rendering of services in which case revenue is recognized based on stage of
completion. Contracts involving provision of services with the construction materials and
where the risks and reward of ownership are transferred to the buyer on a continuous basis,
will also be accounted for based on stage of completion. This Interpretation will not be
applicable to the Globe Group.
• Philippine Interpretation IFRIC 17, Distributions of Non-cash Assets to Owners
This Interpretation provides guidance on non-reciprocal distribution of assets by an entity
to its owners acting in their capacity as owners, including distributions of non-cash assets
and those giving the shareholders a choice of receiving non-cash assets or cash, provided
that: (a) all owners of the same class of equity instruments are treated equally; and (b) the
non-cash assets distributed are not ultimately controlled by the same party or parties both
before and after the distribution, and as such, excluding transactions under common
control. This Interpretation is applied prospectively and is applicable for annual periods
beginning on or after July 1, 2009 with early application permitted.
• Amendment to PAS 39, Financial Instruments: Recognition and Measurement Eligible
Hedged Items
This Amendment, which will be effective for annual periods beginning on or after
July 1, 2009, addresses only the designation of a one-sided risk in a hedged item, and the
designation of inflation as a hedged risk or portion in particular situations. The
Amendment clarifies that an entity is permitted to designate a portion of the fair value
changes or cash flow variability of a financial instrument as a hedged item. The Globe
Group will assess the impact of this Amendment on its current manner of accounting for
hedged items.
• Amendments to PFRS 2, Share-based Payment: Group Cash-settled Transactions
The IASB amended the IFRS 2 to clarify its scope and the accounting for group cashsettled
share-based payment transactions in the separate or individual financial statement
of the entity receiving the goods or services when that entity has no obligation to settle the
share-based payment transaction. This Amendment is effective January 1, 2010. It
supersedes IFRIC 8, Scope of IFRS 2 and IFRIC 11, IFRIC 2 - Group and Treasury Share
Transactions.
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• Philippine Interpretation IFRIC 18, Transfer of Assets from Customers
This Interpretation is to be applied prospectively to transfers of assets from customers
received on or after July 1, 2009. The Interpretation provides guidance on how to account
for items of property, plant and equipment received from customers or cash that is received
and used to acquire or construct assets that are used to connect the customer to a network
or to provide ongoing access to a supply of goods or services or both. When the transferred
item meets the definition of an asset, the asset is measured at fair value on initial
recognition as part of an exchange transaction. The service(s) delivered are identified and
the consideration received (the fair value of the asset) allocated to each identifiable
service. Revenue is recognized as each service is delivered by the entity.
2.5.1. Improvements to PFRSs
The omnibus amendments to PFRSs issued in 2009 were issued primarily with a view to
removing inconsistencies and clarifying wordings. There are separate transitional
provisions for each standard and will become effective January 1, 2010. Except otherwise
stated, the Globe Group does not except the adoption of these new standards to have
significant impact on the consolidated financial statements.
• PFRS 2, Share-based Payment
This Amendment clarifies that the contribution of a business on formation of a joint
venture and combinations under common control are not within the scope of PFRS 2
even though they are out of scope of PFRS 3. The amendment is effective for
financial years on or after July 1, 2009.
• PFRS 5, Non-current Assets Held for Sale and Discontinued Operations
This Amendment clarifies that the disclosures required in respect of non-current
assets and disposal groups classified as held for sale or discontinued operations are
only those set out in PFRS 5. The disclosure requirements of other PFRSs only apply
if specifically required for such non-current assets or discontinued operations.
• PFRS 8, Operating Segments
The Amendment clarifies that segment assets and liabilities need only be reported
when those assets and liabilities are included in measures that are used by the chief
operating decision maker.
• PAS 1, Presentation of Financial Statements
The Amendment clarifies that the terms of a liability that could result, at anytime, in
its settlement by the issuance of equity instruments at the option of the counterparty
do not affect its classification.
• PAS 7, Statement of Cash Flows
This Amendment explicitly states that only expenditure that results in a recognized
asset can be classified as a cash flow from investing activities.
• PAS 17, Leases
Removes the specific guidance on classifying land as a lease. Prior to the amendment,
leases of land were classified as operating leases. The Amendment now requires that
leases of land are classified as either ‘finance’ or ‘operating’ in accordance with the
general principles of PAS 17. The amendments will be applied retrospectively.
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• PAS 36, Impairment of Assets
This Amendment clarifies that the largest unit permitted for allocating goodwill,
acquired in a business combination, is the operating segment as defined in PFRS 8
before aggregation for reporting purposes.
• PAS 38, Intangible Assets
This Amendment clarifies that if an intangible asset acquired in a business
combination is identifiable only with another intangible asset, the acquirer may
recognize the group of intangible assets as a single asset provided the individual
assets have similar useful lives. Also clarifies that the valuation techniques presented
for determining the fair value of intangible assets acquired in a business combination
that are not traded in active markets are only examples and are not restrictive on the
methods that can be used.
• PAS 39, Financial Instruments: Recognition and Measurement
This Amendment clarifies the following: 1) that a prepayment option is considered
closely related to the host contract when the exercise price of a prepayment option
reimburses the lender up to the approximate present value of lost interest for the
remaining term of the host contract; 2) that the scope exemption for contracts between
an acquirer and a vendor in a business combination to buy or sell an acquiree at a
future date applies only to binding forward contracts, and not derivative contracts
where further actions by either party are still to be taken and 3) that gains or losses on
cash flow hedges of a forecast transaction that subsequently results in the recognition
of a financial instrument or on cash flow hedges of recognized financial instruments
should be reclassified in the period that the hedged forecast cash flows affect profit or
loss.
• Philippine Interpretation IFRIC 9, Reassessment of Embedded Derivatives
This Interpretation clarifies that it does not apply to possible reassessment, at the date
of acquisition, to embedded derivatives in contracts acquired in a combination
between entities or businesses under common control or the formation of a joint
venture.
• Philippine Interpretation IFRIC 16, Hedges of a Net Investment in a Foreign
Operation
This Interpretation states that, in a hedge of a net investment in a foreign operation,
qualifying hedging instruments may be held by any entity or entities within the group,
including the foreign operation itself, as long as the designation, documentation and
effectiveness requirements of PAS 39 that relate to a net investment hedge are
satisfied.
2.6 Significant Accounting Policies
2.6.1 Revenue Recognition
The Globe Group provides mobile and wireline voice and data communication
services which are both provided under postpaid and prepaid arrangements.
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The Globe Group assesses its revenue arrangements against specific criteria in order
to determine if it is acting as principal or agent. The following specific recognition
criteria must also be met before revenue is recognized.
Revenue is recognized when the delivery of the products or services has occurred and
collectibility is reasonably assured.
Revenue is stated at amounts invoiced and accrued to customers, taking into
consideration the bill cycle cut-off (for postpaid subscribers), the amount charged
against preloaded airtime value (for prepaid subscribers), switch-monitored traffic
(for carriers and content providers) and excludes value-added tax (VAT) and overseas
communication tax. Inbound traffic charges, net of discounts and outbound traffics
charges, are accrued based on actual volume of traffic monitored by Globe Group’s
network and in the traffic settlement system.
2.6.1.1 Service Revenue
2.6.1.1.1 Subscribers
Revenues from subscribers principally consist of: (1) fixed
monthly service fees for postpaid wireless and wireline voice and
data subscribers and wireless prepaid subscription fees for
discounted promotional short messaging services (SMS);
(2) usage of airtime and toll fees for local, domestic and
international long distance calls in excess of consumable fixed
monthly service fees, less (a) bonus airtime credits and airtime on
free Subscribers’ Identification module (SIM), and (b) prepaid
reload discounts, (3) revenues from value-added services (VAS)
such as SMS in excess of consumable fixed monthly service fees
(for postpaid) and free SMS allocations (for prepaid), multimedia
messaging services (MMS), content and infotext services, net of
amounts settled with carriers owning the network where the
outgoing voice call or sms terminates and payout to content
providers; (4) inbound revenues from other carriers which
terminate their calls to the Globe Group’s network less discounts;
(5) revenues from international roaming services; (6) usage of
broadband and internet services in excess of fixed monthly
service fees; and (7) one-time service connection fees (for
wireline voice and data subscribers).
Postpaid service arrangements include fixed monthly service
fees, which are recognized over the subscription period on a prorata
basis. Monthly service fees billed in advance are initially
deferred and recognized as revenues during the period when
earned. Telecommunications services provided to postpaid
subscribers are billed throughout the month according to the bill
cycles of subscribers. As a result of bill cycle cut-off, monthly
service revenues earned but not yet billed at the end of the month
are estimated and accrued. These estimates are based on actual
usage less estimated consumable usage using historical ratio of
consumable usage over billable usage.
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Proceeds from over-the-air reloading channels and the sale of
prepaid cards are deferred and shown as “Unearned revenues” in
the consolidated statements of financial position. Revenue is
recognized upon actual usage of airtime value net of discounts on
promotional calls and net of discounted promotional SMS usage
and bonus reloads. Unused airtime value is recognized as
revenue upon expiration.
The Globe Group offers loyalty programmes which allow its
subscribers to accumulate points when they purchase services
from the Globe Group. The points can then be redeemed for free
services, discounts and raffle coupons, subject to a minimum
number of points being obtained. The consideration received or
receivable is allocated between the sale of services and award
credits. The portion of the consideration allocated to the award
credits is accounted for as unearned revenues. This will be
recognized as revenue upon the award redemption.
2.6.1.1.2 Traffic
Inbound revenues refer to traffic originating from other
telecommunications providers terminating to the Globe Group’s
network, while outbound charges represent traffic sent out or
mobile content delivered using agreed termination rates and/or
revenue sharing with other foreign and local carriers and content
providers. Adjustments are made to the accrued amount for
discrepancies between the traffic volume per Globe Group’s
records and per records of the other carriers as these are
determined and/or mutually agreed upon by the parties.
Uncollected inbound revenues are shown as traffic settlements
receivable under the “Receivables” account, while unpaid
outbound charges are shown as traffic settlements
payable under the “Accounts payable and accrued expenses”
account in the consolidated statements of financial position
unless a legal right of offset exists.
2.6.1.2 Nonservice revenues
Proceeds from sale of handsets, phonekits, SIM packs, modems and
accessories are recognized upon delivery of the item. The related cost or net
realizable value of handsets, phonekits, modems, SIM packs and accessories
sold to customers are presented as “Cost of sales”, in the consolidated
statements of comprehensive income.
2.6.1.3 Others
Interest income is recognized as it accrues using the effective interest rate
method.
Lease income from operating lease is recognized on a straight-line basis over
the lease term.
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Dividend income is recognized when the Globe Group’s right to receive
payment is established.
2.6.2 Subscriber Acquisition and Retention Costs
The related costs incurred in connection with the acquisition of subscribers are
charged against current operations. Subscriber acquisition costs primarily include
commissions, handset, phonekit and device subsidies and selling expenses. Subsidies
represent the difference between the cost of handsets, phonekits, SIM cards, modems
and accessories (included in the “Cost of sales” and “Impairment losses and others”
account), and the price offered to the subscribers (included in the “Nonservice
revenues” account). Retention costs for existing postpaid subscribers are in the form
of free handsets and bill credits. Free handsets are charged against current operations
and included under the “General, selling and administrative expenses” account in the
consolidated statements of comprehensive income upon delivery or when there is a
contractual obligation to deliver. Bill credits are deducted from service revenues
upon application against qualifying subscriber bills.
2.6.3 Cash and Cash Equivalents
Cash includes cash on hand and in banks. Cash equivalents are short-term, highly
liquid investments that are readily convertible to known amounts of cash with original
maturities of three months or less from date of placement and that are subject to an
insignificant risk of changes in value.
2.6.4 Financial Instruments
2.6.4.1 General
2.6.4.1.1 Initial recognition and fair value measurement
Financial instruments are recognized in the Globe Group’s
consolidated statements of financial position when the Globe
Group becomes a party to the contractual provisions of the
instrument. Purchases or sales of financial assets that require
delivery of assets within the time frame established by regulation
or convention in the marketplace are recognized (regular way
trades) on the trade date, i.e., the date that the Group commits to
purchase or sell the asset.
Financial instruments are recognized initially at fair value.
Except for financial instruments at fair value through profit or
loss (FVPL), the initial measurement of financial assets includes
directly attributable transaction costs.
The Globe Group classifies its financial assets into the following
categories: financial assets at FVPL, held-to-maturity (HTM)
investments, AFS investments, and loans and receivables. The
Globe Group classifies its financial liabilities into financial
liabilities at FVPL and other financial liabilities. The
classification depends on the purpose for which the investments
were acquired and whether they are quoted in an active market.
Management determines the classification of its investments at
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initial recognition and, where allowed and appropriate, reevaluates
such designation every reporting date.
The fair value for financial instruments traded in active markets
at the end of reporting date is based on their quoted market price
or dealer price quotations (bid price for long positions and ask
price for short positions), without any deduction for transaction
costs. When current bid and ask prices are not available, the
price of the most recent transaction provides evidence of the
current fair value as long as there has not been a significant
change in economic circumstances since the time of the
transaction.
For all other financial instruments not listed in an active market,
the fair value is determined by using appropriate valuation
techniques. Valuation techniques include net present value
techniques, comparison to similar instruments for which market
observable prices exist, option pricing models, and other relevant
valuation models. Any difference noted between the fair value
and the transaction price is treated as expense or income, unless
it qualifies for recognition as some type of asset or liability.
Where the transaction price in a non-active market is different
from the fair value of other observable current market
transactions in the same instrument or based on a valuation
technique whose variables include only data from observable
market, the Globe Group recognizes the difference between the
transaction price and fair value (a “Day 1” profit) in profit or
loss. In cases where no observable data is used, the difference
between the transaction price and model value is only recognized
in profit or loss when the inputs become observable or when the
instrument is derecognized. For each transaction, the Globe
Group determines the appropriate method of recognizing the
“Day 1” profit amount.
2.6.4.1.2 Financial Assets or Financial Liabilities at FVPL
This category consists of financial assets or financial liabilities
that are held for trading or designated by management as FVPL
on initial recognition. Derivative instruments, except those
designated as hedging instruments in hedge relationships as
defined by PAS 39, are classified under this category.
Derivatives, including separated embedded derivatives, are also
classified as held for trading unless they are designated as
effective hedging instruments.
Financial assets or financial liabilities at FVPL are recorded in
the consolidated statements of financial position at fair value,
with changes in fair value being recorded in profit and loss.
Interest earned or incurred is recorded as “Interest income or
expense”, respectively, in profit and loss while dividend income
is recorded when the right of payment has been established.
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Financial assets or financial liabilities are classified in this
category as designated by management on initial recognition
when any of the following criteria are met:
• the designation eliminates or significantly reduces the
inconsistent treatment that would otherwise arise from
measuring the assets or liabilities or recognizing gains or
losses on a different basis; or
• the assets and liabilities are part of a group of financial assets,
financial liabilities or both which are managed and their
performance are evaluated on a fair value basis in accordance
with a documented risk management or investment strategy;
or
• the financial instrument contains an embedded derivative,
unless the embedded derivative does not significantly modify
the cash flows or it is clear, with little or no analysis, that it
would not be separately recorded.
As of December 31, 2009, 2008 and 2007, the Globe Group has
not classified any financial asset or liability as Financial Assets
or Financial Liabilities at FVPL.
2.6.4.1.3 HTM investments
HTM investments are quoted non-derivative financial assets with
fixed or determinable payments and fixed maturities for which
the Globe Group’s management has the positive intention and
ability to hold to maturity. Where the Globe Group sells other
than an insignificant amount of HTM investments, the entire
category would be tainted and reclassified as AFS investments.
After initial measurement, HTM investments are subsequently
measured at amortized cost using the effective interest rate
method, less any impairment losses. Amortized cost is calculated
by taking into account any discount or premium on acquisition
and fees that are an integral part of the effective interest rate.
The amortization is included in “Interest income” in the
consolidated statements of comprehensive income. Gains and
losses are recognized in profit or loss when the HTM investments
are derecognized and impaired, as well as through the
amortization process. The effects of restatement of foreign
currency-denominated HTM investments are recognized in profit
or loss.
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As of December 31, 2007, the Globe Group has classified certain
special deposits as HTM investments. These investments
matured in 2008. There are no outstanding HTM investments as
of December 31, 2009 and 2008.
2.6.4.1.4 Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are not entered into with the intention of
immediate or short-term resale and are not classified as financial
assets held for trading, designated as AFS investments or
designated at FVPL.
This accounting policy relates to the consolidated statements of
financial position caption “Receivables”, which arise primarily
from subscriber and traffic revenues and other types of
receivables, “Short-term investments”, which arise primarily
from unquoted debt securities, and other nontrade receivables
included under “Prepayments and other current assets” and loans
receivable included under “Other noncurrent assets”.
Receivables are recognized initially at fair value, which normally
pertains to the billable amount. After initial measurement,
receivables are subsequently measured at amortized cost using
the effective interest rate method, less any allowance for
impairment losses. Amortized cost is calculated by taking into
account any discount or premium on the issue and fees that are an
integral part of the effective interest rate. Penalties, termination
fees and surcharges on past due accounts of postpaid subscribers
are recognized as revenues upon collection. The losses arising
from impairment of receivables are recognized in the
“Impairment losses and others” account in the consolidated
statements of comprehensive income. The level of allowance for
impairment losses is evaluated by management on the basis of
factors that affect the collectibility of accounts (see accounting
policy on 2.6.4.2 Impairment of Financial Assets).
Short-term investments, other nontrade receivables and loans
receivable are recognized initially at fair value, which normally
pertains to the consideration paid. Similar to receivables,
subsequent to initial recognition, short-term investments, other
nontrade receivables and loans receivables are measured at
amortized cost using the effective interest rate method, less any
allowance for impairment losses.
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2.6.4.1.5 AFS investments
AFS investments are those investments which are designated as
such or do not qualify to be classified as designated as FVPL,
HTM investments or loans and receivables. They are purchased
and held indefinitely, and may be sold in response to liquidity
requirements or changes in market conditions. They include
equity investments, money market papers and other debt
instruments.
After initial measurement, AFS investments are subsequently
measured at fair value. Interest earned on holding AFS
investments are reported as interest income using the effective
interest rate. The unrealized gains and losses arising from the
fair valuation of AFS investments are excluded from reported
earnings and are reported as “Other reserves” (net of tax where
applicable) in the equity section of the consolidated statements of
financial position. When the investment is disposed of, the
cumulative gains or losses previously recognized in equity is
recognized in profit or loss.
When the fair value of AFS investments cannot be measured
reliably because of lack of reliable estimates of future cash flows
and discount rates necessary to calculate the fair value of
unquoted equity instruments, these investments are carried at
cost, less any allowance for impairment losses. Dividends earned
on holding AFS investments are recognized in profit or loss when
the right of payment has been established.
The Globe Group evaluates its AFS investments whether the
ability and intention to sell them in the near term is still
appropriate. When the Globe Group is unable to trade the AFS
investments due to inactive markets and management intent
significantly changes to do so in the foreseeable future, the Globe
Group may elect to reclassify it in rare circumstances.
The losses arising from impairment of such investments are
recognized as “Impairment losses and others” in consolidated
statements of comprehensive income.
2.6.4.1.6 Other financial liabilities
Issued financial instruments or their components, which are not
designated at FVPL are classified as other financial liabilities
where the substance of the contractual arrangement results in the
Globe Group having an obligation either to deliver cash or
another financial asset to the holder, or to satisfy the obligation
other than by the exchange of a fixed amount of cash or another
financial asset for a fixed number of own equity shares. The
components of issued financial instruments that contain both
liability and equity elements are accounted for separately, with
the equity component being assigned the residual amount after
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deducting from the instrument as a whole the amount separately
determined as the fair value of the liability component on the date
of issue. After initial measurement, other financial liabilities are
subsequently measured at amortized cost using the effective
interest rate method. Amortized cost is calculated by taking into
account any discount or premium on the issue and fees that are an
integral part of the effective interest rate. Any effects of
restatement of foreign currency-denominated liabilities are
recognized in profit or loss.
This accounting policy applies primarily to the Globe Group’s
debt, accounts payable and other obligations that meet the above
definition (other than liabilities covered by other accounting
standards, such as income tax payable).
2.6.4.1.7 Derivative Instruments
2.6.4.1.7.1 General
The Globe Group enters into short-term deliverable and
nondeliverable currency forward contracts to manage its
currency exchange exposure related to short-term foreign
currency-denominated monetary assets and liabilities and
foreign currency linked revenues. The Globe Group also
enters into structured currency forward contracts where call
options are sold in combination with such currency forward
contracts.
The Globe Group enters into deliverable prepaid forward
contracts that entitle the Globe Group to a discount on the
contracted forward rate. Such contracts contain embedded
currency derivatives that are bifurcated and marked-tomarket
through earnings, with the host debt instrument being
accreted to its face value.
The Globe Group enters into short-term interest rate swap
contracts to manage its interest rate exposures on certain
short-term floating rate peso investments. The Globe Group
also enters into long-term currency and interest rate swap
contracts to manage its foreign currency and interest rate
exposures arising from its long-term loan. Such swap
contracts are sometimes entered into in combination with
options. The Globe Group also sells covered currency
options as cost subsidy for outstanding currency swap
contracts.
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2.6.4.1.7.2 Recognition and measurement
Derivative financial instruments are initially recognized at
fair value on the date on which a derivative contract is
entered into and are subsequently remeasured at fair value.
Derivatives are carried as financial assets when the fair value
is positive and as financial liabilities when the fair value is
negative. The method of recognizing the resulting gain or
loss depends on whether the derivative is designated as a
hedge of an identified risk and qualifies for hedge accounting
treatment. The objective of hedge accounting is to match the
impact of the hedged item and the hedging instrument in
profit or loss. To qualify for hedge accounting, the hedging
relationship must comply with strict requirements such as the
designation of the derivative as a hedge of an identified risk
exposure, hedge documentation, probability of occurrence of
the forecasted transaction in a cash flow hedge, assessment
(both prospective and retrospective bases) and measurement
of hedge effectiveness, and reliability of the measurement
bases of the derivative instruments.
Upon inception of the hedge, the Globe Group documents the
relationship between the hedging instrument and the hedged
item, its risk management objective and strategy for
undertaking various hedge transactions, and the details of the
hedging instrument and the hedged item. The Globe Group
also documents its hedge effectiveness assessment
methodology, both at the hedge inception and on an ongoing
basis, as to whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair
values or cash flows of hedged items.
Hedge effectiveness is likewise measured, with any
ineffectiveness being reported immediately in profit or loss.
2.6.4.1.7.3 Types of Hedges
The Globe Group designates derivatives which qualify as
accounting hedges as either: (a) a hedge of the fair value of a
recognized fixed rate asset, liability or unrecognized firm
commitment (fair value hedge); or (b) a hedge of the cash
flow variability of recognized floating rate asset and liability
or forecasted sales transaction (cash flow hedge).
Fair Value Hedges
Fair value hedges are hedges of the exposure to variability in
the fair value of recognized assets, liabilities or unrecognized
firm commitments. The gain or loss on a derivative
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instrument designated and qualifying as a fair value hedge, as
well as the offsetting loss or gain on the hedged item
attributable to the hedged risk are recognized in profit or loss
in the same accounting period. Hedge effectiveness is
determined based on the hedge ratio of the fair value changes
of the hedging instrument and the underlying hedged item.
When the hedge ceases to be highly effective, hedge
accounting is discontinued.
As of December 31, 2009, 2008 and 2007, there were no
derivatives designated and accounted for as fair value hedges.
Cash Flow Hedges
The Globe Group designates as cash flow hedges the
following derivatives: (a) interest rate swaps as cash flow
hedge of the interest rate risk of a floating rate foreign
currency-denominated obligation and (b) certain foreign
exchange forward contracts as cash flow hedge of expected
United States Dollar (USD) revenues.
A cash flow hedge is a hedge of the exposure to variability in
future cash flows related to a recognized asset, liability or a
forecasted sales transaction. Changes in the fair value of a
hedging instrument that qualifies as a highly effective cash
flow hedge are recognized in “Other reserves,” which is a
component of equity. Any hedge ineffectiveness is
immediately recognized in profit or loss.
If the hedged cash flow results in the recognition of a
nonfinancial asset or liability, gains and losses previously
recognized directly in equity are transferred from equity and
included in the initial measurement of the cost or carrying
value of the asset or liability. Otherwise, for all other cash
flow hedges, gains and losses initially recognized in equity
are transferred from equity to profit or loss in the same
period or periods during which the hedged forecasted
transaction or recognized asset or liability affect earnings.
Hedge accounting is discontinued prospectively when the
hedge ceases to be highly effective. When hedge accounting
is discontinued, the cumulative gains or losses on the hedging
instrument that has been reported in “Other reserves” is
retained in other comprehensive income until the hedged
transaction impacts profit or loss. When the forecasted
transaction is no longer expected to occur, any net
cumulative gains or losses previously reported in “Other
reserves” is recognized immediately in profit or loss.
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The effective portion of the hedge transaction coming from
the fair value changes of the currency forwards are
subsequently recycled from equity to profit or loss and is
presented as part of the US dollar-based revenues.
2.6.4.1.7.4 Other Derivative Instruments Not Accounted for as
Accounting Hedges
Certain freestanding derivative instruments that provide
economic hedges under the Globe Group’s policies either do
not qualify for hedge accounting or are not designated as
accounting hedges. Changes in the fair values of derivative
instruments not designated as hedges are recognized
immediately in profit or loss. For bifurcated embedded
derivatives in financial and nonfinancial contracts that are
not designated or do not qualify as hedges, changes in the fair
values of such transactions are recognized in profit or loss.
2.6.4.1.8 Offsetting
Financial assets and financial liabilities are offset and the net
amount is reported in the consolidated statements of financial
position if, and only if, there is a currently enforceable legal right
to offset the recognized amounts and there is an intention to settle
on a net basis, or to realize the asset and settle the liability
simultaneously. This is not generally the case with master
netting agreements; thus, the related assets and liabilities are
presented gross in the consolidated statements of financial
position.
2.6.4.2 Impairment of Financial Assets
The Globe Group assesses at end of the reporting date whether a financial
asset or group of financial assets is impaired.
2.6.4.2.1 Assets carried at amortized cost
If there is objective evidence that an impairment loss on financial
assets carried at amortized cost (e.g. receivables) has been
incurred, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of
estimated future cash flows discounted at the asset’s original
effective interest rate. Time value is generally not considered
when the effect of discounting is not material. The carrying
amount of the asset is reduced through the use of an allowance
account. The amount of the loss shall be recognized in profit or
loss.
The Globe Group first assesses whether objective evidence of
impairment exists individually for financial assets that are
individually significant, and individually or collectively for
financial assets that are not individually significant. If it is
determined that no objective evidence of impairment exists for an
individually assessed financial asset, whether significant or not,
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the asset is included in a group of financial assets with similar
credit risk characteristics and that group of financial assets is
collectively assessed for impairment. Assets that are individually
assessed for impairment and for which an impairment loss is or
continues to be recognized are not included in a collective
assessment of impairment.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occurring after the impairment was recognized, the previously
recognized impairment loss is reversed. Any subsequent reversal
of an impairment loss is recognized in profit or loss to the extent
that the carrying value of the asset does not exceed its amortized
cost at the reversal date.
With respect to receivables, the Globe Group performs a regular
review of the age and status of these accounts, designed to
identify accounts with objective evidence of impairment and
provide the appropriate allowance for impairment losses. The
review is accomplished using a combination of specific and
collective assessment approaches, with the impairment losses
being determined for each risk grouping identified by the Globe
Group.
2.6.4.2.1.1 Subscribers
Full allowance for impairment losses is provided for
receivables from permanently disconnected wireless and
wireline subscribers. Permanent disconnections are made
after a series of collection steps following nonpayment by
postpaid subscribers. Such permanent disconnections
generally occur within a predetermined period from
statement date.
The allowance for impairment loss on wireless subscriber
accounts is determined based on the results of the net flow to
write-off methodology. Net flow tables are derived from
account-level monitoring of subscriber accounts between
different age brackets, from current to 1 day past due to 210
days past due. The net flow to write-off methodology relies
on the historical data of net flow tables to establish a
percentage (“net flow rate”) of subscriber receivables that are
current or in any state of delinquency as of reporting date that
will eventually result in write-off. The allowance for
impairment losses is then computed based on the outstanding
balances of the receivables at the end of reporting date and
the net flow rates determined for the current and each
delinquency bracket.
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For active residential and business wireline voice
subscribers, full allowance is generally provided for
outstanding receivables that are past due by 90 and 150 days,
respectively. Full allowance is likewise provided for
receivables from wireline data corporate accounts that are
past due by 150 days.
Regardless of the age of the account, additional impairment
losses are also made for wireless and wireline accounts
specifically identified to be doubtful of collection when there
is information on financial incapacity after considering the
other contractual obligations between the Globe Group and
the subscriber.
2.6.4.2.1.2 Traffic
For traffic receivables, impairment losses are made for
accounts specifically identified to be doubtful of collection
regardless of the age of the account. For receivable balances
that appear doubtful of collection, allowance is provided after
review of the status of settlement with each carrier and
roaming partner, taking into consideration normal payment
cycles, recovery experience and credit history of the parties.
2.6.4.2.1.3 Other receivables
Other receivables from dealers, credit card companies and
other parties are provided with allowance for impairment
losses if specifically identified to be doubtful of collection
regardless of the age of the account.
2.6.4.2.2 AFS investments carried at cost
If there is objective evidence that an impairment loss has been
incurred on an unquoted equity instrument that is not carried at
fair value because its fair value cannot be reliably measured, or
on a derivative asset that is linked to and must be settled by
delivery of such unquoted equity instrument, the amount of the
loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows
discounted at the current market rate of return for a similar
financial asset. The carrying amount of the asset is reduced
through the use of an allowance account.
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2.6.4.2.3 AFS investments carried at fair value
If an AFS investments carried at fair value is impaired, an
amount comprising the difference between its cost (net of any
principal repayment and amortization) and its current fair value,
less any impairment loss previously recognized in profit or loss,
is transferred from equity to profit or loss. Reversals of
impairment losses in respect of equity instruments classified as
AFS are not recognized in profit or loss. Reversals of
impairment losses on debt instruments are made through profit or
loss if the increase in fair value of the instrument can be
objectively related to an event occurring after the impairment loss
was recognized in profit or loss.
2.6.4.3 Derecognition of Financial Instruments
2.6.4.3.1 Financial Asset
A financial asset (or, where applicable a part of a financial asset
or part of a group of financial assets) is derecognized where:
• the rights to receive cash flows from the asset have expired;
• the Globe Group retains the right to receive cash flows from
the asset, but has assumed an obligation to pay them in full
without material delay to a third party under a “pass-through”
arrangement; or
• the Globe Group has transferred its rights to receive
cashflows from the asset and either (a) has transferred
substantially all the risks and rewards of ownership or (b) has
neither transferred nor retained the risk and rewards of the
asset but has transferred the control of the asset.
Where the Globe Group has transferred its rights to receive cash
flows from an asset and has neither transferred nor retained
substantially all the risks and rewards of the asset nor transferred
control of the asset, the asset is recognized to the extent of the
Globe Group’s continuing involvement in the asset.
2.6.4.3.2 Financial Liability
A financial liability is derecognized when the obligation under
the liability is discharged or cancelled or expires. Where an
existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability
and the recognition of a new liability, and the difference in the
respective carrying amounts is recognized in profit or loss.
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2.6.5 Inventories and Supplies
Inventories and supplies are stated at the lower of cost or net realizable value (NRV).
NRV for handsets, modems and accessories is the selling price in the ordinary course
of business less direct costs to sell, while NRV for SIM packs, call cards, spare parts
and supplies consists of the related replacement costs. In determining the NRV, the
Globe Group considers any adjustment necessary for obsolescence, which is
generally provided 100% for nonmoving items after a certain period. Cost is
determined using the moving average method.
2.6.6 Property and Equipment
Property and equipment, except land, are carried at cost less accumulated
depreciation, amortization and impairment losses. Land is stated at cost less any
impairment losses.
The initial cost of an item of property and equipment includes its purchase price and
any cost attributable in bringing the property and equipment to its intended location
and working condition. Cost also includes: (a) interest and other financing charges
on borrowed funds used to finance the acquisition of property and equipment to the
extent incurred during the period of installation and construction; and (b) asset
retirement obligations (ARO) specifically on property and equipment
installed/constructed on leased properties.
Subsequent costs are capitalized as part of property and equipment only when it is
probable that future economic benefits associated with the item will flow to the Globe
Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged against current operations as incurred.
Assets under construction (AUC) are carried at cost and transferred to the related
property and equipment account when the construction or installation and related
activities necessary to prepare the property and equipment for their intended use are
complete, and the property and equipment are ready for service.
Depreciation and amortization of property and equipment commences once the
property and equipment are available for use and computed using the straight-line
method over the estimated useful lives (EUL) of the property and equipment.
Leasehold improvements are amortized over the shorter of their EUL or the
corresponding lease terms.
The EUL of property and equipment are reviewed annually based on expected asset
utilization as anchored on business plans and strategies that also consider expected
future technological developments and market behavior to ensure that the period of
depreciation and amortization is consistent with the expected pattern of economic
benefits from items of property and equipment.
When property and equipment is retired or otherwise disposed of, the cost and the
related accumulated depreciation, amortization and impairment losses are removed
from the accounts and any resulting gain or loss is credited to or charged against
current operations.
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2.6.7 ARO
The Globe Group is legally required under various contracts to restore leased
property to its original condition and to bear the cost of dismantling and deinstallation
at the end of the contract period. The Globe Group recognizes the present value of
these obligations and capitalizes these costs as part of the balances of the related
property and equipment accounts, which are depreciated on a straight-line basis over
the useful life of the related property and equipment or the contract period, whichever
is shorter.
The amount of ARO is accrued and such accretion is recognized as interest expense.
2.6.8 Investment Property
Investment property is initially measured at cost, including transaction costs.
Subsequent to initial recognition, investment property is carried at cost less
accumulated depreciation and any impairment losses.
Expenditures incurred after the investment property has been put in operation, such as
repairs and maintenance costs, are normally charged against income in the period in
which the costs are incurred.
Depreciation of investment property is computed using the straight-line method over
its useful life, regardless of utilization. The EUL and the depreciation method are
reviewed periodically to ensure that the period and method of depreciation are
consistent with the expected pattern of economic benefits from items of investment
properties.
Transfers are made to investment property, when, and only when, there is a change in
use, evidenced by the end of the owner occupation, commencement of an operating
lease to another party or completion of construction or development. Transfers are
made from investment property when, and only when, there is a change in use,
evidenced by the commencement of owner occupation or commencement of
development with the intention to sell.
Investment property is derecognized when it has either been disposed of or
permanently withdrawn from use and no future benefit is expected from its disposal.
Any gain or loss on derecognition of an investment property is recognized in profit or
loss in the period of derecognition.
2.6.9 Intangible Assets
Intangible assets consist of 1) costs incurred to acquire application software (not an
integral part of its related hardware or equipment) and telecommunications equipment
software licenses; and 2) intangible assets identified to exist during the acquisition of
EGG Group for its existing customer contracts. Costs directly associated with the
development of identifiable software that generate expected future benefits to the
Globe Group are recognized as intangible assets. All other costs of developing and
maintaining software programs are recognized as expense when incurred.
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Subsequent to initial recognition, intangible assets are measured at cost less
accumulated amortization and any impairment losses. The EUL of intangible assets
with finite lives are assessed at the individual asset level. Intangible assets with finite
lives are amortized on a straight-line basis over their useful lives. The periods and
method of amortization for intangible assets with finite useful lives are reviewed
annually or more frequently when an indicator of impairment exists.
A gain or loss arising from derecognition of an intangible asset is measured as the
difference between the net disposal proceeds and the carrying amount of the asset and
is recognized in the consolidated statements of comprehensive income when the asset
is derecognized.
2.6.10 Business Combinations and Goodwill
Business combinations are accounted for using the purchase method. The cost of an
acquisition is measured as the fair value of the assets given, equity instruments issued
and liabilities incurred or assumed at the date of exchange, plus costs directly
attributable to the acquisition. Identifiable assets (including previously unrecognized
intangible assets) acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at fair values at the date of acquisition,
irrespective of the extent of any minority interest.
Goodwill is initially measured at cost being the excess of the cost of the business
combination over the Group’s share in the net fair value of the acquiree’s identifiable
assets, liabilities and contingent liabilities. If the cost of the acquisition is less than
the fair value of the net assets of the subsidiary acquired, the difference is recognized
directly in the consolidated statements of comprehensive income.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of the impairment testing, goodwill acquired in a
business combination is, from the acquisition date, allocated to each of the Group’s
cash-generating units (CGU) that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to those units.
Goodwill allocated to a cash-generating unit is included in the carrying amount of the
CGU being disposed when determining the gain or loss on disposal. For partial
disposal of operation within the CGU, the goodwill associated with the disposed
operation is included in the carrying amount of the operation when determining gain
or loss on disposal and measured on the basis of the relative values of the operation
disposed of and the portion of the CGU retained, unless another method better
reflects the goodwill associated with the operation disposed of.
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2.6.11 Investments in Joint Ventures
Investments in joint ventures (JV) are accounted for under the equity method, less any
impairment losses. A JV is an entity, not being a subsidiary nor an associate, in
which the Globe Group exercises joint control together with one or more venturers.
Under the equity method, the investments in JV are carried in the consolidated
statements of financial position at cost plus post-acquisition changes in the Globe
Group’s share in net assets of the JV, less any allowance for impairment losses. The
profit or loss includes Globe Group’s share in the results of operations of its JV.
Where there has been a change recognized directly in the JV’s equity, the Globe
Group recognizes its share of any changes and discloses this, when applicable, in
other comprehensive income.
2.6.12 Impairment of Nonfinancial Assets
For assets excluding goodwill, an assessment is made at the end of the reporting date
to determine whether there is any indication that an asset may be impaired, or
whether there is any indication that an impairment loss previously recognized for an
asset in prior periods may no longer exist or may have decreased. If any such
indication exists and when the carrying value of an asset exceeds its estimated
recoverable amount, the asset or CGU to which the asset belongs is written down to
its recoverable amount. The recoverable amount of an asset is the greater of its net
selling price and value in use. Recoverable amounts are estimated for individual
assets or investments or, if it is not possible, for the CGU to which the asset belongs.
For impairment loss on specific assets or investments, the recoverable amount
represents the net selling price.
In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
An impairment loss is recognized only if the carrying amount of an asset exceeds its
recoverable amount. An impairment loss is charged against operations in the year in
which it arises. A previously recognized impairment loss is reversed only if there has
been a change in estimate used to determine the recoverable amount of an asset,
however, not to an amount higher than the carrying amount that would have been
determined (net of any accumulated depreciation and amortization for property and
equipment, investment property and intangible assets) had no impairment loss been
recognized for the asset in prior years. A reversal of an impairment loss is credited to
current operations.
For assessing impairment of goodwill, a test for impairment is performed annually
and when circumstances indicate that the carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each
CGU (or group of CGUs) to which the goodwill relates. Where the recoverable
amount of the CGU is less than their carrying amount an impairment loss is
recognized. Impairment losses relating to goodwill cannot be reversed in future
periods.
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2.6.13 Income Tax
2.6.13.1 Current Tax
Current tax assets and liabilities for the current and prior periods are
measured at the amount expected to be recovered from or paid to the tax
authority. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted as at the end of the
reporting period.
2.6.13.2 Deferred Income Tax
Deferred income tax is provided using the liability method on all
temporary differences, with certain exceptions, at the end of the reporting
period between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary
differences, with certain exceptions. Deferred income tax assets are
recognized for all deductible temporary differences, with certain
exceptions, and carryforward benefits of unused tax credits from excess
minimum corporate income tax (MCIT) over regular corporate income
tax and net operating loss carryover (NOLCO) to the extent that it is
probable that taxable income will be available against which the
deductible temporary differences and the carryforward benefits of unused
MCIT and NOLCO can be used.
Deferred income tax is not recognized when it arises from the initial
recognition of an asset or liability in a transaction that is not a business
combination and, at the time of transaction, affects neither the accounting
income nor taxable income or loss. Deferred income tax liabilities are
not provided on nontaxable temporary differences associated with
investments in JV.
Deferred income tax relating to items recognized directly in equity or
other comprehensive income is included in the related equity or other
comprehensive income account and not in profit or loss.
The carrying amounts of deferred income tax assets are reviewed every
end of reporting period and reduced to the extent that it is no longer
probable that sufficient taxable income will be available to allow all or
part of the deferred income tax assets to be utilized.
Deferred income tax assets and liabilities are offset, if a legally
enforceable right exists to set off current income tax assets against
current income tax liabilities and the deferred income taxes relate to the
same taxable entity and the same taxation authority.
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Deferred income tax assets and liabilities are measured at the tax rates
that are expected to apply in the year when the assets are realized or the
liabilities are settled based on tax rates (and tax laws) that have been
enacted or substantively enacted as at the end of the reporting period.
Movements in the deferred income tax assets and liabilities arising from
changes in tax rates are charged or credited to income for the period.
2.6.14 Provisions
Provisions are recognized when: (a) the Globe Group has present obligation (legal or
constructive) as a result of a past event; (b) it is probable (i.e., more likely than not)
that an outflow of resources embodying economic benefits will be required to settle
the obligation; and (c) a reliable estimate can be made of the amount of the
obligation. Provisions are reviewed every end of the reporting period and adjusted to
reflect the current best estimate. If the effect of the time value of money is material,
provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessment of the time value of money and, where
appropriate, the risks specific to the liability. Where discounting is used, the increase
in the provision due to the passage of time is recognized as interest expense under
“Financing costs” in consolidated statements of comprehensive income.
2.6.15 Share-based Payment Transactions
Certain employees (including directors) of the Globe Group receive remuneration in
the form of share-based payment transactions, whereby employees render services in
exchange for shares or rights over shares (“equity-settled transactions”)
(see Note 18).
The cost of equity-settled transactions with employees is measured by reference to the
fair value at the date at which they are granted. In valuing equity-settled transactions,
vesting conditions, including performance conditions, other than market conditions
(conditions linked to share prices), shall not be taken into account when estimating
the fair value of the shares or share options at the measurement date. Instead, vesting
conditions are taken into account in estimating the number of equity instruments that
will vest.
The cost of equity-settled transactions is recognized in profit or loss, together with a
corresponding increase in equity, over the period in which the service conditions are
fulfilled, ending on the date on which the relevant employees become fully entitled to
the award (‘vesting date’). The cumulative expense recognized for equity-settled
transactions at each reporting date until the vesting date reflects the extent to which
the vesting period has expired and the number of awards that, in the opinion of the
management of the Globe Group at that date, based on the best available estimate of
the number of equity instruments, will ultimately vest.
No expense is recognized for awards that do not ultimately vest, except for awards
where vesting is conditional upon a market condition, which are treated as vesting
irrespective of whether or not the market condition is satisfied, provided that all other
performance conditions are satisfied.
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Where the terms of an equity-settled award are modified, as a minimum, an expense
is recognized as if the terms had not been modified. In addition, an expense is
recognized for any increase in the value of the transaction as a result of the
modification, measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date
of cancellation, and any expense not yet recognized for the award is recognized
immediately. However, if a new award is substituted for the cancelled award, and
designated as a replacement award on the date that it is granted, the cancelled and
new awards are treated as if they were a modification of the original award, as
described in the previous paragraph. The dilutive effect of outstanding options is
reflected as additional share dilution in the computation of earnings per share (EPS)
(see Note 27).
2.6.16 Treasury Stock
Treasury stock is recorded at cost and is presented as a deduction from equity. When
the shares are retired, the capital stock account is reduced by its par value and the
excess of cost over par value upon retirement is debited to additional paid-in capital
to the extent of the specific or average additional paid-in capital when the shares were
issued and to retained earnings for the remaining balance.
2.6.17 Pension Cost
Pension cost is actuarially determined using the projected unit credit method. This
method reflects services rendered by employees up to the date of valuation and
incorporates assumptions concerning employees’ projected salaries. Actuarial
valuations are conducted with sufficient regularity, with option to accelerate when
significant changes to underlying assumptions occur. Pension cost includes current
service cost, interest cost, expected return on any plan assets, actuarial gains and
losses and the effect of any curtailment or settlement.
The net pension asset recognized by the Globe Group in respect of the defined benefit
pension plan is the lower of: (a) the fair value of the plan assets less the present value
of the defined benefit obligation at the end of the reporting period, together with
adjustments for unrecognized actuarial gains or losses that shall be recognized in later
periods; or (b) the total of any cumulative unrecognized net actuarial losses and past
service cost and the present value of any economic benefits available in the form of
refunds from the plan or reductions in future contributions to the plan. The defined
benefit obligation is calculated annually by an independent actuary using the
projected unit credit method. The present value of the defined benefit obligation is
determined by using risk-free interest rates of government bonds that have terms to
maturity approximating the terms of the related pension liabilities or by applying a
single weighted average discount rate that reflects the estimated timing and amount of
benefit payments.
A portion of actuarial gains and losses is recognized as income or expense if the
cumulative unrecognized actuarial gains and losses at the end of the previous
reporting period exceeded the greater of 10% of the present value of defined benefit
obligation or 10% of the fair value of plan assets. These gains and losses are
recognized over the expected average remaining working lives of the employees
participating in the plan.
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2.6.18 Borrowing Costs
Borrowing costs are capitalized if these are directly attributable to the acquisition,
construction or production of a qualifying asset. Capitalization of borrowing costs
commences when the activities for the asset’s intended use are in progress and
expenditures and borrowing costs are being incurred. Borrowing costs are capitalized
until the assets are ready for their intended use. These costs are amortized using the
straight-line method over the EUL of the related property and equipment. If the
resulting carrying amount of the asset exceeds its recoverable amount, an impairment
loss is recognized. Borrowing costs include interest charges and other related
financing charges incurred in connection with the borrowing of funds, as well as
exchange differences arising from foreign currency borrowings used to finance these
projects to the extent that they are regarded as an adjustment to interest costs.
Premiums on long-term debt are included under the “Long-term debt” account in the
consolidated statements of financial position and are amortized using the effective
interest rate method.
Other borrowing costs are recognized as expense in the period in which these are
incurred.
2.6.19 Leases
The determination of whether an arrangement is, or contains a lease, is based on the
substance of the arrangement and requires an assessment of whether the fulfillment of
the arrangement is dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset. A reassessment is made after inception
of the lease only if one of the following applies:
• there is a change in contractual terms, other than a renewal or extension of the
arrangement;
• a renewal option is exercised or an extension granted, unless that term of the
renewal or extension was initially included in the lease term;
• there is a change in the determination of whether fulfillment is dependent on a
specified asset; or
• there is a substantial change to the asset.
Where a reassessment is made, lease accounting shall commence or cease from the
date when the change in circumstances gave rise to the reassessment for any of the
scenarios above, and at the date of renewal or extension period for the second
scenario.
2.6.19.1 Group as Lessee
Finance leases, which transfer to the Globe Group substantially all the
risks and benefits incidental to ownership of the leased item, are
capitalized at the inception of the lease at the fair value of the leased
property or, if lower, at the present value of the minimum lease payments
and included in the “Property and equipment” account with the
corresponding liability to the lessor included in the “Other long-term
liabilities” account in the consolidated statements of financial position.
Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of interest
on the remaining balance of the liability. Finance charges are charged
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directly as “Interest expense” in the consolidated statements of
comprehensive income.
Capitalized leased assets are depreciated over the shorter of the EUL of
the assets and the respective lease terms.
Leases where the lessor retains substantially all the risks and benefits of
ownership of the asset are classified as operating leases. Operating lease
payments are recognized as an expense in profit or loss on a straight-line
basis over the lease term.
2.6.19.2 Group as Lessor
Finance leases, where the Globe Group transfers substantially all the risk
and benefits incidental to ownership of the leased item to the lessee, are
included in the consolidated statements of financial position under
“Prepayments and other current assets” account. A lease receivable is
recognized equivalent to the net investment (asset cost) in the lease. All
income resulting from the receivable is included in the “Interest income”
account in the consolidated statements of comprehensive income.
Leases where the Globe Group does not transfer substantially all the risk
and benefits of ownership of the assets are classified as operating leases.
Initial direct costs incurred in negotiating operating leases are added to
the carrying amount of the leased asset and recognized over the lease
term on the same basis as the rental income. Contingent rents are
recognized as revenue in the period in which they are earned.
2.6.20 General, Selling and Administrative Expenses
General, selling and administrative expenses, except for rent, are charged against
current operations as incurred.
2.6.21 Foreign Currency Transactions
The functional and presentation currency of the Globe Group is the Philippine Peso,
except for EHL whose functional currency is the Hongkong Dollar (HKD).
Transactions in foreign currencies are initially recorded at the functional currency
rate prevailing at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the functional currency rate of
exchange ruling at the end of reporting period.
Nonmonetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate as at the date of the initial transaction and are
not subsequently restated. Nonmonetary items measured at fair value in a foreign
currency are translated using the exchange rate at the date when the fair value was
determined. All foreign exchange differences are taken to profit or loss, except where
it relates to equity securities where gains or losses are recognized directly in other
comprehensive income.
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As at the reporting date, the assets and liabilities of EHL are translated into the
presentation currency of the Globe Group at the rate of exchange prevailing at the end
of reporting period and its profit or loss is translated at the monthly weighted average
exchange rates during the year. The exchange differences arising on the translation
are taken directly to a separate component of equity under “Other reserves” account.
Upon disposal of EHL, the cumulative translation adjustments relating to EHL shall
be recognized in profit or loss.
2.6.22 EPS
Basic EPS is computed by dividing earnings applicable to common stock by the
weighted average number of common shares outstanding, after giving retroactive
effect for any stock dividends, stock splits or reverse stock splits during the period.
Diluted EPS is computed by dividing net income by the weighted average number of
common shares outstanding during the period, after giving retroactive effect for any
stock dividends, stock splits or reverse stock splits during the period, and adjusted for
the effect of dilutive options and dilutive convertible preferred shares. Outstanding
stock options will have a dilutive effect under the treasury stock method only when
the average market price of the underlying common share during the period exceeds
the exercise price of the option. If the required dividends to be declared on
convertible preferred shares divided by the number of equivalent common shares,
assuming such shares are converted, would decrease the basic EPS, then such
convertible preferred shares would be deemed dilutive. Where the effect of the
assumed conversion of the preferred shares and the exercise of all outstanding options
have anti-dilutive effect, basic and diluted EPS are stated at the same amount.
2.6.23 Operating Segment
The Globe Group’s major operating business units are the basis upon which the
Globe Group reports its primary segment information. The Globe Group’s business
segments consist of: (1) mobile communication services; (2) wireline communication
services; and (3) others. The Globe Group generally accounts for intersegment
revenues and expenses at agreed transfer prices.
2.6.24 Contingencies
Contingent liabilities are not recognized in the consolidated financial statements.
These are disclosed unless the possibility of an outflow of resources embodying
economic benefits is remote. Contingent assets are not recognized in the consolidated
financial statements but are disclosed when an inflow of economic benefits is
probable.
2.6.25 Events after the Reporting Period
Any post period-end event up to the date of approval of the BOD of the consolidated
financial statements that provides additional information about the Globe Group’s
position at the end of reporting period (adjusting event) is reflected in the
consolidated financial statements. Any post period-end event that is not an adjusting
event is disclosed in the consolidated financial statements when material.
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3. Management’s Significant Accounting Judgments and Use of Estimates
3.1 Judgments and Estimates
The preparation of the accompanying consolidated financial statements in conformity with
PFRS requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. The estimates and
assumptions used in the accompanying consolidated financial statements are based upon
management’s evaluation of relevant facts and circumstances as of the date of the
consolidated financial statements. Actual results could differ from such estimates.
Judgments and estimates are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
3.1.1 Judgments
3.1.1.1 Leases
The Globe Group has entered into various lease agreements as lessee and
lessor. The Globe Group has determined that it retains all the significant
risks and rewards on equipment and office spaces leased out on operating
lease and various items of property and equipment acquired through finance
lease.
3.1.1.2 Fair value of financial instruments
Where the fair values of financial assets and financial liabilities recorded on
the consolidated statements of financial position cannot be derived from
active markets, they are determined using a variety of valuation techniques
that include the use of mathematical models. The input to these models is
taken from observable markets where possible, but where this is not feasible,
a degree of judgment is required in establishing fair values. The judgments
include considerations of liquidity and model inputs such as correlation and
volatility for longer dated derivatives.
As of December 31, 2009, 2008 and 2007, the fair value of financial assets
and liabilities that were determined using valuation techniques, inputs and
assumptions are based on market observable data and conditions and reflect
appropriate risk adjustments that market participants would make for credit
and liquidity risks existing as of the periods indicated.
The Globe Group considers a market as active if it is one in which
transactions are taking place regularly on an arm’s length basis. On the other
hand, the Globe Group considers a market as inactive if there is a significant
decline in the volume and level of trading activity and the available prices
vary significantly over time among market participants or the prices are not
current.
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3.1.1.3 HTM investments
The classification as HTM investments requires significant judgment. In
making this judgment, the Globe Group evaluates its intention and ability to
hold such investments to maturity. If the Globe Group fails to keep these
investments to maturity other than in certain specific circumstances - for
example, selling an insignificant amount close to maturity - it will be required
to reclassify the entire portfolio as AFS investments. The investments would
therefore be measured at fair value and not at amortized cost.
3.1.1.4 Financial assets not quoted in an active market
The Globe Group classifies financial assets by evaluating, among others,
whether the asset is quoted or not in an active market. Included in the
evaluation on whether a financial asset is quoted in an active market is the
determination on whether quoted prices are readily and regularly available,
and whether those prices represent actual and regularly occurring market
transactions on an arm’s length basis.
3.1.1.5 Allocation of goodwill to cash-generating units
The Globe Group allocated the carrying amount of goodwill to the mobile
content and application development services business CGU, for the Group
believes that this CGU represents the lowest level within the Globe Group at
which the goodwill is monitored for internal management reporting purposes;
and not larger than an operating segment determined in accordance with
PFRS 8.
3.1.1.6 Determination of whether the Globe Group is acting as a principal or an
agent
The Globe Group assesses its revenue arrangements against the following
criteria to determine whether it is acting as a principal or an agent:
• whether the Group has primary responsibility for providing the goods and
services;
• whether the Group has inventory risk;
• whether the Group has discretion in establishing prices; and
• whether the Group bears the credit risk.
If the Globe Group has determined it is acting as a principal, the Group
recognizes revenue on a gross basis with the amount remitted to the other
party being accounted for as part of costs and expenses.
If the Globe Group has determined it is acting as an agent, only the net
amount retained is recognized as revenue.
The Group assessed its revenue arrangements and concluded that it is acting
as principal in some arrangements and as an agent in other arrangements.
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3.1.2 Estimates
3.1.2.1 Revenue recognition
The Globe Group’s revenue recognition policies require management to make
use of estimates and assumptions that may affect the reported amounts of
revenues and receivables.
The Globe Group estimates the fair value of points awarded under its loyalty
programmes, which are within the scope of Philippine Interpretation
IFRIC 13, based on historical trend of availment. The Group has no
outstanding liability related to unredeemed points as of December 31, 2009.
As of December 31, 2008, the estimated liability for unredeemed points
included in “Unearned revenues” amounted to P=8.05 million. There are no
loyalty programs qualifying under IFRIC 13 as of December 31, 2009.
3.1.2.2 Allowance for impairment losses on receivables
The Globe Group maintains an allowance for impairment losses at a level
considered adequate to provide for potential uncollectible receivables. The
Globe Group performs a regular review of the age and status of these
accounts, designed to identify accounts with objective evidence of
impairment and provide the appropriate allowance for impairment losses.
The review is accomplished using a combination of specific and collective
assessment approaches, with the impairment losses being determined for each
risk grouping identified by the Globe Group. The amount and timing of
recorded expenses for any period would differ if the Globe Group made
different judgments or utilized different methodologies. An increase in
allowance for impairment losses would increase the recorded operating
expenses and decrease current assets.
Impairment losses on receivables for the years ended December 31, 2009,
2008 and 2007 amounted to P=754.63 million, P=979.78 million and
P=711.40 million, respectively (see Note 23). Receivables, net of allowance
for impairment losses, amounted to P=6,583.23 million, P=7,473.35 million and
P=6,383.54 million as of December 31, 2009, 2008 and 2007, respectively
(see Note 4).
3.1.2.3 Obsolescence and market decline
The Globe Group, in determining the NRV, considers any adjustment
necessary for obsolescence which is generally provided 100% for nonmoving
items after a certain period. The Globe Group adjusts the cost of inventory to
the recoverable value at a level considered adequate to reflect market decline
in the value of the recorded inventories. The Globe Group reviews the
classification of the inventories and generally provides adjustments for
recoverable values of new, actively sold and slow-moving inventories by
reference to prevailing values of the same inventories in the market.
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The amount and timing of recorded expenses for any period would differ if
different judgments were made or different estimates were utilized. An
increase in allowance for obsolescence and market decline would increase
recorded operating expenses and decrease current assets.
Inventory obsolescence and market decline for the years ended
December 31, 2009, 2008 and 2007 amounted to P=58.74 million,
P=262.10 million and P=298.12 million, respectively (see Note 23).
Inventories and supplies, net of allowances, amounted to P=1,653.75 million,
P=1,124.32 million and P=1,112.15 million as of December 31, 2009, 2008 and
2007, respectively (see Note 5).
3.1.2.4 ARO
The Globe Group is legally required under various contracts to restore leased
property to its original condition and to bear the costs of dismantling and
deinstallation at the end of the contract period. These costs are accrued
based on an in-house estimate, which incorporates estimates of asset
retirement costs and interest rates. The Globe Group recognizes the present
value of these obligations and capitalizes the present value of these costs as
part of the balance of the related property and equipment accounts, which are
being depreciated and amortized on a straight-line basis over the EUL of the
related asset or the lease term, whichever is shorter. The market risk
premium was excluded from the estimate of the fair value of the ARO
because a reasonable and reliable estimate of the market risk premium is not
obtainable.
Since a market risk premium is unavailable, fair value is assumed to be the
present value of the obligations. The present value of dismantling costs is
computed based on an average credit adjusted risk free rate of 10.09%,
11.17% and 6.96% in 2009, 2008 and 2007, respectively. Assumptions used
to compute ARO are reviewed and updated annually.
The amount and timing of recorded expenses for any period would differ if
different judgments were made or different estimates were utilized. An
increase in ARO would increase recorded operating expenses and increase
noncurrent liabilities.
In 2008, the Globe Group updated its assumptions on timing of settlement
and estimated cash outflows arising from ARO on its leased premises. As a
result of the changes in estimates reckoned as of January 1, 2008, the Globe
Group adjusted downward its ARO liability (included under “Other long-term
liabilities” account) by P=714.78 million against the book value of the assets
on leased premises (see Note 15).
As of December 31, 2009, 2008 and 2007, ARO amounted to
P=1,269.29 million, P=1,081.41 million and P=1,623.83 million, respectively
(see Note 15).
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3.1.2.5 EUL of property and equipment, investment property and intangible assets
Globe Group reviews annually the EUL of these assets based on expected
asset utilization as anchored on business plans and strategies that also
consider expected future technological developments and market behavior.
It is possible that future results of operations could be materially affected by
changes in these estimates brought about by changes in the factors mentioned.
A reduction in the EUL of property and equipment, investment property and
intangible assets would increase the recorded depreciation and amortization
expense and decrease noncurrent assets.
The EUL of property and equipment of the Globe Group are as follows:
Years
Telecommunications equipment:
Tower 20
Switch 7 and 10
Outside plant, cellsite structures
and improvements 10-20
Distribution dropwires and other
wireline assets 2-10
Cellular equipment and others 2-10
Buildings 20
Leasehold improvements
5 years or lease term, whichever is shorter
Investments in cable systems 15
Office equipment 3-5
Transportation equipment 3-5
The EUL of investment property is 20 years.
Intangible assets comprising of licenses and application software are
amortized over the EUL of the related hardware or equipment ranging from
3 to 10 years or life of the telecommunications equipment where it is
assigned. Customer contracts acquired during business combination are
amortized over 5 years.
In 2009, 2008 and 2007, the Globe Group changed the EUL of certain
wireless and wireline telecommunications equipment resulting from new
information affecting the expected utilization of these assets. The net effect
of the change in EUL resulted in higher depreciation of P=347.62 million for
the year ended December 31, 2009 and lower depreciation of P=159.76 million
and P=105.31 million for the years ended December 31, 2008 and 2007.
As of December 31, 2009, 2008 and 2007, property and equipment,
investment property and intangible assets amounted to P=104,586.34 million,
P=96,811.28 million and P=94,253.65 million, respectively
(see Notes 7, 8 and 9).
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3.1.2.6 Asset impairment
3.1.2.6.1 Impairment of nonfinancial assets other than goodwill
The Globe Group assesses impairment of assets (property and
equipment, investment property, intangible assets and
investments in joint ventures) whenever events or changes in
circumstances indicate that the carrying amount of an asset may
not be recoverable. The factors that the Globe Group considers
important which could trigger an impairment review include the
following:
• significant underperformance relative to expected historical
or projected future operating results;
• significant changes in the manner of use of the acquired
assets or the strategy for the overall business; and
• significant negative industry or economic trends.
An impairment loss is recognized whenever the carrying amount
of an asset or investment exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s net selling price
and value in use. The net selling price is the amount obtainable
from the sale of an asset in an arm’s length transaction while
value in use is the present value of estimated future cash flows
expected to arise from the continuing use of an asset and from its
disposal at the end of its useful life. Recoverable amounts are
estimated for individual assets or investments or, if it is not
possible, for the CGU to which the asset belongs.
For impairment loss on specific assets or investments, the
recoverable amount represents the net selling price.
In 2007, the Globe Group reversed a portion of estimated
provision for impairment losses amounting to P=178.80 million on
a certain network asset component based on adjusted component
values resulting from its continuing implementation of
comprehensive asset component accounting.
For the Globe Group, the CGU is the combined mobile and
wireline asset groups of Globe Telecom and Innove. This asset
grouping is predicated upon the requirement contained in
Executive Order (EO) No.109 and RA No.7925 requiring
licensees of Cellular Mobile Telephone System (CMTS) and
International Digital Gateway Facility (IGF) services to provide
400,000 and 300,000 LEC lines, respectively, as a condition for
the grant of such licenses.
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In determining the present value of estimated future cash flows
expected to be generated from the continued use of the assets or
holding of an investment, the Globe Group is required to make
estimates and assumptions that can materially affect the
consolidated financial statements.
Property and equipment, investment property, intangible assets,
and investments in joint ventures amounted to
P=104,820.14 million, P=96,884.81 million and P=94,336.91 million
as of December 31, 2009, 2008 and 2007, respectively
(see Notes 7, 8, 9 and 10).
3.1.2.6.2 Impairment of goodwill
The Globe Group’s impairment test for goodwill is based on
value in use calculations that use a discounted cash flow model.
The cash flows are derived from the budget for the next five
years and do not include restructuring activities that the Group is
not yet committed to or significant future investments that will
enhance the asset base of the CGU being tested. The recoverable
amount is most sensitive to the discount rate used for the
discounted cash flow model as well as the expected future cash
inflows and the growth rate used for extrapolation purposes. As
of December 31, 2009 and 2008 (restated), the carrying value of
goodwill amounted to P=327.13 million (see Note 9).
Goodwill acquired through business combination with EGG
Group was allocated to the mobile content and applications
development services business CGU, which is part of the
“Others” reporting segment.
The recoverable amount of the CGU which exceeds the carrying
amount by P=63.00 million and P=98.00 million as of
December 31, 2009 and 2008, respectively, has been determined
based on value in use calculations using cash flow projections
from financial budgets covering a 5-year period. The pretax
discount rate applied to cash flow projections is 12% and 15% in
2009 and 2008, respectively, and cash flows beyond the 5-year
period are extrapolated using a 3% long-term growth rate in 2009
and 2008.
The calculations of value in use for the CGU are most sensitive
to the following assumptions: (a) 5-year growth rates on VAS
subscriber base and average revenue per unit (ARPU) based on
management’s projections; (b) contract values of application
development services contracts based on management’s target
growth rates; (c) discount rate based on the weighted average
cost of capital of Globe Telecom; and (d) long-term growth rate
beyond the 5-year period based on the expected long-term GDP
growth of the Philippines.
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With regard to the assessment of value in use of the combined
VAS and applications development services business, there are
reasonably possible changes in key assumptions which could
cause the carrying value of the CGU to exceed its recoverable
amount. Specifically, this pertains to the 5-year growth rate
assumptions. A reduction in the assumed 27% and 21%
compounded annual growth rate in 2009 and 2008, respectively,
the during the 5-year period to 26% and 12%, respectively, would
give a value in use equal to the carrying amount of the CGU.
3.1.2.7 Deferred income tax assets
The carrying amounts of deferred income tax assets are reviewed at each
reporting date and reduced to the extent that it is no longer probable that
sufficient taxable income will be available to allow all or part of the deferred
income tax assets to be utilized (see Note 24).
As of December 31, 2009, 2008 and 2007, Innove and EGG Group has net
deferred income tax assets amounting to P=742.54 million, P=523.72 million
and P=637.72 million, respectively. As of December 31, 2009, 2008 and 2007,
Globe Telecom has net deferred income tax liabilities amounting to
P=4,627.29 million, P=4,590.43 million and P=5,502.89 million, respectively
(see Note 24). Globe Telecom and Innove have no unrecognized deferred
income tax assets as of December 31, 2009, 2008 and 2007. GXI has not
recognized deferred income tax assets since there is no assurance that GXI
will generate sufficient taxable income to allow all or part of it to be utilized.
As of December 31, 2009, Innove and EGG Group’s recognized deferred
income tax assets from NOLCO and MCIT amounted to P=138.05 million and
P=46.71 million, respectively (see Note 24).
3.1.2.8 Financial assets and liabilities
Globe Group carries certain financial assets and liabilities at fair value, which
requires extensive use of accounting estimates and judgment. While
significant components of fair value measurement were determined using
verifiable objective evidence (i.e., foreign exchange rates, interest rates,
volatility rates), the amount of changes in fair value would differ if the Globe
Group utilized different valuation methodologies. Any changes in fair value
of these financial assets and liabilities would affect the consolidated
statements of comprehensive income and consolidated statements of changes
in equity.
Financial assets comprising AFS investments and derivative assets carried at
fair values as of December 31, 2009, 2008 and 2007, amounted to
P=118.03 million, P=230.34 million and P=584.11 million, respectively, and
financial liabilities comprising of derivative liabilities carried at fair values as
of December 31, 2009, 2008 and 2007, amounted to P=92.46 million,
P=185.65 million and P=340.83 million, respectively (see Note 28.10).
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3.1.2.9 Pension and other employee benefits
The determination of the obligation and cost of pension is dependent on the
selection of certain assumptions used in calculating such amounts. Those
assumptions include, among others, discount rates, expected returns on plan
assets and salary rates increase (see Note 18). In accordance with PAS 19,
actual results that differ from the Globe Group’s assumptions, subject to the
10% corridor test, are accumulated and amortized over future periods and
therefore, generally affect the recognized expense and recorded obligation in
such future periods.
As of December 31, 2009, 2008 and 2007, Globe Group has unrecognized net
actuarial losses of P=799.54 million, P=115.40 million and P=511.80 million,
respectively (see Note 18.2).
The Globe Group also determines the cost of equity-settled transactions using
assumptions on the appropriate pricing model. Significant assumptions for
the cost of share-based payments include, among others, share price, exercise
price, option life, risk-free interest rate, expected dividend and expected
volatility rate.
Cost of share-based payments for the years ended December 31, 2009, 2008
and 2007 amounted to P=126.44 million, P=182.32 million and P=129.91 million,
respectively (see Notes 16 and 18.1).
The Globe Group also estimates other employee benefit obligations and
expenses, including cost of paid leaves based on historical leave availments
of employees, subject to the Globe Group’s policy. These estimates may vary
depending on the future changes in salaries and actual experiences during the
year.
The accrued balance of other employee benefits (included in the “Accounts
payable and accrued expenses” account and in the “Other long-term
liabilities” account in the consolidated statements of financial position) as of
December 31, 2009, 2008 and 2007 amounted to P=371.61 million,
P=340.47 million and P=294.35 million, respectively.
While the Globe Group believes that the assumptions are reasonable and
appropriate, significant differences between actual experiences and
assumptions may materially affect the cost of employee benefits and related
obligations.
3.1.2.10 Contingencies
Globe Telecom and Innove are currently involved in various legal
proceedings. The estimate of the probable costs for the resolution of these
claims has been developed in consultation with internal and external counsel
handling Globe Telecom and Innove’s defense in these matters and is based
upon an analysis of potential results. Globe Telecom and Innove currently do
not believe that these proceedings will have a material adverse effect on the
consolidated statements of financial position. It is possible, however, that
future results of operations could be materially affected by changes in the
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estimates or in the effectiveness of the strategies relating to these proceedings
(see Note 26).
3.1.2.11 Purchase Price Allocation
As of December 31, 2008, the purchase price allocation relating to the Globe
Group’s acquisition of EGG Group has been prepared on a preliminary basis.
The provisional fair values of the assets acquired and liabilities assumed as of
date of acquisition were based on the net book values of the identifiable
assets and liabilities since these approximate the fair values. The difference
between the total consideration and the net assets amounting to
P=346.99 million was initially allocated to goodwill as of December 31, 2008.
The valuation of the intangible assets was completed in June 2009 and
showed that the fair value at the date of acquisition was P=28.38 million. The
2008 comparative information has been restated to reflect this adjustment.
The value of intangible assets and deferred tax liability increased by
P=28.38 million and P=8.51 million, respectively. This resulted in a reduction
in goodwill by P=19.87 million (see Note 9).
4. Receivables
This account consists of receivables from:
Notes 2009 2008 2007
(In Thousand Pesos)
Subscribers 28.2.2 P=4,980,195 P=4,563,825 P=4,759,249
Traffic settlements - net 16, 28.2.2 2,319,273 3,618,010 2,605,913
Others 28.2.2 634,751 478,170 401,854
7,934,219 8,660,005 7,767,016
Less allowance for impairment losses
Subscribers 28.2.2 1,162,792 785,812 1,097,423
Traffic settlements and others 28.2.2 188,199 400,847 286,052
1,350,991 1,186,659 1,383,475
P=6,583,228 P=7,473,346 P=6,383,541
Subscriber receivables arise from wireless and wireline communications and data services
provided under postpaid arrangements.
Amounts collected from wireless subscribers under prepaid arrangements are reported under
“Unearned revenues” in the consolidated statements of financial position and recognized as
revenues upon actual usage of airtime value or upon expiration of the prepaid credit. The
unearned revenues from these subscribers amounted to P=2,981.88 million, P=3,247.71 million and
P=1,866.53 million as of December 31, 2009, 2008 and 2007, respectively.
Traffic settlements receivable are presented net of traffic settlements payable from the same
carrier amounting to P=3,130.28 million, P=5,297.07 million and P=7,297.75 million as of
December 31, 2009, 2008 and 2007, respectively.
Receivables are non-interest bearing and are generally collectible in the short-term.
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5. Inventories and Supplies
This account consists of:
2009 2008 2007
(In Thousand Pesos)
At cost:
Modems and accessories P=237,288 P=49,982 P=277,509
SIM packs 1,624 2,749 –
Spare parts and supplies – 292 7,030
238,912 53,023 284,539
At NRV:
Modems and accessories 615,514 200,005 63,476
Spare parts and supplies 469,663 354,157 310,919
Handsets and accessories 255,205 437,023 382,192
SIM packs 69,347 76,172 62,847
Call cards and others 5,109 3,942 8,173
1,414,838 1,071,299 827,607
P=1,653,750 P=1,124,322 P=1,112,146
Inventories recognized as expense during the year amounted to P=3,006.69 million,
P=3,379.28 million and P=3,620.89 million in 2009, 2008 and 2007, respectively, is included as part
of “Cost of sales” and “Impairment losses and others” accounts (see Note 23) in the consolidated
statements of comprehensive income. An insignificant amount is included under “General,
selling and administrative expenses” as part of “Utilities, supplies and other administrative
expenses” account (see Note 21).
6. Prepayments and Other Current Assets
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Advance payments to suppliers and
contractors 25.3 P=1,143,891 P=2,114,203 P=992,212
Input VAT – net 889,941 334,579 8,521
Miscellaneous receivables – net 28.10 853,243 515,966 483,949
Prepayments 534,304 617,379 534,959
Loan receivable from Globe Telecom
retirement fund 11, 28.10 – 800,000 –
Other current assets 16, 28.10 777,941 724,302 647,575
P=4,199,320 P=5,106,429 P=2,667,216
As of December 31, 2009, Innove and GXI reported net input VAT amounted to P=889.94 million,
net of output VAT of P=89.26 million. As of December 31, 2008, Innove, GXI and EGG Group
reported net input VAT amounted to P=334.58 million, net of output VAT of P=157.05 million.
GXI’s net input VAT amounted to P=8.52 million as of December 31, 2007 is presented net of
output VAT of P=0.16 million.
The “Prepayments” account includes prepaid insurance, rent, among others.
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In 2008, the Globe Group granted a loan to the retirement fund amounted to P=800.00 million with
interest at 6.20%. Upon maturity in 2009, the loan was rolled over until September 2014 with
7.75% interest and reclassified under “Other noncurrent assets” account (see Note 11).
The “Other current assets” account includes accrued interest receivable and creditable taxes
withheld, among others.
7. Property and Equipment
2009
The rollforward analysis of this account follows:
Telecommunications
Equipment
Buildings and
Leasehold
Improvements
Investments in
Cable Systems
Office
Equipment
Transportation
Equipment Land
Assets Under
Construction Total
(In Thousand Pesos)
Cost
At January 1 P=148,988,985 P=22,235,361 P=10,185,208 P=5,479,851 P=2,125,186 P=1,495,841 P=13,980,362 P=204,490,794
Additions 1,308,160 169,162 353 379,911 225,515 50,511 22,469,550 24,603,162
Retirements/disposals (9,013,358) (13,228) – (9,418) (111,951) – (24,258) (9,172,213)
Reclassifications/adjustments 20,109,866 1,697,636 4,258,448 199,087 (164,601) 5,206 (22,399,993) 3,705,649
At December 31 161,393,653 24,088,931 14,444,009 6,049,431 2,074,149 1,551,558 14,025,661 223,627,392
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 91,235,779 9,984,888 3,918,995 4,558,370 1,252,372 – – 110,950,404
Depreciation and amortization 13,800,566 969,115 787,648 497,005 305,715 – – 16,360,049
Retirements/disposals (5,367,847) 55,760 51,567 10,445 (126,854) – – (5,376,929)
At December 31 99,668,498 11,009,763 4,758,210 5,065,820 1,431,233 – – 121,933,524
Net Book Value at
December 31 P=61,725,155 P=13,079,168 P=9,685,799 P=983,611 P=642,916 P=1,551,558 P=14,025,661 P=101,693,868
2008
Telecommunications
Equipment
Buildings and
Leasehold
Improvements
Investments in
Cable Systems
Office
Equipment
Transportation
Equipment
Land
Assets Under
Construction Total
(In Thousand Pesos)
Cost
At January 1 P=139,902,905 P=21,364,791 P=9,928,378 P=5,127,124 P=1,643,361 P=948,315 P=8,380,425 P=187,295,299
Additions (see Note 9) 5,134,081 71,342 97,936 494,805 495,182 547,526 13,345,254 20,186,126
Retirements/disposals (304,569) (5,377) – (13,325) (226,391) – (30,008) (579,670)
Reclassifications/adjustments 4,256,568 804,605 158,894 (128,753) 213,034 – (7,715,309) (2,410,961)
At December 31 148,988,985 22,235,361 10,185,208 5,479,851 2,125,186 1,495,841 13,980,362 204,490,794
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 78,114,745 9,087,641 3,246,716 4,247,291 1,071,086 – – 95,767,479
Depreciation and amortization 13,790,032 898,730 672,279 593,715 279,015 – – 16,233,771
Retirements/disposals (668,998) (1,483) – (282,636) (97,729) – – (1,050,846)
At December 31 91,235,779 9,984,888 3,918,995 4,558,370 1,252,372 – – 110,950,404
Net Book Value at
December 31 P=57,753,206 P=12,250,473 P=6,266,213 P=921,481 P=872,814 P=1,495,841 P=13,980,362 P=93,540,390
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2007
Telecommunications
Equipment
Buildings and
Leasehold
Improvements
Investments in
Cable Systems
Office
Equipment
Transportation
Equipment
Land
Assets Under
Construction Total
(In Thousand Pesos)
Cost
At January 1 P=130,620,854 P=20,377,768 P=10,017,962 P=4,515,457 P=1,478,232 P=897,914 P=6,643,502 P=174,551,689
Additions 3,253,235 145,563 181,975 269,558 316,667 – 9,563,221 13,730,219
Retirements/disposals (34,080) (9,157) – (15,476) (147,596) – (50,019) (256,328)
Reclassifications/adjustments 6,062,896 850,617 (271,559) 357,585 (3,942) 50,401 (7,776,279) (730,281)
At December 31 139,902,905 21,364,791 9,928,378 5,127,124 1,643,361 948,315 8,380,425 187,295,299
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 65,330,126 7,114,230 2,641,340 3,439,085 974,189 – – 79,498,970
Depreciation and amortization 12,973,133 1,910,873 659,958 781,626 218,888 – – 16,544,478
Retirements/disposals (188,514) 62,538 (54,582) 26,580 (121,991) – – (275,969)
At December 31 78,114,745 9,087,641 3,246,716 4,247,291 1,071,086 – – 95,767,479
Net Book Value at
December 31 P=61,788,160 P=12,277,150 P=6,681,662 P=879,833 P=572,275 P=948,315 P=8,380,425 P=91,527,820
Assets under construction include intangible components of a network system which are
reclassified to depreciable intangible assets only when assets become available for use
(see Note 9).
Investments in cable systems include the cost of the Globe Group’s ownership share in the
capacity of certain cable systems under a joint venture or a consortium or private cable set-up and
indefeasible rights of use (IRUs) of circuits in various cable systems. It also includes the cost of
cable landing station and transmission facilities where the Globe Group is the landing party.
Fully depreciated property and equipment still being used in the network amounted to
P=35,832.53 million, P=29,537.04 million and P=15,268.34 million in 2009, 2008 and 2007,
respectively.
The carrying values of property and equipment held under finance leases where the Globe Group
is the lessee are immaterial.
The Globe Group uses its borrowed funds to finance the acquisition of property and equipment
and bring it to its intended location and working condition. Borrowing costs incurred relating to
these acquisitions were included in the cost of property and equipment using 3.96%, 2.29% and
0.57% capitalization rates in 2009, 2008 and 2007, respectively. The Globe Group’s total
capitalized borrowing costs amounted to P=979.03 million, P=466.19 million and P=99.16 million for
the years ended December 31, 2009, 2008 and 2007, respectively (see Note 22).
In 2009, the Globe Group entered into an exchange transaction with an equipment supplier
whereby Globe Group conveyed and transferred ownership of certain equipment and licenses in
exchange for more advanced systems. This exchange resulted in a gain amounted to
P=568.12 million, equivalent to the difference between the fair value of the new equipment
stipulated in the purchase agreement and the carrying amount of the old platforms and equipment
at the time the exchange was consummated.
In 2008, the Globe Group purchased a parcel of land from a related party amounting to
P=547.53 million.
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8. Investment Property
The rollforward analysis of this account follows:
2009 2008 2007
(In Thousand Pesos)
Cost
At January 1 P=390,641 P=403,687 P=403,687
Reclassifications/adjustments – (13,046) –
At December 31 390,641 390,641 403,687
Accumulated Depreciation
At January 1 131,418 112,480 89,184
Depreciation 22,547 23,297 23,296
Reclassifications/adjustments (63) (4,359) –
At December 31 153,902 131,418 112,480
Net Book Value at December 31 P=236,739 P=259,223 P=291,207
Investment property represents the portion of a building that is currently being held for lease to
third parties (see Note 25.1b).
The details of income and expenses related to the investment property follow:
2009 2008 2007
(In Thousand Pesos)
Lease income P=31,274 P=41,690 P=40,570
Direct expenses 23,396 19,973 23,564
The fair value of the investment property, as determined by market data approach, amounted to
P=570.64 million based on the report issued by an independent appraiser dated December 21, 2009.
9. Intangible Assets and Goodwill
The rollforward analysis of this account follows:
2009
Licenses and
Application
Software
Total
Customer Intangible
Contracts Assets
(In Thousand Pesos)
Goodwill
Total
Intangible
Assets and
Goodwill
Cost
At January 1 P=6,968,572 P=28,381 P=6,996,953 P=327,125 P=7,324,078
Additions 99,164 – 99,164 – 99,164
Retirements/disposals (685,577) – (685,577) – (685,577)
Reclassifications/
adjustments (Note 7) 1,049,000 – 1,049,000 – 1,049,000
At December 31 7,431,159 28,381 7,459,540 327,125 7,786,665
(Forward)
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Licenses and
Application
Software
Customer
Contracts
Total Intangible
Assets
Total
Intangible
Assets and
Goodwill
Goodwill
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 P=3,985,282 P=– P=3,985,282 P=– P=3,985,282
Amortization 997,320 8,514 1,005,834 – 1,005,834
Retirements/disposals (211,736) – (211,736) – (211,736)
Reclassifications/adjustments 24,429 – 24,429 – 24,429
At December 31 4,795,295 8,514 4,803,809 – 4,803,809
Net Book Value at December 31 P=2,635,864 P=19,867 P=2,655,731 P=327,125 P=2,982,856
2008 (As restated)
Licenses and
Application
Software
Total
Customer Intangible
Contracts Assets
(In Thousand Pesos)
Goodwill
Total
Intangible
Assets and
Goodwill
Cost
At January 1 P=5,548,510 P=– P=5,548,510 P=– P=5,548,510
Additions 167,671 28,381 196,052 327,125 523,177
Retirements/disposals (11,904) – (11,904) – (11,904)
Reclassifications/
adjustments (Note 7) 1,264,295 – 1,264,295 – 1,264,295
At December 31 6,968,572 28,381 6,996,953 327,125 7,324,078
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 3,113,887 – 3,113,887 – 3,113,887
Amortization 771,000 – 771,000 – 771,000
Retirements/disposals (3,727) – (3,727) – (3,727)
Reclassifications/adjustments 104,122 – 104,122 – 104,122
At December 31 3,985,282 – 3,985,282 – 3,985,282
Net Book Value at December 31 P=2,983,290 P=28,381 P=3,011,671 P=327,125 P=3,338,796
2007
Licenses and
Application Software
(In Thousand Pesos)
Cost
At January 1
P=4,626,740
Additions 191,738
Retirements/disposals (249)
Reclassifications/adjustments (Note 7) 730,281
At December 31 5,548,510
Accumulated Depreciation, Amortization and Impairment Losses
At January 1 2,476,422
Amortization 621,224
Retirements/disposals (11)
Reclassifications/adjustments 16,252
At December 31 3,113,887
Net Book Value at December 31
P=2,434,623
Intangible assets pertain to 1) telecommunications equipment software licenses, corporate
application software and licenses and other VAS software applications that are not integral to the
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hardware or equipment; and 2) intangible assets identified to exist during acquisition of EGG
Group for its existing customer contracts. The fair value of customer contracts was determined at
P=28.38 million based on multiple excess earnings approach using a discount rate of 15%.
The fair values of the identified assets and liabilities of EGG Group acquired in 2008 were:
Provisional fair
Notes
Final fair value
upon acquisition
value upon
acquisition
(In Thousand Pesos)
Receivables - net 4 P=35,308 P=35,308
Prepayments and other current assets - net 28 8,842 8,842
Property and equipment - net 7 8,306 8,306
Intangible assets - net 28,381 –
80,837 52,456
Accounts payable and accrued expenses 12 47,949 47,949
Deferred tax liability 24 8,514 –
56,463 47,949
Net assets 24,374 4,507
Goodwill arising from acquisition 327,125 346,992
Total consideration, satisfied by cash P=351,499 P=351,499
The goodwill is attributable to the significant synergies expected to arise after the Globe Group’s
acquisition of the EGG Group.
The business revenues and profit and loss of the EGG Group from June 26, 2008 to
December 31, 2008 are insignificant. If the acquisition had occurred on January 1, 2008, the
Globe Group’s service revenues and net income as of December 31, 2008 would have been
P=62,948.16 million and P=11,260.38 million, respectively.
10. Investments in Joint Ventures
This account consists of:
2009 2008 2007
(In Thousand Pesos)
Acquisition cost
At January 1 P=111,280 P=111,280 P=111,280
Acquisition during the year 141,330 – –
At December 31 252,610 111,280 111,280
Accumulated equity in net gains (losses):
At January 1 (37,751) (28,023) (19,000)
Add:
Equity in net losses (7,009) (9,728) (9,023)
Net foreign exchange difference 25,950 – –
At December 31 (18,810) (37,751) (28,023)
P=233,800 P=73,529 P=83,257
10.1 Investment in BPI Globe BanKO Inc., A Savings Bank (BPI Globe BanKO)
On July 17, 2009, Globe acquired a 40% stake in BPI Globe BanKO (formerly Pilipinas
Savings Bank, Inc. or PS Bank) for P=141.33 million, pursuant to a Shareholder Agreement
with Bank of the Philippine Islands (BPI), AC and PS Bank, and a Deed of Absolute Sale
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with BPI. BPI Globe BanKO will have the capability to provide services to micro-finance
institutions and retail clients through mobile and related technology.
The Globe Group’s interest in BPI Globe BanKO is accounted for as follows:
2009
(In Thousand Pesos)
Assets:
Current
P=147,745
Non-current 3,650
Liabilities:
Current (10,064)
Non-current –
Income 12,572
Expenses (9,627)
10.2 Investment in Bridge Mobile Pte. Ltd. (BMPL)
Globe Telecom and other leading Asia Pacific mobile operators (JV partners) signed an
Agreement in 2004 (JV Agreement) to form a regional mobile alliance, which will operate
through a Singapore-incorporated company, BMPL. The joint venture company is a
commercial vehicle for the JV partners to build and establish a regional mobile
infrastructure and common service platform and deliver different regional mobile services to
their subscribers.
The other joint venture partners with equal stake in the alliance include Bharti Tele-
Ventures Limited, Maxis Communications Berhad, Optus Mobile Pty. Limited, Singapore
Telecom Mobile Pte. Ltd., Taiwan Cellular Corporation, PT Telekomunikasi Selular and
Hongkong CSL Ltd. Under the JV Agreement, each partner shall contribute USD4.00
million based on an agreed schedule of contribution. Globe Telecom may be called upon to
contribute on dates to be determined by the JV. As of December 31, 2009, Globe Telecom
has invested a total of USD2.20 million in the joint venture.
The Globe Group’s interest in BMPL is accounted for as follows:
2009 2008 2007
(In Thousand Pesos)
Assets:
Current P=104,280 P=79,110 P=93,088
Non-current 1,769 13,014 13,319
Liabilities:
Current (6,571) (8,867) (10,927)
Non-current – – (3,344)
Income 17,872 18,083 21,465
Expenses (27,826) (27,811) (30,344)
The Globe Group has no share of any contingent liabilities as of December 31, 2009, 2008
and 2007.
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11. Other Noncurrent Assets
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Prepaid pension 18.2 P=1,055,444 P=1,140,923 P=162,754
Loan receivable from Globe Telecom
retirement fund 6 968,000 – –
Loan receivable from Bethlehem Holdings,
Inc. (BHI) 25.5 295,000 – –
Miscellaneous deposits 431,221 386,678 364,628
Deferred input VAT 372,618 751,000 1,112,370
28.10,
28.11 81,727 61,324 55,461
AFS investment in equity securities - net
Others - net 134,400 20,270 218,426
P=3,338,410 P=2,360,195 P=1,913,639
In 2008, the Globe Group granted a short-term loan to the Globe Telecom retirement fund
amounting to P=800.00 million with interest at 6.20% (see Note 6). Upon maturity in 2009, the
loan was rolled over until September 2014 and bears interest at 7.75%. Further, in 2009, the
Globe Group granted an additional loan to the retirement fund amounting to P=168.00 million
which bears interest at 7.75% and is due also in September 2014.
The Globe Telecom retirement fund utilized the loan to fund its investments in BHI, a
company it organized to invest in media ventures. In 2009, BHI acquired two operating
companies.
On August 13 and December 21, 2009, the Globe Group granted five-year loans amounting to
P=250.00 million and P=45.00 million, respectively to BHI at 8.275% interest. The P=250.00
million loan is covered by a pledge agreement whereby in the event of default, the Globe
Group shall be entitled to set-off whatever amount is due to BHI from any unpaid fees of
Broadcast Enterprises and Affiliated Media Inc. (BEAM), BHI’s subsidiary, from the Globe
Group. The P=45.00 million loan is fully secured by a chattel mortgage agreement dated
December 21, 2009 between Globe Group and BEAM (see Notes 16.3 and 25.5).
12. Accounts Payable and Accrued Expenses
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Accrued project costs 25.3 P=8,081,684 P=5,258,619 P=4,448,646
Accounts payable 16 5,769,355 5,156,011 6,747,779
Accrued expenses 16 4,898,403 4,837,196 4,893,285
Traffic settlements - net 1,866,012 1,545,539 2,085,881
Output VAT 172,735 174,472 210,413
Dividends payable 17.3 50,492 60,637 49,449
P=20,838,681 P=17,032,474 P=18,435,453
Traffic settlements payable are presented net of traffic settlements receivable from the same
carrier amounting to P=1,019.65 million, P=4,313.98 million and P=7,011.72 million as of
December 31, 2009, 2008 and 2007, respectively.
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As of December 31, 2009, Globe Telecom and EGG Group reported net output VAT amounting
to P=172.74 million, net of input VAT of P=361.59 million. As of December 31, 2008, Globe
Telecom reported net output VAT amounting to P=174.47 million, net of input VAT of P=330.34
million. As of December 31, 2007, Globe Telecom and Innove reported net output VAT
amounting to P=210.41 million, net of input VAT of P=384.49 million.
The “Accrued expenses” account includes accruals for general, selling and administrative
expenses.
13. Provisions
The rollforward analysis of this account follows:
Notes 2009 2008 2007
(In Thousand Pesos)
At beginning of year P=202,514 P=219,687 P=248,310
Provisions/ reversals 23 (88,047) (5,031) 3,179
Adjustments (25,063) (12,142) (31,802)
At end of year P=89,404 P=202,514 P=219,687
Provisions relate to various pending unresolved claims and assessments over the Globe Group’s
mobile and wireline business. The information usually required by PAS 37, Provisions,
Contingent Liabilities and Contingent Assets, is not disclosed on the grounds that it can be
expected to prejudice the outcome of these claims and assessments. As of February 4, 2010,
the remaining pending claims and assessments are still being resolved.
The provisions for National Telecommunications Commission (NTC) permit fees amounting to
P=117.26 million for an assessment by the NTC on March 27, 1996 and contested by Innove and
other members of the Telecommunications Operators of the Philippines was reversed in 2009
after taking into account all available evidence including the merits of the ruling of the Court of
Appeals (CA) in favor of another telecommunications service provider.
14. Notes Payable and Long-term Debt
Notes payable consist of short-term promissory notes from local banks for working capital
requirements amounted to P=2,000.83 million, P=4,002.16 million and P=500.00 million as of
December 31, 2009, 2008 and 2007, respectively. These notes bear interest ranging from 4.35%
to 10.00%, 8.38% to 10.00% and 5.25% per annum in 2009, 2008 and 2007, respectively.
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Long-term debt consists of:
2009 2008 2007
(In Thousand Pesos)
Banks:
Local P=15,933,027 P=15,160,390 P=6,534,518
Foreign 6,810,357 4,836,265 6,193,028
Corporate notes 17,775,866 13,846,398 14,407,000
Retail bonds 4,956,772 2,742,885 2,738,306
45,476,022 36,585,938 29,872,852
Less current portion 5,667,965 7,742,227 4,803,341
P=39,808,057 P=28,843,711 P=25,069,511
The maturities of long-term debt at nominal values excluding unamortized debt issuance costs as
of December 31, 2009 follow (in thousand pesos):
Due in:
2010 P=5,687,510
2011 7,993,100
2012 14,539,018
2013 8,499,793
2014 and thereafter 8,954,593
P=45,674,014
Unamortized debt issuance costs included in the above long-term debt as of December 31, 2009
amounted to P=197.99 million.
The interest rates and maturities of the above debt are as follows:
Maturities
Interest Rates
Banks:
Local 2010-2014 5.12% to 7.87% in 2009
5.21% to 9.11% in 2008
5.09% to 11.02% in 2007
Foreign 2010-2012 0.74% to 6.44% in 2009
3.14% to 6.44% in 2008
5.65% to 8.61% in 2007
Corporate notes 2011-2016 5.62% to 8.80% in 2009
5.77% to 13.79% in 2008
5.15% to 16.00% in 2007
Retail bonds 2012-2014 7.50% to 8.00% in 2009
5.49% to 11.70% in 2008
5.16% to 11.70% in 2007
14.1 Bank Loans and Corporate Notes
Globe Telecom’s unsecured bank loans and corporate notes, which consist of fixed and
floating rate notes and peso-denominated bank loans, bear interest at stipulated and
prevailing market rates. The US dollar-denominated unsecured loans extended by
commercial banks bear interest based on US Dollar London Interbank Offered Rate (USD
LIBOR) or Commercial Interest Reference Rate (CIRR) plus margins.
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The loan agreements with banks and other financial institutions provide for certain
restrictions and requirements with respect to, among others, maintenance of financial ratios
and percentage of ownership of specific shareholders, incurrence of additional long-term
indebtedness or guarantees and creation of property encumbrances.
As of February 4, 2010, the Globe Group is not in breach of any loan covenants.
14.2 Retail Bonds
On February 25, 2009, Globe Group issued the P=5,000.00 million fixed rate bonds. This
amount comprises P=1,974.00 million and P=3,026.00 million fixed rate bonds due in 2012
and 2014, respectively, with interest of 7.50% and 8.00%, respectively. The proceeds of
the retail bonds will be used to fund Globe Group’s various capital expenditures.
The five-year retail bonds may be redeemed in whole, but not in part, on the twelfth (12th)
interest payment date at a price equal to 102.00% of the principal amount of the bonds and
all accrued interest to the date of redemption. Globe Group may not redeem the retail
bonds unless allowed under conditions specified in the agreements with respect to
redemption for tax reasons, purchase and cancellation and change in law or circumstance.
The Globe Group has to meet certain bond covenants including a maximum debt-to-equity
ratio of 2 to 1. As of February 4, 2010, the Globe Group is not in breach of any bond
covenants.
14.3 Senior Notes
On February 23, 2007, Globe Telecom exercised its option to call its USD293.54 million
2012 Senior Notes. On April 16, 2007, Globe Telecom fully settled and redeemed the 2012
Senior Notes through the Bank of New York.
Under the bond indenture, Globe Telecom was liable to pay the bondholders 104.875% of
the outstanding principal of the 2012 Senior Notes. Globe Telecom charged to other
financing costs (included in the “Financing costs” account) the bond redemption premium of
4.875%, accelerated the unamortized bond premium of P=356.48 million over the remaining
period up to settlement, and derecognized the carrying value of the bifurcated call option on
the Senior Notes of P=971.18 million.
Consequently, the total amount of bond redemption-related financing costs incurred for the
year ended December 31, 2007 amounted to P=1,301.51 million of which the cash component
amounted to only P=686.81 million, representing the 4.875% bond redemption premium
(see Note 22).
Loss on derivative instruments for the year ended December 31, 2007 includes the losses on
the bond option value prior to the bond call date amounted to P=454.09 million. Following
the bond redemption, the mark-to-market (MTM) losses amounted to P=263.88 million on
Globe Telecom’s cross currency swaps entered into to hedge the Senior Notes and deferred
under “Other reserves” account was charged to consolidated statements of comprehensive
income in 2007 (see Note 22).
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15. Other Long-term Liabilities
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
ARO P=1,269,291 P=1,081,408 P=1,623,830
Noninterest bearing liabilities 25.4 735,944 821,805 830,637
Accrued lease obligations and others 25.1 647,416 591,642 564,881
Advance lease 25.4 67,673 79,929 85,030
2,720,324 2,574,784 3,104,378
Less current portion 803,617 99,145 86,416
P=1,916,707 P=2,475,639 P=3,017,962
The maturities of other long-term liabilities at nominal amounts as of December 31, 2009 follow
(in thousand pesos):
Due in:
2010 P=803,617
2011 and thereafter 1,916,707
P=2,720,324
In 2008, Globe Group updated its assumptions on the timing of settlement and estimated cash
outflows arising from ARO on its leased premises. As a result of the changes in estimates
reckoned as of January 1, 2008, Globe Group adjusted downward its ARO liability by
P=714.78 million against the book value of the assets on leased premises.
The rollforward analysis of the Globe Group’s ARO follows:
Notes 2009 2008 2007
(In Thousand Pesos)
At beginning of year P=1,081,408 P=1,623,830 P=1,316,612
Capitalized to property and equipment
during the year - net of reversal 30 96,959 95,086 150,051
Accretion expense during the year 22 98,117 77,269 157,167
Adjustments due to changes in estimates (7,193) (714,777) –
At end of year P=1,269,291 P=1,081,408 P=1,623,830
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16. Related Party Transactions
Globe Telecom and Innove, in their regular conduct of business, enter into transactions with their
major stockholders, AC and STI, joints ventures and certain related parties. These transactions,
which are accounted for at market prices normally charged to unaffiliated customers for similar
goods and services, include the following:
16.1 Entities with joint control over Globe Group
• Globe Telecom has interconnection agreements with STI. The related net traffic
settlements receivable (included in “Receivables” account in the consolidated
statements of financial position) and the interconnection revenues earned (included in
“Service revenues” account in the consolidated statements of comprehensive income)
are as follows:
2009 2008 2007
(In Thousand Pesos)
Traffic settlements receivable - net P=34,487 P=216,348 P=63,391
Interconnection revenues 2,097,734 1,817,912 1,573,686
• Globe Telecom and STI have a technical assistance agreement whereby STI will provide
consultancy and advisory services, including those with respect to the construction and
operation of Globe Telecom’s networks and communication services (see Notes 25.6),
equipment procurement and personnel services. In addition, Globe Telecom has software
development, supply, license and support arrangements, lease of cable facilities,
maintenance and restoration costs and other transactions with STI.
The details of fees (included in repairs and maintenance under the “General, selling and
administrative expenses” account in the consolidated statements of comprehensive
income) incurred under these agreements are as follows:
2009 2008 2007
(In Thousand Pesos)
Maintenance and restoration costs and
other transactions P=216,701 P=216,813 P=201,576
Software development, supply, license
and support 26,924 2,637 2,074
Technical assistance fee 99,903 83,514 86,935
The net outstanding balances due to STI (included in the “Accounts payable and
accrued expenses” account in the consolidated statements of financial position) arising
from these transactions are as follows:
2009 2008 2007
(In Thousand Pesos)
Maintenance and restoration costs and
other transactions P=33,555 P=115,243 P=54,047
Software development, supply, license
and support 45,734 28,569 14,218
Technical assistance fee 24,180 23,838 25,080
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• Globe Telecom reimburses AC for certain operating expenses. The net outstanding
liabilities to AC related to these transactions amounted to P=31.34 million,
P=23.68 million and P=28.47 million as of December 31, 2009, 2008 and 2007,
respectively.
• Globe Telecom earns subscriber revenues from AC. The outstanding subscribers
receivable from AC (included in “Receivables” account in the consolidated statements
of financial position) and the amount earned as service revenue (included in the
“Service revenues” account in the consolidated statements of comprehensive income)
are as follows:
2009 2008 2007
(In Thousand Pesos)
Subscriber receivables P=59 P=182 P=122
Service revenues 5,245 5,504 5,400
16.2 Joint Ventures in which the Globe Group is a venturer
• Globe Telecom has preferred roaming service contract with BMPL. Under this
contract, Globe Telecom will pay BMPL for services rendered by the latter which
include, among others, coordination and facilitation of preferred roaming arrangement
among JV partners, and procurement and maintenance of telecommunications
equipment necessary for delivery of seamless roaming experience to customers. Globe
Telecom also earns or incurs commission from BMPL for regional top-up service
provided by the JV partners. As of December 31, 2009, 2008 and 2007, balances
related to these transactions amounted to P=1.02 million, P=2.12 million and
P=1.91 million, respectively.
• On October 2009, the Globe Group entered into an agreement with BPI Globe BanKO
for the pursuit of services that will expand the usage of GCash technology. As a result,
the Globe Group recognized revenue of P=9.99 million in 2009.
16.3 Transactions with the retirement fund (see Note 11)
• On February 1, 2009, the Globe Group entered into a memorandum of agreement
(MOA) with BEAM for the latter to render mobile television broadcast service to
Globe subscribers using the mobile TV service. As a result, the Globe Group
recognized an expense (included in “Professional and other contracted services”)
amounting to P=245.58 million in 2009.
• On October 1, 2009, the Globe Group entered into a MOA with Altimax Broadcasting
Co., Inc. (Altimax), a subsidiary of BHI, for the Globe Group’s co-use of specific
frequencies of Altimax’s for the rollout of broadband wireless access to the Globe
Group’s subscribers. As a result, the Globe Group recognized an expense (included in
“General, selling and administrative Expenses”) amounting to P=70.00 million in 2009.
16.4 Transactions with other related parties
Globe Telecom has subscriber receivables (included in “Receivables” account in the
consolidated statements of financial position) and earns service revenues (included in
the “Service revenues” account in the consolidated statements of comprehensive
income) from its other related parties namely, Ayala Land Inc., Ayala Property
Management Corporation, BPI, Manila Water Company, Inc., Integrated
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Microelectronics, Inc. and eTelecare Global Solutions, Inc. These amounted to:
2009 2008 2007
(In Thousand Pesos)
Subscriber receivables P=46,755 P=48,712 P=57,570
Service revenues 150,233 206,635 186,762
The total expenses incurred on leases, utilities, customer contact services and other
miscellaneous services provided to the Globe Group by these other related parties
(included under “General, selling and administrative expenses” account in the
consolidated statements of comprehensive income) amounted to P=241.75 million,
P=205.76 million and P=135.85 million as of December 31, 2009, 2008 and 2007,
respectively. The outstanding balances due related to these expenses amounted to
P=13.68 million and P=1.20 million as of December 1, 2009 and 2008, respectively.
There was no outstanding payable to other related parties as of December 31, 2007.
These related parties are either controlled or significantly influenced by AC.
16.5 Transactions with key management personnel of the Globe Group
The Globe Group’s compensation of key management personnel by benefit type are as
follows:
Notes 2009 2008 2007
(In Thousand Pesos)
Short-term employee benefits 21 P=1,867,128 P=1,833,508 P=1,499,760
Share-based payments 18 126,437 182,324 129,914
Post-employment benefits 18 53,290 112,620 65,563
P=2,046,855 P=2,128,452 P=1,695,237
There are no agreements between the Globe Group and any of its directors and key officers
providing for benefits upon termination of employment, except for such benefits to which
they may be entitled under the Globe Group’s retirement plans.
The Globe Group granted short-term loans to its key management personnel amounting to
P=33.37 million, P=21.32 million and P=10.56 million as of December 31, 2009, 2008 and
2007, respectively, included in the “Prepayments and other current assets” in the
consolidated statements of financial position.
The summary of consolidated outstanding balances resulting from transactions with related
parties follows:
Notes 2009 2008 2007
(In Thousand Pesos)
Subscriber receivables (included in
“Receivables” account) P=46,814 P=48,894 P=57,692
Traffic settlements receivable - net
(included in “Receivables”
account) 4 34,487 216,348 63,391
Other current assets 6 1,475 2,602 1,925
Accounts payable and accrued
expenses 12 149,512 194,657 123,731
In May 2008, the NTC approved the assignment of Innove’s prepaid consumer subscriber
contracts in favor of Globe Telecom. The transfer did not result in the recognition of a gain or
loss in the consolidated financial statements.
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17. Equity and Other Comprehensive Income
Globe Telecom’s authorized capital stock consists of:
2009 2008 2007
Shares Amount Shares Amount Shares Amount
(In Thousand Pesos and Number of Shares)
Preferred stock - Series “A” -
P=5 per share 250,000 P=1,250,000 250,000 P=1,250,000 250,000 P=1,250,000
Common stock - P=50 per share 179,934 8,996,719 179,934 8,996,719 179,934 8,996,719
Globe Telecom’s issued and subscribed capital stock consists of:
2009 2008 2007
Shares Amount Shares Amount Shares Amount
(In Thousand Pesos and Number of Shares)
Preferred stock 158,515 P=792,575 158,515 P=792,575 158,515 P=792,575
Common stock 132,346 6,617,280 132,340 6,617,008 132,334 6,616,677
Subscriptions receivable (776) (1,508) (42,250)
P=7,409,079 P=7,408,075 P=7,367,002
17.1 Preferred Stock
Preferred stock - Series “A” has the following features:
(a) Convertible to one common share after 10 years from issue date on June 29, 2001 at not
less than the prevailing market price of the common stock less the par value of the
preferred shares;
(b) Cumulative and nonparticipating;
(c) Floating rate dividend;
(d) Issued at P=5 par;
(e) With voting rights;
(f) Globe Telecom has the right to redeem the preferred shares at par plus accrued
dividends at any time after 5 years from date of issuance; and
(g) Preferences as to dividend in the event of liquidation.
The dividends for preferred shares are declared upon the sole discretion of the Globe
Telecom’s BOD. As of December 31, 2009, the Globe Group has no dividends in arrears to
its preferred stockholders.
17.2 Common Stock
The rollforward of outstanding common shares are as follows:
2009 2008 2007
Shares Amount Shares Amount Shares Amount
(In Thousand Pesos and Number of Shares)
At beginning of year 132,340 P=6,617,008 132,334 P=6,616,677 132,080 P=6,603,989
Exercise of stock options 6 272 6 331 254 12,688
At end of year 132,346 P=6,617,280 132,340 P=6,617,008 132,334 P=6,616,677
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17.3 Cash Dividends
Information on Globe Telecom’s declaration of cash dividends follows:
Date
Per share Amount Record Payable
(In Thousand Pesos, Except Per Share Figures)
Preferred stock dividends declared on:
December 7, 2007 P=0.31 P=49,449 December 18, 2007 March 17, 2008
December 2, 2008 0.38 60,637 December 18, 2008 March 17, 2009
December 4, 2009 0.32 50,492 December 18, 2009 March 18, 2010
Common stock dividends declared on:
February 5, 2007 P=33.00 P=4,359,650 February 19, 2007 March 15, 2007
August 10, 2007 33.00 4,362,385 August 29, 2007 September 14, 2007
November 6, 2007 50.00 6,616,708 November 20, 2007 December 17, 2007
February 4, 2008 37.50 4,962,508 February 18, 2008 March 13, 2008
August 5, 2008 87.50 11,579,763 August 21, 2008 September 15, 2008
February 3, 2009 32.00 4,234,885 February 17, 2009 March 10, 2009
August 4, 2009 32.00 4,234,979 August 19, 2009 September 15, 2009
November 6, 2009 50.00 6,617,280 November 20, 2009 December 15, 2009
The dividend policy of Globe Telecom as approved by the BOD is to declare cash dividends
to its common stockholders on a regular basis as may be determined by the BOD. The
dividend payout rate starting 2006 is approximately 75% of prior year’s net income payable
semi-annually in March and September of each year. This is reviewed annually, taking into
account Globe Telecom’s operating results, cash flows, debt covenants, capital expenditure
levels and liquidity.
On November 6, 2007, the BOD declared a special cash dividend of P=50.00 per common
share based on shareholders on record as of November 20, 2007 with the payment date of
December 17, 2007. The special dividend was in consideration of the record profitability
and strong operating cash flows of Globe Telecom, and to optimize Globe Telecom’s capital
structure and enhance shareholder value.
On August 5, 2008, the BOD approved the declaration of the second semi-annual cash
dividends in 2008 of P=4,962.61 million (P=37.50 per common share) and additional special
dividend of P=6,616.81 million (P=50.00 per common share) to common stockholders of
record as of August 21, 2008 and payable on September 15, 2008.
On November 6, 2009, the BOD amended the dividend payment rate from 75% to a range of
75% - 90% and declared a special dividend of P=50.00 per common share based on
shareholders on record as of November 20, 2009 with the payment date of
December 15, 2009.
Cash Dividends Declared After the End of Reporting Period
On February 4, 2010, the BOD approved the declaration of the first semi-annual cash
dividend of P=40.00 per common share, payable to shareholders on record as of
February 19, 2010. Total dividends of P=5,293.84 million will be paid on March 15, 2010.
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17.4 Retained Earnings Available for Dividend Declaration
The total unrestricted retained earnings available for dividend declaration amounted to
P=9,604.56 million as of December 31, 2009. This amount excludes the undistributed net
earnings of consolidated subsidiaries, accumulated equity in net earnings of joint ventures
accounted for under the equity method, and unrealized gains recognized on asset and
liability currency translations and unrealized gains on fair value adjustments. The Globe
Group is also subject to loan covenants that restrict its ability to pay dividends
(see Note 14).
17.5 Other Comprehensive Income
Other Reserves
Cash flow hedges
Available-forsale
financial
assets
Exchange
differences arising
from translations of
foreign investments
For the Year Ended December 31, 2009 (In Thousand Pesos)
As of January 1, 2009 (P=37,219) P=329 P=1,508 (P=35,382)
Fair value changes (35,116) 14,553 – (20,563)
Transferred to income and
expenses 60,156 – – 60,156
Tax effect of items taken directly
to or transferred from equity (10,375) – – (10,375)
Exchange differences – – 24,682 24,682
As of December 31, 2009 (P=22,554) P=14,882 P=26,190 P=18,518
Total
For the Year Ended December 31, 2008 (In Thousand Pesos)
As of January 1, 2008 P=164,345 P=20,063 P=– P=184,408
Fair value changes (457,080) (19,734) – (476,814)
Transferred to income and
expenses 146,981 – – 146,981
Tax effect of items taken directly
to or transferred from equity 108,535 – – 108,535
Exchange differences – – 1,508 1,508
As of December 31, 2008 (P=37,219) P=329 P=1,508 (P=35,382)
For the Year Ended December 31, 2007 (In Thousand Pesos)
As of January 1, 2007 (P=197,695) P=3,905 P=– (P=193,790)
Fair value changes 193,165 16,158 – 209,323
Transferred to income and
expenses (26,069) – – (26,069)
Tax effect of items taken directly
to or transferred from equity 194,944 – – 194,944
As of December 31, 2007 P=164,345 P=20,063 P=– P=184,408
18. Employee Benefits
18.1 Stock Option Plans
The Globe Group has a share-based compensation plan called the Executive Stock Option
Plan (ESOP). The number of shares allocated under the ESOP shall not exceed the
aggregate equivalent of 6% of the authorized capital stock.
On October 1, 2009, the Globe Group granted additional stock options to key executives
and senior management personnel under the ESOP. The grant requires the grantees to pay a
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nonrefundable option purchase price of P=1,000.00 until October 30, 2009, which is the
closing date for the acceptance of the offer. In order to avail of the privilege, the grantees
must remain with Globe Telecom or its affiliates from grant date up to the beginning of the
exercise period of the corresponding shares.
The following are the stock option grants to key executives and senior management
personnel of the Globe Group under the ESOP from 2003 to 2009:
Date of Grant
Number of
Options
Granted Exercise Price Exercise Dates
April 4, 2003 680,200 P=547.00 per share 50% of options exercisable from
April 4, 2005 to April 14, 2013; the
remaining 50% exercisable from
April 4, 2006 to April 14, 2013
July 1, 2004 803,800 P=840.75 per share 50% of options exercisable from
July 1, 2006 to June 30, 2014; the
remaining 50% from July 1, 2007 to
June 30, 2014
March 24, 2006 749,500 P=854.75 per share 50% of the options become
exercisable from March 24, 2008 to
March 23, 2016; the remaining
50% become exercisable from
March 24, 2009 to March 23, 2016
May 17, 2007 604,000 P=1,270.50 per share 50% of the options become
exercisable from May 17, 2009 to
May 16, 2017, the remaining 50%
become exercisable from May 17,
2010 to May 16, 2017
August 1, 2008 635,750 P=1,064.00 per share 50% of the options become
exercisable from August 1, 2010 to
July 31, 2018, the remaining 50%
become exercisable from August 1,
2011 to July 31, 2018
October 1, 2009 298,950 P=993.75 per share 50% of the options become
exercisable from October 1, 2011
to September 30, 2019, the
remaining 50% become exercisable
from October 1, 2012 to
September 30, 2019
Fair Value
of each
Option
P=283.11
P=357.94
P=292.12
P=375.89
P=305.03
P=346.79
Fair Value
Measurement
Black-Scholes
option pricing
model
Black-Scholes
option pricing
model
Trinomial option
pricing model
Trinomial option
pricing model
Trinomial option
pricing model
Trinomial option
pricing model
The exercise price is based on the average quoted market price for the last 20 trading days
preceding the approval date of the stock option grant.
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A summary of the Globe Group’s ESOP activity and related information follows:
Number of
Shares
2009 2008 2007
Weighted
Weighted
Average
Average
Exercise Number of Exercise Number of
Price Shares Price Shares
Weighted
Average
Exercise
Price
(In Thousands and Per Share Figures)
Outstanding, at beginning of year 1,929,732 P=1,035.76 1,617,114 P=994.57 1,590,940 P=811.62
Granted 298,950 993.75 650,450 1,052.32 604,000 1,270.50
Exercised (137,626) 843.22 (247,332) 846.80 (465,776) 782.32
Expired/forfeited (52,950) 1,073.58 (90,500) 935.02 (112,050) 766.69
Outstanding, at end of year 2,038,106 P=1,041.62 1,929,732 P=1,035.76 1,617,114 P=994.57
Exercisable, at end of year 828,281 P=962.78 363,032 P=792.12 309,614 P=785.65
The average share prices at dates of exercise of stock options as of December 31, 2009,
2008 and 2007 amounted to P=975.26, P=1,461.82 and P=1,242.57, respectively.
As of December 31, 2009, 2008 and 2007, the weighted average remaining contractual life
of options outstanding is 7.59 years, 8.13 years and 8.29 years, respectively.
The following assumptions were used to determine the fair value of the stock options at
effective grant dates:
October 1, 2009 August 1, 2008 May 17, 2007 June 30, 2006 July 1, 2004 April 4, 2003
Share price P=995.00 P=1,130.00 P=1,340.00 P=930.00 P=835.00 P=580.00
Exercise price P=993.75 P=1,064.00 P=1,270.50 P=854.75 P=840.75 P=547.00
Expected volatility 48.49% 31.73% 38.14% 29.51% 39.50% 34.64%
Option life 10 years 10 years 10 years 10 years 10 years 10 years
Expected dividends 6.43% 6.64% 4.93% 5.38% 4.31% 2.70%
Risk-free interest rate 8.08% 9.62% 7.04% 10.30% 12.91% 11.46%
The expected volatility measured at the standard deviation of expected share price returns
was based on analysis of share prices for the past 365 days.
Cost of share-based payments for the years ended December 31, 2009, 2008 and 2007
amounted to P=126.44 million, P=182.32 million and P=129.91 million, respectively.
18.2 Pension Plan
The Globe Group has a funded, noncontributory, defined benefit pension plan covering
substantially all of its regular employees. The benefits are based on years of service and
compensation on the last year of employment.
The components of pension expense (included in staff costs under “General, selling and
administrative expenses”) in the consolidated statements of comprehensive income are as
follows:
2009 2008 2007
(In Thousand Pesos)
Current service cost P=163,382 P=221,289 P=168,374
Interest cost on benefit obligation 156,182 136,160 80,224
Expected return on plan assets (234,018) (138,301) (127,872)
Net actuarial losses (41) 28,314 11,157
Total pension expense P=85,505 P=247,462 P=131,883
Actual return (loss) on plan assets P=181,051 (P=184,599) P=96,495
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The funded status for the pension plan of Globe Group is as follows:
2009 2008 2007
(In Thousand Pesos)
Benefit obligation P=2,079,316 P=1,319,742 P=1,690,615
Plan assets (2,334,772) (2,344,764) (1,341,568)
(255,456) (1,025,022) 349,047
Unrecognized net actuarial losses (799,539) (115,403) (511,801)
Asset recognized in the consolidated statements
of financial position* (P=1,054,995) (P=1,140,425) (P=162,754)
*Of this amount, P=1,055.44 million is included in “Other noncurrent assets” account, while the P=0.45 million is
included in “Accrued expenses” under “Accounts payable and accrued expenses” account as of December 31, 2009.
The following tables present the changes in the present value of defined benefit obligation
and fair value of plan assets:
Present value of defined benefit obligation
2009 2008 2007
(In Thousand Pesos)
Balance at beginning of year P=1,319,742 P=1,690,615 P=1,267,209
Interest cost 156,182 136,160 80,224
Current service cost 163,382 221,289 168,374
Benefits paid (129,761) (87,941) (58,635)
Actuarial losses (gains) 569,770 (640,381) 233,443
Balance at end of year P=2,079,315 P=1,319,742 P=1,690,615
Fair value of plan assets
2009 2008 2007
(In Thousand Pesos)
Balance at beginning of year P=2,344,764 P=1,341,568 P=1,254,906
Expected return 234,018 138,301 127,872
Contributions 104 1,225,345 47,200
Benefits paid (129,761) (87,941) (58,635)
Actuarial losses (114,353) (272,509) (29,775)
Balance at end of year P=2,334,772 P=2,344,764 P=1,341,568
The Globe Group does not expect to make additional contributions to its retirement fund in
2010.
As of December 31, 2009 and 2008, the allocation of the fair value of the plan assets of the
Globe Group follows:
2009 2008
Investments in fixed income securities:
Corporate 60.43% 69.38%
Government 18.71% 12.80%
Investments in equity securities 18.78% 15.76%
Others 2.08% 2.06%
In 2008, Globe, Innove and GXI pooled its plan assets for single administration by the fund
managers. The EGG Group’s retirement fund is being managed separately and the amount
of defined benefit obligation is immaterial.
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The allocation of the fair value of the plan assets of December 31, 2007 for Globe Telecom
and Innove follows:
Globe Telecom
Innove
Investments in debt securities 68.00% 66.00%
Investments in equity securities 30.00% 32.00%
Others 2.00% 2.00%
As of December 31, 2009, the pension plan assets of the Globe Group include shares of
stock of Globe Telecom with total fair value of P=50.15 million, and shares of stock of other
related parties with total fair value of P=72.03 million.
The assumptions used to determine pension benefits of Globe Group are as follows:
2009 2008 2007
Discount rate 9.00% 12.33% 8.25%
Expected rate of return on plan assets 10.00% 10.00% 10.00%
Salary rate increase 7.00% 7.00% 7.00%
In 2009 and 2008, the Globe Group applied a single weighted average discount rate that
reflects the estimated timing and amount of benefit payments and the currency in which the
benefits are to be paid. In 2007, the Globe Group used risk-free interest rates of government
securities that have terms to maturity approximating the terms of the related pension
liabilities.
The overall expected rate of return on plan assets is determined based on the market prices
prevailing on that date, applicable to the period over which the obligation is to be settled.
Amounts for the current and previous four years are as follows:
2009 2008 2007 2006 2005
(In Thousand Pesos)
Defined benefit obligation P=2,079,316 P=1,319,742 P=1,690,615 P=1,267,209 P=648,825
Plan assets 2,334,772 2,344,764 1,341,568 1,254,906 1,066,441
Deficit (surplus) (255,456) (1,025,022) 349,047 12,303 (417,616)
2009 2008 2007 2006
(In Thousand Pesos)
Experience adjustments:
Gain (loss) on plan liabilities P=18,390 (P=51,340) (P=170,819) (P=72,950)
Gain (loss) on plan assets (114,327) (272,539) 29,780 102,010)
19. Interest Income
Interest income is earned from the following sources:
2009 2008 2007
(In Thousand Pesos)
Short-term placements P=145,623 P=394,824 P=566,358
Cash in banks 67,288 23,033 161,630
Others 58,895 2,568 633
P=271,806 P=420,425 P=728,621
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20. Other Income
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Lease income 8, 25.1.b P=204,505 P=210,003 P=220,258
22,
28.2.1.2 286,530 – 1,431,214
Foreign exchange gain - net
Others 573,441 490,871 138,099
P=1,064,476 P=700,874 P=1,789,571
The peso to US dollar exchange rates amounted to P=46.425, P=47.655 and P=41.411 for the years
ended December 31, 2009, 2008 and 2007, respectively.
The Globe Group’s net foreign currency-denominated liabilities amounted to USD207.18 million,
USD85.37 million and USD166.29 million as of December 31, 2009, 2008 and 2007, respectively
(see Note 28.2.1.2).
These combinations of net liability movements and peso rate depreciation/appreciation resulted in
foreign exchange gains in 2009 and 2007 and loss in 2008 (see Note 22).
The “Others” account includes actual recoveries of operating losses recognized in previous years.
21. General, Selling and Administrative Expenses
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Staff costs 16.5, 18 P=4,980,769 P=5,076,635 P=4,536,508
Selling, advertising and promotions 3,766,390 4,494,329 4,469,486
Rent 25 3,469,319 2,883,397 2,569,773
Professional and other contracted services 16 2,695,598 2,429,615 1,831,121
Utilities, supplies and other administrative
expenses 5 2,692,958 2,709,850 2,243,308
Repairs and maintenance 16 2,581,565 2,495,162 2,205,476
Insurance and security services 1,732,888 1,731,878 1,578,296
Courier, delivery and miscellaneous
expenses 906,451 898,488 918,244
Others 1,670,944 1,037,772 952,261
P=24,496,882 P=23,757,126 P=21,304,473
The “Others” account includes miscellaneous expenses, taxes and licenses, delivery charges and
various other items that are individually immaterial.
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22. Financing Costs
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Interest expense* 7 P=2,096,945 P=2,255,878 P=2,996,347
Foreign exchange loss - net 20, 28.2.1.2 – 759,299 –
Loss (gain) on derivative instruments 14.3, 28 46,943 (1,681) 801,617
Swap and other financing costs - net 14.3 38,993 (13,105) 1,426,975
P=2,182,881 P=3,000,391 P=5,224,939
*This account is net of capitalized expense and amortization of debt issuance costs.
In 2009 and 2007, net foreign exchange gain amounted to P=286.53 million and P=1,431.21 million,
respectively, was presented as part of “Others - net” account in the consolidated statements of
comprehensive income (see Note 20).
Interest expense - net is incurred on the following:
Notes 2009 2008 2007
(In Thousand Pesos)
Long-term debt 14 P=1,751,423 P=2,035,281 P=2,726,466
Short term notes payable 14 170,205 57,391 1,491
Accretion expense 15, 25.4 175,317 163,206 268,390
P=2,096,945 P=2,255,878 P=2,996,347
23. Impairment Losses and Others
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Impairment loss (reversal of impairment loss) on:
Receivables 28 P=754,633 P=979,779 P=711,396
Property and equipment 85,631 (31,172) (71,431)
Provisions for (reversal of):
Inventory obsolescence and market decline 5 58,743 262,103 298,116
Other probable losses 13 (88,047) (5,031) 3,179
P=810,960 P=1,205,679 P=941,260
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24. Income Tax
The significant components of the deferred income tax assets and liabilities of the Globe Group
represent the deferred income tax effects of the following:
2009 2008 2007
(In Thousand Pesos)
Deferred income tax assets on:
Unearned revenues already subjected to
income tax P=918,938 P=1,003,875 P=686,740
Allowance for impairment losses on
receivables 400,352 369,120 496,717
ARO 346,668 317,732 291,521
Accrued rent expense under PAS 17 130,805 122,030 110,959
NOLCO 138,054 – –
Accumulated impairment losses on property
and equipment 88,808 67,195 126,320
Inventory obsolescence and market decline 87,311 94,045 73,017
Accrued vacation leave 76,402 52,095 68,129
MCIT 46,711 – –
Provision for other probable losses 33,097 27,928 38,829
Cost of share-based payments 23,555 7,796 300,714
Unrealized foreign exchange losses 21,202 21,607 36,470
Unrealized loss on derivative transactions 16,845 4,993 –
Others – 235 489
2,328,748 2,088,651 2,229,905
Deferred income tax liabilities on:
Excess of accumulated depreciation and
amortization of Globe Telecom equipment
for tax reporting (a) over financial
reporting (b) 5,116,298 5,342,712 4,763,990
Undepreciated capitalized borrowing costs
already claimed as deduction for tax
reporting 839,330 591,238 1,404,139
Unrealized foreign exchange gain 160,761 92,504 687,341
Unamortized discount on noninterest bearing
liability 67,178 108,041 133,822
Prepaid pension 21,709 12,349 49,454
Unrealized gains on derivative transactions – – 56,328
Customer contracts of acquired company 8,228 8,514 –
6,213,504 6,155,358 7,095,074
Net deferred income tax liabilities P=3,884,756 P=4,066,707 P=4,865,169
(a) Sum-of-the-years digit method
(b) Straight-line method
Net deferred tax assets and liabilities presented in the consolidated statements of financial
position on a net basis by entity are as follows:
2008
2009 (As restated) 2007
(In Thousand Pesos)
Net deferred tax assets (Innove and EGG Group) P=742,538 P=523,722 P=637,721
Net deferred tax liabilities (Globe Telecom) 4,627,294 4,590,429 5,502,890
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GXI did not recognize its deferred income tax assets amounting to P=38.60 million, P=47.75 million
and P=30.95 million as of December 31, 2009, 2008 and 2007, respectively, which includes
deferred income tax assets on NOLCO amounting to P=33.90 million, P=43.90 million and
P=30.82 million as of December 31, 2009, 2008 and 2007, respectively, because the management
believes that there is no assurance that GXI will generate sufficient taxable income to allow all or
part of its deferred income tax assets to be utilized.
The details of Innove’s, GXI’s and EGG Group’s NOLCO and MCIT and the related tax effects
are as follows (in thousand pesos):
Tax Effect of
Inception Year MCIT NOLCO NOLCO Expiry Year
2009 P=47,885 P=425,343 P=127,603 2012
2008 238 97,884 29,365 2011
2007 – 54,025 16,208 2010
P=48,123 P=577,252 P=173,176
GXI’s NOLCO amounting to P=36.72 million expired in 2009.
The reconciliation of the provision for income tax at statutory tax rate and the actual current and
deferred provision for income tax follows:
2009 2008 2007
(In Thousand Pesos)
Provision at statutory income tax rate P=5,391,811 P=6,246,107 P=7,017,622
Add (deduct) tax effects of:
Deferred tax on unexercised stock options and
basis differences on deductible and reported
stock compensation expense 15,405 294,620 (205,738)
Tax rate difference arising from the change in
expected timing of deferred tax
assets’/liabilities’ reversal – 25,911 (84,299)
Equity in net losses of joint ventures 2,103 3,405 3,158
Income subjected to lower tax rates (62,175) (77,364) (107,454)
Others 56,685 77,463 150,040
Actual provision for income tax P=5,403,829 P=6,570,142 P=6,773,329
The current provision for income tax includes the following:
2009 2008 2007
(In Thousand Pesos)
Regular corporate income tax P=5,543,242 P=7,194,104 P=6,723,422
Final tax 40,567 74,480 117,818
P=5,583,809 P=7,268,584 P=6,841,240
The corporate tax rates are 30%, 35% and 35% in 2009, 2008 and 2007, respectively.
Globe Telecom and Innove are entitled to certain tax and nontax incentives and have availed of
incentives for tax and duty-free importation of capital equipment for their services under their
respective franchises.
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25. Agreements and Commitments
25.1 Lease Commitments
(a) Operating lease commitments - Globe Group as lessee
Globe Telecom and Innove lease certain premises for some of its telecommunications
facilities and equipment and for most of its business centers and network sites. The
operating lease agreements are for periods ranging from 1 to 10 years from the date of
the contracts and are renewable under certain terms and conditions. The agreements
generally require certain amounts of deposit and advance rentals, which are shown as
part of the “Other noncurrent assets” account in the consolidated statements of
financial position. The Globe Group also has short term renewable leases on
transmission cables and equipment. The Globe Group’s rentals incurred on these
various leases (included in “General, selling and administrative expenses” account in
the consolidated statements of comprehensive income) amounted toP=3,469.32 million,
P=2,883.40 million and P=2,569.77 million for the years ended December 31, 2009,
2008 and 2007, respectively (see Note 21).
As of December 31, 2009, the future minimum lease payments under these operating
leases are as follows (in thousand pesos):
Not later than one year
P=6,091,957
After one year but not more than five years 8,166,834
After five years 2,628,873
P=16,887,664
(b)
Operating lease commitments - Globe Group as lessor
Globe Telecom and Innove have certain lease agreements on equipment and office
spaces. The operating lease agreements are for periods ranging from 1 to 14 years
from the date of contracts. These include Globe Telecom’s lease agreement with C2C
Pte. Ltd. (C2C) (see related discussion on Agreements with C2C).
Total lease income amounted to P=171.48 million, P=198.10 million and
P=207.73 million for the years ended December 31, 2009, 2008 and 2007, respectively.
The future minimum lease receivables under these operating leases are as follows
(in thousand pesos):
Within one year
P=165,700
After one year but not more than five years 662,799
After five years 207,125
P=1,035,624
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(c)
Finance lease commitments - Globe Group as lessee and lessor
Globe Telecom and Innove have entered into finance lease agreements for various
items of property and equipment. The said leased assets are capitalized and are
depreciated over the EUL of three years, which is also equivalent to the lease term.
As of December 31, 2009, 2008 and 2007, residual present value of net minimum
lease payments due and receivable are immaterial.
25.2 Agreements and Commitments with Other Carriers
Globe Telecom and Innove have existing international telecommunications service
agreements with various foreign administrations and interconnection agreements with local
telecommunications companies for their various services. Globe also has international
roaming agreements with other foreign operators, which allow its subscribers access to
foreign networks. The agreements provide for sharing of toll revenues derived from the
mutual use of telecommunication networks.
25.3 Arrangements and Commitments with Suppliers
Globe Telecom and Innove have entered into agreements with various suppliers for the
development or construction, delivery and installation of property and equipment. Under
the terms of these agreements, advance payments are made to suppliers and delivery,
installation, development or construction commences only when purchase orders are served.
While the development or construction is in progress, project costs are accrued based on the
billings received. Billings are based on the progress of the development or construction and
advance payments are being applied proportionately to the milestone billings. When
development or construction and installation are completed and the property and equipment
is ready for service, the balance of the value of the related purchase orders is accrued. In
2009, the Globe Group reclassified its Advances to Suppliers and Contractors to
“Prepayments and other current assets” based on agreed contract terms. The impact of the
reclassification is an increase in prepayment and other current assets by P=1,143.89 million,
P=2,114.20 million, and P=992.21 million as of December 31, 2009, 2008 and 2007,
respectively (see Note 6).
The consolidated accrued project costs as of December 31, 2009, 2008 and 2007 included
in the “Accounts payable and accrued expenses” account in the consolidated statements of
financial position amounted to P=8,081.68 million, P=5,258.62 million and P=4,448.65 million,
respectively (see Note 12). As of December 31, 2009, the consolidated expected future
billings on the unaccrued portion of purchase orders issued amounted to P=10,778.06
million. The settlement of these liabilities is dependent on the payment terms and project
milestones agreed with the suppliers and contractors. As of December 31, 2009 also, the
unapplied advances made to suppliers and contractors relating to purchase orders issued
amounted to P=1,143.89 million (see Note 6).
25.4 Agreements with C2C
In 2001, Globe Telecom signed a cable equipment supply agreement with C2C. In
March 2002, Globe Telecom entered into an equipment lease agreement for the said
equipment with GB21 Hong Kong Limited (GB21).
Subsequently, GB21, in consideration of C2C’s agreement to assume all payment
obligations pursuant to the lease agreement, assigned all its rights, obligations and interest in
the equipment lease agreement to C2C. As a result of the said assignment of payables by
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GB21 to C2C, Globe Telecom’s liability arising from the cable equipment supply agreement
with C2C was effectively converted into a noninterest bearing long-term obligation
accounted for at net present value under PAS 39 starting 2005 with carrying values
amounting to P=735.95 million, P=821.81 million and P=830.64 million as of December 31,
2009, 2008 and 2007, respectively (see Note 15).
In January 2003, Globe Telecom received advance lease payments from C2C for its use of a
portion of Globe Telecom’s cable landing station facilities. Accordingly, based on the
amortization schedule, Globe Telecom recognized lease income amounted to P=12.26
million, P=11.90 million and P=12.53 million for the years ended December 31, 2009, 2008
and 2007, respectively.
The current and noncurrent portions of the said advances shown as part of the “Other
long-term liabilities” account in the consolidated statements of financial position are as
follows (see Note 15):
2009 2008 2007
(In Thousand Pesos)
Current P=67,673 P=12,256 P=11,305
Noncurrent – 67,673 73,725
P=67,673 P=79,929 P=85,030
On November 17, 2009, Globe Telecom and Pacnet Cable Ltd. (Pacnet), formerly C2C,
signed a memorandum of agreement (MOA) to terminate and unwind their Landing Party
Agreement dated August 15, 2000 (LPA). The MOA further requires Globe Telecom, being
duly licensed and authorized by the NTC to land the C2C Cable Network in the Philippines
and operate the C2C Cable Landing Station (CLS) in Nasugbu, Batangas, Philippines, to
transfer to Pacnet’s designated qualified partner, the license of the C2C CLS, the CLS, a
portion of the property on which the CLS is situated, certain equipment and associated
facilities thereof.
In return, Pacnet will compensate Globe in cash and by way of C2C cable capacities
deliverable upon completion of certain closing conditions. The MOA also provided for
novation of abovementioned equipment supply and lease agreements and reciprocal options
for Globe to purchase future capacities from Pacnet and Pacnet to purchase backhaul and
ducts from Globe at agreed prices. The closing documents are expected to be fully executed
within 2010.
25.5 Agreement with BHI
On August 11, 2009, Globe signed a credit facility agreement with BHI amounting to
P=750.00 million. The total drawdown under this loan made by BHI in 2009 amounted to
P=295.00 million. The loan is payable in one full payment, five years from the date of initial
drawdown with a prepayment option in whole or in part on an interest payment date.
Interest is at the rate of 8.275% payable semi-annually in arrears and the loan is secured by a
chattel mortgage. As of December 31, 2009, the undrawn balance of the credit facility is
P=455.00 million (see Note 11).
25.6 Agreement with STI
In 2009, STI agreed to sell to Globe its own capacity in a certain cable system. In 2009 also,
Globe agreed to sell to STI capacities that it owns in a certain cable system (see Note 16).
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25.7 Construction Maintenance Agreement for South-East Asia Japan Cable System (SJC)
Globe signed a Construction Maintenance Agreement with 5 other international carriers to
construct the SJC system, a 6-fiber pair, high capacity submarine cable system that will link
Singapore, Hong Kong, Indonesia, Philippines and Japan. Globe’s estimated investment for
this project amounts to USD60.00 million.
25.8 Commitment to increase GXI’s paid-up capital
On May 5, 2009, the BOD of Globe Telecom approved the issuance of a guarantee to the
Bangko Sentral ng Pilipinas (BSP) for the proposal of GXI to increase its paid-up capital to
P=100.00 million on a staggered basis over a period of two (2) years to meet the required
minimum capital and qualify as E-Money Issuer-Others in compliance with BSP Circular
No. 649. On August 27, 2009, the Monetary Board of the BSP approved GXI’s compliance
with this circular under Resolution No. 1223.
26. Contingencies
On July 23, 2009, the NTC issued NTC Memorandum Circular (MC) No. 05-07-2009
(Guidelines on Unit of Billing of Mobile Voice Service). The MC provides that the maximum
unit of billing for the cellular mobile telephone service (CMTS) whether postpaid or prepaid shall
be six (6) seconds per pulse. The rate for the first two (2) pulses, or equivalent if lower period per
pulse is used, may be higher than the succeeding pulses to recover the cost of the call set-up.
Subscribers may still opt to be billed on a one (1) minute per pulse basis or to subscribe to
unlimited service offerings or any service offerings if they actively and knowingly enroll in the
scheme.
In compliance with NTC MC 05-07-2009, Globe Telecom refreshed and offered to the general
public its existing per-second rates that, it bears emphasizing, comply with the NTC MC. Globe
Telecom made per second charging for Globe-Globe/TM-TM/Globe available for Globe Telecom
subscribers dialing prefix 232 (GLOBE) OR 803 plus 10-digit TM or Globe number for TM
subscribers. The NTC, however, contends that Globe Telecom’s offering does not comply with
the circular and with the NTC’s Order as of December 7, 2009 which imposed a three-tiered rate
structure with a mandated flag-down of P=3.00, a rate of P=0.4375 for the 13th to the 60th second of
the first minute and P=0.65 for every second thereafter. On December 9, 2009, the NTC issued a
Cease and Desist Order requiring the carriers to refrain from charging under the previous billing
system or regime and refund consumers.
Globe maintains that the Order of the NTC as of December 7, 2009 and the Cease and Desist
Order are void as being without basis in fact and law and in violation of Globe Telecom’s rights
to due process. Globe Telecom, Smart Communications Inc. and Sun Cellular all filed petitions
before the CA seeking the nullification of the questioned orders of the NTC. The NTC is
currently conducting hearings on its show cause order. On January 27, 2010, the telecom carriers
moved to suspend the hearings before the NTC in order to give way to hearings on the Temporary
Restraining Order that the three carriers have asked the CA to issue.
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Globe Telecom believes that its legal position is strong and that its offering is compliant with the
NTC’s MC 05-07-2009, and therefore believes that it would not be obligated to make a refund to
its subscribers. If however, Globe Telecom would be held as not being in compliance with the
circular, Globe may be contingently liable to refund to any complaining subscribers any charges it
may have collected in excess of what it could have charged under the NTC’s disputed Order as of
December 7, 2009, if indeed it is proven by any complaining party that Globe charged more with
its per second scheme than it could have under the NTC’s 6-second pulse billing scheme stated in
the disputed December 7, 2009 Order. As of February 4, 2010, the management has no estimate
of what amount this could be at this time.
The Globe Group are contingently liable for various claims arising in the ordinary conduct of
business and certain tax assessments which are either pending decision by the courts or are being
contested, the outcome of which are not presently determinable. In the opinion of management
and legal counsel, the eventual liability under these claims, if any, will not have a material or
adverse effect on the Globe Group’s financial position and results of operations.
27. Earnings Per Share
The Globe Group’s earnings per share amounts were computed as follows:
2009 2008 2007
(In Thousand Pesos and Number of Shares,
Except Per Share Figures)
Net income attributable to common shareholders
for basic earnings per share P=12,518,381 P=11,215,241 P=13,227,570
Add dividends on preferred shares 50,492 60,637 49,449
Net income attributable to shareholders for diluted
earnings per share 12,568,873 11,275,878 13,277,019
Weighted average number of shares for basic
earnings per share 132,342 132,337 132,184
Dilutive shares arising from:
Convertible preferred shares 66 262 564
Stock options 867 674 576
Adjusted weighted average number of common
stock for diluted earnings per share 133,275 133,273 133,324
Basic earnings per share P=94.59 P=84.75 P=100.07
Diluted earnings per share P=94.31 P=84.61 P=99.58
28. Capital and Risk Management and Financial Instruments
28.1 General
The Globe Group adopts an expanded corporate governance approach in managing its
business risks. An Enterprise Risk Management Policy was developed to systematically
view the risks and to provide a better understanding of the different risks that could threaten
the achievement of the Globe Group’s mission, vision, strategies, and goals, and to provide
emphasis on how management and employees play a vital role in achieving the Globe
Group’s mission of transforming and enriching lives through communications.
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The policies are not intended to eliminate risk but to manage it in such a way that
opportunities to create value for the stakeholders are achieved. Globe Group risk
management takes place in the context of the normal business processes such as strategic
planning, business planning, operational and support processes.
The application of these policies is the responsibility of the BOD through the Chief
Executive Officer. The Chief Financial Officer and concurrent Chief Risk Officer
champions and oversees the entire risk management function. Risk owners have been
identified for each risk and they are responsible for coordinating and continuously
improving risk strategies, processes and measures on an enterprise-wide basis in accordance
with established business objectives.
The risks are managed through the delegation of management and financial authority and
individual accountability as documented in employment contracts, consultancy contracts,
letters of authority, letters of appointment, performance planning and evaluation forms, key
result areas, terms of reference and other policies that provide guidelines for managing
specific risks arising from the Globe Group’s business operations and environment.
The Globe Group continues to monitor and manage its financial risk exposures according to
its BOD approved policies.
The succeeding discussion focuses on Globe Group’s capital and financial risk management.
28.2 Capital and Financial Risk Management Objectives and Policies
The primary objective of the Globe Group’s capital management is to ensure that it
maintains a strong credit rating and healthy capital ratios in order to support its business and
maximize shareholder value.
The Globe Group monitors its use of capital using leverage ratios, such as debt to total
capitalization and makes adjustments to it in light of changes in economic conditions and its
financial position.
The Globe Group is not subject to externally imposed capital requirements. The ratio of
debt to total capitalization for the years ended December 31, 2009, 2008 and 2007 was at
50%, 45%, and 35%, respectively.
The main purpose of the Globe Group’s financial risk management is to fund its operations
and capital expenditures. The risks arising from the use of financial instruments are market
risk, credit risk and liquidity risk. Globe Telecom also enters into derivative transactions,
the purpose of which is to manage the currency and interest rate risk arising from its
financial instruments.
Globe Telecom’s BOD reviews and approves the policies for managing each of these risks.
The Globe Group monitors market price risk arising from all financial instruments and
regularly reports financial management activities and the results of these activities to the
BOD.
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The Globe Group’s risk management policies are summarized below:
28.2.1 Market Risk
Market risk is the risk that the fair value of future cash flows of a financial
instrument will fluctuate because of changes in market prices. Globe Group is
mainly exposed to two types of market risk: interest rate risk and currency risk.
Financial instruments affected by market risk include loans and borrowings, AFS
investments, and derivative financial instruments.
The sensitivity analyses in the following sections relate to the position as at
December 31, 2009, 2008 and 2007. The analyses exclude the impact of movements
in market variables on the carrying value of pension and other post-retirement
obligations, provisions and on the non-financial assets and liabilities of foreign
operations.
The following assumptions have been made in calculating the sensitivity analyses:
• The statement of financial position sensitivity relates to derivatives and AFS debt
instruments.
• The sensitivity of the relevant income statement item is the effect of the assumed
changes in respective market risks. This is based on the financial assets and
financial liabilities held as at December 31, 2009, 2008 and 2007 including the
effect of hedge accounting.
• The sensitivity of equity is calculated by considering the effect of any associated
cash flow hedges for the effects of the assumed changes the underlying.
28.2.1.1 Interest Rate Risk
The Globe Group’s exposure to market risk from changes in interest rates
relates primarily to the Globe Group’s long-term debt obligations. Please
refer to table presented under 28.2.3 Liquidity Risk.
Globe Group’s policy is to manage its interest cost using a mix of fixed
and variable rate debt, targeting a ratio of between 31-62% fixed rate
USD debt to total USD debt, and between 44-88% fixed rate PHP debt to
total PHP debt. To manage this mix in a cost-efficient manner, Globe
Group enters into interest rate swaps, in which Globe Group agrees to
exchange, at specified intervals, the difference between fixed and
variable interest amounts calculated by reference to an agreed-upon
notional principal amount.
After taking into account the effect of currency and interest rate swaps,
34% and 45% of the Globe Group’s USD and PHP borrowings,
respectively, as of December 31, 2009, 35% and 55% of the Globe
Group’s USD and PHP borrowings, respectively, as of
December 31, 2008 and 38% and 56% of the Globe Group’s USD and
PHP borrowings, respectively, as of December 31, 2007, are at a fixed
rate of interest.
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2009
The following tables demonstrate the sensitivity of income before tax to
a reasonably possible change in interest rates after the impact of hedge
accounting, with all other variables held constant.
Increase/decrease
in basis points
Effect on income
before tax
Increase (decrease)
Effect on equity
Increase (decrease)
(In Thousand Pesos)
USD +200bps (P=31,983) P=38,989
-200bps 29,784 (17,214)
PHP +100bps (121,820) –
-100bps 121,747 –
2008
Increase/decrease
in basis points
Effect on income
before tax
Increase (decrease)
Effect on equity
Increase (decrease)
(In Thousand Pesos)
USD +200 bps (P=29,780) P=27,412
-200 bps 30,815 (28,606)
PHP +100 bps (63,938) (1,790)
-100 bps 63,840 1,818
2007
Increase/decrease
in basis points
Effect on income
before tax
Increase (decrease)
Effect on equity
Increase (decrease)
(In Thousand Pesos)
USD +5 bps (P=1,424) P=2,288
-5 bps 1,425 (2,291)
PHP +100 bps 6,257 (24,760)
-100 bps (6,689) 25,157
The impact to equity is caused by the change in MTM of derivatives
classified as hedges. As of December 31, 2009, Globe Group has no
outstanding PHP interest rate swaps and non-deliverable forwards
accounted for as hedges.
28.2.1.2 Foreign Exchange Risk
The Globe Group’s foreign exchange risk results primarily from
movements of the PHP against the USD with respect to USDdenominated
financial assets, USD-denominated financial liabilities and
certain USD-denominated revenues. Majority of revenues are generated
in PHP, while substantially all of capital expenditures are in USD. In
addition, 14%, 12% and 20% of debt as of December 31, 2009, 2008 and
2007, respectively, are denominated in USD before taking into account
any swap and hedges.
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Information on the Globe Group’s foreign currency-denominated
monetary assets and liabilities and their PHP equivalents are as follows:
2009 2008 2007
US
Dollar
Peso
Equivalent
US
Dollar
Peso
Equivalent
US
Dollar
Peso
Equivalent
(In Thousands)
Assets
Cash and cash equivalents $45,684 P=2,120,901 $40,776 P=1,943,159 $24,081 P=997,203
Receivables 50,359 2,337,915 68,004 3,240,744 59,324 2,456,648
Prepayments and other
current assets – 5 14 661 9 389
96,043 4,458,821 108,794 5,184,564 83,414 3,454,240
Liabilities
Accounts payable and
accrued expenses 155,085 7,199,819 92,464 4,406,395 99,873 4,135,830
Long-term debt 148,133 6,877,090 101,696 4,846,310 149,832 6,204,685
303,218 14,076,909 194,160 9,252,705 249,705 10,340,515
Net foreign currencydenominated
liabilities $207,175 P=9,618,088 $85,366 P=4,068,141 $166,291 P=6,886,275
*This table excludes derivative transactions disclosed in Note 28.3
2009
The following tables demonstrate the sensitivity to a reasonably possible
change in the PHP to USD exchange rate, with all other variables held
constant, of the Globe Group’s income before tax (due to changes in the
fair value of financial assets and liabilities).
Increase/decrease
in Peso to
US Dollar exchange rate
2008
2007
Effect on income before tax
Increase (decrease)
(In Thousand Pesos)
+.40 (P=81,857) (P=278)
-.40 81,857 278
Increase/decrease
in Peso to
US Dollar exchange rate
Effect on equity
Increase (decrease)
Effect on income before tax
Increase (decrease)
(In Thousand Pesos)
+.40 (P=37,971) (P=4,291)
-.40 37,971 4,291
Effect on equity
Increase (decrease)
Increase/decrease
in Peso to
US Dollar exchange rate
Effect on income before tax
Increase (decrease)
Effect on equity
Increase (decrease)
(In Thousand Pesos)
+.125 (P=22,133) (P=15,453)
-.125 22,133 15,453
The movement on the post-tax effect is a result of a change in the fair
value of derivative financial instruments not designated in a hedging
relationship and monetary assets and liabilities denominated in US
dollars, where the functional currency of the Group is Philippine Peso.
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Although the derivatives have not been designated in a hedge
relationship, they act as a commercial hedge and will offset the
underlying transactions when they occur.
The movement on equity arises from changes in USD borrowings,
accounts payable and accrued expenses (net of cash and cash
equivalents) in cash flow hedges.
In addition, the consolidated expected future payments on foreign
currency-denominated purchase orders related to capital projects
amounted to USD255.79 million, USD264.66 million and
USD225.00 million as of December 31, 2009, 2008 and 2007,
respectively. The settlement of these liabilities is dependent on the
achievement of project milestones and payment terms agreed with the
suppliers and contractors. In 2009, 2008 and 2007, foreign exchange
exposure assuming a +/-40 centavos, +/- 40 centavos and
+/- 12.50 centavos movement in PHP to USD rate on commitments
amounted to P=91.39 million, P=105.86 million and P=28.13 million gain or
loss, respectively.
The Globe Group’s foreign exchange risk management policy is to
maintain a hedged financial position, after taking into account expected
USD flows from operations and financing transactions. Globe Telecom
enters into short-term foreign currency forwards and long-term foreign
currency swap contracts in order to achieve this target.
28.2.2 Credit Risk
Applications for postpaid service are subjected to standard credit evaluation and
verification procedures. The Credit Management unit of the Globe Group
continuously reviews credit policies and processes and implements various credit
actions, depending on assessed risks, to minimize credit exposure. Receivable
balances of postpaid subscribers are being monitored on a regular basis and
appropriate credit treatments are applied at various stages of delinquency. Likewise,
net receivable balances from carriers of traffic are also being monitored and
subjected to appropriate actions to manage credit risk. The maximum credit
exposure relates to receivables net of any allowances provided.
With respect to credit risk arising from other financial assets of the Globe Group,
which comprise cash and cash equivalents, short-term investments, AFS financial
investments, HTM investments, and certain derivative instruments, the Globe
Group’s exposure to credit risk arises from the default of the counterparty, with a
maximum exposure equal to the carrying amount of these instruments. The Globe
Group’s investments comprise short-term bank deposits and government securities.
Credit risk from these investments is managed on a Globe Group basis. For its
investments with banks, the Globe Group has a counterparty risk management
policy which allocates investment limits based on counterparty credit rating and
credit risk profile.
The Globe Group makes a quarterly assessment of the credit standing of its
investment counterparties, and allocates investment limits based on size, liquidity,
profitability, and asset quality. For investments in government securities, these are
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2009
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denominated in local currency and are considered to be relatively risk-free. The
usage of limits is regularly monitored. For its derivative counterparties, the Globe
Group deals only with counterparty banks with investment grade ratings and large
local banks. Credit ratings of derivative counterparties are reviewed quarterly.
Following are the Globe Group exposures with its investment counterparties for
cash and cash equivalents as of December 31:
2009 2008 2007
Local bank deposits 48% 53% 35%
Onshore foreign bank 25% 27% 37%
Offshore bank deposit 12% 13% –
Special deposit account
(BSP) 15% 7% 28%
The Globe Group has not executed any credit guarantees in favor of other parties.
There is also no concentration of credit risk within the Globe Group. Credit
exposures from subscribers and carrier partners continue to be managed closely for
possible deterioration. When necessary, credit management measures are
proactively implemented and identified collection risks are being provided for
accordingly. Outstanding credit exposures from financial instruments are monitored
daily and allowable exposures are reviewed quarterly.
The tables below show the aging analysis of the Globe Group’s receivables as of
December 31.
Neither Past
Past Due But Not Impaired
Impaired
Due Nor
Impaired
Less than
30 days
31 to 60
days
61 to 90
days
More than
90 days
Financial
Assets Total
(In Thousand Pesos)
Wireless receivables:
Consumer P=262,965 P=354,222 P=151,239 P=93,469 P=255,714 P=88,088 P=1,205,697
Key corporate accounts 32,777 133,249 106,967 69,193 116,094 20,154 478,434
Other corporations and
Small and Medium
Enterprises (SME) 95,547 81,038 35,447 19,608 43,187 47,690 322,517
391,289 568,509 293,653 182,270 414,995 155,932 2,006,648
Wireline receivables:
Consumer 318,053 214,863 120,909 117,642 40,240 643,047 1,454,754
Key corporate accounts 352,769 27,591 14,040 7,777 – 167,282 569,459
Other corporations and
SME 87,388 341,818 240,709 145,834 14,462 97,320 927,531
758,210 584,272 375,658 271,253 54,702 907,649 2,951,744
Other trade receivables – 19,121 – – – 2,682 21,803
Traffic receivables:
Foreign 1,838,777 – – – – 97,971 1,936,748
Local 303,090 – – – – 79,435 382,525
2,141,867 – – – – 177,406 2,319,273
Other receivables 626,640 – – – – 8,111 634,751
Total P=3,918,006 P=1,171,902 P= 669,311 P=453,523 P=469,697 P=1,251,780 P=7,934,219
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2008
Neither Past Past Due But Not Impaired Impaired
Due Nor
Impaired
Less than
30 days
31 to
60 days
61 to
90 days
More than
90 days
Financial
Assets Total
(In Thousands Pesos)
Wireless receivables:
Consumer P=403,189 P=370,507 P=193,777 P=100,177 P=255,357 P=131,423 P=1,454,430
Key corporate accounts 20,824 116,519 104,325 51,295 53,863 62,132 408,958
Other corporations and
SME 98,183 79,355 42,239 20,586 50,188 139,099 429,650
522,196 566,381 340,341 172,058 359,408 332,654 2,293,038
Wireline receivables:
Consumer 211,371 120,057 91,340 71,724 – 288,433 782,925
Key corporate accounts 280,441 37,900 20,637 15,581 336,903 87,958 779,420
Other corporations and
SME 79,239 247,028 172,190 116,153 11,994 60,579 687,183
571,051 404,985 284,167 203,458 348,897 436,970 2,249,528
Other trade receivables – 12,625 3,281 3,686 1,667 – 21,259
Traffic receivables:
Foreign 2,879,081 – – – – 79,559 2,958,640
Local 349,642 – – – – 309,728 659,370
3,228,723 – – – – 389,287 3,618,010
Other receivables 466,610 – – – – 11,560 478,170
Total P=4,788,580 P=983,991 P=627,789 P=379,202 P=709,972 P=1,170,471 P=8,660,005
2007
Neither Past Past Due But Not Impaired Impaired
Due Nor
Impaired
Less than
30 days
31 to
60 days
61 to
90 days
More than
90 days
Financial
Assets Total
(In Thousands Pesos)
Wireless receivables:
Consumer P=383,776 P=349,596 P=151,452 P=70,953 P=155,202 P=266,268 P=1,377,247
Key corporate accounts 13,950 116,406 95,807 46,418 181,610 191,683 645,874
Other corporations and
SME 67,501 61,985 29,066 16,763 73,691 216,574 465,580
465,227 527,987 276,325 134,134 410,503 674,525 2,488,701
Wireline receivables:
Consumer 234,259 129,635 71,227 55,060 7,941 163,053 661,175
Key corporate accounts 314,822 35,681 13,728 12,499 188,545 143,251 708,526
Other corporations and
SME 110,065 336,910 205,634 172,296 11,365 64,577 900,847
659,146 502,226 290,589 239,855 207,851 370,881 2,270,548
Traffic receivables:
Foreign 1,644,169 – – – – 38,449 1,682,618
Local 690,035 – – – – 233,260 923,295
2,334,204 – – – – 271,709 2,605,913
Other receivables 387,511 – – – – 14,343 401,854
Total P=3,846,088 P=1,030,213 P=566,914 P=373,989 P=618,354 P=1,331,458 P=7,767,016
Total allowance for impairment losses amounted to P=1,350.99 million,
P=1,186.66 million and P=1,383.48 million includes allowance for impairment arising
from collective assessment amounted to P=99.21 million, P=16.19 million and
P=52.02 million as of December 31, 2009, 2008 and 2007, respectively (see Note 4).
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2009
The table below provides information regarding the credit risk exposure of the
Globe Group by classifying assets according to the Globe Group’s credit ratings of
receivables as of December 31. The Globe Group’s credit rating is based on
individual borrower characteristics and their relationship to credit event experiences.
Neither past-due nor impaired
High Quality Medium Quality Low Quality Total
(In Thousand Pesos)
Wireless receivables:
Consumer P=183,594 P=41,292 P=38,079 P=262,965
Key corporate accounts 27,339 3,867 1,571 32,777
Other corporations and SME 10,075 37,692 47,780 95,547
221,008 82,851 87,430 391,289
Wireline receivables:
Consumer 141,281 21,199 155,573 318,053
Key corporate accounts 296,269 2,494 54,006 352,769
Other corporations and SME 50,480 4,096 32,812 87,388
488,030 27,789 242,391 758,210
Total P=709,038 P=110,640 P=329,821 P=1,149,499
2008
Neither past-due nor impaired
High Quality Medium Quality Low Quality Total
(In Thousands Pesos)
Wireless receivables:
Consumer P=278,522 P=64,959 P=59,708 P=403,189
Key corporate accounts 17,006 2,338 1,480 20,824
Other corporations and SME 11,171 37,113 49,899 98,183
306,699 104,410 111,087 522,196
Wireline receivables:
Consumer 82,158 44,684 84,529 211,371
Key corporate accounts 273,941 6,499 1 280,441
Other corporations and SME 30,481 12,146 36,612 79,239
386,580 63,329 121,142 571,051
Total P=693,279 P=167,739 P=232,229 P=1,093,247
2007
Neither past-due nor impaired
High Quality Medium Quality Low Quality Total
(In Thousands Pesos)
Wireless receivables:
Consumer P=338,862 P=41,007 P=3,907 P=383,776
Key corporate accounts 12,354 923 673 13,950
Other corporations and SME 54,692 7,755 5,054 67,501
405,908 49,685 9,634 465,227
Wireline receivables:
Consumer 95,950 127,670 10,639 234,259
Key corporate accounts 308,286 – 6,536 314,822
Other corporations and SME 68,009 40,053 2,003 110,065
472,245 167,723 19,178 659,146
Total P=878,153 P=217,408 P=28,812 P=1,124,373
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High quality accounts are accounts considered to be high value and have
consistently exhibited good paying habits. Medium quality accounts are active
accounts with propensity of deteriorating to mid-range age buckets. These accounts
do not flow through to permanent disconnection status as they generally respond to
credit actions and update their payments accordingly. Low quality accounts are
accounts which have probability of impairment based on historical trend. These
accounts show propensity to default in payment despite regular follow-up actions
and extended payment terms. Impairment losses are also provided for these
accounts based on net flow rate.
Traffic receivables that are neither past due nor impaired are considered to be high
quality given the reciprocal nature of the Globe Group’s interconnect and roaming
partner agreements with the carriers and the Globe Group’s historical collection
experience.
Other receivables are considered high quality accounts as these are substantially
from credit card companies and Globe dealers.
The following is a reconciliation of the changes in the allowance for impairment
losses for receivables as of December 31 (in thousand pesos) (see Note 4):
2009
Subscribers
Other
corporations
and SME
Traffic
Settlements
and Others
Consumer
Key corporate
accounts
Non-trade
(Note 6) Total
At beginning of year P=400,926 P=119,986 P=264,900 P=400,847 P=43,753 P=1,230,412
Charges for the year 856,184 35,900 79,898 (211,351) (5,998) 754,633
Reversals/write offs/
adjustments (436,707) 21,087 (179,382) (1,297) (2,979) (599,278)
At end of year P=820,403 P=176,973 P=165,416 P=188,199 P=34,776 P=1,385,767
2008
Subscribers
Other
corporations
and SME
Traffic
Settlements and
Others
Consumer
Key corporate
accounts
Non-trade
(Note 6) Total
At beginning of year P=481,599 P=336,558 P=279,266 P=286,052 P=35,720 P=1,419,195
Charges for the year 501,426 146,725 187,523 134,504 9,601 979,779
Reversals/write offs/
adjustments (582,099) (363,297) (201,889) (19,709) (1,568) (1,168,562)
At end of year P=400,926 P=119,986 P=264,900 P=400,847 P=43,753 P=1,230,412
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2007
Subscribers
Other
corporations
and SME
Traffic
Settlements and
Others
Consumer
Key corporate
accounts
Non-trade
(Note 6) Total
At beginning of year P=1,740,442 P=430,435 P=314,311 P=199,595 P=43,581 P=2,728,364
Charges for the year 463,312 80,959 77,614 90,507 (996) 711,396
Reversals/write offs/
adjustments (1,722,155) (174,836) (112,659) (4,050) (6,865) (2,020,565)
At end of year P=481,599 P=336,558 P=279,266 P=286,052 P=35,720 P=1,419,195
28.2.3 Liquidity Risk
The Globe Group seeks to manage its liquidity profile to be able to finance capital
expenditures and service maturing debts. As of December 31, 2009, 2008 and 2007,
Globe Group has available uncommitted short-term credit facilities of
USD19.00 million and P=9,000.00 million, USD39.00 million and P=5,297.10 million,
and USD39.00 million and P=4,520.00 million, respectively. As of
December 31, 2009, the Globe Group also has USD93.00 million committed longterm
facilities which remain undrawn.
As part of its liquidity risk management, the Globe Group regularly evaluates its
projected and actual cash flows. It also continuously assesses conditions in the
financial markets for opportunities to pursue fund raising activities, in case any
requirements arise. Fund raising activities may include bank loans, export credit
agency facilities and capital market issues.
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The following tables show comparative information about the Globe Group’s financial instruments as of December 31 that are exposed to liquidity
risk and interest rate risk and presented by maturity profile including forecasted interest payments for the next five years from December 31 figures
(in thousands).
Long-term Liabilities:
2009
Liabilities:
Long-term debt
Fixed rate
2010 2011 2012 2013
2014 and
thereafter
Total
(in USD)
Total
(in PHP)
Debt
Issuance Costs
Carrying Value
(in PHP)
Fair Value
(in PHP)
Philippine peso P=13,700 P=4,093,700 P=6,988,150 P=933,700 P=6,450,750 $– P=18,480,000 P=95,604 P=18,384,396 P=19,413,016
5.97%;
5.97%;
6.68%; 7.03%; 6.68%;7.03%; 6.68%; 7.03%; 7.24%; 7.50%;
Interest rate 7.24%; 8.36% 7.24%; 8.36% 7.50%; 8.00%
7.24%; 8.00%; 8.36%
Floating rate
USD notes $66,622 $68,511 $13,000 $– $– 148,133 – 66,734 6,810,357 5,472,014
Interest rate
– –
6mo LIBOR+.85%
;6mo LIBOR+3%
margin; 1mo or 3mo
or 6mo LIBOR+2%
margin; 3mo or 6mo
LIBOR+.43% margin
(rounded to 1/16%)
6mo LIBOR+ .85%;
6mo LIBOR + 3%
margin; 1mo or 3mo or
6mo LIBOR + 3%
margin; 3mo or 6mo
LIBOR + .43%
6mo LIBOR+ 2% margin (rounded to
1/16%)
margin; 3mo or 6mo
LIBOR + .43% margin
(rounded to 1/16%)
Philippine peso 2,580,873 718,771 6,947,343 7,566,093 2,503,843 – 20,316,923 35,654 20,281,269 20,245,723
Interest rate PDSTF3mo + 1% PDSTF3mo + 1% PDSTF3mo + 1% PDSTF3mo + 1% PDSTF3mo + 1%
margin; PDSTF margin; PDSTF3mo+ margin; PDSTF 3mo+ margin; PDSTF3 margin;
3mo+ 1.30% ,
PDSTF3mo + 1.10%
1.30% , PDSTF3mo + 1.30% , PDSTF3mo +
1.10% margin, 1.10% margin, PDSTF
mo+ 1.30% ,
PDSTF3mo +
PDSTF6mo +
1.25% margin
margin, PDSTF3mo + PDSTF3mo + 1% 3mo + 1% margin; 1.10% margin,
1% margin; PDSTF margin; PDSTF6mo + PDSTF6mo + 1.25% PDSTF3mo + 1%
6mo + 1.25% margin 1.25% margin margin; PDSTF3mo + margin;
1.50% margin PDSTF6mo +
1.25% margin
$148,133 P=38,796,923 P=197,992 P=45,476,022 P=45,130,753
Interest payable*
PHP debt P=2,369,013 P=2,181,085 P=1,483,347 P=1,020,253 P= 638,566 P=– P=7,692,264 P=– P=– P=–
USD debt $2,727 $1,305 $157 $– $– $4,189 $– $– $– $–
*Used month-end Libor and Philippine Dealing and Exchange Corporation (PDEX) rates.
*Using P=46.425 - USD exchange rate as of December 31, 2009.
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2008
2013 and
thereafter
Total
USD Debt
Total
PHP Debt
Debt
Issuance Costs
Carrying Value
(in PHP)
Fair Value
(in PHP)
2009 2010 2011 2012
Liabilities:
Long-term debt
Fixed rate
USD notes $6,140 $– $– $– $– $6,140 P=– P=– P=292,610 P=299,267
Interest rate 6.44% – – – –
Philippine peso P=4,700,000 P=– P=4,080,000 P=6,087,000 P=920,000 – 15,787,000 47,091 15,739,909 16,314,939
Interest rate 11.70% – 13.79%; 5.97%;
6.68%; 7.03%
13.79%; 5.97%;
6.68%; 7.03%
13.79%; 5.97%;
6.68%; 7.03%
Floating rate
USD notes $32,222 $32,222 $26,112 $5,000 $– 95,556 – 10,045 4,543,655 4,588,401
Interest rate 3mo/6mo
LIBOR+.43%
margin (rounded
to .06%);
LIBOR+.85%
3mo/6mo
LIBOR+.43%
margin (rounded
to .06%);
LIBOR+.85%
3mo/6mo
LIBOR+.43%
margin (rounded
to .06%);
LIBOR+.85%
3mo/6mo
LIBOR+.43%
margin (rounded
to .06%)
–
Philippine peso P=1,240,373 P=2,503,173 P=25,000 P=5,825,000 P=6,443,750 – 16,037,296 27,532 16,009,764 16,009,764
Interest rate PDSTF3mo+
1.38%;
PDSTF1mo+
1% margin
PDSTF3mo+1.30%
;
PDSTF1mo+1.10%
margin;
PDSTF3mo+1%
margin;
PDSTF1mo+1%
margin
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin;
PDSTF3mo+1%
margin
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin;
PDSTF3mo+1%
margin;
PDSTF1mo+
1.50% margin
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin;
PDSTF3mo+
1% margin;
PDSTF1mo+
1.25% margin
$101,696 P=31,824,296 P=84,668 P=36,585,938 P=37,212,371
Interest payable*
PHP debt P=2,244,472 P=1,870,132 P=1,522,663 P=845,511 P=391,305 P=– P=6,874,083 P=– P=– P=–
USD debt $1,775 $824 $263 $63 $– $2,925 $– $– $– $–
*Used month-end LIBOR and Philippine Dealing and Exchange Corporation (PDEX) rates.
*Using P=47.655-USD exchange rate as of December 31, 2008.
*SGVMC113950*

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2007
2012 and
thereafter
Total
USD Debt
Total
PHP Debt
Debt
Issuance Costs
Carrying Value
(in PHP)
Fair Value
(in PHP)
2008 2009 2010 2011
Liabilities:
Long-term debt
Fixed rate
USD notes $11,116 $6,140 $– $– $– $17,256 P=– P=– P=714,596 P=731,506
Interest rate 6.44% 6.44% – – –
Philippine peso P=2,208,550 P=4,700,000 P=– P=520,000 P=6,087,000 – 13,515,550 – 13,515,550 14,700,078
Interest rate 10.72%-11.70% 11.70% – 16.00% 13.79%, 5.97%
Floating rate
USD notes $35,421 $33,822 $32,222 $26,111 $5,000 132,576 – 11,657 5,478,432 5,579,271
Interest rate LIBOR+1.2%,
LIBOR+.85%,
3mo/6mo
LIBOR+.43%
LIBOR+1.20%,
LIBOR+.85%,
3mo/6mo
LIBOR+.43%
LIBOR+.85%,
3mo/6mo
LIBOR+.43%
LIBOR+.85%,
3mo/6mo,
LIBOR+.43%
3mo/6mo
LIBOR+.43%
Philippine peso P=684,423 P=1,240,373 P=2,496,923 P=– P=5,800,000 – 10,221,719 57,445 10,164,274 10,221,719
Interest rate PDSTF1mo+1% PDSTF3mo+1.38%; PDSTF1mo+1%
PDSTF1mo+
margin;
PDSTF1mo+
1.30%
margin
PDSTF1mo+1%
margin;
PDSTF1mo+1.30%
margin
margin;
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin
1.50% margin;
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin
$149,832 P=23,737,269 P=69,102 P=29,872,852 P=31,232,574
Interest payable*
PHP debt P=1,801,058 P=1,388,110 P=1,021,604 P=837,860 P=309,631 P=– P=5,358,263 P=– P=– P=–
USD debt $6,925 $4,818 $2,814 $951 $130 $15,638 $– $– $– $–
*Used month-end LIBOR and PDEX rates.
*Using P=41.411-USD exchange rate as of December 31, 2007.
*SGVMC113950*

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The following tables present the maturity profile of the Globe Group’s other liabilities and derivative instruments (undiscounted cash flows including
swap costs payments/receipts except for other long-term liabilities) as of December 31 (in thousands):
2009
Other Financial Liabilities:
On demand
Less than
1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
Accounts payable and accrued expenses* P=2,201,314 P=16,458,817 P=– P=– P=– P=– P=– P=18,660,131
Derivative liabilities – 85,867 5,515 – 1,074 – – 92,456
Notes payable – 2,000,829 – – – – – 2,000,829
Other long-term liabilities – 735,944 – – – – 647,416 1,383,360
*Excludes taxes payable which is not a financial instrument.
Derivative Instruments:
P=2,201,314 P=19,281,457 P=5,515 P=– P=1,074 P=– P=647,416 P=22,136,776
2010 2011 2012 2013 2014 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Swap Coupons*:
Principal Only Swaps P=– P=4,290 P=– P=5,436 P=– P=2,726 P=– P=– P=– P=–
Interest Rate Swaps – 21,424 – 4,401 4,240 – – – – –
*Projected USD swap coupons were converted to PHP at the balance sheet rate. Further, it was assumed that 3m Libor, 3m PDSTF, and 6m PDSTF would stay at December 31, 2009 levels.
2010 2011 2012 2013 2014 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Principal Exchanges*:
Principal Only Swaps $– P=– $– P=– $2,500 P=140,825 $ P=– $– P=–
Forward Purchase of USD $20,000 P=959,500 – – – – – – – –
Forward Sale of USD P=964,150 $20,000 – – – – – – – –
*Projected principal exchanges represent commitments to purchase USD for payment of USD debts with the same maturities.
*SGVMC113950*

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2008
Other Financial Liabilities:
On demand
Less than
1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
Accounts payable and accrued expenses* P=1,522,730 P=14,196,610 P=– P=– P=– P=– P=– P=15,719,340
Derivative liabilities – 163,989 – – 21,665 – – 185,654
Notes payable 4,002,160 – – – – – – 4,002,160
Other long-term liabilities – 86,099 93,632 102,107 111,348 121,426 898,835 1,413,447
P=5,524,890 P=14,446,698 P=93,632 P=102,107 P=133,013 P=121,426 P=898,835 P=21,320,601
*Excludes taxes payable which is not a financial instrument.
Derivative Instruments:
2009 2010 2011 2012 2013 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Swap Coupons*:
Principal Only Swaps P=– P=5,580 P=– P=5,580 P=– P=5,580 P=– P=2,798 P=– P=–
Interest Rate Swaps – 3,293 – 15,306 4,093 – 4,491 – – –
*Projected USD swap coupons were converted to PHP at the balance sheet rate. Further, it was assumed that 3m Libor, 3m PDSTF, and 6m PDSTF would stay at December 31, 2008 levels.
2009 2010 2011 2012 2013 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Principal Exchanges*:
Principal Only Swaps $– P=– $– P=– $– P=– $2,500 P=140,825 $– P=–
Forwards (Deliverable and
Nondeliverable) P=1,018,058 $22,000 – – – – – – – –
*Projected principal exchanges represent commitments to purchase USD for payment of USD debts with the same maturities.
*SGVMC113950*

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2007
Other Financial Liabilities:
On demand
Less than
1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
Accounts payable and accrued expenses* P=1,151,747 P=15,240,407 P=– P=– P=– P=– P=– P=16,392,154
Derivative liabilities – 326,721 – – – 14,110 – 340,831
Notes payable – 500,000 – – – – – 500,000
Other long-term liabilities – 72,623 79,196 86,364 94,181 102,705 591,486 1,026,555
P=1,151,747 P=16,139,751 P=79,196 P=86,364 P=94,181 P=116,815 P=591,486 P=18,259,540
*Excludes taxes payable which is not a financial instrument.
Derivative Instruments:
Projected Swap Coupons*:
2008 2009 2010 2011 2012 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Principal Only Swaps P=– P=21,447 P=– P=13,259 P=– P=13,259 P=– P=13,259 P=– P=6,648
Interest Rate Swaps 50,058 – 22,902 – 756 – 1,680 – 956 –
*Projected USD swap coupons were converted to PHP at the balance sheet rate. Further, it was assumed that 3m Libor, 3m PDSTF, and 6m PDSTF would stay at December 31, 2007 levels.
2008 2009 2010 2011 2012 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Principal Exchanges*:
Principal Only Swaps $5,000 P=280,850 $– P=– $– P=– $– P=– $5,000 P=281,650
Forwards (Deliverable and
Nondeliverable) P=242,256 $– P=964 $– – – – – – –
*Projected principal exchanges represent commitments to purchase USD for payment of USD debts with the same maturities.
*SGVMC113950*

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28.2.4 Hedging Objectives and Policies
The Globe Group uses a combination of natural hedges and derivative hedging to
manage its foreign exchange exposure. It uses interest rate derivatives to reduce
earnings volatility related to interest rate movements.
It is the Globe Group’s policy to ensure that capabilities exist for active but
conservative management of its foreign exchange and interest rate risks. The Globe
Group does not engage in any speculative derivative transactions. Authorized
derivative instruments include currency forward contracts (freestanding and
embedded), currency swap contracts, interest rate swap contracts and currency
option contracts (freestanding and embedded). Certain currency swaps are entered
with option combination or structured provisions.
28.3 Derivative Financial Instruments
The Globe Group’s freestanding and embedded derivative financial instruments are
accounted for as hedges or transactions not designated as hedges. The table below sets out
information about the Globe Group’s derivative financial instruments and the related fair
values as of December 31 (in thousands):
2009
Notional
Amount
Notional
Amount
Derivative
Asset
Derivative
Liability
Derivative instruments designated as hedges:
Cash flow hedges:
Interest rate swaps $51,000 P=– P=– P=32,221
Derivative instruments not designated
as hedges:
Freestanding:
Nondeliverable forwards* 40,000 – 14,424 9,775
Interest rate swaps 10,000 – 15,468 5,084
Cross-currency swaps 2,500 – – 26,789
Embedded
Currency forwards** 9,972 – 6,413 18,587
Net P=36,305 P=92,456
* Buy position: USD20,000; Sell position: USD20,000.
** The embedded currency forwards are at a net sell position.
2008
Notional
Amount
Notional
Amount
Derivative
Asset
Derivative
Liability
Derivative instruments designated as hedges:
Cash flow hedges:
Nondeliverable forwards* $10,000 P=– P=– P=19,456
Interest rate swaps 25,000 – – 37,804
Derivative instruments not designated
as hedges:
Freestanding:
Deliverable and nondeliverable forwards** 75,100 – 109,454 70,705
Interest rate swaps 13,333 2,000,000 8,086 14,752
Currency swaps and cross currency swaps 2,500 – – 29,731
Embedded:
Currency forwards 25,564 – 51,470 13,206
Currency options*** 3 – 2 –
Net P=169,012 P=185,654
*All sell position
**Buy position: USD31,550; Sell position: USD43,550
****All embedded options are long call positions.

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2007
Notional
Amount
Notional
Amount
Derivative
Asset
Derivative
Liability
Derivative instruments designated as hedges:
Cash flow hedges:
Nondeliverable forwards* $120,000 P=– P=267,865 P=–
Interest rate swaps 35,000 – – 15,026
Derivative instruments not designated
as hedges:
Freestanding:
Nondeliverable forwards** 46,000 – 115,064 97,027
Interest rate swaps 15,000 2,000,000 58,922 11,613
Currency swaps and cross
currency swaps 10,000 – – 172,194
Embedded:
Currency forwards*** 34,305 – 86,781 44,971
Currency options**** 430 – 14 –
Net P=528,646 P=340,831
*Sell position: USD120,000
**Buy position: USD20,000; Sell position: USD26,000
***Buy position: USD10,118; Sell position USD24,187
****All embedded options are long call positions.
The table below also sets out information about the maturities of Globe Group’s derivative
instruments as of December 31 that were entered into to manage interest and foreign
exchange risks related to the long-term debt and US dollar-based revenues (in thousands).
2009
1-2-3-4-

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2008
1-2-3-4-

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The Globe Group’s other financial instruments which are non-interest bearing and therefore
not subject to interest rate risk are trade and other receivables, accounts payable and accrued
expenses and long-term liabilities.
The subsequent sections will discuss the Globe Group’s derivative financial instruments
according to the type of financial risk being managed and the details of derivative financial
instruments that are categorized into those accounted for as hedges and those that are not
designated as hedges.
28.4 Derivative Instruments Accounted for as Hedges
The following sections discuss in detail the derivative instruments accounted for as cash
flow hedges.
• Interest Rate Swaps
As of December 31, 2009, 2008 and 2007, the Globe Group has USD51.00 million,
USD25.00 million and USD35.00 million, respectively, in notional amount of interest
rate swap that has been designated as cash flow hedge. The interest rate swaps
effectively fixed the benchmark rate of the hedged loan at 1.64% to 4.84% over the
duration of the agreement, which involves semi-annual or quarterly payment intervals
up to April 2012.
As of December 31, 2009, 2008 and 2007, the fair value of the outstanding swap
amounted to P=32.22 million loss, P=37.80 million loss and P=15.03 million loss,
respectively, of which P=22.56 million, P=26.46 million and P=9.77 million (net of tax),
respectively, is reported as “Other reserves” in the equity section of the consolidated
statements of financial position.
Accumulated swap income/ (cost) for the years ended December 31, 2009, 2008 and
2007 amounted to (P=40.21 million), (P=19.46 million) and P=7.36 million, respectively.
• Nondeliverable Forwards
The Globe group has no outstanding short-term nondeliverable currency forward
contracts accounted as hedge as of December 31, 2009.
Hedging gain or loss on derivatives intended to manage foreign currency fluctuations
on dollar based revenues for the years ended December 31, 2009, 2008 and 2007
amounted to P=18.47 million loss, P=127.52 million loss and P=4.97 million gain,
respectively. These hedging losses are reflected under service revenues in the
consolidated statements of comprehensive income.
28.5 Other Derivative Instruments not Designated as Hedges
The Globe Group enters into certain derivatives as economic hedges of certain underlying
exposures. Such derivatives, which include embedded and freestanding currency forwards,
embedded call options, and certain currency swaps with option combination or structured
provisions, are not designated as accounting hedges. The gains or losses on these
instruments are accounted for directly in the other comprehensive income. This section
consists of freestanding derivatives and embedded derivatives found in both financial and
nonfinancial contracts.
*SGVMC113950*

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28.6 Freestanding Derivatives
Freestanding derivatives that are not designated as hedges consist of currency forwards,
options, currency and interest rate swaps entered into by the Globe Group. Fair value
changes on these instruments are accounted for directly in the consolidated statements of
comprehensive income.
• Deliverable and Nondeliverable Forwards
The Globe Group entered into short-term deliverable and nondeliverable currency
forward contracts which have maturities until October 2010. These currency forward
contracts have a notional amount of USD40.00 million, USD75.10 million and
USD46.00 million as of December 31, 2009, 2008 and 2007, respectively. The net fair
value gain amounted to P=4.65 million, P=38.75 million and P=18.04 million in
December 31, 2009, 2008 and 2007, respectively.
• Interest Rate Swaps
The Globe Group has outstanding interest rate swap contracts which swap certain fixed
and floating USD-denominated loans into floating and fixed rate with semi-annual
payments interval up to April 2012. The swaps have outstanding notional of
USD10.00 million as of December 31, 2009, USD13.33 million and
PHP2,000.00 million as of December 31, 2008 and USD15.00 million and
PHP2,000.00 million as of December 31, 2007.
The fair values on the interest rate swaps as of December 31, 2009, 2008 and 2007
amounted to P=10.38 million net gain, P=6.67 million net loss, and P=47.31 million net
gain, respectively.
• Currency Swaps and Cross-Currency Swaps
The Globe Group also has an outstanding foreign currency swap agreement with a
certain bank, under which it swaps the principal of USD-denominated loans into PHP
up to April 2012. Under these contracts, swap costs are payable in semi-annual
intervals in PHP or USD. The notional of the swaps amounted to USD2.50 million as
of December 31, 2009 and 2008, and USD10.00 million as of December 31, 2007. The
fair value loss of the currency swaps as of December 31, 2009, 2008 and 2007
amounted to P=26.79 million, P=29.73 million and P=172.19 million, respectively.
28.7 Embedded Derivatives
The Globe Group has instituted a process to identify any derivatives embedded in its
financial or non financial contracts. Based on PAS 39, the Globe Group assesses whether
these derivatives are required to be bifurcated or are exempted based on the qualifications
provided by the said standard. The Globe Group’s embedded derivatives include embedded
currency derivatives noted in non-financial contracts.
*SGVMC113950*

- 97 -
• Embedded Currency Forwards
As of December 31, 2009, 2008 and 2007, the total outstanding notional amount of
currency forwards embedded in nonfinancial contracts amounted to USD9.97 million,
USD25.56 million and USD34.30 million, respectively. The nonfinancial contracts
consist mainly of foreign currency-denominated purchase orders with various expected
delivery dates. The net fair value of the embedded currency forwards as of
December 31, 2009, 2008 and 2007 amounted to P=12.18 million loss, P=38.26 million
gain and P=41.81 million gain, respectively.
• Embedded Currency Options
As of December 31, 2009, the Globe Group does not have an outstanding currency
option embedded in non-financial contracts.
28.8 Fair Value Changes on Derivatives
The net movements in fair value changes of all derivative instruments are as follows:
December 31
2009 2008 2007
(In Thousand Pesos)
At beginning of year (P=16,642) P=187,815 P=540,544
Net changes in fair value of derivatives:
Designated as accounting hedges (35,116) (457,080) 193,165
Not designated as accounting hedges (44,253) 34,265 (1,512,636)
(96,011) (235,000) (778,927)
Less fair value of settled instruments (39,860) (218,358) (966,742)
At end of year (P=56,151) (P=16,642) P=187,815
28.9 Hedge Effectiveness Results
As of December 31, 2009, 2008 and 2007, the effective fair value changes on the Globe
Group’s cash flow hedges that were deferred in equity amounted to P=22.56 million,
P=40.08 million loss and P=164.34 million gain, net of tax, respectively. Total ineffectiveness
for the years ended December 31, 2009, 2008 and 2007 is immaterial.
The distinction of the results of hedge accounting into “Effective” or “Ineffective” represent
designations based on PAS 39 and are not necessarily reflective of the economic
effectiveness of the instruments.
*SGVMC113950*

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28.10 Categories of Financial Assets and Financial Liabilities
The table below presents the carrying value of Globe Group’s financial instruments by
category as of December 31:
2009 2008 2007
(In Thousand Pesos)
Financial assets:
Financial assets at FVPL:
Derivative assets designated as cash flow hedges P=– P=– P=267,865
Derivative assets not designated as hedges 36,305 169,012 260,781
AFS investment in equity securities - net (Note 11) 81,727 61,324 55,461
HTM investments – – 2,350,032
Loans and receivables - net* 13,441,734 14,491,808 13,384,165
Financial liabilities:
Financial liabilities at FVPL:
Derivative liabilities designated as cash flow hedges P=32,221 P=57,260 P=15,026
Derivative liabilities not designated as hedges 60,235 128,394 325,805
Financial liabilities at amortized cost** 67,520,342 57,720,885 49,151,283
* This consists of cash and cash equivalents, short-term investments and long-term investments, receivables, other nontrade
receivables and loans receivables.
**This consists of accounts payable, accrued expenses, accrued project cost, traffic settlement-net, dividends payable, notes payable,
long-term debt (including current portion) and other long-term liabilities (including current portion).
As of December 31, 2009, 2008 and 2007, the Globe Group has no investments in foreign
securities.
28.11 Fair Values of Financial Assets and Financial Liabilities
The table below presents a comparison of the carrying amounts and estimated fair values of
all the Globe Group’s financial instruments as of:
December 31
2009 2008 2007
Carrying Value Fair Value Carrying Value Fair Value Carrying Value Fair Value
(In Thousand Pesos)
Financial assets:
Cash and cash equivalents P=5,939,927 P=5,939,927 P=5,782,224 P=5,782,224 P=6,191,004 P=6,191,004
Short-term investments 2,784 2,784 – – 500,000 500,000
HTM investments – – – – 2,350,032 2,350,032
Receivables - net 6,583,228 6,583,228 7,473,346 7,473,346 6,383,541 6,383,541
Derivative assets (including
noncurrent portion) 36,305 36,305 169,012 169,012 528,646 528,646
Other nontrade receivables* 915,795 915,795 1,236,238 1,236,238 261,279 261,279
AFS investment in equity
securities - net (Note 11) 81,727 81,727 61,324 61,324 55,461 55,461
Financial liabilities:
Accounts payable and accrued
expenses ** 18,660,131 18,660,131 15,719,340 15,719,340 16,392,154 16,392,154
Derivative liabilities (including
noncurrent portion) 92,456 92,456 185,654 185,654 340,831 340,831
Notes payable 2,000,829 2,000,829 4,002,160 4,002,160 500,000 500,000
Long-term debt (including
current portion) 45,476,022 45,130,753 36,585,938 37,212,371 29,872,852 31,232,574
Other long-term liabilities
(including current portion) 1,383,360 1,383,360 1,413,447 1,413,447 1,026,555 1,026,555
* This consists of loan, accrued interest and miscellaneous receivables included under “Prepayments and other current assets” and
“Other noncurrent assets” (see Notes 6 and 11).
** This consists of accounts payable, accrued expenses, accrued project cost, traffic settlement-net and dividends payable.
The following discussions are methods and assumptions used to estimate the fair value of
each class of financial instrument for which it is practicable to estimate such value.
*SGVMC113950*

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28.11.1 Non-derivative Financial Instruments
The fair values of cash and cash equivalents, short-term investments, AFS
investments, subscriber receivables, traffic settlements receivable, loan receivable,
miscellaneous receivables, accrued interest receivables, accounts payable, accrued
expenses and notes payable are approximately equal to their carrying amounts
considering the short-term maturities of these financial instruments.
The fair value of AFS investments are based on quoted prices. Unquoted AFS
equity securities are carried at cost, subject to impairment.
For variable rate financial instruments that reprice every three months, the carrying
value approximates the fair value because of recent and regular repricing based on
current market rates. For variable rate financial instruments that reprice every six
months, the fair value is determined by discounting the principal amount plus the
next interest payment using the prevailing market rate for the period up to the next
repricing date. The discount rates used range from 0.08% to 1.64% (for USD
loans) and from 4.37% to 6.55% (for PHP loans). The variable rate PHP loans
reprice every six months. For noninterest bearing obligations, the fair value is
estimated as the present value of all future cash flows discounted using the
prevailing market rate of interest for a similar instrument.
28.11.2. Derivative Instruments
The fair value of freestanding and embedded forward exchange contracts is
calculated by using the net present value concept.
The fair values of interest rate swaps, currency and cross currency swap
transactions are determined using valuation techniques with inputs and
assumptions that are based on market observable data and conditions and reflect
appropriate risk adjustments that market participants would make for credit and
liquidity risks existing at the end each of reporting period. The fair value of
interest rate swap transactions is the net present value of the estimated future cash
flows. The fair values of currency and cross currency swap transactions are
determined based on changes in the term structure of interest rates of each
currency and the spot rate.
Embedded currency options are valued using the simple option pricing model of
Bloomberg.
28.11.3. Fair Value Hierarchy
The Globe Group held the following financial instruments measured at fair value.
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities
Level 2: other techniques for which all inputs which have a significant effect on
the recorded fair value are observable, either directly or indirectly
Level 3: techniques which use inputs which have a significant effect on the
recorded fair value that are not based on observable market data.
*SGVMC113950*

- 100-
December 31
2009 2008 2007
(In Thousand Pesos)
Level 1
AFS investment in equity securities - net P=81,727 P=61,324 P=55,461
Level 2
Derivative assets (including noncurrent portion) 36,305 169,012 528,646
Derivative liabilities (including noncurrent portion) 92,456 185,654 340,831
There were no transfers from Level 1 and Level 2 fair value measurements for the
years ended December 31, 2009, 2008 and 2007. The Globe Group has no
financial instruments classified under Level 3.
29. Operating Segment Information
The Globe Group’s reportable segments consist of: (1) mobile communications services;
(2) wireline communication services; and (3) others, which the Globe Group operate and manage
as strategic business units and organize by products and services. The Globe Group presents its
various operating segments based on segment net income.
Intersegment transfers or transactions are entered into under the normal commercial terms and
conditions that would also be available to unrelated third parties. Segment revenue, segment
expense and segment result include transfers between business segments. Those transfers are
eliminated in consolidation.
Most of revenues are derived from operations within the Philippines, hence, the Globe Group
does not present geographical information required by PFRS 8. The Globe Group does not have a
single customer that will meet the 10% reporting criteria.
The Globe Group also presents the different product types that are included in the report that is
regularly reviewed by the chief operating decision maker in assessing the operating segments
performance.
Segment assets and liabilities are not measures used by the chief operating decision maker since
the assets and liabilities are managed on a group basis.
*SGVMC113950*

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The Globe Group’s segment information is as follows (in thousand pesos):
2009
Mobile Wireline
Communications Communications Intersegment
Services Services Others Transactions Consolidated
REVENUES:
Service revenues
External customers:
Voice P=26,497,050 P=2,794,855 P=– P=– P=29,291,905
Data 26,736,627 3,037,749 87,775 – 29,862,151
Broadband – 3,289,462 – – 3,289,462
Intersegment revenues:
Voice 1,101,882 56,180 – (1,158,062) –
Data (55,567) 96,637 57,013 (98,083) –
Broadband – 19,693 – (19,693) –
Nonservice revenues:
External customers 916,655 501,959 – – 1,418,614
Intersegment revenues – 115 – (115) –
Segment revenues 55,196,647 9,796,650 144,788 (1,275,953) 63,862,132
EBITDA 35,547,646 901,447 7,128 6,687 36,462,908
Depreciation and
amortization (13,535,502) (3,642,803) (2,914) (207,211) (17,388,430)
EBIT 22,012,144 (2,741,356) 4,214 (200,524) 19,074,478
NET INCOME ( LOSS)
BEFORE TAX 20,923,569 (2,791,545) 3,933 (203,822) 17,932,135
Benefit from (provision
for) income tax* (5,866,931) 501,115 2,554 – (5,363,262)
NET INCOME (LOSS) P=15,056,638 (P=2,290,430) P=6,487 (P=203,822) P=12,568,873
*Excluding final taxes
Other segment information:
Subsidy 1 (P=1,146,915) (P=382,306) P=– (P=115) (P=1,529,336)
Interest income 2 192,620 38,511 108 – 231,239
Interest expense (2,086,307) (10,455) (183) – (2,096,945)
Equity in net losses of
joint ventures (7,009) – – – (7,009)
Impairment losses and
others (694,335) (116,625) – – (810,960)
Capital expenditure 17,609,324 7,086,349 6,653 – 24,702,326
Cash Flows
Net cash provided by (used
in):
Operating activities 25,718,316 3,796,387 3,818 848,460 30,366,981
Investing activities (15,927,101) (5,215,702) (9,824) (676,477) (21,829,104)
Financing activities (8,333,155) (12,000) (1,331) 12,000 (8,334,486)
1
Computed as non-service revenues less cost of sales
2 Net of final taxes
*SGVMC113950*

- 102-
2008 (As restated)
Mobile Wireline
Communications Communications Intersegment
Services Services Others Transactions Consolidated
REVENUES:
Service revenues
External customers:
Voice P=26,971,442 P=3,087,685 P=– P=– P=30,059,127
Data 28,434,219 2,477,900 31,169 – 30,943,288
Broadband – 1,892,073 – – 1,892,073
Intersegment revenues:
Voice 455,335 13,229 – (468,564) –
Data 4,242 134,689 14,140 (153,071) –
Broadband – 7,395 – (7,395) –
Nonservice revenues:
External customers 1,582,653 340,907 – – 1,923,560
Intersegment revenues – 352 – (352) –
Segment revenues 57,447,891 7,954,230 45,309 (629,382) 64,818,048
EBITDA 36,631,217 724,359 (16,275) 58,744 37,398,045
Depreciation and
amortization (13,649,575) (3,166,975) (1,061) (210,457) (17,028,068)
EBIT 22,981,642 (2,442,616) (17,336) (151,713) 20,369,977
NET INCOME (LOSS)
BEFORE TAX 20,033,238 (2,091,677) (18,308) (151,713) 17,771,540
Benefit from (provision
for) income tax* (7,242,264) 746,602 – – (6,495,662)
NET INCOME (LOSS) P=12,790,974 (P=1,345,075) (P=18,308) (P=151,713) P=11,275,878
*Excluding final taxes
Other segment information:
Subsidy 1 (P=1,109,632) (P=83,980) P=– P=– (P=1,193,612)
Interest income 2 300,596 45,326 23 – 345,945
Interest expense (2,254,107) (1,771) – – (2,255,878)
Equity in net losses of
joint ventures (9,728) – – – (9,728)
Impairment losses and
others (498,227) (707,452) – – (1,205,679)
Capital expenditure 14,931,556 5,442,877 7,745 – 20,382,178
Cash Flows
Net cash provided by (used
in):
Operating activities 20,669,605 1,981,905 8,228 (152,338) 22,507,400
Investing activities (13,150,317) (868,806) (507) (2,561,647) (16,581,277)
Financing activities (7,047,656) (2,000,000) (2,340) 2,685,362 (6,364,634)
1
Computed as non-service revenues less cost of sales
2 Net of final taxes
*SGVMC113950*

- 103-
2007 (As restated)
Mobile
Communications
Services
Wireline
Communications
Services
Intersegment
Transactions
Consolidated
REVENUES:
Service revenues
External customers:
Voice P=27,976,477 P=3,397,538 P=– P=31,374,015
Data 28,433,864 2,197,044 – 30,630,908
Broadband – 1,203,729 – 1,203,729
Intersegment revenues:
Voice 439,424 (1,874) (437,550) –
Data (1,601) 137,599 (135,998) –
Broadband – – – –
Nonservice revenues:
External customers 2,263,186 36,878 – 2,300,064
Intersegment revenues – 166 (166) –
Segment revenues 59,111,350 6,971,080 (573,714) 65,508,716
EBITDA 42,839,077 1,879,421 (4,498,612) 40,219,886
Depreciation and amortization (13,938,120) (2,938,844) (312,034) (17,188,998)
EBIT 28,900,957 (1,059,423) (4,810,646) 23,030,888
NET INCOME (LOSS) BEFORE TAX 25,784,024 (1,040,848) (4,810,646) 19,932,530
Benefit from (provision
for) income tax* (7,023,381) 367,870 – (6,655,511)
NET INCOME (LOSS) P=18,760,643 (P=672,978) (P=4,810,646) P=13,277,019
*Excluding final taxes
Other segment information:
Subsidy 1 (P=968,674) (P=54,039) P=– (P=1,022,713)
Interest income 2 263,377 347,426 – 610,803
Interest expense (2,979,104) (17,243) – (2,996,347)
Equity in net losses of joint
ventures (9,023) – – (9,023)
Impairment losses and others (547,803) (393,457) – (941,260)
Capital expenditure 10,151,435 3,770,522 – 13,921,957
Cash Flows
Net cash provided by (used in):
Operating activities 24,781,924 7,074,197 146,927 32,003,048
Investing activities (3,193,754) (1,543,518) (4,363,237) (9,100,509)
Financing activities (23,816,624) (4,512,000) 4,510,163 (23,818,461)
1
Computed as non-service revenues less cost of sales
2 Net of final taxes
A reconciliation of segment revenue to the total revenues presented in the consolidated statements
of comprehensive income is shown below:
2009 2008 2007
(In Thousand Pesos)
Segment revenues P=63,862,132 P=64,818,048 P=65,508,716
Interest income 271,806 420,425 728,621
Other income - net 1,064,476 700,874 1,789,571
Gain on disposal of property and
equipment - net 608,400 24,837 14,910
Total revenues P=65,806,814 P=65,964,184 P=68,041,818
*SGVMC113950*

- 104-
The reconciliation of the EBITDA to income before income tax presented in the consolidated
statements of comprehensive income is shown below:
2009 2008 2007
(In Thousand Pesos)
EBITDA P=36,462,908 P=37,398,045 P=40,219,886
Depreciation and amortization (17,388,430) (17,028,068) (17,188,998)
Interest income 271,806 420,425 728,621
Gain on disposal of property and
equipment - net 608,400 24,837 14,910
Financing costs (2,182,881) (3,000,391) (5,224,939)
Equity in net losses of joint ventures (7,009) (9,728) (9,023)
Other items 207,908 40,900 1,509,891
INCOME BEFORE INCOME TAX P=17,972,702 P=17,846,020 P=20,050,348
29.1 Mobile Communications Services
This reporting segment is made up of digital cellular telecommunications services that allow
subscribers to make and receive local, domestic long distance and international long
distance calls, international roaming calls and other value added services in any place within
the coverage areas.
29.1.1 Mobile communication voice net service revenues include the following:
a) Monthly service fees on postpaid plans;
b) Charges for intra-network and outbound calls in excess of the consumable
minutes for various Globe Postpaid plans, including currency exchange rate
adjustments (CERA) net of loyalty discounts credited to subscriber billings; and
c) Airtime fees for intra network and outbound calls recognized upon the earlier of
actual usage of the airtime value or expiration of the unused value of the prepaid
reload denomination (for Globe Prepaid and TM) which occurs between 1 and 60
days after activation depending on the prepaid value reloaded by the subscriber
net of (i) bonus credits and (ii) prepaid reload discounts; and revenues generated
from inbound international and national long distance calls and international
roaming calls.
Revenues from (a) to (c) are net of any settlement payouts to international and local
carriers.
29.1.2 Mobile communication data net service revenues consist of revenues from valueadded
services such as inbound and outbound SMS and MMS, content downloading
and infotext, subscription fees on unlimited and bucket prepaid SMS services net of
any settlement payouts to international and local carriers and content providers.
29.1.3 Globe Telecom offers its wireless communications services to consumers, corporate
and SME clients through the following three (3) brands: Globe Postpaid, Globe
Prepaid and Touch Mobile.
The Globe Group also provides its subscribers with mobile payment and remittance
services under the GCash brand.
*SGVMC113950*

- 105-
29.2 Wireline Communications Services
This reporting segment is made up of fixed line telecommunications services which offer
subscribers local, domestic long distance and international long distance voice services in
addition to broadband and mobile internet services and a number of VAS in various areas
covered by the Certificate of Public Convenience and Necessity (CPCN) granted by the
NTC.
29.2.1 Wireline voice net service revenues consist of the following:
a) Monthly service fees including CERA of voice-only subscriptions;
b) Revenues from local, international and national long distance calls made by
postpaid, prepaid wireline subscribers and payphone customers, as well as
broadband customers who have subscribed to data packages bundled with a voice
service. Revenues are net of prepaid and payphone call card discounts;
c) Revenues from inbound local, international and national long distance calls from
other carriers terminating on our network;
d) Revenues from additional landline features such as caller ID, call waiting, call
forwarding, multi-calling, voice mail, duplex and hotline numbers and other
value-added features; and
e) Installation charges and other one-time fees associated with the establishment of
the service.
Revenues from (a) to (c) are net of any settlement payments to domestic and
international carriers.
29.2.2 Wireline data net service revenues consist of the following:
a) Monthly service fees from international and domestic leased lines. This is net of
any settlement payments to other carriers;
b) Other wholesale transport services;
c) Revenues from value-added services; and
d) One-time connection charges associated with the establishment of service.
29.2.3 Broadband service revenues consist of the following:
a) Monthly service fees on mobile and wired broadband plans and charges for usage
in excess of plan minutes; and
b) Prepaid usage charges consumed by mobile broadband subscribers.
29.2.4 Innove provides wireline voice communications (local, national and international
long distance), data and broadband and data services to consumers, corporate and
SME clients in the Philippines.
• Consumers - the Globe Group’s postpaid voice service provides basic landline
services including toll-free NDD calls to other Globe landline subscribers for a
fixed monthly fee. For wired broadband, consumers can choose between
broadband services bundled with a voice line, or a broadband data-only service.
For fixed wireless broadband connection using 3G with High-Speed Downlink
Packet Access (HSDPA) network, the Globe Group offers broadband packages
bundled with voice, or broadband data-only service. For subscribers who require
*SGVMC113950*

- 106-
full mobility, Globe Broadband Tattoo service come in postpaid and prepaid
packages and allow them to access the internet via 3G with HSDPA, Enhanced
Datarate for GSM Evolution (EDGE), General Packet Radio Service (GPRS) or
WiFi at hotspots located nationwide.
• Corporate/SME clients - for corporate and SME enterprise clients wireline voice
communication needs, the Globe Group offers postpaid service bundles which
come with a business landline and unlimited dial-up internet access. The Globe
Group also provides a full suite of telephony services from basic direct lines to
Integrated Services Digital Network (ISDN) services, 1-800 numbers,
International Direct Dialing (IDD) and National Direct Dialing (NDD) access as
well as managed voice solutions such as Voice Over Internet Protocol (VOIP)
and managed Internet Protocol (IP) communications. Value-priced, high speed
data services, wholesale and corporate internet access, data center services and
segment-specific solutions customized to the needs of vertical industries.
29.3 Others
This reporting segment represents mobile value added data content and application
development services. Revenues principally consist of revenue share with various carriers
on content downloaded by their subscribers and contracted fees for other application
development services provided to various partners.
30. Notes to Consolidated Statements of Cash Flows
The principal noncash transactions are as follows:
2009 2008 2007
(In Thousand Pesos)
Increase (decrease) in liabilities related to the
acquisition of property and equipment P=2,548,409 P=870,346 (P=343,874)
Capitalized ARO 96,959 95,086 150,051
Dividends on preferred shares 50,492 60,637 49,449
The cash and cash equivalents account consists of:
2009 2008 2007
(In Thousand Pesos)
Cash on hand and in banks P=1,104,231 P=1,479,948 P=1,679,081
Short-term placements 4,835,696 4,302,276 4,511,923
P=5,939,927 P=5,782,224 P=6,191,004
Cash in banks earn interest at the respective bank deposit rates. Short-term placements represent
short-term money market placements.
The ranges of interest rates of the above placements are as follows:
2009 2008 2007
Placements:
PHP 2.00% to 5.00% 2.50% to 6.50% 2.25% to 7.79%
USD 0.05% to 1.63% 0.05% to 4.30% 4.01% to 5.50%
*SGVMC113950*

GLOBE TELECOM, INC. AND SUBSIDIARIES
SCHEDULE B - Amounts Receivable from Directors, Officers, Employees, Related
Parties and Principal Stockho
As of December 31, 2009
(In Thousand Pesos)
Name and Designation of Debtor
Balance as of December
31, 2008 (1)
Additions Collections Adjustments
Balance as of
December 31, 2009 (1)
Receivable from employees:
Medical, salary and other loans (see B.1)* 70,072 322,668 (310,512) (44) 82,184
70,072 322,668 (310,512) (44) 82,184
Receivable from Related Parties and Principal
Stockholders:
Receivable from Singapore Telecom Int'l Pte. Ltd 2,601 (2,601) 0
Receivable from Asiacom 52 (52)
2,653 0 (2,653) 0 0
72,725 322,668 (313,165) (44) 82,184
* restated to include GXI and EGG's balances
(1)
All the receivables from directors, officers, employees, related parties and principal stockholders as of
December 31, 2009 are classified under current.
1 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10000435 ABAD ALVIN DREXEL 68,815
10039 ABADA JAY 21,013
8996 ABADICIO ANNA RHODORA 33,000
1274 ABADILLA EDGARDO 28,239
8169 ABAGAT ADREANNE 28,183
9075 ABALOYAN WENDELL 47,500
4354 ABARQUEZ ROSEMARIE 49,471
10001029 ABARRO JOSEPH REX 32,056
4122 ABE CHERYL 21,314
9795 ABEL MARK ALEXANDER 43,000
7896 ABELLA FIDEL 32,429
7701 ABENOJA MELANIE 20,801
7301 ABRASADO PAULO 21,383
8812 ABRENICA ELENITA 24,436
7612 ACEBES SHEILA MARIE 64,270
2073 ACOSTA FELIXBERTO POCHOLO 55,407
2229 ADAME ARMANDO 72,500
8470 ADOLFO JOFFER 124,036
1981 ADRE ELISEO 81,374
10001826 AESQUIVEL RAMON NONATO 81,258
6048 AGBAYANI GRACE 24,100
8478 AGDIPA JONATHAN 26,887
10003215 AGREGADO JOSEFINA MARIA 45,320
10001693 AGUILAR VILDA GRACE 23,658
3600 AGUILAR RAYMOND MARTIN 34,640
7002 AGUILAR JONALYN 83,333
10315 AGUIRRE JAN THERESE 31,000
6485 AGUSTIN ULYSSES 55,598
10000782 ALANO JOSEFINA 44,610
10003612 ALANO CHARRIE MYN 169,583
2060 ALAO OFELIA 38,615
6882 ALBANO DENNIS CHRISTOPHER 79,445
4364 ALBARILLO HONORATO 81,479
10000089 ALBERTO JULIE ANNE 24,504
4834 ALBINA IAN HIPOLITO 33,125
10003552 ALBURO ROSLYNNE 45,250
10001844 ALCANTARA CAMILLE CORNELIA 24,474
10001153 ALCANTARA ERIC ADRIAN 29,368
4263 ALCANTARA RAPHAEL NINO 40,729
10007 ALCARAZ AERON PAUL 55,773
7650 ALCOVINDAS CHRISTOPHER 71,699
10003274 ALDANA JESSELITO 43,125
4138 ALDOVINO ROMEL 74,197
10001004 ALEJANDRO LEMUEL 24,544
6099 ALFAFARA MARIE THERESE 29,696
10001460 ALIT DEXTER IAN 28,333
4306 ALLADO ROMULO 63,618
3625 ALLAS MARIA CORAZON 45,687
4015 ALMAZAN BERNARDO 423,132
2977 ALMINE DULCE AMOR 73,943
7615 ALMORADIE ALAN 42,968
8446 ALSOL CATHERINE 34,693
5800 ALVARADO MARY ANN 21,802
2 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
2334 ALVIZ MAY 27,840
10001619 AMAT MA. CORAZON 28,627
3183 AMAT LEO 29,935
5661 AMBAGAN LORELIE 92,000
10001255 AMOR DARWIN 45,311
2519 AMORES ARVIN 30,000
9800 AMPARO FENEE MARIE EVELYN 150,000
10000741 AMPE MARILYN KAREN 27,837
10000458 ANASTACIO OVID 40,000
10001917 ANASTACIO NORINA 46,243
4314 ANCHETA JOSEPH 33,153
5080 ANG CATHERINE 191,220
6813 ANGELES ROWENA 21,667
10000669 ANGELES RODELIZ 51,630
7423 ANIMAS RANDY 21,860
10001300 AÑORA ARGIE 69,583
5467 ANOTA GINALYN 38,958
6495 ANSELMO MICHAEL 41,256
10002340 ANSUS MARY GRACE 29,680
10000765 ANTOLINES GERARDO 134,993
7839 APANAY GEORGE PATRICK 45,007
10001866 APOLINARIO DAX CESAR 49,799
9788 APOLTO MARIA GLENISE 20,845
10002931 AQUINO RIC ANGELO 29,555
7081 AQUINO EUNICE 66,089
3284 AQUITANIA NOEMI 21,611
6584 ARAGO ALBERTO 31,125
9804 ARAGONES MARK JOSEPH 68,130
10003147 ARAN AURORA 42,485
10001835 ARANETA PHILIP JAMES 66,169
5867 ARBAN MARINELLA 28,022
1961 ARBULANTE SHEILA 20,775
10001292 ARCA BEN 131,536
6039 ARCADIO MA. NIMFA 22,145
7069 ARCEGA ERIC 32,822
3160 ARCEO SANTIAGO 29,563
9451 ARCILLA MARISSA 68,100
4811 ARELLANO CHANDA 88,898
10003311 AREVALO RITCHIE 31,740
10000855 ARINES MA. VICTORIA 59,307
10444 ARISTON EMILYN 46,121
3488 ARISTORENAS ROSALYN 20,833
10000888 ARISTORENAS MA. ALICIA 30,360
3252 ARQUELADA JOANNE FABIANNE 96,479
2858 ARRIOLA MARY GRACE 22,500
9809 ARRIOLA CHARLIME 39,719
10003624 ARROYO DEINY JOYCE 55,000
1364 ARROYO LOYOLA 104,008
10000851 ARROYO LEILA 108,814
10001771 ASIGNAR MARICEL 26,268
10290 ASPI ADAN 43,869
10213 ATIENZA VELMER 29,948
10001463 ATIENZA ERICH VON 30,444
3 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
4589 AUSON GALLARDO 157,500
7322 AVERILLA CARLA BRIGIDA 52,644
10000814 AVERION ANGELITO 20,707
4598 AVERION AILENE 159,320
10001544 AVILA JESSIE 22,917
10003450 AYLLON JOSEPH ANTHONY 98,623
5471 AZANZA LOUISA 20,707
10001747 BABASA ALVIN 22,200
7904 BABIA ETHELWIN 40,222
10001405 BACAL ARIEL 20,210
6796 BACALING CHERRIELYN 26,175
10001073 BACO REY 32,180
10000135 BACOL LOUELLA JANE 44,930
8724 BACULIO RUSSEL 39,870
8615 BACULOT JENNIFER 22,264
4235 BADILLA JONAH MARIE 21,771
9633 BADILLO KIM 49,167
10001933 BAGCAL WELFREDO 24,287
10003290 BAJAR JOSE VITTORIO 112,117
10004 BALANQUIT JANET 29,167
10002457 BALBAS DENNIS MICHAEL 44,930
7941 BALBASTRO LEILANI 372,750
10002498 BALDERAMA CESAR 22,500
10002395 BALEROS PHILIP HERSON 278,899
10003141 BALID DENVER 23,313
5266 BALLARAN ZACHARY 42,000
10002469 BALOLOY MA. AVE GAIL 40,267
8590 BALUYUT CHERYL 45,250
10002928 BANAAG MARIA DINAH DIANA 30,512
6732 BAO RONNE 40,000
10001172 BARBAIRA SABRINA 54,265
10001593 BARCELLANO JENNYBEL 24,458
1481 BARCELONA MA LOURDES 20,333
7559 BARGOLA VERGIL 27,426
10000724 BARRAMEDA MA. BELLA 20,246
3562 BARRAMEDA LOURDES 47,556
4884 BARRAQUIAS MA. VILMA 144,701
9499 BARRETTO DOMINIC 73,142
9327 BARRIDO RALPH IAN 27,100
10003162 BARTOLOME ANA MARIE 25,422
8374 BARTOLOME JANICE JILL 28,778
8840 BARTOLOME ROBERT BRYAN 37,075
10001498 BASA KIMBERLY 61,248
10000768 BASCARA CARMELO 27,243
5623 BASILAN JOVY GAY 30,750
10001008 BASILIO RODOLFO 51,750
10506 BASILLA MARIA JOCEN 51,180
10002937 BASTES HERNANDO 43,910
2473 BATAC CECILIA 48,333
4954 BATANES CHERRY 64,840
10001049 BAUTISTA MA. LOURDES 22,500
1965 BAUTISTA RONNIE EDGARDO 27,000
10002953 BAUTISTA DIONNETTE 27,000
4 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
6201 BAUTISTA MARIA AMOR 27,854
9100 BAUTISTA ALIDA 43,500
10000828 BAUTISTA BENJAMIN 44,801
10001741 BAUTISTA MICHAEL 59,961
10000908 BAUTISTA III DAVID 35,417
8114 BAYLE JOWIE 21,172
3997 BAYLOSIS CHRISTIAN 21,185
6880 BAYONA FRANCIS 22,318
6245 BAYONITA GENEROSO 29,737
5031 BAYOT ANNE CLAIRE 26,379
10286 BAYSA JENNIFER 22,806
9299 BEA ROMUALDO 432,404
10003308 BELANGEL CHRISTINE 29,880
2161 BELEN ALEXANDER 65,645
8659 BELGIRA ANNALYN 31,845
10002227 BELLEZA CHARISMA MICHELLE 54,299
2181 BELULIA EMILIANO 53,916
4496 BENITEZ SHEILA MARIE 41,250
6390 BENITO VENERANDO 89,234
10279 BERDAN ALMA 75,930
7544 BERGADO CARMELA SOCORRO 74,078
10001371 BERNAL NOEL 26,561
3098 BERNALES FELIZARDO 41,967
10001699 BERNALES MAXIMO 96,754
8121 BERNARDINO BRIAN 30,904
10002203 BERNARDO MARIBEL 29,200
10003323 BERNARDO RAQUEL 43,932
6988 BESA MELISSA 137,217
3559 BIEN LODEVICA 25,290
10003089 BIGLETE CARLITO 20,196
2468 BIGORNIA GERTRUDES 94,375
8674 BILLONES JOSEFINA 23,040
1851 BITO JESUS 64,682
10059 BLANQUERA RICARDO 65,340
10001801 BOLTRON ERNEZAR 24,293
10001143 BONDOY ROMMEL 79,000
10002402 BONETE JOVENSON 30,808
10028 BONITES GERALDINE 28,811
10000843 BORCENA NELSON 114,339
10555 BORROMEO SHALIE 24,577
1558 BORROMEO JENNY 58,720
9263 BOSA JASON 28,906
7193 BOYLES LEO 93,828
10001222 BRAGAS ELMER 30,000
7753 BRAVO ANNA LIZA 22,069
6255 BRAVO JIMMY 22,291
7629 BRECIO MANUEL 40,973
6098 BRIGOLI EDWARD 31,363
8387 BRIONES JANET 47,125
10001339 BRITANICO FERDINAND 66,112
8205 BRIZUELA JENNIFER 49,492
2502 BROSAS ELBERT 33,567
9571 BRUNIDOR RYAN 37,000
5 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
7514 BUCTUAN ANDRENE 44,049
10001707 BUENA ARLENE 22,974
10002040 BUENAVENTURA NORRIECEL 21,196
5965 BUENAVENTURA RAUL 24,179
3085 BUENAVENTURA JENNIFER 89,888
7624 BUGAY ROWENA 30,000
10002589 BUHAIN PETER JHON 24,708
10002281 BULOTANO MANUEL 40,752
4332 BUNAG MELANIE ROSE 23,750
1808 BURGOS AILEEN 202,750
6120 CABAGUE LARRY 53,750
10000253 CABALATUNGAN CONNIEL REY 57,180
10001928 CABANERO ARNEL 36,700
10001717 CABANES MA. CHRISTINA 22,405
10001884 CABARILLOS JASON 80,116
10000489 CABARRUBIAS VINCENT AMOR 40,583
5070 CABEZAS NONITA 37,500
9934 CABILDO CHRISTOPHER 25,434
8950 CABILDO ENRICO BERNARDINO 83,070
2363 CABILUNA MELISSA PAULA 29,167
6315 CABILUNA ELEUTERIO SHANE 43,186
9512 CABORNAY AGNES JOY 22,500
10001832 CABRERA NOEL 21,342
4043 CABUGAO JUDITH 35,820
5879 CACAO HERBERT 29,896
5450 CACHERO PAMELA 35,656
4056 CACHO DARLEY DAPHNE 41,697
10002026 CACHUELA RACHEL 113,750
10061 CACNIO MARVIN 57,185
4297 CADA RHENILA 29,680
10003467 CADATAL HEHERSON 63,938
2230 CADO BRIGETH 33,474
10001631 CADUYAC MARLOS 30,000
9440 CAFE KAREN 93,222
10000859 CAGAANAN SUZETTE 27,083
10002879 CAGAOAN ANNA LIZA 21,140
8846 CAGATIN AGATHA MARINESS 48,794
1457 CAGUIOA ELLENNETTE 282,000
1862 CAIPANG CLINTON 29,167
5305 CAIRO RICHARD 65,392
10001911 CALABROSO FILOMENO 27,390
10001980 CALALAY GILBERT 30,000
2514 CALDERON YASMIN 40,000
10003485 CALIBO ANTHONY ALFONSO III 70,833
10000948 CALLE MARIA OLIVIA 27,180
2044 CALLEJO JHON DEXTER 30,000
4761 CALMA MARIA THERESA 45,250
6642 CAMACHO MA. SHEILA 23,139
8005 CAMACHO MA. VICTORIA 28,363
10001837 CAMBRONERO NOEL 21,179
9280 CAMINGAL MARLYN 101,061
4585 CAMPOS CLAIRE 59,310
4942 CANARIAS SARAH 72,150
6 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10001432 CANIZARES JOSEPHINE 94,440
3070 CANO MARY ROSSALYN 28,720
10003267 CANO EDERLINA 30,360
10001766 CANONG CYNTHIA 36,804
6156 CANORA EDWARD 55,243
9956 CAPARANGA ALMA 30,680
6421 CAPIENDO MYRA LYN 29,360
10000678 CAPILLAR EUNICE 66,479
3071 CAPULE LORENA 72,733
7877 CAPULLA WENDY JULIE KRISTINE 48,234
4419 CAPUNO RUBY ANN 35,417
10001725 CARAG BENIGNO 21,897
10001861 CARANDANG MELCHOR 27,764
4011 CARANDANG ALEJANDRO 40,965
8801 CARGADO GLADYS 31,108
3491 CARIASO DENNIS 82,028
6969 CARPIO CRISLYN 38,117
10002345 CARPIO BASILIO PONCIANO 71,376
9815 CARRULLO PHOEBE 41,901
10001596 CASACLANG DONATO 38,896
10037 CASAYURAN JOYNA 47,597
3583 CASIDO NERRIZA 59,785
10001695 CASIMIRO ROSELYN 30,530
10000727 CASIMIRO ANDREW 47,584
10003622 CASTANO DANNY 31,000
10003139 CASTILLO CLARIZA ANN 47,601
10000718 CASTILLO CECILIA GRACE 66,667
3094 CASTILLO ALJUN 70,781
7608 CASTOR LAARNIE 27,319
10000697 CASTRO JEROME JIREH 38,497
10000091 CASTRO ANNA LEA 51,750
2557 CASTRO CRISTY 83,136
10002101 CASUNCAD RIA 27,083
9095 CATACUTAN LLOYD 47,298
10001357 CATALAN MARY COR 24,050
9556 CATALLO CHRISTOPHER 45,250
10511 CATINDIG SIDNEY DOMINIC 40,638
3213 CATIVO RANDY 26,755
5984 CATUBIG EMY 70,131
2396 CAUTON MARIA LUISITA JEAN DONATILA 50,551
10001089 CAVE RONNIE 80,331
1741 CEDENO ROCARLEO JUNO 45,447
2992 CELERIO MIRASOL 34,082
10202 CENIT CLAUDEN 29,638
10001305 CENIZA HENRY 25,613
9131 CENTENO JASMIN 26,379
10546 CENTENO MINERVA 51,167
8767 CEPE JOY ANN 33,003
10482 CERDIÑO GENEVIEVE LEIGH 22,935
6712 CERIO JIBI 37,204
4229 CERVALES ADELPHA 32,930
4997 CERVANTES GILBERT 29,625
9750 CERVANTES MANUEL ANGELO 45,250
7 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
9591 CHACON IAN 45,250
10000686 CHAN JESSE 37,875
8396 CHANCO JOANE 54,892
10432 CHAVEZ AILEEN 32,641
5744 CHAVEZ MELISSA 33,795
8425 CHAVEZ BENSON 37,230
7058 CHIUCO MICHAEL 40,102
8576 CHUA CYRIL 21,000
10002686 CHUA CHERRY ANN 26,500
10003087 CHUA JANNIE ANN 59,040
10000233 CHUA AMES JASON 121,500
10001400 CINCO SHEILA MARIE 32,902
2257 CIOCON MARIA SHARON 28,400
10001482 CIPRES ROBERT 28,602
10002406 CLAOR FREDIE 85,000
10001374 CLAUDIO JOSELITO 23,333
4070 CLEMENTE JANNETTE 20,175
10000902 CLEMENTE GEORGE CARMELO 34,000
9690 CLORES GLENN MARK 50,000
6102 COBAR ROVI 84,066
10001976 COGAL ALMA 30,000
1701 COLINARES CARMELO 40,419
8516 COLONIA RONALD 46,757
4691 COLOQUIO JAHIL 65,507
3629 COMLA RACHELLE 22,476
10000945 CONCEPCION JOLLY 20,480
5492 CONCEPCION DONNA BEATRICE 31,446
10001762 CONCEPCION RUBEN 43,000
8508 CONCHA MEILARNI 35,494
2661 CONSTANTINO VIRGILIO 48,208
5064 CORDERO ROCKY 35,625
2844 CORONADO XERXEZ APRONIANO 23,212
10001814 CORONADO SARAH LYN 29,800
10001149 CORONADO EDWIN 48,083
9570 CORONEL SERGIO 25,000
8393 CORPUZ CHARINA 41,465
10002037 CORPUZ ROWENA 177,711
7071 COSCA ROSALYN 48,485
10002674 CREDO BETSY 23,210
3641 CRISOSTOMO EDEN 29,040
1544 CRISOSTOMO CRISTINO 92,583
10000 CRISTI WILFREDA 25,750
10002084 CRUZ MARIE GAIL PAULINE 20,200
5202 CRUZ GEORGE JOSEPH 20,263
10001474 CRUZ MARIA PATRICIA CHELO 25,574
10002277 CRUZ GLOVELYN 27,915
10001726 CRUZ DENNIS 28,746
4281 CRUZ GOLDA MEIR 29,375
8471 CRUZ OLIVER 41,883
10001666 CRUZ RONALDO 48,523
2213 CRUZ GABRIEL RESURECCION 60,920
2552 CRUZ CIRIACO 82,423
6204 CRUZ CARMENCITA 143,843
8 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
3095 CUARESMA MELY BERNARDA 44,345
6032 CUARESMA GUISEPPE 126,004
10001025 CUEJILO IVY 30,000
3704 CUETO MELITA 33,333
10002654 CUEVAS SALVE 27,517
4865 CUEVAS CECILIA 70,930
3700 CUSTODIO LEILA 53,863
1535 CUSTODIO ISAGANI 78,254
7465 DACANAY MARCHEL 90,500
10001247 DACILLO DAX 27,000
10001155 DAGA MA. GRACIA 25,230
10000875 DALANGIN LORETO 38,807
10000961 DALIDA WINSTON 198,253
4163 DANTES JENNIFER 47,667
6750 DATU JEROME JACOBO 40,053
10002349 DAVID ALLAN 21,875
10001032 DAVID BENJAMIN 22,500
10001620 DAVID BIENVENIDO 23,484
5100 DAVID GERARDO 25,417
7694 DAVID NORMAN THEODORE 28,725
5325 DAVID RONALDO 45,704
6064 DE CASTRO MARIA VICTORIA 22,917
8092 DE CASTRO JIL 37,083
4278 DE CASTRO CORAZON 56,086
9430 DE DUQUE MARY JANE 49,000
10002144 DE GOITIA RODRIGO MARTHIN 39,240
6372 DE GUZMAN NORLY 21,997
3507 DE GUZMAN JANET 32,704
10001776 DE GUZMAN JOEL 41,677
9231 DE GUZMAN MACLENIN 42,500
10439 DE GUZMAN RODOLFO 55,139
2059 DE GUZMAN JOSEPHINE 63,446
10002309 DE GUZMAN MICHAEL IAN 117,657
4546 DE JESUS JOY 30,000
2916 DE JESUS MIGUEL 34,684
10001843 DE JOYA MONETTE 32,428
10000304 DE LA CRUZ LEAH 71,889
10000131 DE LA PAZ JONATHAN 63,400
10168 DE LEON AL RONNIE 22,009
10000983 DE LEON KRISTOFFER LOUIE 24,621
10223 DE LEON CHRIS VINCENT 30,680
10002660 DE LEON FREDRICK ELLIS 36,188
6530 DE LEON MARIE RACHEL 48,447
10001401 DE LEON CRYSTAL 49,789
10000167 DE LEON ROBERT EDISON 59,766
7222 DE LEON THOMAS JEFFERSON 156,041
10443 DE LUNA RYAN 29,680
1337 DE MESA LUISA 72,679
10002499 DE TORRES MARICAR 44,005
10000016 DE TORRES JENEFER 53,396
5750 DE VERA LARISSA 34,664
9948 DEBALUCOS IAN NEAL 32,000
1340 DEL MAR SERGIO 22,408
9 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10001613 DEL ROSARIO MICHAEL 25,800
5171 DEL ROSARIO MARK 26,460
5111 DEL ROSARIO CECILIA 27,282
10003492 DEL ROSARIO VANESSA MAR 62,610
4376 DELA CRUZ SHELLA 20,624
5434 DELA CRUZ MA. ELINORE 20,625
10257 DELA CRUZ BERNADETTE 23,765
9916 DELA CRUZ NOEMI 31,000
7068 DELA CRUZ ALAN 36,120
8193 DELA CRUZ ERRVIC 41,308
4223 DELA CRUZ DIERDRE 41,420
9377 DELA CRUZ MICHEL 45,250
2373 DELA CRUZ SHEILA MARIE 48,260
10001988 DELA CRUZ PETER RONALD 53,250
8070 DELA CRUZ RHIA 55,417
10002743 DELA CRUZ PAOLO 58,705
5296 DELA CRUZ AIREEN 183,333
3445 DELA PAZ MYLENE 31,165
10002760 DELA PAZ IVY ANN 34,000
4951 DELA PAZ ALFRED MICHAEL 50,414
10072 DELA ROSA KRYSTAL 43,314
10000994 DELA ROSA MARSHA 78,125
10001949 DELA VEGA JOHN RON 62,917
6818 DELGADO DARIUS JOSE 153,333
4730 DELLOSA MA. LUZ FATIMA 22,665
2728 DELOS REYES PATRICIA 35,900
8889 DEQUINA CHRISTOPHER EUGENE 20,693
8068 DERLA ARLLETH 43,067
9294 DESALISA IRENE 30,000
2517 DESPOJO RAY 66,317
10000757 DETCHING DANILO 67,208
10001541 DIAMANTE RONALDO 45,250
10002521 DIAZ CZARINA JEAN 45,250
5404 DIMANLIG FRANCILYN 26,212
6160 DIN JOSEPH 23,629
8142 DINO ROMINA PAULA 106,158
10003343 DINOSO MARIA EFIGENIA 25,805
10001551 DIOLASO MARIA LYN 50,722
7709 DIONGZON ELAINE 175,713
10001090 DIONISIO FREDERICK 44,311
6119 DISTURA MARITES 58,348
10001006 DISUANCO HOYLE RAUL 246,669
10000014 DIVINAGRACIA GERALD 75,000
1933 DIZON LUWYNA 42,228
8361 DIZON CATHERINE ANNE 46,359
10003134 DIZON MARK ANDREW 101,625
9417 DOLAR MA. CORAZON 30,680
5400 DOLDOL ENCARNATO 83,013
9901 DOMINGO RICARDO 41,667
3141 DOMINGUEZ EDWIN 27,000
10001705 DONATO CINDY 60,625
3304 DORADO IREEN 23,821
3578 DORENDEZ MA. SNOOKY 36,804
10 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
9588 DORILLO NATHALIE JOY 50,162
10000090 DOROTEO RHODALYNDA 37,868
10003106 DOTIMAS LEONOR 24,233
9807 DUENAS JOEL 30,116
10000663 DUGAY MARIA ROWENA 30,915
1597 DUGENIA JONATHAN 46,509
10002205 DULAY EDMUND 31,328
10001260 DUMINDIN PAUL 48,505
7299 DUNGO LADY LYNN 21,481
4473 DUNGO LUISITO 25,911
4920 DURAN GIGI 35,140
10003435 DUREZA ROSE 45,250
3643 DUSARAN ELJIM 40,514
10000751 DY BENNY 28,500
10001816 DY RYAN 40,241
10001093 ECARMA EDWIN 24,978
10002038 ELNAR SHERYL ANN 33,330
4130 ENDAYA ERWIN 54,045
5453 ENDRIGA MARIGOLD 105,695
4963 ENRIQUEZ ANNA MARIE 67,015
4629 ENRIQUEZ CHITO 133,957
10003359 ERESTAIN RYAN CLINT 38,179
10000834 ERGUIZA RICKY 30,000
5319 ERGUIZA RUEL 132,472
5354 ERMAC MAJARLIKA LOU 45,000
10000647 ESCALONA MICHAEL 45,250
3897 ESCATRON ARNEL 38,033
3163 ESCOBAR FRANCISCO 35,836
10002672 ESCOTO MARY ANN 31,000
6177 ESCOTO GILBERT 197,667
10199 ESCUREL NEIL 30,680
6285 ESGUERRA GENER 46,083
10000845 ESPERAS CHERRY 23,110
7396 ESPINA LINA 38,378
10000898 ESPINOLA ARNOLD 23,308
9561 ESPINOSA PAULINO 35,417
10003276 ESPINOSA OLIVER 57,125
5391 ESPIRITU JUSTINIANO 74,209
10002750 ESQUIDA JOVEN 20,495
4995 ESTANDARTE MICHELLE ANN 35,631
10001424 ESTANISLAO JEDREK 31,000
5809 ESTEPA MARIA ANA 59,680
9196 ESTILLORE MARCELO 73,177
10001708 ESTONINA CARLO JESUS 20,553
10000946 ESTRADA FEDERICO 56,667
6409 ESTRADA RICKY 137,659
5634 ESTRELLA RAYMOND 21,256
9432 ESTRELLA JULIE 32,925
7080 ESTRELLA FRIDAY JAN 33,429
3472 EUGENIO AMABELLE 47,278
3603 EVANGELISTA MARY ANNE 23,864
10002007 EVANGELISTA NORMAN 24,040
1764 EVANGELISTA ANTONET 60,250
11 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
3224 EVARISTO GILBERT 58,009
10003508 EVIO JONATHAN 48,750
3426 FABELICO SHARON 31,112
3702 FABROS ROLANDO 33,908
8007 FACISTOL MARY GRACE 20,833
4269 FAJARDO MARJORIE 26,042
10526 FAJARDO JOSE MARI 42,806
10000112 FAJARDO MARICAR 66,000
1648 FAJUTAGANA ROBERTO 59,446
6068 FALCIS FEDERICO 26,000
3664 FALLER JENNIFER 22,053
9189 FAMADOR CYRELLE VINCENT 21,729
9880 FAROL JAY ALBERT 25,763
10000923 FAUNILLAN ROMEO 42,761
10332 FAVIS ESPERATO 45,609
10001825 FERAREN JOJI VISSIA 22,917
9919 FERIA RICHARD NEAL 39,253
4128 FERNANDEZ MARIA DOLORES 26,660
2907 FERNANDEZ NARCISO 29,327
10003005 FERNANDEZ EDMUND 30,600
10000674 FERNANDEZ ADRIAN JOSEPH 31,000
10001110 FERNANDEZ VHIC MHARR 35,305
10001309 FERNANDEZ RODRIGO 46,250
10001702 FERNANDEZ RONA 46,992
2430 FERNANDEZ DANILO 68,154
3639 FERNANDEZ ROSEMARIE 68,447
3497 FERNANDO MICHAEL 168,400
10000125 FERRER JESSICA ELAINE 45,250
10001554 FERROLINO ALFREDO JAMES 40,771
4224 FESTIN DANNY 68,515
7075 FIDELINO ARTURO 24,050
1536 FIGUERRES VENANCIO 93,200
10001280 FILIPINAS ROLANDO 25,000
2146 FINEZ MA. THERESA 67,500
10002382 FIRMALO ANNA MARIEL 21,908
10001805 FLORENDO HARRY 69,553
3062 FLORES ELMIRA 20,833
8745 FLORES MA. THERESA 28,333
10001650 FLORES MARIA ROSA ISABEL 38,580
2624 FLORES LEONIDA JASMIN 61,449
10001604 FLORES ADONIS 85,555
9620 FORMARAN ANNA 30,000
7368 FORMOSO MA. TERESA 48,806
6829 FRAGINAL JAIME 252,083
3131 FRANCISCO LEAH 36,300
2434 FRANCISCO SHIELA 44,228
1439 FRANCISCO MA. CARMEN 75,741
5155 FRANCISCO CYRA 98,625
7572 FULLERO EDUARDO 176,450
8510 GABRIEL AYNA LOU 25,134
10001875 GABUNALES ANGELO JOSEPH 31,000
10001914 GADAINGAN JOSE ROGER 32,356
3635 GADOR ZINIA 26,066
12 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
1655 GAGUA FELICISIMO 105,721
10000312 GAJO FERDINAND 45,250
9044 GALANG ALELI 37,234
1870 GALAPON SAMUEL 187,197
3734 GALICIA ANN SALVACION 107,628
10002813 GALINGAN MARK WILLIAM 33,475
10001141 GALVERO GENELYNN DIMPLE 26,296
7481 GALVEZ MAYETTE 39,680
8565 GAMBAN JOSE ERWIN 25,265
8586 GAMBOA VALERIE ANN 65,897
6088 GAMBOA JOHN ARTHUR 131,250
4186 GAMBOA CEFERINO 163,268
7609 GAN SHERRY 28,207
10003217 GAN BERNARD ERIC 30,586
10001724 GAPIDO DAVID 114,375
10000700 GARAY MYRA FE 66,625
3707 GARCERA MA. EFIGENIA 91,297
10000955 GARCES GLENN 75,899
10002636 GARCIA MICHEL EUGENE 27,000
5150 GARCIA MARIA CRISTETA 29,360
9697 GARCIA RESTITUTO 31,113
1789 GARCIA RAY PATRICK 32,075
10001734 GARCIA RENATO 46,778
9766 GARCIA ALEGRE 47,917
5551 GARCIA BENJAMIN JOSE 55,417
10001984 GARCIA MA. CHARIBEL 56,498
8988 GARCIA BENJAMIN 71,042
4061 GARGANERA NANCY 89,027
10000774 GATCHALIAN JOSEPH 62,084
10000813 GATELA HEIDI 36,318
10001475 GATUS CEZAR 21,558
10001206 GATUS ARTURO 175,824
2069 GAVINO DARWIN 21,300
6637 GAYAMO JOELINE 28,700
8166 GAYTA MELVA 39,000
4836 GELERA DARLENE CHUCHI 38,158
10000291 GENER MARY GRACE 31,000
2749 GENTALLAN JULITO 41,047
6639 GEPANAYAO LISA 30,000
4923 GERALDES ROLAND JOSEPH 60,000
6795 GERONA ELLEN JOY 30,000
6215 GERONIMO JOEL 36,676
10001633 GIMAY JOB 23,730
3350 GINETE MARY ANNE 29,078
4773 GO MARY LOU 21,578
10000787 GO MARIA CHRISTINA ELISE 43,650
6159 GOHETIA JESSIE 25,688
10412 GOMEZ KATHERINE 23,027
8170 GONZAGA HAZEL 50,822
9213 GONZALES RAMONCITO 22,906
10001477 GONZALES JAIME 38,113
10003073 GONZALES ALDRIN 39,583
3149 GONZALES HERSHEY 53,333
13 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10000733 GONZALES LEONILA 61,145
2249 GONZALES LUDOVICA 87,582
10002024 GONZALES JAYME 108,068
1930 GONZALES MA. CARIDAD 162,767
5717 GONZALEZ JEREMIAH 22,500
10000652 GONZALEZ EDUARDO 50,537
1494 GOROSPE REY 128,187
5788 GO-SOCO JOSEFINA 24,284
7985 GOZUN MARIO JOSE 216,800
10001711 GRANADA DOROTHY 25,662
10000860 GRATE IMELDA 51,997
2516 GRATELA ROWENA LORETA 27,708
10000742 GREGORIO LIVERN 128,274
10003047 GUARDIANO RAQUEL 41,455
10002136 GUARDINO FIDEL ANDREI NINO 78,135
1190 GUDAO SANTOS 35,450
6186 GUDMALIN RAYMUNDO 21,934
5939 GUDY MA. GILDA 23,875
10003314 GUEVARA ALMA 30,000
10001287 GUEVARA GERARD 64,750
10000839 GUEVARRA AIREEN 30,993
3576 GUILLEN JANETTE PATRICIA 45,290
10001736 GUIMARY RANDY 54,069
6199 GUINTO DIANNA 33,442
8683 GUINTO ADRIAN GINO 34,221
10001459 GUMBAN LEONOR 30,000
2211 GUTIERREZ EDILBERTO 22,917
3289 GUTIERREZ REYNALDO 60,085
8974 GUTIERREZ ROWENA 64,800
10001647 HABASA REYNALDO 20,387
10000849 HANDOG RECHILDA RUTH 40,534
6330 HANDUMON LEONIDES 31,000
10002698 HANOPOL ALEXANDER 36,328
10505 HANS JOSEPH FREDERICK 61,319
10000273 HARILLA ALVIN 46,987
2546 HARMOND JEROME 42,291
6141 HEBRONA RICHARD DANJE 21,711
3001 HECHANOVA ROMEO 681,733
4231 HENSON MA. TRINIDAD 40,306
10000639 HENSON JHON ISRAEL 51,475
7356 HERIDA EDUARDO 77,340
5583 HERMOGENES PRINCESS ANN 25,000
5437 HERMOGENES MICHAEL MARTIN 45,250
10000812 HERNANDEZ JOSE 33,333
10003202 HERNANDEZ MARIA MELODY 36,421
7555 HERNANDEZ MARCELLUS ANTHONY 87,941
7529 HERRERA MARK CARLO 66,000
2262 HINAYAN-UY MA. THERESA ESTHER 29,109
5731 HINLO CRISTINA 25,664
4804 HONIG MICHAEL 25,833
3592 HONRADO JOSEFINA 67,290
3703 HUGO MILANIO 65,335
10001215 HULIGANGA RICHARD 44,910
14 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
3683 IBARRA JOCEL 24,838
4123 IBAY MALEHA 74,055
10001588 IGLIANE ARNEL 27,426
3979 IGNACIO ROMANIE 23,043
2435 IGNACIO ARNEL 57,081
10002700 IGNACIO VICTOR ANTONIO 57,798
10000816 IGNACIO JASMIN 83,500
10001077 ILAGAN JOANAH GRACE 22,500
3747 ILAGAN EDGARD 24,667
4009 ILAGAN RAYMUNDO 36,518
4508 ILETO JAMES 83,333
8277 IMPERIAL STANLEY 53,800
10001882 INAJADA LUCIO 29,167
10001270 INAJADA EDGARDO 53,667
3813 INDAPAN ELCID ANTHONY 41,912
10002614 INDIONGCO MARIA YVETTE 45,250
2731 INFANTE JOSEPHINE 28,720
10001945 INOCANDO EDWIN 53,846
9976 INOCENCIO JULIANA JESSICA NIÑA 24,039
8187 IRIOLA SALVADOR 52,500
10001512 ISAIS MOISES 74,143
1161 ISIDRO ROSELINA 20,300
2550 ISIDRO GRACITA 80,000
6056 ISIP ALVIN DALE 44,333
3569 ISLA JOSEPH 111,024
6983 ISLER REGINA 35,000
3478 ISRAEL DAVID 94,290
7505 JABRICA ANNA LOREN 26,671
8966 JACINTO MELCHOR 27,500
7963 JACINTO MARIANNE 45,243
8086 JACOB RODOLFO 41,670
6418 JACOMINA ANTONIO 58,409
10000517 JAEN REGGIE 35,417
10001790 JAKOSALEM SEGUNDO 60,000
2299 JALECO JOSEPHINE 163,619
4893 JAMALI ABDULGANI 36,667
9345 JAMORA JOSEPH FRANCIS 44,792
3827 JAUDIAN JENETTE 38,218
10000806 JAVIER MARIA CECILIA 24,694
6472 JAVIER ROMMEL 28,640
10003304 JAVIER JAYSIE 30,975
8030 JAVIER DAISY 35,564
10002963 JAVIER MARIFI 49,470
6550 JAVIER MA. BERNADETTE 104,382
10002390 JERESANO ROY 54,167
9240 JEREZ ROQUILLO 48,985
10001786 JEREZA JOSE RAMON GERARDO 27,758
6934 JIMENEZ MA. CARMEN 29,542
10003225 JIMENEZ MIGUEL 30,000
10118 JIMENEZ BERNADETTE 37,377
2297 JIMENEZ JELINA 64,353
10047 JOSE FRANCE MARIE 22,127
3444 JOSE JONATHAN 96,764
15 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
2970 JOSUE ROSALIE 30,000
5777 JOSUE LARINA 43,605
10002226 JOSUE ARSENIO 69,577
10000925 JOSUE ROBERT 124,900
10002354 JUALO JENNIFER 32,000
5428 JUCAL HIYASMIN 56,441
10001014 JUMALON LOU ANN 50,915
10001520 JUMONONG JESSE 30,000
9493 JUSTINIANO ARNOLD FRANCIS 196,570
4228 JUTARE JENNIFER 31,000
10001277 KATALBAS ENRIQUE 31,263
7665 KATIGBAK VENER 55,833
9854 KHO SHERYL LYNN 37,477
10000440 KIERULF JOANNE 30,000
10001451 LABATETE RHOLANIE 48,025
9818 LABAYEN BENJAMIN 41,150
6069 LABRADO JASPER JACINTO 54,167
5132 LABRE MARIANNETTE 85,906
5783 LACANDAZO LILYNER 55,610
2076 LACONICO PANFILO 28,067
8429 LACSAMANA LEONARD 86,533
8746 LACUNA PAOLO CESAR 88,055
8817 LADABAN SHALIMAR 68,949
10001017 LAGAZON MARIA TERESA 31,860
4333 LAGERA ERIC GERARD 27,907
10001821 LAGUDA RICHARD 52,500
9172 LALLAVE MARITES 48,325
5078 LALU ROMMEL 24,409
9803 LAM KO KATHRYN 75,000
7476 LAMPA JUDITH 44,029
10003402 LAMUG ANN RUTH 179,049
10001343 LANCE EMERLYN 30,712
10001888 LANDICHO MANOLITO 30,000
3117 LANGCAUON RUSHELL 32,829
10001410 LANIT FREDIE BABB 79,708
7532 LAO VINA 126,667
6292 LAPURGA MICHELLE AMITA 31,246
4174 LARANAN ELEONOR 34,308
10001915 LASTIMOSA ROY 29,167
8581 LATOJA MARK ANTHONY 28,361
6142 LATONIO REY 27,500
5947 LAVADIA EMERLON 25,000
10001075 LAWAS ALFREDO 31,208
6071 LAYCO RANIE 28,747
8157 LAYNESA ANTHONY FRANCIS 45,833
3029 LEANO MARLON 90,000
9847 LEGASPI REGULUS PAUL 38,333
4859 LEONCIO RYAN 59,909
5626 LEONOR MA. REGINA 59,241
10001850 LEOPOLDO LEO 43,522
4439 LEUNG MA. ZENAIDA 102,991
10001769 LIM EDUARDO 20,900
4939 LIM NORITA 22,591
16 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
3952 LIM LEONILO 24,780
8016 LIM MELISSA 28,208
10001275 LIM ROYSON 32,472
10001494 LIM TERRY 48,583
5692 LIM BERNADETTE 69,040
10002719 LIM TRILBY 135,108
1778 LIMQUECO ARLEEN 116,162
10001121 LING JUN 90,208
10000444 LINGA JAYSON 66,261
10001157 LIWANAG RONALDO 23,333
6458 LIWANAG DONALD 45,500
10002178 LIZARDO ZANDER KHAN 30,000
9464 LIZARONDO ROY 20,300
1313 LLAMEG MILAGROS 20,000
10001756 LLAVE RUEL 22,500
8780 LLEANDER NAPOLEON 23,803
4022 LLEGO ROEL 20,833
8430 LOBINA SHIRLEY 28,571
9568 LOJA DEXTER 20,071
10003456 LOMOTAN MONICA LAURICE 98,000
10001532 LONTOC RONALDO 29,000
5478 LOPENA JENNIFER 25,000
2961 LOPEZ ADONIS 28,447
2111 LOPEZ LEVI 196,456
8421 LORENZO JOAN 30,000
2636 LORICO MANUEL 25,735
8799 LOYA ROSANNA 59,564
9055 LOZADA MARLON 98,366
3749 LOZANO MYRNA 47,629
8463 LUBANG MARC ANTHONY 26,746
8915 LUCERO APPLE MICHELLE 22,427
10119 LUCIO EVA JOYCE 50,767
4953 LUMAQUE GILBERT 31,215
7304 LUNA VIVIAN 31,000
5444 LUNA RANDALL 36,761
10285 MACALINO MICHAEL PAUL 29,375
10001066 MACARAIG ANNALISA 27,953
3411 MACARAIG SEAN 83,728
3100 MACARANAS GIL PONCIANO 104,569
6196 MACARULAY FELIX 91,262
8494 MACATANGAY FRANCIS 30,000
6638 MADAYAG ROWEL 20,417
3333 MADERA MYLA 38,095
10000234 MADRIDEO CHARINA 29,680
7159 MAGAHIS JOCELYN 27,188
6010 MAGCALE RAYMOND 29,834
4850 MAGMANLAC GILBERTO 30,000
10000705 MAGNO JOAN 22,572
10002946 MAGNO ELFIN JAY 38,662
10001605 MAGNO ROMINA AUREA 54,167
7560 MAGSAJO PATRICK JOHN 36,952
10001621 MAGTAJAS JONAH 30,000
3655 MAGTAJAS EDWARD ROLF 31,000
17 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10001815 MAHINAY HARLEY 30,920
10001879 MALALUAN KHRISTINA 37,977
9498 MALDIA LORIZ ANN 20,208
3964 MALIKSI DINO 24,961
4885 MALIXI HENRIETTA 51,281
2343 MALLARI JOCELYN 23,621
10288 MALLARI GERARD 45,342
2243 MALLARI VICTOR JAMES 51,711
8583 MALLARI JEANNA 58,392
10002938 MALONZO MANDY 45,250
6070 MAMARIL ROGER 30,834
7599 MAMARIL WILLIAM 32,017
10001217 MANABAT ANNA MAE 67,784
10000145 MANAJERO JINNYFER 29,492
2647 MANALO KAREN 49,731
7779 MANALO MYRLA 50,250
8611 MANALO CARLO 50,771
9390 MANALO SUSAN GRACE 182,000
1462 MANANGUIT NOEL 63,705
9670 MANANSALA MARITES 52,140
10001577 MANANSALA LIONEL 55,000
5308 MANANSALA WILFREDO 75,984
10000118 MANAOG JEFFREY 31,250
10002399 MANCIA JANE 22,388
10003291 MANDAPAT FELIXBERTO 48,533
8098 MANGAHAS MARIA CYNTHIA 21,142
1732 MANGALIMAN ANTHONY 58,507
4946 MANGAOANG ELLEN 23,248
1943 MANGENTE YVETTE GRACE 56,687
10003117 MANGLO JAN KATHLEEN 29,775
10003120 MANGUBAT GARNET 50,000
3793 MANLAPAO MARIE CATHERINE 26,421
1794 MANN JOEL RAPHAEL 32,900
6149 MANTUA CAROLINE 45,437
9949 MANUEL ELIZAR 29,360
1553 MANUEL LILIBETH 46,540
10002891 MANUEL JELLIN 82,773
2140 MAPANAO VIC JOSE 27,913
10000817 MAPANAO ANTHONY GARTH 32,000
8890 MAPOY MELANIE 25,820
10000747 MAQUIRAN MICHAEL 68,795
10002058 MARAAN ROBERT 47,959
5203 MARASIGAN NELSON 21,115
7375 MARAYAG MARIE ANTONETTE 47,051
10001778 MARIANO ARVIN 26,410
10000858 MARIANO YOLANDA 275,916
5901 MARIBOJOC ANUNSACION 28,079
6190 MARQUEZ ARMILENE 25,256
10003481 MARQUEZ GENARO BLAIR 25,540
10002551 MARQUEZ JOEL 28,500
10002794 MARQUEZ IRVING 30,861
1916 MARQUEZ RUBY 32,302
3617 MARQUEZ PAUL 107,348
18 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10001097 MARTE JULIUS 34,738
6415 MARTIN LUISITA 80,207
10001906 MARTIN KEN CARLO 100,833
2004 MARTINEZ GILBERT 33,333
2031 MARTINEZ RICARDO 52,470
10001891 MARTINEZ ROBERT 74,680
10003484 MARTINEZ JOSEPH CLEMENS 80,000
10000467 MARTINEZ ARVIN 181,000
10001376 MARZAN DINDO 73,254
8871 MATIAS RICHARD 21,319
8634 MATIAS DONNA 26,250
7312 MAYORALGO IMELDA 30,000
4078 MAYORES ANNA LIZA 71,706
10000763 MEDINA SONNY 30,999
10001409 MEDINA MA. TRISTAN BERNADETTE 33,375
2163 MEDINA RESORTE 44,900
2085 MEDINA RIZALINDA 59,680
6946 MEDINA ROELA 95,450
1448 MEDINA ROSARIO 133,750
10002192 MEDINA RAMON ANTONIO 237,500
10001043 MELGAR MOSES 29,167
7085 MENDOZA MIA 23,333
9140 MENDOZA JACINTO 23,867
6187 MENDOZA CLEOFE 31,000
10000099 MENDOZA GENEVIE 31,680
7528 MENDOZA JAIME 39,625
10001113 MENDOZA CARLO 40,788
10001763 MENDOZA ISAGANI 47,720
10000794 MENDOZA VANESSA 54,211
10000802 MENDOZA FULBERT ELI 67,817
10001001 MENDOZA MARIA SALOME 77,039
10002956 MENDOZA JAYSON ROBERT 105,000
3352 MENDOZA JUANITO 106,374
2719 MENDOZA CYNTHIA 124,268
9805 MENDOZA ARLENE 166,461
7723 MENEZ MICHELLE 42,474
2753 MERCADO MARVIN 44,510
9565 MERCADO MARJORIE 83,333
10002632 MERCADO MONICA SOLEIL 86,983
8765 MESINA JEAN JOAN 25,932
10003523 MILANES MILVUR 34,000
5735 MILANEZ CHRISTIAN 29,680
8363 MILAOR JEANNE 71,580
4878 MILLENA LEA 32,939
3527 MINA JENNIFER 30,722
10001331 MINA RUBY DYMEL 34,486
6497 MINOZA JASON 105,248
10002819 MIRADOR JOEY 22,500
10496 MIRANDA LOUIE SEBASTIAN 43,838
10484 MIRO RHEA 22,119
10001689 MISA ROSEMARIE 65,544
2032 MOLINA ROLLIE 86,910
8677 MONASTERIO TRISTAN 21,196
19 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
9666 MONDANO SHEENA MAY 32,229
3355 MONTALES MADONNA 54,349
2113 MONTANIEL JOEL 56,230
3103 MONTANO SOTERO 42,708
8349 MONTECILLO ROELA 36,197
4552 MONTELIBANO JOSE DONNIE 21,078
10001670 MONTELIBANO MARIUS 40,196
10200 MONTERAS EDGAR 24,067
10003220 MORALEJA DORIS 27,000
10001058 MORALES RICARDO 27,708
6862 MORALES DEO ANTONIO 30,859
9454 MORALES JOSETTE 31,653
7427 MORALES ARMANDO 99,966
9966 MORANA JOSE VICTOR 44,653
10003573 MORENO ALFREDO 46,500
5135 MORILLA FELIPE 56,250
6552 MURGA JOSEPH RONALD 35,889
10001940 NABABLIT MARLON 27,500
3541 NACU GLENDA 37,890
2097 NADORA JACQUELINE 51,205
10002353 NAGE MA. REGINA 29,680
3396 NAMOCATCAT JOHNNY 21,007
2755 NAN ANNIE 34,570
2507 NAPALLATAN RAYMUND 26,125
10001484 NAPILE SALVADOR 31,000
7721 NAPOLES MARY JANE 24,822
1883 NARAGDAO MA. RAQUEL 41,828
3231 NARRA MARILOU 72,327
1642 NARVAEZ MARLON 77,003
7595 NATIVIDAD MANUEL 69,577
10002443 NATO RYAN EMILSON 35,000
10003006 NAVA ARIANE JOI 87,085
10388 NAVARRO EDMUND CHRISTOPHER 33,100
10001055 NAVARRO SHERWIN 117,250
10001677 NAVIDA MARIA JOSEFA 29,680
10001886 NAVIS CARLOS 66,208
9225 NEBRIA ABELARDO 28,500
10001080 NECESARIO JO PAUL 36,808
9385 NECIO BHREM HERNANDO 57,750
3148 NEVARES JUAN EDWIN 26,222
6278 NEYPES CARLOS 42,623
10002501 NG JONATHAN 45,380
8936 NICASIO JOHN ANDREW 26,707
10001893 NICHOLAS FERNANDO 105,875
10002228 NIERVA JONAH 30,000
3689 NOCHE ANNALIZA 30,001
2662 NOCHE NATHALIE 55,833
10001187 NOCHESEDA POLLY 34,024
10002248 NOLASCO NOE CHRISTIAN 28,560
10000661 NORA NERIZA 20,223
10001509 NULO ZENAIDA 31,000
10001464 NUNAG RODERICK 24,999
7416 NUÑEZ RAUL 30,274
20 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
5673 NUNEZA MAILA 20,832
9322 OBERIANO JAN JEE 44,930
10003430 OBISPADO RICHARD 33,333
5886 OBNIAL JOAN CHRIS 86,223
8220 OCAMPO HEDDA 30,850
10002964 OCANADA RHIA 29,178
2275 OGOT RENITA 25,930
10001246 OLAES ALBERT 34,768
3705 OLARTE JOEL 45,060
10001428 OLASIMAN RANDY 25,401
9193 OLI MARK IAN 25,837
10001966 OLIVAR CANDICE 30,000
10234 OMILA DENNIS 43,502
3852 ONG JONCRIS 65,457
7998 OPLE CHRISTIAN ACE 30,625
3748 OPULENCIA ROMMEL JOSEPH 29,854
8754 ORALE SHERRY 44,680
8017 ORENDAIN JESIELYN 55,583
10003114 ORENDAIN OMAR 65,190
9812 ORLANDA MICHAEL 33,593
10554 ORNEDO LAARNIE 30,714
10000907 ORNOPIA RODOLFO 26,110
3778 ORTEGA JOSEPH 31,399
10001779 ORTIZ TINA MARIE 29,156
10000836 ORUGA RONALD ALLAN 58,863
10001714 OSORIO CRISTOPHER 30,000
10002177 OYCO JERICKSON 31,000
3966 OYCO JOEY ANGELO 83,904
9326 PABATANG JANICE 35,621
9133 PACHECO MARIE PATRICIA 53,857
10001864 PACIFICO JOEL 22,659
4501 PAGE PATRICK HERBERT 27,053
9634 PAGKALIWANGAN MYRA 39,453
10003163 PAGLINAWAN ALEXIS 75,351
7527 PALABAY NOEL 35,630
2444 PALANCA MA. CLARISSA 21,347
10002721 PALERMO CATHERINE 47,178
9554 PALILEO NESCEL PAUL 63,396
10000993 PALOMAR DONALDO 24,125
10002991 PANA WILLIAM 141,792
10001676 PANGILINAN DEMOSTHENES 91,748
10000995 PANGILINAN JESUS 93,862
10131 PANGILINAN ELMA 257,423
1906 PANIGBATAN DENNIS 42,696
10003209 PANIS AARON PAUL 27,768
3317 PANLAQUI MA.ARSENIA 96,250
6230 PANOPIO JOHANNA MARIQUEZ 23,095
10001697 PANOPIO ALDRIN LINCOLN 108,804
10002326 PAPA MA. AURORA 31,000
10002976 PARAGAS MARICAR 49,947
7258 PARAGAS FREDIE 52,333
10449 PARAISO EDGARDO 68,553
8261 PARAS MA. MELINDA 96,000
21 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10000967 PARAS RADEL 109,642
10001069 PARRENAS CYRIL 56,356
10178 PARRENO EFREN 45,250
10000912 PASA MARIFLOR 25,000
2855 PASCASIO JOSEPHINE 30,000
10148 PASCUAL ANTONIO 20,833
10000736 PASCUAL MARYROSE 21,309
10003297 PASCUAL GIAN CARLO 33,680
10001535 PASCUAL LOURDES 47,250
4497 PASTOR MICHAEL 73,250
10002839 PASTORPIDE MARICEL 31,342
5762 PASTRANA MELISSA 31,055
2595 PATINIO ZORAIDA 36,292
7414 PATRICIO RODOLFO 23,872
10001056 PAULINO JOHN ERIC 22,917
10293 PAYOG SHIELLA MEI 28,467
10000252 PAZA RADOMIR 45,250
5390 PEDRIALVA ROGER ANGELO 39,263
6985 PEDRO KRISTINA 30,894
3233 PELEGRINA BEVERLY 34,205
10179 PELLETERO MARC 21,097
10002520 PENA PAUL JOHN 31,000
10000830 PENALOSA JOHN OHMAR 39,583
3701 PENERA ERWIN MATTHEWS 39,330
10000914 PERALTA ANTHONY 22,917
4267 PERALTA JAYSON 23,605
3096 PERALTA MARITES 32,095
7482 PEREZ GEMMA 36,667
7302 PEREZ MARIAN CATHERINE 36,697
3215 PEREZ LILYBETH 46,680
3721 PEREZ JAMES 57,500
10002655 PEREZ MARIA LOURDES 83,650
9039 PERFECTO ANABELLE 29,680
2645 PERIDO ALBERT 30,000
3557 PESEBRE CAROLYN 20,680
6036 PETATE LIWANAG 42,175
9200 PEVIDAL ELMER 80,833
10000501 PIAMONTE REYNALDO 32,174
8648 PIANSAY JONALYN 29,198
5925 PIEDAD MARIA BELINDA LOURDES 79,167
5429 PILAPIL MONICA SHANTA 27,500
1885 PINEDA MIRA 25,632
7864 PINEDA RAYMUND CARLO 31,333
10000784 PINEDA LAURO 89,000
10000433 PINEDA LOUWIE CHRIS 114,730
4952 PINGOL RONALDO 40,687
4602 PINILI ETHEL 29,044
5184 PINILI WILVEN 32,700
7434 PIOQUINTO SHERWIN 30,625
8815 PLANTA ANABELLE 55,543
5384 PLAYDA KHARYLL 42,409
10002181 POLICARPIO ROGELIO 45,250
9056 POLICARPIO RAYMOND NOEL 70,845
22 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10000510 PONCE JUDITH 29,525
9582 PONCIANO ANGELINE 47,693
10000913 PONTINO ANGELICA 34,000
2303 POQUIZ RICHARD 88,925
9337 PORCIL CATHERINE 35,000
2795 PORTES MARY JOY 60,000
10000193 POSADAS GERALD REY 130,417
4154 POTENCIANO RONALDO 22,201
10000795 PRADO ROVI 20,506
8059 PRAT CHRISTIA MARIE 45,425
2047 PRIVADO EMELYN 20,833
5643 PUNAN DULCE 20,325
10002359 PUNZALAN ALLAN 30,000
10003001 PUNZALAN CRISTIAN 31,000
1666 PUNZALAN CONCEPCION 57,251
7478 PUNZALAN JEANNE 68,190
4549 PUSING SHEILAH MICHELLE 26,978
6107 QUENIAHAN DWIGHT 26,836
6759 QUIJANO AUDREY ROSE 37,988
10003250 QUIJANO MIKHAIL DOUGLAS 60,500
4845 QUILILAN ALVIN GERARD 333,334
10002113 QUINTO ENGELBERTO 51,621
9274 QUINTOS FEMIE 29,546
8258 QUINTOS NORBEN 60,194
10001128 QUITALIG GIRLIE 46,695
4835 RABOY DANILO 34,990
1761 RACELA TEODORA 43,830
10003646 RACHO JUABILLY 248,042
8658 RACILES AISSA NINIA 41,625
10001180 RADA ALDRIN NEIL 67,660
9079 RAFANAN DENNIS 22,917
3358 RAFLORES IRNAND 96,537
10001632 RAGUINDIN EVA 28,802
4628 RAMIREZ MARVIN 30,000
9344 RAMIREZ ANNABELLE 40,677
1252 RAMIREZ MEDEL 58,869
4472 RAMOLETE AUDI JOHN 32,826
10000047 RAMOS JEYEL 29,978
9656 RAMOS JAIME 31,000
2067 RAMOS REYNOLD 37,175
3288 RAMOS GENARO 45,100
10530 RAMOS SERAFIN 45,250
1944 RAMOS TRISHA 175,000
6244 RAMOS ARMAND 260,081
10000403 RANARIO ELIGIO 29,250
7781 RAQUEDAN LUISA 37,412
3845 RAZO BRIANNE 45,440
9942 REAL RODEL 23,441
10001174 REAL JEAN 31,000
10001205 REALINA TEODORO 26,667
9706 REBELLON RENE REX 33,865
6373 REBONG KENNETH 88,386
10001904 RECIO SHERWIN 45,250
23 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10001364 REGIO JAENA MERIZA 28,500
10050 RELOVA MELISSA EDEN 94,500
1423 REODIQUE DOMINGO 58,740
10000775 RESTAURO RICHARD 254,164
5624 RESURRECCION CATLEYA BLANCA 25,894
5587 REYES JOSE LUIS 21,013
10000712 REYES REINA 21,260
10001390 REYES VIVIAN 21,337
10000746 REYES REYNALDO 21,550
3083 REYES MADELIENE 23,237
10002093 REYES EELAN MARCEL 26,250
10001313 REYES ROCHELLE 30,000
10001108 REYES ROGEL 31,368
2304 REYES JOSEPH 36,357
8083 REYES JHOHARICK 39,018
10002519 REYES MALVIN KIM 45,250
10117 REYES SUSAN 51,100
10034 REYES LEA MARIE 62,265
10001169 REYES ERWIE 77,495
10002836 REYES FRANCIS ARVIN 97,688
8742 REYES CARMEN 100,531
2014 RICARTE WALTER 38,500
10000737 RICO DAVID 30,000
7728 RICOHERMOSO LERMA 94,095
10000046 RIÑON MA. VICTORIA 40,337
10001665 RIVERA ROEL 21,489
4604 RIVERA ROMANO 23,447
10001982 RIVERA CARMENCITA 26,908
4840 RIVERA MA. CRISTINA RIA 30,031
2979 RIVERA SHERYL 37,180
10001186 RIVERA RENEIR 57,083
4767 RIVERA TEODORICO 60,497
9725 ROA CHRISTIE 31,000
10002657 ROBEA ROSALYN MAY 34,744
2872 ROCELES ANNA LIZA 22,725
7009 ROCERO JERONIMO 22,420
10001502 ROCES LOURDES DIANNE 56,438
2215 RODELAS NOEL 43,400
8764 RODRIGUEZ FERNANDO 36,092
5432 RODRIGUEZ ANDREI JAY 45,250
10003194 RODRIGUEZ MARIA CELIA 45,250
2553 RODRIGUEZ ARNEL 62,580
7263 RODRIGUEZ KAREN 86,455
6356 ROMABILES LANA RENEE 42,756
6104 ROMAGOS JOSE 29,633
5451 ROMANO NADJA AVA 39,000
10001624 ROMERO GERFROM 25,480
6817 ROMERO MARIONNE 39,288
6363 ROMERO GREG 58,071
2480 ROMERO MA. AMPARO 87,075
6608 ROMERO GLEN 108,284
10000987 ROMERO JESUS 255,930
10002827 ROQUE JONATHAN 29,360
24 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10002959 ROQUE GLEN 70,163
10001751 ROSALES NELSON 27,247
10002161 ROSALES LYN 200,826
10000854 ROSARIO SHIELA MAE 58,400
2364 ROSELL ROSALYN 30,099
5222 ROSELL EASTER 32,895
10000916 ROSELLO DANTE 42,254
10002540 RUBIO ANINA KRISTINA 45,250
3493 RUFINO LOIDA 27,342
8227 RUIZ MARIA AILEEN 28,648
10000720 RUIZ REYNALEE ANN 30,000
3882 RUZ ARTEMIO 20,573
10003353 SABANG DONNIE-LEE 57,917
6731 SABANTO VINCENT 40,000
8896 SABAY MYLENE 196,315
9694 SABELA MARIE JOY 30,000
10001639 SABILE TERESITA 119,945
10318 SABINORIO FRASCEL 43,750
7644 SABLAYAN HELENE CECILIA 196,767
9197 SADORRA MARIA ANNA PATRICIA 59,040
3596 SAET ALICE 37,026
9439 SAING MARJORY 30,457
10000877 SALAMAT NARCISO 21,830
8133 SALANGA CHRISTIAN ARVIN 20,144
10002584 SALAZAR MARLYN 52,728
10002691 SALENGA RALPH DANNIEL 31,000
4330 SALES CATHERINE 216,129
6846 SALGADO RUEL 37,074
6038 SALUD DEMETRIO 22,545
2834 SALVADOR REYNANTE 27,500
7180 SALVADOR DENNIS GABINO 37,406
10001054 SALVAÑA SHERYLL 41,875
10000061 SALVINO RIZZA 46,347
10000156 SALVOSA FRETZIE 180,680
2908 SAMPUANG NIÑO LITO 34,611
10002536 SAMSON JONATHAN RAMON 39,859
10000199 SAMSON AILEEN 46,247
1122 SAMSON NUMERIANO 47,150
10001922 SAMSON CHRISTOPHER 49,680
7536 SAMSON BERNARD 52,137
8864 SAMSON CATHERINE 63,425
1559 SAMSON GLORIA 73,806
10002029 SAN ANTONIO LOUISE ANTONIETTE 30,000
10001366 SAN DIEGO JOSEPH 48,789
3504 SAN DIEGO ELISA 104,958
4583 SAN GABRIEL ALAN 23,333
3228 SAN JOSE MARJORETTE 174,536
10000260 SAN JUAN MICHELLE MARIE 71,250
1714 SAN MIGUEL LEILANI 51,447
10460 SAN PEDRO ARIEL 34,200
5071 SANDICO JOSEPH RICHARD 34,838
2681 SANTIAGO TEODORA FELICITACION 22,106
2667 SANTIAGO WILMA 78,978
25 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10001427 SANTILLAN PETER JOSEPH 31,363
10001369 SANTOS SHERWIN 24,782
10003289 SANTOS JOHN RICHARD 28,148
9272 SANTOS NICANOR 30,337
9163 SANTOS ELEIN 35,102
5638 SANTOS REYMUNDO 37,500
4711 SANTOS MYLEEN 38,659
5814 SANTOS MERRILYN 38,708
10002391 SANTOS DON NINO 41,047
8047 SANTOS JOHANNA LYNN 46,789
6815 SANTOS ROSEMARIE 47,759
10001116 SANTOS EFREN 66,503
6003 SANTOS MELVIN 69,892
5503 SANTOS MICHAEL MARCEL 85,333
7078 SANTOS JENNIFER JOY 432,897
10001492 SARI DEXTER 45,250
10001538 SARILI ARNEL 31,655
8317 SAWIT SHEILA MARIE 33,226
7064 SELIM JEROME JOHN 36,250
10002317 SERAFICA CONSTANTINE 357,500
8690 SERRANO JENES JAN 43,051
10003124 SERRANO WILBERT 47,623
7277 SEVALLA LIWAYWAY 142,586
7777 SEVERINO ANTONIO LINO 55,601
9019 SEVILLA NOEMI 39,381
1715 SIAO ARTHUR 33,750
10000500 SIASOCO FRIDEL EDWARD 65,180
8850 SIBAL MICHELLE 23,013
10002148 SIGUEZA MA. KRISHNA ESTELLE 29,680
10002338 SILAO EDGARDO 52,844
10002196 SILDA JUHN EVANS 30,000
10002351 SILO MARY JOCY 30,092
6825 SILVA NOELYN 21,803
10001584 SILVA NICO 46,875
10000231 SIMON MICHAEL 24,689
10003382 SIMON JOSE CONRADO 125,000
8217 SINGCA ROGELIO 23,930
3806 SINGH LUZ 52,898
10001974 SINGSON RONNIE 20,000
3712 SINGSON RICHARD 60,000
5443 SINGSON MARIA VIRGINIA 95,000
3360 SINGSON RONALD 101,275
2028 SINLAO MARILYN 45,699
4383 SIONGCO NATHANIEL PASCHAL 49,799
6658 SIOSON MA. CRISTINA 145,432
10001977 SIRUMA AURA 71,892
5847 SISO LANI 29,680
10003183 SISON MARIA LYNDA 67,708
5671 SOLIMAN EDWIN 242,960
10003029 SOLIS MA. TERESA 37,339
10001257 SOLIS MICHAEL 44,290
10001330 SOLUTAN STEPHEN 27,000
10000750 SONZA ROWINA CIELO 23,595
26 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
1518 SONZA MARY ANTONETTE 80,226
9650 SORIANO GEMILE GRACE 30,000
7910 SORRONDA CLIFFORD 41,867
2727 SOSING CECILE 62,983
6195 SOTECO ROSITA 60,833
8591 STA. ANA MYLENE 30,000
10001690 STA. ANA MA. ROWENA 30,363
2286 STA. CATALINA RONALD 42,460
10002985 STO. DOMINGO RACHEL 40,000
6628 SUAREZ MA. CELESTE 43,901
10001926 SUGAROL JELACIO 96,311
6679 SULAIMAN TAJMAHAL 43,750
5689 SULIT WALTER 27,560
10002314 SUMAYAO MARTIN 30,403
10002139 SUMPAICO ANNA MELISSA 29,970
10001441 SUPERABLE KATHLYN KEITH 30,730
7865 SUSULIN GILBERT FRANCIS 41,576
10000790 SY BUENAVENTURA 23,333
7479 SY CHRISTINE 136,540
6163 TABANAO LOEN 55,499
5021 TABAO MARIA KAREN 42,131
8354 TABIGUE RICHARD 26,242
10001314 TABORADA GEROME 32,711
10001627 TABUAC CRISTINA 21,225
10003387 TABUDLONG JR. AUGUSTO 48,000
10002689 TABUG CLARINDA LISETTE 77,000
10001185 TADUYO SHELLA 74,412
10428 TAGUIBAO FERDINAND 25,505
10001489 TALAMAYAN RONDOLF 49,714
6357 TALENTO ALONA 52,030
10000633 TAMAYO LEOMEL RUBY 45,401
8585 TAMESIS GENE VICENTE 77,902
10001321 TAMSE JOHN ANTHONY 126,056
9505 TAN MARY ROSE 23,104
10000719 TAN PETER 28,866
6134 TAN MARY JOY 32,390
8710 TAN AYAN 60,750
9709 TAN MARIE GAY 90,500
10002032 TAN MARIA CATHERINE 101,667
10003037 TAN BRYAN VINCENT 144,930
10002374 TANBAUCO ERIC LEIF 45,250
2888 TANGAPA CHERRYL JOYCE 79,062
5035 TANHUECO MILDRED 55,423
4402 TANHUECO CHRISTOPHER 128,333
9054 TANJUTCO ALDWIN JAYSON 45,464
3955 TANYANG OSCAR 41,250
10000721 TAROY RAUL 333,333
8137 TARROJA REGINALD 101,772
10002397 TARROSA MA. BARBARA 53,388
1373 TENG MA. TERESA 65,150
6361 TIAMBENG SHYDEE 68,740
10000947 TIANCO RODOLFO 75,995
7861 TIANGHA FERDINAND 27,949
27 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
7383 TIANO JENNIFER 51,325
10001995 TIMBANG CLARISA 181,902
4796 TINIO CONRAD 32,329
10001394 TINIO ALBERT RAYMUND 65,846
8279 TITO JHONATHAN 61,250
6364 TIU MARIBETH 103,125
10001162 TOLEDO RENATO 49,337
10001721 TOLENTINO BENJAMIN 20,278
10000066 TOLENTINO MARY ELLEN 36,400
9833 TOLENTINO DIANA 52,845
4435 TOLENTINO VICTOR 92,064
10002511 TOLENTINO JOSE RODELIO 93,408
7688 TOLOSA CRISTINE 68,110
10002608 TORIBIO RUSSEL 25,872
10001370 TORILLO NORMAN 21,279
1967 TORRES ARNOLD 23,437
1827 TORRES VICENTE 38,221
7749 TORRES DIANE JOY 50,597
7857 TORRES MARIA DONAVIE 56,000
9669 TORRES MA. ELENITA 64,375
10000997 TORRES LOUIE 69,810
1940 TRESMANIO JESUS 67,092
10002765 TRIA DOMINIC 170,833
7758 TRINIDAD DONNER 20,000
10002801 TRINIDAD JOSELITO ANDRES 49,820
10001129 TRUJILLO DYNA 59,680
9531 TSANG BRYAN KENNETH 56,867
6682 TUGAOEN SHUYEN PAMELA 103,024
10001444 TULAY JOSE VIRGILIO 22,040
6615 TUMANG ENRIQUE 109,482
8477 TURLA JOVEEN 31,000
1776 TY CHRISTOPHER 97,093
10001927 UBAS YVONNE 25,120
10003255 UDAUNDO MARIA VENESSA 45,250
4437 UMIPIG RONALD 120,000
10002310 UNTALAN ELY CHRISTIANE 22,246
8704 URRIZA THYZA 45,322
10002371 UY CHARLOTTE 32,792
10256 UY KAREN 66,590
10002737 UYAO ALBERT 21,467
4528 UYCHUTIN RONALD 100,000
10001667 VALDERRAMA ALFONSO 23,484
7940 VALDES MARIA VERONICA 29,182
8541 VALDEZ ANNA RICCI 23,208
10000702 VALENCIA SALLY 64,283
8039 VALENZUELA RAMON DONATO 34,500
7787 VALENZUELA MICHELLE 37,674
10002915 VALLADOLID CARLA MARIE 32,292
10001165 VALLEJO OLIVER 38,363
4494 VARIAS HENRY JEFFREY 64,258
10002510 VASQUEZ ARISTOTLE 62,046
5403 VEDUA MARICEL 49,750
4697 VELASQUEZ APRIL ROSE 60,567
28 / 35

GLOBE TELECOM, INC.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
ID No Last Name First Name Amount
10001099 VELINA WILLIE 58,525
6948 VELOSO MA. BETTINA 33,430
4289 VENDIOLA ANNA MA. RITA 23,056
2861 VICERA DAISY 37,220
10001738 VIDAL REYNALDO 119,330
9509 VIERNES MARIO GERMANO 53,531
3238 VILLA LILIAN 34,291
8052 VILLACORTA ABELARDO CARLOS 20,311
9118 VILLAFLORES DINNA PERLIE 43,150
2445 VILLAFUERTE MICHELLE 28,624
6173 VILLAGONZALO CESAR 34,978
10001678 VILLAHERMOSA AILEEN 36,340
3084 VILLALON RODOLFO 33,867
2423 VILLANUEVA MARY CATHERINE 20,833
3724 VILLANUEVA LIEZYL 28,080
10000690 VILLANUEVA JOHN PAUL 31,000
3219 VILLANUEVA CRISTINA 33,934
5328 VILLANUEVA JENNIFER 36,970
7598 VILLANUEVA AURORA 45,000
5486 VILLANUEVA MARIA SUZETTE 60,690
8642 VILLANUEVA LUIS 139,013
9557 VILLARAMA ELAINE 86,250
6162 VILLAROJO HENRY 20,595
3593 VILLAROSA SHIRLEY 40,692
10001005 VILLARUZ KENN JOHN 82,836
5544 VILLASENOR RACHELLE JOANNA 54,933
10001211 VILLAVERDE JULIEN 34,159
1578 VILLENA MA LILIBETH 25,053
2965 VILLETA JONATHAN 32,500
5138 VINALON ROCHELLE 54,906
6152 VINAS ULYSSES 109,653
10002715 VIRAY IRENE 38,876
10001227 VIRTUCIO GILBERT 153,750
9900 VISBAL ROBERT 70,167
10001208 VISITA AARON 75,925
9009 VITUG VICTOR IVAN PABLO 57,141
8527 YANGA MARITONI 20,588
10001622 YASON PAOLO ANTONIO 109,262
3838 YLESCUPIDEZ EDWIN 31,788
10550 YOCOT JUVY 78,953
10000992 YONGCO FRANCISCO 58,473
10003309 YU NIEZA 26,425
10000928 YU NICOLAS 48,623
7474 YUIPCO KARLA 51,725
2616 YUMUL SANDIE 23,333
10001102 ZAFRA ZEL 35,998
10000119 ZALDIVAR MARK PAUL 27,000
10542 ZAMORA MARIA THERESA 60,291
10001704 ZARZA JAY 33,333
Others 3,007,503
TOTAL 81,886,106
29 / 35

INNOVE COMMUNICATIONS, INC
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
Last Name First Name Amount
DE GUZMAN VLADEMIR 33,333.34
Others below 20K 18,281.60
TOTAL 51,614.94
30 / 35

G-Xchange, Inc.
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
Emp No Last Name First Name Amount
700011 SOLIS CLAIRE CECIL 39,518.50
700006 SABANDAL SHEELA 40,251.70
10003221 DUDAS AMABELLE 9,508.75
700005 FRANCISCO KAREN 8,566.25
TOTAL 97,845.20
31 / 35

ENTERTAINMENT GATEWAY GROUP CORPORATION (EGGC)
Schedule B.1 - Hospitalization, Medicines and Others
As of December 31, 2009
LAST NAME FIRST NAME Amount
ANIEVAS RACQUEL 873.00
ANTONIO PRINCESS 10,000.00
ARTAJO JOSEPHINE 196.62
AUMENTADO MARIA RONA 5,992.35
BOGNOT MARK 8,333.32
BUTAWAN KRISTIAN 1,746.00
CAJUCOM MAXIMA 8,333.32
CELINO ROMULO 12,077.31
CRISOLOGO VALERIE KATHY 14,704.50
DAVID MARIA JOHANNA 1,746.00
DE GUZMAN MA. CHARISSE 4,236.64
DOMINGO EDWARD 8,333.32
EDRADA MARK WILSON 873.00
FOJAS IVAN 32.49
JACINTO JOELLE FLORENCE PATRICE -0.02
JAVIER PRINCESS ELAINE C. 8,333.32
MERCADO IVY 190.71
MORADA MARIEJO 8,333.32
OROZCO GENESIS 14,166.82
PEÑA LILIA T. 8,333.32
SALVACION RONALDO 8,333.32
SANTOS SOLIEL 10,079.32
TORRES ANN GENEVI D. 8,246.28
TUAZON RENEE ROSE 208.00
UY STEPHEN 5,000.00
TOTAL 148,702.26
32 / 35

GLOBE TELECOM, INC. AND SUBSIDIARIES
SCHEDULE E - Intangible Assets
As of December 31, 2009
(In Thousand Pesos)
Classification
Balance as of
December 31, 2008
Additions at cost
Charged to
cost and
expenses
Retirements/Disposal
Reclassifications /
Adjustments
Balance as of
December 31, 2009
Cost 6,996,953 99,164 (685,577) 1,049,000 7,459,540
Accumulated amortization (3,985,282) (1,005,834) 211,736 (24,429) (4,803,809)
Total 3,011,671 (906,670) (473,841) 1,024,571 2,655,731
33 / 35

Globe Telecom, Inc.
SCHEDULE F - Long Term Debt
As of December 31, 2009
(in thousand pesos)
Nature of Funded
Obligation
Amount authorized by
indenture
Amount shown under
caption "Current
portion of long-term
debt" in related
balance sheet
Amount shown under
caption "Long-Term
Debt" in related
balance sheet
Rate During the Year
Date of
Maturity
Corporate Notes
Standard Chartered Bank PHP 12,800,000 0 12,800,000 5.62%-7.03% various
FMIC PHP 5,000,000 28,900 4,971,100 5.29% - 8.36%
5/23/2014 and
5/23/2016
Banks
Local
Banco de Oro PHP 4,000,000 0 4,000,000 5.28% - 6.04% 8/9/2013
Citibank PHP 515,000 158,462 0 5.16% - 5.56% 12/22/2010
Development Bank of the Philippines PHP 600,000 184,615 0 5.16% - 5.56% 12/22/2010
Land Bank of the Philippines PHP 500,000 153,846 0 5.16% - 5.56% 12/22/2010
P1B Land Bank of the Philippines PHP 1,000,000 62,500 937,501 5.07% - 5.11% 7/30/2014
Metrobank PHP 7,500,000 2,006,250 5,493,750 5.09% - 6.51% various
Unionbank P3.0B Term Loan PHP 3,000,000 0 3,000,000 5.45% 12/4/2014
Foreign
SCB - $100Mn Nordeutsche Landesbank G $100,000 1,031,667 515,833 1.80% - 2.53% 1/27/2011
DBS Bank Ltd $50,000 464,250 928,500 0.74% - 1.62% 4/15/2012
Nordlandesbank $66M loan $66,000 1,225,620 1,225,620 2.24% - 3.13% 12/24/2011
EDC $50M $50,000 371,400 1,114,200 3.41% 4/28/2012
Retail Bond
PDTC P5.0B Bonds - P1.974B 3yr Fixed PHP 1,974,450 0 1,974,450 7.50% 2/25/2012
PDTC P5.0B Bonds - P3.026B 5yr Fixed PHP 3,025,550 0 3,025,550 8.00% 2/26/2014
Less: Debt Issue Cost (19,545) (178,447)
TOTAL 5,667,965 39,808,057
34 / 35

Globe Telecom, Inc.
SCHEDULE I - Capital Stock
As of December 31, 2009
Class of Stock
Number of Shares
Authorized
No. of shares
allocated to stock
option
Total Issued and
Outstanding
Shares Held by
Majority
Stockholders
Directors, Officers
and Employees
Minority
Stockholders
Number of Shares
Reserved for
Warrants
Common 179,934,373 10,796,062 132,345,595 123,527,329 248,219 8,570,047 0
Preferred (Series "A") 250,000,000 0 158,515,021 158,515,018 3 0 0
35 / 35

GLOBE TELECOM, INC AND SUBSIDIARIES
Globe Telecom Plaza, Pioneer Cor Madison Sts, Mandaluyong City
< nature of dividend declared >
Adjusted Unappropriated Retained Earnings, beginning 12,061,766,123.65
Add: Net income actually earned/realized during the period
Net income during the period closed to Retained Earnings 12,580,624,986.07
Less: Non-actual/unrealized income net of tax
Equity in net share of associate/ joint venture/subsidiaries 222,648,458.28
Unrealized foreign exchange gain - net (375,101,117.87)
Unrealized actuarial gain
Fair value adjustment (mark-to-market) 0.00
Fair value adjustment of Investment Property resulting to gain
Adjustment due to deviation from PFRS/GAAP - gain
(152,452,659.59)
Add: Non-actual losses net of tax
Depreciation on revaluation increment
Adjustment due to deviation from PFRS/GAAP - loss
Loss on fair value adjustment of investment property
0.00
Net income actually earned/realized during the period 12,428,172,326.48
Add (Less):
Dividend declarations during the period (15,087,144,006.00)
Consolidation adjustment on RE 201,766,405.67
Dividends declared by subsidiary in 2008 0.00
Treasury shares 0.00 (14,885,377,600.33)
Total Retained Earnings, end - Available for Dividend 9,604,560,849.81
Retained Earnings Restriction_Conso
As of December 31, 2009

Strengthening Bonds
i

contents
I
II
III
IV
V
VI
VII
OUR COMPANY
MISSION, VISION, CORE VALUES
COMPANY MILESTONES
MESSAGE FROM THE CHAIRPERSONS
MESSAGE FROM THE PRESIDENT AND CEO
OUR CUSTOMERS
OUR BRAND
OUR PRODUCTS AND SERVICES
OUR PRESENCE
OUR PEOPLE
CORPORATE SOCIAL RESPONSIBILITY
01
03
05
07
11
19
23
29
35
41
53
VIII PRIDE AND PERFORMANCE
CORPORATE GOVERNANCE
MANAGEMENT’S DISCUSSION AND ANALYSIS
REPORT OF THE AUDIT COMMITTEE TO THE BOARD OF DIRECTORS
STATEMENT OF MANAGEMENTS’ RESPONSIBILITY FOR FINANCIAL STATEMENTS
INDEPENDENT AUDITORS’ REPORT
59
61
78
84
85
86
About the cover
We live in a connected world, bonded by our
common experiences and shared dreams. These
bonds bring us together, across space and time.
Each passing second, Globe strengthens these
bonds—with every voice heard, with every
message received, with every story shared.

OUR COMPANY
I
One begins, another ends.
One remembers, another regrets.
One man dreams, another awakes.
One man loves, another forgets.
See the ties between one and the other;
see how these bonds gather strength.

OUR COMPANY
Our Mission
Transforming and enriching lives through communications.
Our Vision
Globe is indispensable to people’s lives —
We provide our customers with superior experience.
We are a center of excellence for innovation worldwide.
We create a rewarding environment where people strive for excellence and grow.
We attract people who are innovative, passionate and results-oriented.
We create superior value for our shareholders.
We make great things possible.
Our Core Values
Customer First
Our customers are our greatest passion. We are personally responsible for satisfying and even
exceeding their expectations.
Accountability
We take ownership of and responsibility for our actions, decisions, and their results.
Excellence
We strive to be best in everything we do, in an environment that is nurturing and fulfilling.
We learn and make ourselves better everyday.
Innovation
We relentlessly create and improve products, services and processes for our customers.
Teamwork
We respect each other as individuals. We work as a team and support each other’s goals.
Integrity
We honor our commitments. We are fair, ethical and honest. Ultimately, these are what
count to our Nation and God.
3

OUR COMPANY
Company Milestones
Our steadfast efforts to bring people together using the highest
standards of performance have not escaped the attention of
the most respected institutions in the world, and have brought
your Company acclaim.
Globe has set a benchmark in the Philippine
telecommunications industry with the Metro Ethernet
Forum (MEF) 9 Certification for its Carrier Ethernet
Services. Composed of over 150 of the world’s top
service providers and equipment vendors, the MEF
gives its seal of approval only to those that have put in
place the technical specifications and implementation
agreements conforming to the highest global
standards. MEF certification attests to the Globe brand
of quality.
For All-Around Excellence in Financial Performance,
Management, Corporate Governance, Social
Responsibility, Environmental Responsibility and
Investor Relations, your Company won the The Asset
Platinum Award, one of Asia’s most prestigious
independent research and multimedia firms. This
award is special because it lauds the totality of our
operations; the soundness of our management
practices despite fierce competition; and our social
objectives which are integral parts of our business.
Having met the Quality Management System
standard for its Data Center, Globe received its ISO
9001:2008 certification upgrade. This further assures
enterprise customers that the Globe Data Center
applies duly certified processes in delivering its
highly reliable services.
All these inspire us to outdo ourselves, and we
will continue to do so keeping in mind that our
responsibility is, first and foremost, to our customers.
Metro Ethernet Forum (MEF) 9 Certification for Carrier Ethernet
Services – Iometrix
Platinum Award – The Asset
ISO 9001:2008 Certification Upgrade for the Globe Data Center –
Anglo Japanese American (AJA) Registrars LTD.
CSR Leadership Challenge Award for Enterprise Development –
Management Association of the Philippines
Top 15 publicly listed companies to obtain the highest score in the
Corporate Governance Scorecard – Institute of Corporate Directors
3rd Best Managed Company and Best in Corporate Governance –
Finance Asia Magazine
Best CFO (Philippines) Delfin C. Gonzalez, Jr. –
Finance Asia Magazine
KAPATID AWARDS Outstanding Achievement – Employers Confederation
of the Philippines
Best Practices in the field of social accountability
Citation for strategic visioning and partnering for business
and job survival
Award of Excellence 45th Anvil Awards - PRSP
Globe BridgeCom Enterprise Development Program
Globe Sagot Ka ni Kap!
Globe BridgeCom: From Philanthropy to Sustainability—Transforming
Globe’s CSR
Award of Merit 45th Anvil Awards - PRSP
Globe BridgeCom
Internet-in-Schools Program
Disaster Response Program
Globe: Leading the Industry in CSR and Sustainability Reporting
Globe BridgeCom Entrepreneurship Fair
Globe Kababayan Hatid Saya
Excellence Awards Philippine Quill - IABC Philippines
Globe Bridging Communities Enterprise Development Program
Globe Internet-in-Schools Program
Sagot Ka Ni Kap! Program
Merit Awards Philippine Quill - IABC Philippines
Globe Bridging Communities Program
Disaster Response Program
Globe BridgeCom Employee Volunteerism
From Philanthropy to Globe’s Sustainability Communication Strategy
Globe BridgeCom Entrepreneurship Fair
5

OUR COMPANY
Message from the Chairpersons
We are pleased to report that Globe Telecom has made
important financial and operational gains in 2009, even in
the face of a challenging economic environment.
While the country was fortunate to have escaped a
recession, economic growth was limited. Personal
consumption was weak, even with the sustained growth of
overseas remittances, private sector investments contracted,
and the country’s exports declined until the latter part of the
year. The destruction brought about by typhoons Ondoy
and Pepeng in Metro Manila and Northern Luzon further
exacerbated what were already difficult market conditions.
At the industry level, competition remained intense. Growth
slowed as unique subscriber penetration rates approached
maturity at 80% of population. Pricing and yields trended
downwards given the market’s preference for unlimited and
bucket-priced offers, putting more pressure on operating
margins. The regulatory environment likewise presented
new challenges as operators were mandated to change
load validity periods for prepaid subscribers, while further
regulating value-added services, and driving per-pulse
billing (or charging based on 6-second intervals, instead of
per-minute) as the standard for voice calls.
Working within this economic and regulatory framework,
Globe remained financially resilient and closed the year
with solid results. Consolidated service revenues were level
at P62.4 billion from P62.9 billion in 2008. The explosive
growth of Globe’s broadband business and the continued
double-digit expansion of the Company’s corporate, fixed
line data business offset the softness in the core mobile
business. Net income increased by 11% to P12.6 billion
from P11.3 billion in 2008. These financial results remain
among the strongest in Globe’s earnings history,
second only to 2007 when the Philippine
economy grew at a much faster pace.
Return on equity was at an all-time
high of 26%, up from 21% in 2008 as a
result of higher profits and the capital
management initiatives we started in 2006.
Total shareholder return for the year was at
a robust 30%, driven by a 16% improvement
in share prices and a very competitive dividend
yield of 14%. This was one of the highest
7

OUR COMPANY
dividend yields among telecom companies in the region.
Over P15 billion in dividends were paid out in 2009,
representing 134% of prior year’s net income. This included
special dividends of P6.6 billion as part of our efforts to
optimize Globe’s balance sheet while retaining the flexibility
to pursue attractive growth opportunities. The Board
likewise upgraded the Company’s dividend pay-out policy
starting in 2010, raising the regular pay-out from 75% to a
range of 75% to 90% of prior year’s net income.
Globe’s focus on its customers, its strong brand portfolio,
and its robust financial position enabled it to tackle
operational challenges, while simultaneously allowing the
Company to make investments in new technologies and
2009 2008
Basic Earnings per Share P94.59 P84.75
Fully Diluted Earnings per Share P94.31 P84.61
Dividends per Share P114.00 P125.00
Share Price* P915.00 P760.00
Dividend Yield** 14% 8%
*As of last trading day of the year
**Based on share price at the beginning of the year
capabilities that will form the foundation for its long-term
success. Globe was the first to launch WiMAX (Worldwide
Interoperability for Microwave Access) in the country,
and one of the first in the region to commercially roll out
the service. Globe WiMAX is now available in over 190
towns and cities nationwide, bringing the internet to areas
previously not serviceable by wired broadband offerings.
The Company also continued to expand the coverage of its
3G network to support the growing demand for reliable,
affordable broadband internet service. It also reduced the
costs of prepaid kits to enable the adoption of broadband
solutions by a wider sector of the market, especially among
the digitally attuned youth.
Your Company completed a number of milestone
investments in the past year that have brought it closer
to its goal of providing superior, differentiated network
service. It completed its second international landing
station in North Luzon and started carrying live traffic in
the Tata Global Network-Intra Asia (TGN-IA) submarine
cable system in March, offering clients a geographically
diverse, high-capacity connection to Hong Kong, Japan,
Singapore, Vietnam and the US. Last November, Globe
put into full operation the FOBN 2, its second fiber optic
backbone network. Completed over a two-year period and
built at a cost of around US$70 million, FOBN 2 network
spans over 1,900 kilometers of inland and submarine cable
and covers most areas of Luzon, Visayas, and Mindanao.
This dramatically improves the resiliency of our domestic
transmission system.
Finally, last December, Globe joined a partnership that
includes some of the biggest names in the industry,
including Google, Singtel, KDDI, Telkom Indonesia, and
Bharti Airtel to form the Southeast Asia-Japan Cable
System (SJC). Scheduled for completion in 2012, the SJC
system will initially link Singapore, Hong Kong, Indonesia,
the Philippines, and Japan. It has a design capacity of
17 terabits per second, the highest capacity system built
so far. This puts Globe in a strong position to serve the
connectivity needs of its corporate clients in the BPO
space, while providing retail customers with a better, faster
internet experience.
In the areas of mobile banking and micro-finance,
a partnership was forged among Globe, Bank of the
Philippine Islands (BPI), and Ayala Corporation,
creating BPI Globe BanKO, Inc., the country’s first mobile
microfinance bank. We believe that the combined expertise
of BPI in financial services and Globe through its GCash
8

OUR COMPANY
platform can create innovative financial and communication
products and services for the rural and lower income
sectors. This partnership has the potential to significantly
expand the reach of banking services to a much broader
consumer base, and can positively change the way smallscale
entrepreneurs develop and grow their businesses.
Beyond the direct scope of our business operations, we also
take pride in the developmental role that Globe continues
to play in our community, as it leads and supports various
initiatives that promote education and entrepreneurship,
and others which protect and sustain the environment. We
achieved a major milestone in 2009 as we released our first
CSR and Sustainability Report, using the internationally
recognized Global Reporting Initiative (GRI) standards.
This pioneering report provides a detailed account of
our various CSR programs, with specific focus on their
economic, social, and environmental impact. It underscores
our commitment to build sustainable business models that
contribute to national development, while strengthening
our ability to serve our customers and provide returns in
the capital we deploy.
Globe also launched the Bangon Pinoy program in 2009 in
response to the widespread devastation caused by typhoons
Ondoy and Pepeng and to help our customers, employees,
business partners, and adopted communities rebuild
their homes and lives. Bangon Pinoy is a comprehensive,
integrated effort, combining rebates for our affected
subscribers, community rebuilding activities together with
employee volunteers, and special assistance packages for
our distributors and other local businesses to help them
get back on their feet. The program is built on the values of
hope and perseverance, and on the belief that even in the
toughest of times, we can rely on each other and collectively
rise above the challenges.
We look forward with measured optimism to another year
of fresh opportunities and we reaffirm our commitment to
our mission of transforming and enriching lives through
communications. We will remain focused on enriching
the experience of our customers by driving more product
and service innovations, enhancing our value propositions,
embracing new technologies, and sustaining our state-ofthe-art
infrastructure to help our customers stay connected
– anytime, anywhere. We will also sustain the growth of our
core business while creating new revenue streams, in order
to consistently deliver value to our shareholders.
Finally, we wish to extend our appreciation to our
Board for their unwavering support, our investors for
their trust, our employees and business partners for their
dedication and perseverance, and to our subscribers for
their loyal patronage.
JAIME AUGUSTO ZOBEL DE AYALA
Chairman, Board of Directors
GERARDO C. ABLAZA, JR.
Co-Vice Chairman and
Chairman of the Executive Committee
MARK CHONG CHIN KOK
Co-Vice Chairman
9

OUR COMPANY
Message from the President and CEO
Put customers at the center of what you do—the
customer-centric organization lives and dies by this
dictum. It dedicates itself to delivering the best customer
experience, from service quality to using up-to-date
technology to the brand’s abiding promise of fulfilling the
customer’s expectations. This total customer experience
cannot be delegated solely to the marketing personnel
but must become the core function of the organization,
led by customer-oriented leadership and peopled with
employees who are empowered to deliver the best service.
We in Globe strive to attain this ideal. In 2009, a year
fraught with challenges and intensifying competition,
we demonstrated this commitment clearly to our publics.
We adopted a challenger mindset and dictated the rules
of engagement in spaces that we created and defined.
We viewed all challenges and competition as positive,
value-creating factors that bring out the best in the
organization, enabling us to serve our customers and
stakeholders in ways previously seen as unthinkable.
Given this perspective, your Company withstood the
challenges of a declining global economy with confidence,
well thought-out strategies, innovativeness and teamwork.
As a result, we emerged from this extraordinary year with a
mixed bag of persistent difficulties and banner results while
emerging as a strong challenger and key market player .
Put customers at the
center of what you do—
the customer-centric
organization lives and dies
by this dictum.
11

OUR COMPANY
Competition was particularly intense in the mobile and
broadband markets. The mobile business turned in a weaker
top line as it had to contend not only with fierce competition
but also with increasing subscribers’ preference for value offers
on the back of a weaker comsumer economy.
On the other hand, our broadband and data businesses
continue to outperform the industry with their consistent
double-digit top line growth. The dramatic growth in
broadband take up in the industry, now with 2.5 million
subscribers from barely 350,000 subscribers in 2006, is
foreseen to continue in the next few years.
Operating expenses and subsidy increased by 2% yearon-year
to P26.0 billion from P25.5 billion in 2008 driven
by higher subsidies, rent and services offset by lower
marketing costs and provisions. Network-related charges
such as rent, electricity and fuel charges were higher
compared to last year as a result of expanded 2G, 3G and
broadband networks. Higher costs of contracted services
were due to increases in security charges and costs for
outsourced customer service and logistics functions.
Marketing effectiveness ratio improved, however, with
total marketing and subsidy expenses at 8% of service
revenues compared to the prior year’s 9%.
Fixed line data revenues from the corporate and
enterprise segments were buoyed by the sustained
growth of the outsourcing and offshoring industry, as
well as earlier efforts of your Company to expand the
footprint and increase the capacity of its high speed
data network.
Your company closed the year with net income after tax
of P12.6 billion, up 11% from 2008. Non-recurring gains
and lower taxes helped drive growth in net income. Core
net income, excluding foreign exchange and mark-tomarket
gains and losses as well as non-recurring items,
increased by 2% from P11.8 billion to P12.0 billion.
Given this environment, Globe posted consolidated
service revenues of P62.4 billion in the year just ended
compared with the previous year’s P62.9 billion, with
mobile revenue decline being offset by double-digit
growth in the broadband and fixed line data business.
Mobile Business
The wireless industry’s growth slowed down to 1%
from 6% in 2008 despite SIM penetration approaching
80%, as unlimited and bucket price offers became
market staples. The rising incidence of multi-SIM usage
resulting from SIM prices and attractive intra-network
offers led to elevated churn rates and declining ARPUs
(average revenue per user). Also, the industry took in
new regulatory measures such as the extended validity of
prepaid loads, the shifting from per minute to per pulse
billing, and the amendment of broadcast SMS rules.
12

OUR COMPANY
2009 At a glance
23.2M
mobile subscribers
715,000
broadband
subscribers
18,000
GCash
remittance
network
P62.4B
consolidated service revenues
P12.6B
net income after tax
P36.5B
consolidated
EBITDA
P24.7B
capital expenditures
13

OUR COMPANY
Mobile revenues for 2009 slid to P53.3 billion from
P55.4 billion the previous year, yet our mobile business
maintained high profit margins at 65%.
Our SIM base stood at 23.2 million, 6% lower than the
previous year’s 24.6 million as we deliberately churned
out marginal subscribers, especially among prepaid
subscribers, and recalibrated acquisition drives. With the
adjustments in our acquisition and subscriber retention
programs, and continued clean-up of our SIM base,
gross additions were lower by 5% while churn rates were
higher. Blended net ARPU for the year was at P185, 10%
lower year on year.
Even as consumer spending remained soft, we pursued
multi-pronged efforts to grow and recover revenue
market share for the mobile business. To do so, we
continued to upgrade our network to improve coverage,
quality and reliability. We focused on quality acquisitions
to regrow our subscriber base; unveiled promos to
increase share of wallet; enhanced loyalty programs to
reduce churn; kept a pervasive presence in distribution
channels; and stayed focused on customer service. Each
step of the way, we made sure that we strengthened the
Globe brand and that its image resonated in the minds of
our customers.
solid hold on the youth market. To keep our products
for the youth personable and edgy, we showcased our
products’ capabilities through interactive and groundbreaking
advertising forays that saw customers texting
messages or posting photos displayed on interactive
billboards along EDSA.
We launched various unlimited, fixed rate offers for both
prepaid and postpaid customers, including Super Duo,
a game-changing product which blends mobile and
landline usage seamlessly. For the mass market,
we launched AstigTxt10, the lowest unlimited SMS
offer in the market; SUPER-UNLI which offers
unlimited intra-network calling and texting; and
IMMORTALCALL+, a bucket call and text service
with no expiry period. In 2009, the iPhone 3GS was
introduced and warmly received by our customers. We
also launched the “Worldwidest Campaign” to keep
overseas Filipino communities always close to home
through Globe’s services.
To strengthen our position in the different mobile
market segments, we offered game-changing products
and services that were differentiated by each brand’s
unique proposition. Recognizing the huge demand for
broadband service among the digitally attuned youth,
Globe Tattoo was relaunched last August, giving us a
14

OUR COMPANY
Broadband Business
As more people embraced the digital lifestyle , our
broadband business posted its highest ever jump,
outpacing the market and surpassing projections with
a 376% increase in net subscriber additions across all
products in 2009, bringing our cumulative subscribers to
715,000, triple the previous year’s level of 230,000. Our
challenger mindset clearly put us at the driver’s seat of the
broadband business. We changed the rules of engagement
and undertook aggressive advertising campaigns that
resonated with the youth. As a result, revenues rose 74%
to close the year at P3.3 billion from P1.9 billion in 2008
on the back of strong take up for our nomadic, on-the-go
broadband service which we relaunched as Globe Tattoo.
We reframed competition and pushed the envelope on
innovation, allowing us to lay claim to the digital lifestyle.
By repackaging our USB sticks, adding more functionalities
and giving them edge and attitude, we saw sales soar. To
stay ahead of competition, we offered competitive deals for
our prepaid kits which were well-received by our valueconscious
customers.
To strengthen our foothold in the home broadband market,
we undertook end-to-end improvements from subscriber
acquisition all the way to installation. As a result, we saw a
significant increase in installations and activations. We also
accelerated our 3G and WiMAX network build to capture
growth opportunities and support the exponential growth
in subscribers. Our WiMAX network is now the largest in
Southeast Asia with over 900 sites available in 190 cities and
municipalities nationwide. Sites continue to be upgraded
under high utilization levels. We also invested US$60
million in the new Southeast Asia-Japan Cable system — the
highest capacity cable system in the world to date, where
minimum activation in 2012 will be 40 Gbps from its design
capacity of 17 to 23 Tbps.
We also participated in the Tata Global Network-Intra
Asia Cable System, an alternative access around Asia and
a more direct route to the US. Located outside the Ring of
Fire, it provides us with network diversity and resiliency. At
the same time, our second fiber optic backbone network
(FOBN2), a high capacity transmission system spanning
over 1,900 kilometers of inland and submarine cable,
became operational last November.
Each step of the way,
we made sure that we
strengthened the Globe
brand and that its image
resonated in the minds of
our customers.
15

OUR COMPANY
Fixed Line Business
These investments backed our enterprise business,
which saw a 23% increase in fixed line data revenues
year-on-year to P3 billion. Circuit count was up
33% from last year.
Revenue growth exceeded targets across all product
lines — voice and data, wired and wireless. Growth
and contribution-wise, wireline data services gave the
biggest lift. Demand for data products was fueled by our
customers in the offshoring and outsourcing sectors,
which stayed in growth mode. Demand from banks and
manufacturing industries remained steady, driven by
migration to newer technologies.
We proactively embraced cutting-edge technologies
to trailblaze in the data market. We were able to forge
ahead in the Ethernet space, a position strengthened by
our Metro Ethernet Forum 9 Certification, a first in the
Philippines; and our ISO 9001:2008 certification upgrade
for meeting the Quality Management System standard.
As we invested in additional equipment and increased
our domestic footprint with more high bandwidth,
multiple protocol nodes, we expectedly kept our rank as
the Best Connected ISP in the Philippines.
We went beyond providing mere connections and
offered managed services, which became one of our
strongest growth drivers in 2009. Hand in hand with
this, we embraced a strategy of continuous innovation
and developed end-to-end solutions including managed
telephony and application, and transaction-based mobile
solutions, all characterized by greater flexibility.
Mobile Commerce Business
We did not stop at traditional business models to
connect people. GCash, the flagship product of our
wholly owned subsidiary, G-Xchange, Inc. (GXI), grew
as the electronic currency that allows people to bond
meaningfully. GXI continued to expand its network by
forging several strategic partnerships. These partnerships
included Xoom, MoneyGram, New York Bay Remittance,
Trans-fast, Vodafone Qatar, Belgacom International
Carrier Services, Asiapay, Boku, Multiply, Friendster, and
Delbros, Inc. These are valuable additions to the 60 rural
banking partners serving more communities and microentrepreneurs
using the GCash platform on top of our
other key partners like Villarica, Tambunting, and Prime
Asia pawnshops, SM, and Mercury Drug.
On July 17, your Company acquired a 40% stake in BPI-
Globe BanKO Savings, Inc. BanKO’s main thrust is to
provide a robust platform that will enable microfinance
institutions to expand their reach exponentially. The
vision is to create solutions that lower overall operating
cost structures through a combination of new business
models aided by mobile and related technologies.
16

OUR COMPANY
Looking forward to 2010, customers will benefit from the
approval GXI secured to use your Company’s sub-dealers
as GCash outlets subject to various conditions defined
by the Bangko Sentral ng Pilipinas. This will significantly
expand accessibility for customers by providing 18,000
accredited payout locations nationwide, making GCash
even more accessible to subscribers as it will soon be
available in more loading stations, sari-sari stores,
gift shops, pharmacies, internet cafes, boutiques, food
establishments, photocopying stations, school supply
stores, bakeshops, rice dealers, farm and poultry supply
stores, gas stations, multipurpose cooperatives, cellphone
shops, and various stores across the country.
Robust Financial Position
Despite the challenging year, your Company has
maintained a strong financial position. Our conservative
leverage profiles have well spread-out maturities and
overall gearing levels are within target optimum ratio.
We continue to enhance shareholder value with recently
updated dividend payout policy of distributing 75% to
90% of prior years’ net income. Total shareholder return
was at 30% in 2009 with dividend yield at a highly
competitive 14%.
Globe maintained a healthy balance sheet that is
supported by strong cash flows enabling your Company
to accelerate capital investments needed to sustain
gains in the broadband space, upgrade mobile networks
and complete transmission projects with full year capex
of P24.7 billion.
2010 Outlook
With the world economy gradually recovering and key
local industries back to growth mode, competition is
expected to remain intense and to experience continued
pressures on margins and profitability. On the positive
side, election-related spending and the optimism that
comes with the imminent new government would
likely boost the economy. Remittances from Overseas
Filipino Workers remain robust and the Business Process
Outsourcing/Offshoring sector likewise continues to
expand. For 2010, we will take advantage of our wider
global footprint and innovations to turn around our
mobile competitive position. We would also make use of
our existing platforms to create value-added services that
are relevant to our market.
To retain our competitiveness in the telecommunications
industry, we will continue to accelerate our broadband
capacity-building investments to sustain our market
position, while continuing programs that will push
our mobile business on the growth track. In line with
this, your Company is allocating about US$500 million
in capital expenditures in 2010. This includes US$170
million for the mobile telephony business, and another
17

OUR COMPANY
US$230 million for the broadband business to augment
existing capacities and expand the coverage and footprint
of Globe DSL, WiMAX, and 3G broadband services.
The 2010 capex plan also includes about US$50 million
for the Globe fixed line data networks which primarily
cater to the corporate and enterprise sector and about
US$50 million in additional one-time investments. Going
into 2010, I believe we are now in a better position to
collectively shape and define the future we want for the
Company, coming from the learnings of last year.
We have built a solid foundation to seize opportunities
that will turn our goals to reality, and for this, your
management acknowledges the continuing trust of its
shareholders, the commitment of our fellow employees,
and the support of our business partners and customers.
To make the most results from the groundwork we have
laid down, this year calls for us to transform the way
we do things from being a utility company to a more
service-oriented, customer-focused organization. We
have to create and sustain a culture that truly places our
customers at the heart of our business. By strengthening
the bonds between your Company and our customers,
we hope to make Globe the prefered brand of choice.
ERNEST L. CU
President and Chief Executive Officer
18

OUR CUSTOMERS
II
When you hold nothing in your hand,
but keep everything in mind;
everyone within reach —
I am in yours; you are in mine.

OUR CUSTOMERS
At Globe, our customers are our reason for being.
To the digitally attuned youth, the value-seeker,
a premium subscriber, businesses big and small,
communicating is essential and always with a purpose.
Globe addresses these needs, serving you in more
ways than one.
For the dynamic and youthful set, Globe Tattoo is edgy,
fits your digital lifestyle, and expresses your personality.
If you want the best value for your money, our TM
brand’s lowest cash outlays and all-network offers
continue to be the most competitive in the market.
Globe Prepaid and Postpaid subscribers are constantly
provided with breakthrough service offers that are at the
cutting edge of innovation.
For the most distinctive premium services, Globe
Platinum anticipates and answers your every need.
Wherever you are in the
Philippines, from the largest
cities to faraway islands,
all the way to the capitals
of the world, Globe services
bring you closer to people
and events that matter
most to you.
Micro entrepreneurs turn to us for access to financing,
and families regard us as one of the most effective
channels for sending cash. We have established strong
partnerships to bring customized communication
services to key affinity partners who require such.
Businesses of all sizes rely on us for their varying
communication needs. Our cost-effective solutions
support corporate and small and medium enterprises
across the archipelago, and power the operations of the
largest corporations and enterprises in the land through
Globe Business.
Our customers are everywhere. Wherever you are in the
Philippines, from the largest cities to faraway islands, all
the way to the capitals of the world, Globe services bring
you closer to people and events that matter most to you.
Customers get a feel of our extensive reach domestically
and internationally through our worldwidest services.
We have made it easy and convenient for you to get hold
of our products and services as we enhanced our sales
infrastructure. Our customer-facing units were integrated
to create a single interface for customers, giving rise to
one-stop shops across all distribution channels. Territorial
distributors were appointed for more efficient sales
channel management.
21

OUR CUSTOMERS
This way, you can find our products and services just as
easily while being assured of quality service wherever
you are. Step into a Globe Store, run to the nearest
neighborhood sari-sari store, pass by a trade partner in
your area, or if you are abroad, go to the Globe remittance
partner overseas and find the product and service you need.
But just as we strive to make our products and services
as ubiquitous as possible, we enhanced our after-sales
services to make sure you are well taken care of. Now
we can be reached through chat and email facilities to
complement voice and SMS. New online media channels
such as Twitter and Facebook are now available to help
make your Globe experience seamless and delightful,
encouraging you to stay Globe-connected.
In 2009, we launched Chat Assist, an online customer
service assistance that can be accessed using the Globe
website to provide real time customer service to our
subscribers. A Globe Chat Assist specialist is always
ready to serve customers online so feedback on inquiries
is immediate and concerns are resolved at the soonest
possible time. But should you choose to call us for concerns
on mobile, landline and broadband services, call 730-1000
from your landline or 211 from your mobile phone.
Making the customer experience simple and convenient
is a continuing process. The customer first mindset
throughout the Company is a core value that every
employee lives by. We engage you, our customers, in as
many ways imaginable as we focus on your needs and
desires to communicate with others.
Making the customer
experience simple
and convenient is a
continuing process. The
customer first mindset
throughout the Company
is a core value that every
employee lives by.
22

OUR BRAND
III
It is not the phone but the phone call,
not the free minutes but the shared silences,
not the free text messages but the thought
that flies between absence and presence.
It is not the stars but the reaching.
It is not the dream but the dreaming.

OUR BRAND
In 2009, Globe continued its track record
of innovation and marketing precision to
rise above competition.
It was innovation that enabled Globe to stand out from
the crowd and rise head and shoulders above the rest.
The year began with the commoditization of mobile
telephony, with a slew of bulk offers, unlimited deals,
and value-erosive pricing that characterized the cutthroat
competition of the day.
To stay afloat in the telecom industry’s red ocean, Globe
launched successive waves of high-impact marketing
campaigns which delivered encouraging results. The
broadband business in particular saw tremendous
uptake, with double-digit growth in mobile broadband
that bit off competition’s share. The launch of our
WiMAX service, to date the first and largest WiMAX
network in Southeast Asia, further democratized internet
access, bringing affordable in-home broadband service to
a larger base of Filipinos.
The mobile business held its own as well. Globe sustained
its market leader position in the postpaid segment while
we continue to make headway in the mass market through
our TM brand.
The growth came as a result of a series of hard-hitting
campaigns, kicked off by a game-changing broadband
revamp in the first quarter of the year. In February,
Globe took its nomadic broadband product, Visibility,
and re-christened and re-packaged it as Globe Tattoo
Broadband, an edgy new brand that changed the face
of broadband services. Where previously broadband
advertising had been antiseptic and functional, focusing
more on speed, price, and catering to parents and high
school students, this time Globe Tattoo Broadband
went after a market that value individualism and selfexpression.
Globe introduced a whole new way of looking
at the category - as a badge of personal expression for the
youth subculture. The brand boasted an array of hip USB
designs inspired by tribal prints or tech patterns, offers
hinged on youth passions like gaming, music and fashion,
and tie-ups with hot new movies like “G.I. Joe”. The
tagline “This is my internet” became a personal anthem for
many who felt the brand spoke directly to their hunger for
freedom and individuality.
25

OUR BRAND
Immediately, our Globe Tattoo Broadband user base
followed a hockey stick ascent, and yielded an impressive
gain in market share versus previous periods, even in the
face of massive spending from competition that seemed
determined to outvoice Globe Tattoo by plastering its
own advertising campaigns all over primetime media. But
Globe Tattoo’s creative use of media — a combination
of TV, digital and point of sale merchandising — proved
more efficient, raising the brand’s single-digit top of
mind awareness scores to double-digit levels.
In August, your Company’s prepaid mobile business
followed suit, with the launch of Globe Tattoo, the
new prepaid mobile brand intended for the digitally
attuned youth. With first-of-its-kind immortal offers,
ImmortalTxt and ImmortalCall+, the brand
introduced the concept of prepaid text and call minutes
that would never expire, flying in the face of all
conventional wisdom pertaining to prepaid service. Its
integrated mobile and broadband offers, with a single
SIM to be used for calling, texting and web surfing,
brought new meaning to the buzzword “convergence”.
the first-ever interactive billboards, situated along main
thoroughfares, where users could send text messages or
photos to be posted for everyone to see. The campaign
also used superstar Sarah Geronimo as the new brand
endorser; with her built-in fan base, she was the perfect
choice to represent the new Globe Tattoo, generating
tremendous talk value offline and online.
Globe Tattoo drove signups to an all-time high just
a month into the campaign, with its immortal and
unlimited text offers also performing beautifully.
At the other end of the brand spectrum, the TM brand
strengthened its reputation as the everyday best-value
brand, introducing a series of all-network offers, unlimited
texting deals and the lowest rates.
All this was introduced as “Republika ng TM”, a
new banner that played well into the groundswell of
brotherhood and patriotic emotion that characterized youth
movements in 2009, and which cemented TM as the choice
of the urban and rural mass markets.
Artsy designer SIM cards and partnerships with popular
sportswear, fashion and tech brands added to the mix
of youth-friendly deals. Globe Tattoo also introduced
Perhaps the biggest Globe story of 2009 was the launch
of Duo in April, a world-class breakthrough that truly
broke all communication barriers, with the first-ever
Globe Tattoo was hailed
as the fastest-growing
broadband brand
in the country.
26

OUR BRAND
2-in-1 mobile and landline service that provides
unlimited meter-free calls to landlines and other Duo
users. A boon to the budget-conscious who still wanted
to ride the unlimited wave, Globe Duo helped users save
their hard-earned cash by giving them an easier and
more economical way to stay in touch with other Duo
users and landline users within their local calling area.
With a single handset, a user could have both a mobile
number and a Duo landline number. If the user called
a landline, his phone would switch to the Duo number;
if he called a mobile phone, his phone would use the
mobile number. In like fashion, anyone using a landline
could easily call him on the Duo number, making it a
snap to stay in touch.
Because of the popularity of Duo, a beefed-up offshoot
service, SuperDuo, was launched in October 2009, this
time offering the add-on benefit of unlimited calls to
Globe and TM users nationwide.
arena, Globe introduced new retail products such as
co-branded OFW SIMs, IDD cards, and calling services
with strategic partners in the top OFW destinations.
Globe closed the year on a strong note, fortifying its
worldwidest claim through a 360-degree campaign
featuring child sensation Zaijian Jaranilla, star of a muchloved
local TV program.
For Globe, 2009 was all about looking at things
differently and introducing revolutionary new products,
services and campaigns to delight customers and bring
their communications experience to a whole new level.
Instead of echoing the functional claims of broadband
service providers, Globe re-framed the service by creating
a nomadic broadband brand with a personality that was
irresistible to the youth market. Instead of simply adding
to the “unli” clutter, Globe reinvented the experience by
adding immortality and the never-say-die text and call
offers that consumers had been clamoring for.
Not forgetting its duties to overseas Filipinos and their
families, Globe reinforced its worldwidest stance in
2009, launching a number of promotions as well as
local and foreign partnerships that helped Filipinos stay
connected with ease and economy. A roster of offers
included lower international call rates, an increase in
sales channels, and tie-ups with the Overseas Workers
Welfare Administration (OWWA) and the Department of
Labor and Employment (DOLE) to show the Company’s
support for the OFW community. In the international
In 2009, Globe changed the game, giving subscribers a host
of breakthrough products and services they never knew
they needed, but which they grew to love, and which made
being Globe-connected a singular experience.
27

OUR PRODUCTS AND SERVICES
IV
When no satellite can show you
how close people really are;
when no search engine will ever tell you
what you’ve really found — or what you’ve really lost;
when you stop counting megapixels
and start counting smiles.

OUR PRODUCTS AND SERVICES
Globe strengthens the bonds that bring people
together with products and services that resonate
in their hearts and minds.
Be it voice calling, text messaging or broadband
connectivity at affordable rates and packages suited to
customers’ needs, we provide relevant and easy to use
services that bridge communications and enrich lives
one day at a time.
Innovation and affordability within grasp.
Ever the challenger, Globe changed the rules of the game
and redefined the digital lifestyle when we relaunched
our on-the-go broadband service as Globe Tattoo. We also
added innovative features such as text and call functions
and exciting content like movie clips and games giving our
customers a richer broadband experience.
WiMAX redefined broadband connectivity for our
at-home subscribers. The speed and expanded reach
of WiMAX has become an effective platform for us
to showcase seamless connectivity and the many
ways our subscribers can reach out to others, whether
to communicate to a colleague privately, or to post
messages and photos on interactive billboards for the
world to see. Our customers experienced services that
changed the way they communicate, allowing them to
discover new modes to do things, new opportunities
and new means to stay in touch.
We also made connecting more affordable. We launched
Globe SupertSurf that enabled unlimited browsing
from the Globe mobile phone. We also introduced
SUPER-Unli which offers unlimited intra-network
calling and texting for only P150 for 5 days. We believe
cost should not get in the way of people reaching out
to each other, and it is our job to find ways to make
connecting affordable and easy.
Our OFW customers felt our efforts to strengthen their
bonds with their dependents. We rolled out the tipIDD
card and introduced the IDD Suki offer following the warm
acceptance of the OFW Family Pack. Globe is the only
operator in the country that offers a 3-SIM OFW Family
Pack, one OFW SIM pre-activated for roaming and two
family SIMs. Globe was positioned as an ally of OFWs and
migrants with popular marketing initiatives that brought
together Filipinos abroad. With the OWWA and our partner
telcos abroad, we revived and mounted the OWWA Hatid
Saya programs which celebrated Philippine Independence
Day and fiestas in 12 key countries and cities. In all, the
Company launched 6 new Globe Kababayan retail products
with strategic partners in the top 10 OFW destinations.
31

OUR PRODUCTS AND SERVICES
Business enabler of choice. Our robust network
goes beyond mere connections. To businesses, big and
small, we offered managed services that allowed us
to customize solutions to what our enterprise clients
needed. We adopted a new account engagement
framework that brought us closer and more responsive
to our clients. Coupled with the implementation of
the Globe Sales and Account Management (GSAM)
program our unique engagement framework brings to
fore one-of-a-kind tools such as Business and Technical
Consulting that provided our customers relevant
solutions to real life problems as compared to the
traditional product push that telcos are known for.
Globe Business also introduced the Globe Hosted
Contact Center, an end-to-end hosted service that
offers a highly scalable, multi-channel contact center
solution which enables organizations to communicate
more effectively with their customers. This offered full
features of contact center applications with a robust
capacity platform and a highly secured infrastructure.
Our Managed Voice Solution (MVS) brought a suite of
voice products that accommodates the most complex
requirements of the most demanding corporate
customers. It primarily addressed the international voice
requirements of call centers, BPOs, and MNCs with large
international voice traffic requirements.
In 2009, Globe launched new managed solutions for
large enterprises operating in the Philippines. We
introduced Net Accelerator, a fully-managed wide
area data service that enabled corporations to enjoy
the benefits of a complete Wide Area Network (WAN)
Optimization and Application Acceleration solution
without the high upfront capital expenditure. We also
offered Globe Conferencing, an audio-conferencing
solution that enabled organizers to conduct meetings
with their colleagues and customers from disparate
locations using landline and mobile phones. This allowed
organizers to invite participants to join teleconferences
without the latter incurring NDD or IDD charges as all
costs are billed to the organizer.
As a value-added service for business customers, GPS
Tracker offered a simple and easy to use application that
allowed an enterprise to monitor and locate its valuable
assets. GPS Tracker enjoyed strong customer take-up
and proved its worth to enterprises when it helped
deliver quantifiable business results highlighted by the
successful recovery of a hijacked truck carrying consumer
products worth over P3 million.
For our business users, we launched ONEcall, the
first all-mobile office phone system that combines the
power and functionality of a business trunkline system,
and the freedom of mobile phone telephony. ONEcall
is a specially designed office mobility solution for
corporations and small and medium enterprises (SME),
enabling them to collectively stay connected with just
one landline number. It transforms a Globe mobile
phone into a flexible business phone system —
a virtual trunkline where all the calling extensions or
local numbers are the mobile phones of employees.
32

OUR PRODUCTS AND SERVICES
To keep Filipino entrepreneurs at the cutting edge of
information, we held the Globe Biz Forum, a series
of business advantage seminars tailor fit to the needs
of SMEs, and separately conducted one for corporate
customers. We also worked with Planters Development
Bank in mounting the SME Toolkit Roadshow and the
SME Speaker Series across the nation. We have created a
Globe portal for SMEs, containing links to SME resources
and tools, as well as Masigasig Online, a webpage
dedicated to the Masigasig magazine, our exclusive print
publication designed for SMEs.
The Globe Data Center also
received an ISO 9001:2008
certification upgrade
for meeting the Quality
Management System standard
The solutions Globe provided continue to meet global
standards. We were the first and only company in the
Philippines to receive an MEF (Metro Ethernet Forum)
9 certification, a worldwide assurance of quality. This
certified that our Globe Ethernet Line, Ethernet Virtual
Private Line, and Ethernet LAN Ethernet services
conformed to MEF’s standards. Through Globe Business,
we have been making Carrier Ethernet services available
since 2000, delivering these services through our highspeed
Broadband Access Service network. The Globe
Data Center also received an ISO 9001:2008 certification
upgrade for meeting the Quality Management System
standard. It also achieved an ISO 27001:2005 certification
for having met the Information Security Management
System (ISMS) standard. The Globe Data Center
provides a world-class facility to manage the critical ICT
resources of enterprises which requires the highest level
of security, availability, reliability and redundancy.
Magnifying mobile commerce. In financial
services, G-Xchange, Inc. (GXI), our mobile commerce
subsidiary has been at the forefront of convergence.
Starting with the development of an electronic mobile
money wallet in 2004, GCash, which saw the marriage
of telecommunications and financial services in the
form of a mobile based electronic money wallet, has
now grown into a robust remittance platform. Today
an OFW can send money back to the Philippines from
any of our 826 partner outlets in 32 territories abroad
and can be claimed by beneficiaries in any of our
18,000 payout locations nationwide.
At the payment front, GCash has also gained momentum
as today, peer to peer sending via GCash is the preferred
payment method in sites such as eBay.ph and Multiply
for purchases over the web. To further strengthen our
internet footprint we recently launched an end-to-end
payment and delivery service called GCash Click. This is
the first ever operational service bringing together online
shopping and virtual payments but at the same time
ensuring delivery of goods purchased.
33

OUR PRODUCTS AND SERVICES
In the near term, GCash is set to further solidify its
position as an enabler for the microfinance industry.
2009 marked the five-year partnership between GXI,
the RBAP (Rural Banks Association of the Philippines),
and USAID-MABS (Microenterprise Access to Banking
Services) that have worked together to jumpstart
financial inclusion through Mobile Phone Banking
Services. With 60 partner banks across the country,
mobile banking, powered by GCash, has bridged a
number of communities in the Philippines making
financial transactions secure, faster and easier with
just a text message. This has allowed them to reach
communities, providing mobile banking services
through the GCash platform. RBAP, MABS and
GXI, in turn, have significantly contributed to the
microentrepreneur’s access to financial services. In
partnership with Bank of the Philippine Islands and
Ayala Corporation, Globe recently purchased a 40%
stake in BPI Globe BanKO Savings, Inc. to further test
new business models and related technologies that
could further benefit the microfinance industry.
Platinum customer experience. Select customers
that belong to Globe Platinum, the exclusive membership
for the Company’s premium subscribers, receive the
ultimate premium service experience.
Unlike other telecommunications service providers,
Globe Platinum rewards subscribers based on actual
usage, inclusive of international roaming charges.
This allows more premium reward loyalty options for
Globe Platinum subscribers to choose from. On top
of this, Globe Platinum members enjoy discounts,
perks and privileges from partner establishments,
exclusive invites to special events, free use of handsets
for roaming to US, Canada and Japan, pick-up and
delivery of handsets for repairs and use of emergency
handsets at no charge, automatic roaming to more
than 200 destinations, a special 24-hour dedicated
Globe Platinum hotline, and priority handling at
Globe Stores. Globe Platinum subscribers also have
at their disposal a personal relationship manager for
superior service. Your Company offers the premium
mobile lifestyle through Globe Platinum.
34

OUR PRESENCE
V
It is in the palm of your hand,
the hollow of your pocket;
the space between words,
the time between moments.
It is in a thousand places you’ve never been;
a thousand places you’ll never see —
the one place where you are,
and soon, where you have been.

OUR PRESENCE
GMA
(Greater Manila Area)
North14
Central12
South14
40
Luzon
North
Central
South 1
South 2
10
11
12
8
41
VISAYAS
Eastern10
Central14
West14
38
MINDANAO
North8
South10
18
36

OUR PRESENCE
GLOBE STORES DIRECTORY
GMA REGION
North GMA
Central GMA
ALI MALL CUBAO
Space 35 Ali Mall II
Upper Ground Flr., Araneta
Cubao, Quezon City
912-6193
TRINOMA*
M1 Unit 1034 Trinoma Mall,
EDSA, Quezon City
916-9027 and 29
Fax 916-9028
GATEWAY*
3/F Gateway Mall, Araneta
Center, Cubao, Quezon City
913-5825
QUEZON AVENUE*
Unit 103 -A Ground Floor,
National Bookstore Inc.,
Quezon Ave., Quezon City
374-7453
SM FAIRVIEW*
Unit 2004 2nd level, SM Fairview
Quirino Highway corner Regalado
Avenue, Greater Lagro,
Quezon City
419-6881/936-6331
ROBINSONS GALLERIA*
Unit 440-441 Level 1 East Wing
Robinson's Galleria Mall,
Ortigas St. Quezon City
914-3693
SM NORTH EDSA
4/F Cyberzone, New SM Annex,
SM City North Edsa, Quezon City
501-2157
SM VALENZUELA*
338-339 3rd Flr. SM Valenzuela
Supercenter, Mc Arthur Highway
Valenzuela City
293-1845
Fax 291-0448
SM TAYTAY*
2F Bldg. B SM City Taytay, Manila
East Rd., Taytay, Rizal
286-1944 to 45
SM MARIKINA
Unit 148, 149 Ground Floor
Cyberzone SM City Marikina,
Marcos Highway, Calumpang,
Marikina City
799-6115
UP TECHNO STORE
UP Ayala Land Techno Hub,
Commonwealth Avenue,
Quezon City
508-7350
CALOOCAN
2nd Flr., Victory Central Mall,
Caloocan City
5086148
SM NORTH EDSA
4th floor, Unit 425, New
Cyberzone Bldg, SM Annex
SM City North Edsa, Sto. Cristo,
Quezon City
7386986
GLORIETTA GLOBE STORE
GF Glorietta 3, Ayala
Center, Makati City
757-0525
PARK SQUARE 1*
Park Square 1, South Drive
Ayala Center, Makati City
752-8137
SM MAKATI*
4th level, Concourse Area,
SM Makati Dept. Store, Ayala
Center, Makati City
Telefax 818-3382
GREENBELT 4*
Unit 230-F Level 2, Greenbelt4,
Ayala Center, Makati City
757-0944
TOWER ONE*
G/F Unit C Tower One
and Exchange Plaza
Ayala Avenue, Makati City
759-4132
Fax 759-4128
MARKET MARKET*
Unit 444 & 445
4/F Market Market, Lot C,
Bonifacio Global City,
Taguig, Metro Manila
757-2693
SHANGRI-LA*
Level 1, Shangri-la Plaza,
EDSA cor. Shaw Blvd.,
Mandaluyong City
910-2048
PODIUM HUB*
5th Level The Podium Bldg
ADB Ave., Ortigas Center,
Madaluyong City
914-3842
SM MEGAMALL GLOBE STORE
4F Cyberzone Area,
SM Megamall Bldg. B
Ortigas Center, Pasig City
910-6521
GT PLAZA (PIONEER)
Upper Ground Floor, Globe
Telecom Plaza Tower 1, cor.
Pioneer & Madison Sts.,
Mandaluyong City
7304149/ 7302828/
7390412/ 7304298
Fax 739-8000
South GMA
ALABANG TOWN CENTER
3/F New Wing ATC Alabang,
Muntinlupa City
850-5236
SM MALL OF ASIA*
Unit 202 2nd floor
North Parking Bldg.
Sm Mall of Asia, Pasay city
915-1690
Fax 915-1692
SM SOUTHMALL
2/F Cyberzone, SM Southmall,
Zapote-Alabang Road,
Las Piñas City
805-2979
EASTWOOD MALL
Unit A 414 Level 4 Eastwood Mall
Eastwood City Cyberpark
E. Rodriguez Jr. Ave.
Bagumbayan, Quezon City
901-5877
GREENHILLS HUB*
G/F Greenhills Connecticut
Carpark 1 Bldg.,
Ortigas Avenue, San Juan
744-0866/744-0875
*Globe Stores accepting Globelines Payments
37

OUR PRESENCE
SM SUCAT*
3rd Level, SM SUPERSUCAT
CENTER, Sucat Road,
Paranaque City
820-7734
SM BICUTAN*
Bldg B, Unit 212
2/F SM Bicutan
776-1408
SM MUNTINLUPA
2/F Unit 240 SM Supercenter
Muntinlupa National Rd., Tunasan,
Muntinlupa City
659-2303
ROBINSONS PLACE MANILA*
Space 020 Level 3,
Pedro Gil Wing,
Robinsons Place Manila
400-1430
SM MANILA*
4/Flr Unit 430
SM City Manila, Arroceros St.
corner Marcelino St. and
Concepcion Avenue Manila
522-8894
SM SAN LAZARO*
3rd flr SM San Lazaro, Feliz
Huertas St. corner Lacson St.
Sta. Cruz, Manila
786-2624
BINONDO*
G/F & 2/F Enrique T. Yuchengco
Bldg., 484 Quintin Paredes St.,
Binondo, Manila
245-9046
SM CENTERPOINT
3/F Unit 310 Magsaysay Blvd.
Cor. Araneta Ave.,
Sta. Mesa Manila
713-1606
FESTIVAL MALL
1014 G/F Festival Mall,
Filinvest Corporate City, Alabang
7560350
Fax 7560351
UN AVENUE
G/F Globe Telecom UN Building,
United Nations Avenue,
Ermita, Manila
7597014
Fax 7597015
LUZON REGION
North Luzon
CANDON
KanPing Commercial Bldg.
Maharlika Highway, Bgy. San
Antonio Candon City, Ilocos Sur
(077)742-5565
DAGUPAN*
G/F 127 Nepo Mall Dagupan
Arellano Ave.,
Dagupan, Pangasinan
(075)523-0527
LAOAG
G/F Lazo Bldg.,
Abadilla cor. Bonifacio Sts.,
Bgy. San Lorenzo, Laoag City
(077)770-3895
SAN FERNANDO, LA UNION*
G/F La Union Provincial
Administrative Commercial
Bldg., Quezon Ave.,
2500 San Fernando, La Union
(072)246-3003
SANTIAGO, ISABELA
Unit 7 - VMG Bldg.,
Maharlika Highway, Centro East,
Santiago City, Isabela
(078)682-3844, (078)682-3955
SM BAGUIO*
Unit 349 & 350 - Level 3,
SM City Baguio, Luneta Hill,
Upper Session Road, Baguio City
(074)304-1223
SOLANO
#225 J.P. Rizal Avenue,
Maharlika Highway, Solano,
Nueva Vizcaya 3709
(078)326-7413
TUGUEGARAO
Unit 57-B Chowking Bldg.
Balzain Rd. Tuguegarao City,
Cagayan Valley
(078)844-5528
SM ROSALES
Unit 1102 G/F, SM City Rosales
MacArthur Highway Brgy.,
Carmen East , Rosales, Pangasinan
(075)202-4113 to 115
VIGAN
Collegio Business Center, Mart
1Nueva Segovia St., Vigan City
(077)722-1697
Central Luzon
SM MARILAO*
Unit 219 level 2, SM City Marilao,
Km. 21 Brgy. Ibayo, McArthur
Highway, Bulacan
(044)933-2026
PLARIDEL*
Grid E-F & 1-2 Walter Mart
Supermarket Cagayan Valley Rd.,
Barrio Banga 1, Plaridel, Bulacan
(044)795-3095
SM BALIUAG*
SM City Baliwag Doña Remedios
Trinidad Hiway, Pagala
Baliuag Bulacan
(044)308-0420-21
Fax (044)308-0422
SM CLARK GLOBE STORE
Unit 203-204 2nd Level, SM City
Clark, Clarkfield, Pampanga
(045)449-0034
SM PAMPANGA*
Unit 148 Ground Floor,
SM City Pampanga, Lagundi,
Mexico, Pampanga
(045)875-1741
BALANGA
G/F Recar Commercial Complex
J.P. Rizal St., Balanga City, Bataan
(047)246-8201/(047)237-7747
OLONGAPO GLOBE STORE
1750 Rizal Ave., East Bajac-Bajac,
Olongapo City
(047)304-5074
CABANATUAN*
Ground Level GL-4B NE Pacific
Mall, Km. 111, Maharlika Highway
Cabanatuan City, Nueva Ecija
(044)246-5006
TARLAC*
G/F Metrotown Mall,
Juan Luna St. Cor. McArthur
Highway, Tarlac City
(045)982-4372
MARQUEE MALL
Space 1053, Ground Floor,
Level 1, Angeles City, Pampanga
(045)304-0629
LEMERY
CJ Bldg., Independencia St.,
Lemery, Batangas
(043)409-0073
Fax (043)409-0074
SM BATANGAS
Ground Level, SM City Batangas,
Brgy. Pallocan West, Batangas City
(043)9840211/984-9777
Fax (043)9841067
*Globe Stores accepting Globelines Payments
38

OUR PRESENCE
SM BATANGAS
2nd Level SM City Batangas,
Units 229 & 230, Pastor Village,
Pallocan West, Batangas City
(043)980-5039
SM LIPA
Level II SM City Lipa, Ayala
Highway, Lipa City, Batangas
(043)981-1748/981-6031
Fax (043)981-1749
SM DASMARINAS
2nd Level , SM City Dasmarinas,
Governor’s Drive 1, Barangay
Sampaloc, Dasmarinas, Cavite
(046)973-5555
Fax (046)973-5455
BACOOR
General Tirona Highway, Barangay
Dulong Bayan, Bacoor, Cavite
(046)970-8888
Fax (046)970-1555
MOLINO
2nd Level, SM Supercenter Molino,
Molino IV, Bacoor, Cavite
(046)519-3963
Fax (046)519-3962
GEN. TRIAS
2nd Floor, Trinidad Ybay Building,
National Highway, Brgy. Tejero,
Gen. Trias, Cavite
(046)509-9888
Fax (046)509-1555/
(046)509-9888
South Luzon
CALAMBA*
G/F Calamba Executive Bldg.,
Crossing, Calamba Laguna
(049)420-8249/(049)420-8248
SAN PABLO*
Unit 30 Ultimart Shopping Mall,
M. Paulino St., San Pablo, Laguna
(049)561-2003
SM BACOOR*
3 Level SM Bacoor Aguinaldo
Highway cor. Tirona,
Bacoor, Cavite
(046)970-8134
SM DASMARINAS
GT 2/F Level SM Dasmarinas,
Governors Drive 1, Brgy. Sampaloc,
Dasmarinas, Cavite
(046)973-0376
TAGAYTAY*
K1-K3 Magallanes Square,
Tagaytay City
(046)413-3051
SM STA. ROSA*
Unit 281, 2nd Flr, SM City,
Sta. Rosa, Brgy. Tagapo,
Sta. Rosa City, Laguna
(049)900-1013
LEGASPI
2nd Level Pacific Mall,
Landco Business Park,
Bitano, Legaspi City
(052)480-8134
NAGA*
2/F Unit 212 SM City Naga,
Central Business II,
Brgy. Triangulo, Naga City
(054)811-6169
SM LUCENA*
Unit 343 L3 SM City Lucena,
Dalahican Road cor. Pagbilao Rd.,
Bgy. Ibabang Dupay Red V,
Lucena City
(042)710-3439
PUERTO PRINCESA*
G-7 & M-7, Pacific Plaza Bldg.,
Rizal Avenue,
Puerto Princesa City, Palawan
(048)434-7855
CALAPAN
014 JP Rizal St. San Vicente
Central, Calapan City,
Oriental Mindoro
(043)441-0652
CALAPAN
GF Panaligan Bldg, MH del Pilar
St. cor. Fallarme St. San Vicente
East, Calapan City Or. Mindoro
(043)441-2123
VISAYAS REGION
Eastern Visayas
TAGBILARAN
Digal Bldg., Carlos P.
Garcia Ave., Tagbilaran City
(038)501-7203
(038)501-7201
CALBAYOG*
Unit #2, Crown Bldg.
Magsaysay Blvd.,
Calbayog City, Western Samar
(055)533-9126/(055)533-9128
ISLAND CITY MALL
U/G Island City Mall, Dao District,
Tagbilaran City
(038)501-0028/5017170/5010027
Fax (038)501-0029
TAGBILARAN
5 EB Gallares Bldg., Carlos P.
Garcia Ave., Tabilaran City
(038)501-0777/501-7000/
501-0111
Fax (038)501-7666/501-0090
TUBIGON
Pooc Occidental, Poblacion,
Tubigon, Bohol
(038)508-8001
Fax (038)508-8003
UBAY
N. Reyes St., Poblacion,
Ubay, Bohol
(038)518-0435
Fax (038)518-0435
TACLOBAN
22 P.Burgos St., Tacloban City
(053)4348308
Fax (053)523-1972
ORMOC
MFT Bldg., Real St., Ormoc City
(053)561-8402/561-9801
Fax (053)561-4400
MAASIN
Maasin Port Terminal Commercial
Complex, Demeterio St.,
Agbao, Maasin City
(053)570-8451
Fax (053)570-8452
BORONGAN
2nd Level, Wilsam Uptown Mall,
Borongan, Samar
(055)560-9991
Fax (055)560-9881
POTOTAN
Teresa Magbanua St.,
Pototan, Iloilo
(033)529-8000
Fax (033)529-7703
MANDAUE
2nd Level Fortune Square Bldg.,
M.C. Briones Highway cor. A.S.
Fortuna St., Mandaue City
(032)420-6039
Fax (032)420-6104
*Globe Stores accepting Globelines Payments
39

OUR PRESENCE
TOLEDO
G/F Unit 14 Toledo Commercial
Village, Reclamation Area,
Poblacion, Toledo City,
(032)467-8607
Fax (032)467-8501
DUMAGUETE
GF Sol y Mar Bldg., Cor. Rizal Blvd.
& San Juan Sts., Dumaguete City
(035)422-9284
ROXAS CITY
Area #9 Gaisano Arcade Arnaldo
Boulevard, Roxas City
(036)522-2082
Central Visayas
CEBU AYALA CENTER
3rd level Expansion Bldg.,
Ayala Center Cebu, Cebu City
(032)412-2215/(032)412-2216
ILIGAN*
3/F Gaisano Mall, Roxas Ave.,
Villa Verde, Iligan City
(063)492-2093
OZAMIZ
B-5 G/F Gaisano Ozamis City
Mall, corner Rizal Ave. & Zamora
Extension, Ozamiz City,
Misamis Occidental
(088)521-4054
GENERAL SANTOS*
201, 2/F KCC Mall of Gensan,
J. Catololico Ave.,
General Santos City
(083)553-1303
DAVAO
3rd Floor NCCC Mall, McArthur
Highway, Matina, Davao
(082)320-0030/321-0500
Fax (082)321-0500
TANJAY
Kyle’s foodshoppe,
Magallanes St.,Tanjay City
(035415-8080
Fax (035)415-8098
Western Visayas
ROBINSONS BACOLOD*
3rd Level, Robinsons Place,
Mandalagan, Bacolod City
(034)709-7600
SM BACOLOD*
Unit 115 Southwing SM City,
Poblacion Reclamation Area,
Bacolod City
(034)707-1100/(034)707-9595
SM ILOILO
Level 2 SM City Iloilo, B. Aquino
Ave. Mandurriao, Iloilo City 5000
(033)509-6777
SM DELGADO
Ground Floor, SM Delgado cor.
Valeria & Delgado Sts. Iloilo City
(033) 08-7605
KALIBO, AKLAN*
Unit 3, Waldolf Bldg.,
Kalibo Aklan
(036)500-7243
SM CEBU
Cyberzone 2nd Level, SM
City Cebu Northwing, North
Reclamation Area, Cebu City
(032)412-9957 (032)412-9435
DUMAGUETE
G/F Sol Y Mar Bldg; San Juan st.
corner Rizal Avenue,
Dumaguete City
(035)422-0105
MINDANAO REGION
North Mindanao
BUTUAN*
3rd level Gaisano Mall,
J.C. Aquino Avenue, Butuan City
(085)300-0300
SM CAGAYAN DE ORO*
Unit 313, 3rd level SM City-CDO,
Gran Via St. corner Mastersons
Ave. Cagayan De Oro City 9000
(088)859-1150
CDO LIMKETKAI*
Unit M2-101 Limketkai Mall,
Entrance 2, Lapasan Highway,
Cagayan De Oro
(088)856-6750
South Mindanao
SM DAVAO*
3rd Level, SM City Davao, Ecoland
Subd., Quimpo Blvd., Davao City
(082)297-7727
DAVAO VP
2/F Victoria Plaza, J.P. Laurel Ave.,
Bajada, Davao City
(082)300-3666
DAVAO GAISANO MALL
3rd Level Gaisano Mall,
JP Laurel Avenue, Davao City
(082)221-6283
COTABATO CITY*
BPI Bldg. Makakua St.,
Cotabato City
(064)482-0000
TAGUM
GF NCCC Mall,
National Highway, Tagum City
(084)400-4362
ZAMBOANGA
Door 2 & 3, ARV Bldg.,
San Jose Road, Zamboanga City
(062)992-1015
*Globe Stores accepting Globelines Payments
40

OUR PEOPLE
VI
Hold together now.
Hold fast, keep still,
keep them close at hand —
the big things, the little things,
the things that hold them together.
Hold it, pass it, forward it, reply to all.
See it gain speed.
See it gather strength.
Strong bonds building stronger bonds.

OUR PEOPLE
At Globe, we recognize the vital role we play in other
people’s lives. That’s why we are always challenging the
status quo in order to find better, more effective ways
of reaching and touching our customers. Our people
embrace the soul of change and live by the spirit of selfimprovement
to deliver superior service in all circumstances.
Organizational streamlining for increased
customer focus. In 2009, we integrated our mobile
telephony and broadband customer-facing units. This reorganization
underscored our desire to comprehensively
address our customers’ communication needs. Be it for
voice or data connectivity, text messaging or internet
access — we strive to know and understand our
customers intimately to please them fully.
With current mobile telecommunications market
saturation vis-à-vis the rapid ascent of broadband
demand, the reorganization could not have been timed
more perfectly. It paves a promising path for synergy and
learning by weighing in the strengths and pitfalls of both
business propositions. Importantly, it drives our people to
be even more attuned to the pulse of the market.
Globe constantly reviews the way we operate. We look
for opportunities to streamline operations, maximize
resources, and capitalize on core competencies with the
end goal of operating our business more efficiently and
cost-effectively. Thus, we outsourced certain functions
and processes that allowed us to rapidly respond to
customer needs and gave us access to service innovations
in the thriving BPO industry. Deriving saving in the
long run is but secondary to the primary objective of the
streamlining — ultimately serving our customers better.
In 2009, we took deliberate steps to organize ourselves
around the customer, instituting structural changes to
engage the customer more.
Fostering an environment that encourages
continuous learning. As a dynamic organization,
we provide our employees with a variety of learning
opportunities that broaden their knowledge and
maximize their skills and competencies. Our talent
philosophy is key to enabling high and consistent
performance among our employees.
Through a blend of formal training programs, exposure
to cross-functional project teams, lunch-and-learn
and brown bag cascade sessions, and interactive CEO
and peer-to-peer conversations, our people learn and
discover from each other, enabling stronger and tighter
collaboration towards delivering results. Close to 400
training, mentoring and coaching programs were
implemented in 2009 which involved more than half of
our workforce in fundamental and highly specialized
learning events and skills upgrades conducted within and
outside of Globe. 2009 also saw the birth of the Globe
Trainer Management Program (GTMP), which developed
in-house trainers, coaches and mentors involved in
facilitating various programs in different learning fields.
43

OUR PEOPLE
We are committed to harnessing the full potential
of our employees. Our people strategy of empowering,
engaging, and energizing our talents allows us to transform
their capabilities into significant contributions that enrich
and transform the lives of the people around us.
Our leaders always strive to be at the top of their game.
To remain at the cutting edge of innovation, our leaders
are always eager to learn new strategies, approaches and
best practices. To prepare for even bigger challenges, our
senior leaders underwent intensive training programs
within the broad SingTel and Ayala communities to share
best management practices and leverage on strategic
partnerships and alliances. Through the international
learning and sharing opportunities among SingTel group
affiliates, our executives were better tooled to more
effectively manage the business and our people. These
activities also gave them the opportunity to share their
thought leadership in an international setting.
We empower our people to proactively manage their
careers and pursue opportunities consistent with their
aspirations. In 2009, we cemented our learning and
talent management philosophies through programs that
empowered our employees to own their development.
This also strengthened communication and performance
conversations between people managers and their direct
reports, building more proactive rapport between them
as they leveraged synergy to creatively and effectively
perform their respective functions.
A culture of excellence. As we nurture a
pronounced culture of excellence in the company, we
also continue to strengthen our rewards, benefits and
recognition systems for each and every Globe employee.
In 2009, we started building towards enhancing Globe’s
employer value proposition that will strategically define
the total experience of working in Globe as one that
enables a person’s success. This included leadership
visibility programs which launched our CEO’s “Talk To
Me” blog, interactive line to management events such as
Kapihan and Merienda open dialogue sessions, themed
townhalls, and special employee offers and privileges in
Globe and the Ayala Group of Companies. Employee
recognition programs like the Globe Excellence Awards
further promoted internal pride and encouraged excellence.
We also fortified our focus on our people as our primary
customers and brand ambassadors with the launch of
the Customer First Circle (CFC) Program, which looked
at organization-wide process improvements and system
enhancements. More than 10% of our employees
underwent training and certification programs leading
to 52 CFC projects completed wich are expected to
generate close to P800 million worth of savings on the first
implementation cycle.
Our people strategy of
empowering, engaging,
and energizing our talents
allows us to transform their
capabilities into significant
contributions that enrich and
transform the lives of the
people around us.
44

OUR PEOPLE
Bangon Pinoy. As a testament to our commitment
to public service, we launched Bangon Pinoy when
typhoons Ondoy and Pepeng hit Luzon. This large scale
integrated program that intertwined volunteerism,
disaster responsiveness, with service recovery and
corporate social responsibility captured our commitment
to keep people connected at the most critical moments,
showcasing our customer focus and responsiveness
at all times. We quickly mobilized our resources and
manpower for this purpose to help people quickly
connect with those that matter in their lives. We invested
in the timely repair of our mobile and broadband
networks, and provided rebates, payment reprieves, and
flexible connection options for our affected subscribers.
Bangon Pinoy embodied our commitment to strengthen
our relationships with our stakeholders. To help our
retailers, sub-dealers and distributors to recover losses,
Globe provided special assistance packages such as free
replacement Retailer SIMs and handsets and new SIM
stocks for selling to replace those that were lost in the
floods. Distributors got discounts on their stock orders,
which were extended down the line to their sub-dealers
and retailers.
and partnered with local government units and church
groups to offer free calls, free internet and free phone
charging. Our corporate social responsibility program,
Globe Bridging Communities, has provided relief
packages to 17,000 families.
Innovating to make a difference in the lives
of others. Innovation is second nature to our people.
Unleashing the power of technology to stir community
participation and bring relief where it was needed,
Globe launched a social media campaign to raise funds
for typhoon victims through Twitter. The Philippine
National Red Cross was also our beneficiaries when we
channeled donations to their cause through our text
messaging service. By enabling these platforms, we made
a difference in the lives of many.
Volunteerism as a way of life. A deep sense
of community is ingrained in our people, for whom
volunteerism is a way of life. Among the many
substantive opportunities to provide volunteer work, our
Globe volunteers distributed farm implements in Globe-
Gawad Kalinga Bayan Anihan, built a school building
and provided furniture and books to schools in Baguio,
45

THE BOAR
Moving as one for the benefit of all
OUR PEOPLE
Jaime Augusto Zobel de Ayala. Chairman of the Board
since 1997 and has been a Director since 1989. Chairman of the Board
of Directors and Chief Executive Officer of Ayala Corporation. Chairman
of the Board of Directors of Bank of the Philippine Islands and Integrated
Micro-Electronics, Inc., Azalea Technology Investment, Inc., World Wildlife
Fund Philippine Advisory Council, and AI North America. Vice Chairman of
Ayala Land, Inc. and Manila Water Co., Inc., and Asia Society Philippines
Foundation, Inc.; Co-Vice Chairman of Mermac, Inc., Ayala Foundation,
Inc., and Makati Business Club; Director of BPI PHILAM Life Assurance
Corporation, Alabang Commercial Corporation, Ayala Hotels, Inc. member
of JP Morgan International Council, Mitsubishi Corporation International
Advisory Committee, Toshiba International Advisory Group, Harvard University
Asia Center Advisory Committee, Harvard Business School Asia-Pacific
Advisory Board, The Asia Society, The Singapore Management University,
The Conference Board, Pacific Basin Economic Council, Children’s Hour
Philippines, Inc., Asian Institute of Management and Philippine Economic
Society; Board of Trustee of Ramon Magsaysay Awards Foundation national
council member of the World Wildlife Fund (US). TOYM (Ten Outstanding
Young Men) Awardee in 1999, Management Man of the Year in 2006
by the Management Association of the Philippines. Recognized as the
Emerging Markets CEO of the Year (1998); Harvard Business School Alumni
Achievement Awardee (2007); Presidential Medal of Merit (2009); and
Outstanding Manilan (2009).
Gerardo C. Ablaza, Jr. Director since 1998. Senior managing
director of Ayala Corporation. Co-Vice Chairman of the Board of Directors
Globe Telecom, Inc. and a board director of Bank of the Philippine Islands,
BPI Family Savings Bank, BPI Card Finance Corporation, Azalea Technology
Investments, Inc. and Asiacom Philippines, Inc., Manila Water Company,
Integrated Microelectronic Inc. Chief Executive Officer of AC Capital with
directorship positions in HRMall Holdings Limited, LiveIT Investments Limited,
Integreon, Inc., Affinity Express Holdings Limited, NewBridge International
Investments Ltd., Stream Global Services., RETC Renewable Energy Test
Center. Former president and Chief Executive Officer of Globe Telecom, Inc.
46

DROOMOUR PEOPLE
Former vice-president and country business manager for the Philippines
and Guam of Citibank, N.A. Former vice-president for consumer banking of
Citibank, N.A. Singapore. In 2004, CNBC as the Asia Business Leader of the
Year, Telecom Asia as the Best Asian Telecom CEO in 2004.
Mark Chong Chin Kok. Executive Vice President (Networks)
of the SingTel Singapore Telco. Director of International Cableship Pte Ltd,
OpenNet Pte Ltd. Southern Cross Cables Holdings Limited, Cable Management
Limited, SCCL Australia Limited, SCCL Fiji Limited and SCCL New Zealand.
Senior Fellow of the Singapore Computer Society.
Romeo L. Bernardo. Director since 2001. President of Lazaro
Bernardo Tiu & Associates, Inc., serves as the Global Source economist in the
Philippines. Currently sits on the Board of Directors of Bank of the Philippine
Islands, RFM Corporation, Philippine Investment Management (PHINMA), Inc.,
Ayala Life Assurance Inc./Ayala Plans, Inc., National Reinsurance Corporation
of the Philippines, Aboitiz Power and the Philippine Institute for Development
Studies. Chairman of the ALFM Peso, Dollar and Euro Bond Funds and the
Philippine Stock Index Fund.Former Undersecretary of Finance of the Republic
of the Philippines and was Executive Director at the Asian Development Bank.
He was also an Advisor at the World Bank and the IMF (Washington D.C.)
and served as Deputy Chief of the Philippine Delegation to the GATT (WTO),
Geneva. Currently does World Bank and Asian Development Bank-funded policy
advisory work. He was formerly the President of the Philippine Economics
Society and Chairman of the Federation of ASEAN Economic Societies.
Ernest L. Cu. Currently the President and Chief Executive Officer of
Globe Telecom. Served as Director since 2009. Director of Systems Technology
Institute, Inc., Rockwell Residential Condominium, ATR KimEng Capital
Partners, Inc., ATR KimEng Financial Corporation, Game Services Group, Encash
and a Trustee for De La Salle College of St. Benilde. Former President and Chief
Executive Officer of SPI Technologies, Inc. Served as Director of Digital Media
Exchange, Inc. and a Trustee of the International School Manila.
47

OUR PEOPLE
Roberto F. de Ocampo. Director since 2003. President of Philam
Asset Management, Inc. Funds, and the Chairman of DFNN International,
Eastbay Resorts,Inc., Stradcom Corporation and Stradcom International
Holdings, Inc., Tollways Association of the Philippines, MoneyTree Publishing
Corporation and Centennial Asia Advisors Pte. Ltd. Vice Chairman of
Seaboard Eastern Insurance Company, Universal LRT Corporation, Ltd.,
Tranzen Group and a Member of the Board of Trustees of Montalban
Methane Power Corporation, Agus 3 Hydro Power Corporation and La Costa
Development Corporation. Member of the Board of Directors of Bacnotan
Consolidated, Benlife-PNB Life Insurance, Philippine Phosphate Fertilizer
Corp., Thunderbird Resorts, AB Capital and Investment Corporation, Alaska
Milk, Bankard, EEI Corporation, House of Investments, PSi Technologies,
Rizal Commercial Banking Corporation, Robinsons Land Corporation, Salcon
Power and United Overseas Bank. He is Board of Advisers of ARGOSY Fund,
Inc., NAVIS Capital Partners and AES Corporation (Philippines) member
of the Board of Trustees of Asian Institute of Management and Angeles
University Foundation. Founding Director of the Centennial Group Policy &
Strategic Advisors (Washington, DC) Chairman of the RFO Center for Public
Finance and Regional Economic Cooperation (an ADB Regional Knowledge
Hub), Public Finance Institute of the Philippines and the British Alumni
Association. Former Secretary of Finance of the Republic of the Philippines;
Former Chairman and Chief Executive Officer of the Development Bank of the
Philippines; Recipient of Finance Minister of the Year, Philippine Legion of
Honor, Chevalier of the Legion of Honor of France, ADFIAP Man of the Year,
Ten Outstanding Young Men Award (TOYM), several Who’s Who Awards, and
the 2006 Asian HRD Award for Outstanding Contribution to Society.
Koh Kah Sek. Director since 2006. Group Treasurer of SingTel.
Formerly with Far East Organisation – Yeo Hiap Seng Limited as Vice
President (Finance) responsible for the financial functions of the Singapore
and US operations. Prior to joining Far East Organisation, she had spent a
number of years in PricewaterhouseCoopers and Goldman Sachs.
Delfin L. Lazaro. Director since January 1997. Member of the
Management Committee of Ayala Corporation. Chairman of Philwater
Holdings Company, Inc., Atlas Fertilizer & Chemicals Inc., Chairman and
President of Michigan Power, Inc., Purefoods International, Ltd. and A.C.S.T.
Business Holdings, Inc.; President of Azalea Technology Investments, Inc.;
Director of Ayala Land, Inc., Integrated Micro-Electronics, Inc., Manila Water
Co., Inc., Ayala DBS Holdings, Inc., AYC Holdings, Ltd., Ayala International
Holdings, Ltd., Bestfull Holdings Limited, AG Holdings, AI North America, Inc.,
Probe Productions, Inc. and Empire Insurance Company; Trustee of Insular Life
Assurance Co., Ltd. Management Man of the Year 1999 by the Management
Association of the Philippines
48

OUR PEOPLE
Xavier P. Loinaz. Independent Director since 2009. Formerly
President of the Bank of the Philippine Islands (BPI). Independent Director of
BPI, BPI Capital Corporation, BPI Direct Savings Bank, Inc., BPI/MS Insurance
Corporation, BPI Family Savings Bank, Inc. and Ayala Corporation; Vice
Chairman of the Board of Directorsof FGU Insurance Corporation; and
Member of the Board of Trustees of BPI Foundation, Inc, E. Zobel
Foundation and is Chairman of the Board of Directors of Alay Kapwa
Kilusan Pangkalusugan.
Guillermo D. Luchangco. Independent Director since 2001.
Chairman and Chief Executive Officer of ICCP Group, including Investment
& Capital Corporation of the Philippines, Cebu Light Industrial Park, Inc.,
Pueblo de Oro Development Corp., Regatta Properties, Inc, and RFM-Science
Park of the Philippines, Inc.; Chairman and President of Beacon Property
Ventures, Inc. and Manila Exposition Complex, Inc; Chairman of ICCP Venture
Partners, Inc. and Director of Bacnotan Consolidated Industries, Inc., Phinma
Property Holdings Corp., Roxas & Co., Inc., Ionics, Inc., Ionics EMS, Inc., and
Science Park of the Philippines, Inc.
Fernando Zobel de Ayala. Director since 1995. Vice
Chairman, President and Chief Operating Officer of Ayala Corporation.
Chairman of Ayala Land, Inc., Manila Water Co., Inc., Ayala Automotive
Holdings, Inc., Ayala DBS Holdings, Inc. and Alabang Commercial Corporation;
Vice Chairman of Aurora Properties, Inc., Azalea Tehnology Investments, Inc.,
Ceci Realty, Inc. and Vesta Property Holdings, Inc.; Co-Vice Chairman of Ayala
Foundation, Inc. and Mermac, Inc.; Director of Bank of the Philippine Islands,
Integrated Micro-Electronics, Inc., Asiacom Philippines, Inc., Ayala Hotels,
Inc., AC International Finance Limited, Ayala International Pte, Ltd., and
Caritas Manila; and Member of INSEAD, East Asia Council; World Economic
Forum, Habitat for Humanity International Asia-Pacific Steering Committee.
Trustee of the International Council of Shopping Centers.
49

OUR PEOPLE
SENIOR EXECUTIVE GROUP
Ferdinand M.
de la Cruz
Head, Consumer
Sales and After Sales
Susan Rivera-
Manalo
Head, Human
Resources
Carmencita T. Orlina
Head, Consumer
Marketing
Rodell A. Garcia
Chief Technical
Officer
Delfin C. Gonzalez, Jr.
Chief Financial Officer
50

OUR PEOPLE
Greg L. Romero
Head, Information
Systems
Caridad D. Gonzales
Corporate Secretary and
Head, Corporate and
Regulatory Affairs
Rebecca V. Eclipse
Head, Office of
Strategy Management
Gil B. Genio
President, Innove
Communications and
Head, Business CFU
51

OUR PEOPLE
KEY CONSULTANTS AND
INTERNAL AUDIT
Rodolfo A. Salalima
Chief Legal Counsel
Catherine Hufana-Ang
Head, Internal Audit
Lee Han Kheng
Chief Operating Adviser
52

CORPORATE SOCIAL RESPONSIBILITY
VII
Thought into word, word into action.
Change your mind, change your profile, change the world.
Make a statement, make a stand, make a difference.

CORPORATE SOCIAL RESPONSIBILITY
We give back to the community that sustains us.
We live in a connected world, where communities
share common dreams for a bright future and a
sustainable environment.
For this reason, Globe regards corporate social
responsibility as an integral part of its business, not
divorced from its operations. As we exercise good
corporate citizenship, we also remain true to form
by using our inherent strengths in information and
communications technology to define our outreach
programs in various communities.
Our CSR philosophy comes alive in Globe Bridging
Communities (Globe BridgeCom), which embodies
our collective aspiration to contribute to national
development and to give back to the community
that sustains us. Globe BridgeCom focuses on the
areas where challenges are most pressing: education,
entrepreneurship, environment, and volunteerism.
Education
By utilizing mobile and broadband technologies, Globe
continues to enable public school students and teachers
nationwide to gain more knowledge. Internet in Schools
Program (ISP) is one of Globe BridgeCom’s major
education programs wherein public schools are given free
Internet access for one year via Globe Broadband. ISP
has brought internet connectivity to almost 2,000 schools
nationwide since 2001. Globe also pioneered the use of
the latest information technologies, such as WiMAX in
the public education system. ISP encourages teachers
and students to use the internet as an integral tool for
learning. We also continued our partnerships with GILAS
(Gearing Up Internet Literacy and Access for Students) and
GEM-USAID (Growth with Equity in Mindanao US Agency
for International Development) through Computer Literacy
and Internet Connection Project for public high schools in
ARMM (Autonomous Region of Muslim Mindanao) and
CAAM (Conflict Affected Areas in Mindanao). Moreover,
by donating internet access subscriptions to a number
of institutions, we have helped empower young Filipino
learners to develop their technology skills, and to be able to
compete in the global economy.
55

CORPORATE SOCIAL RESPONSIBILITY
To complement ISP, Globe launched the Global Filipino
Teachers (GFT) program to enhance the information
and communications technology (ICT) competencies of
teachers so they will be able to integrate ICT-based teaching
strategies in classroom instruction. Launched in September
2009, the GFT program is part of our effort to make ICT
more pervasive in public schools all over the country.
Through GFT, public high school teachers are equipped
with the tools to make them more globally competitive. In
addition, the training program can also be credited as three
units of a Masters Program should the teacher want to
pursue higher education.
Another program, Text2Teach brought educational
content to public elementary schools anywhere in the
country through educational videos in science, math,
english, and values, downloaded through a text message.
Text2Teach proved that multi-media assisted learning
is an effective teaching aid, firing up the imagination
of pupils with informative videos, and boosting their
knowledge gains. Today, close to one million students
from 331 public elementary schools in Quezon City,
Manila, Isabela, Ilocos Sur, Batangas, Calapan, Oriental
Mindoro, Antique, Cagayan de Oro City, Maguindanao,
Cotabato City, North and South Cotabato, Sharif
Kabunsuan, Isabela, Cagayan Valley, Ilocos Sur, Benguet
and Pangasinan benefit from Text2Teach. The program
is made possible in partnership with Nokia, Ayala
Foundation and the Southeast Asian Ministers of
Education Organization (SEAMEO)-INNOTECH.
Globe continues to deliver community development
projects to as many stakeholders as possible with the
vision of becoming the leader in ICT for education.
Entrepreneurship
Our enterprise development program provided
capability-building assistance to barangays where Globe
cell sites are located. The entrepreneurship program
covers leadership and livelihood training for more
than 15,000 barangay leaders and microentrepreneurs,
cooperatives, microfinance institutions, youth groups and
families of overseas Filipino workers from almost 2,600
barangays. This program incorporated Globe products
and services to enable the growth or expansion of the
participants’ micro enterprises. By making enterprise
skills development available in far flung areas, Globe
democratized entrepreneurship to those who need
it most – small entrepreneurs in the countryside. It
forged partnerships with the private sector to develop
community-based tourism, and helped barangays
manufacture, package and market local goods. Since
2005, this project has already reached 75 of the country’s
80 provinces. Globe believes that the marginalized sector
of our society has an equal stake in national growth
and development.
56

CORPORATE SOCIAL RESPONSIBILITY
Globe BridgeCom
Beneficiaries and support
1,618
Public Schools
3,388
Barangays
15,645
Micro-Entrepreneurs
over one million
Public School Students
1,220
Public School Teachers
41,615
Volunteer Hours
2,410
Youth Leaders
457
PCs donated
4,121
Volunteers
206
Non Government
Organization
Partners
57

CORPORATE SOCIAL RESPONSIBILITY
Environment
An important pillar of Globe’s business strategy is its
commitment to sustainable business practices and
environmental protection throughout its operations.
In 2009, Globe made significant progress with
environmental initiatives through a comprehensive
baseline assessment of its environmental performance.
Globe implemented its first greenhouse gas accounting
activity that identified and tracked key performance
indicators on energy efficiency. Globe acknowledged the
threat of climate change and resolved to help mitigate
the impact of increased carbon dioxide emissions from its
operations. It began implementing renewable energies,
such as wind and solar power, in applicable infrastructure
such as cell sites. To date, Globe has 32 cell sites running
on solar energy and 3 with wind power. The Company
also continued to study and apply the use of renewable
energy to as many sites as possible. Globe continuously
applies environment-friendly end-of-life management
on lead-acid batteries that are generated that are use in
its telecom operations.
Employee Volunteerism
Globe believes in the power of human potential, and on
countless occassions, many employees have selflessly
volunteered their time, treasure, and talent to help
disadvantaged communities around the Philippines.
Through Globe BridgeCom’s Employee Volunteerism
program, employee volunteers are able to bring
meaningful change to communities they touched. In
the past 5 years, various programs attracted more than
4,000 employee volunteers which generated over 41,000
volunteer hours. Among many employee engagement
activities, volunteerism always carries a strong following
in Globe. For instance, about one-fourth of total Globe
employees volunteered their personal time to work on
Gawad Kalinga (GK) projects. This further enriched the
Company’s long standing partnership with GK.
During typhoon Ondoy, more than 600 employee
volunteers distributed relief goods to over 12,000 families
in devastated areas like Marikina, Rizal, Muntinlupa,
and Laguna.
58

PRIDE AND PERFORMANCE
VIII
See the ties between one and another;
see these bonds gather strength —
holding on to the stars,
holding on to your dreams.
One begins, another follows.
One man dreams, another believes.

PRIDE AND PERFORMANCE
CORPORATE GOVERNANCE
We strive to adhere to the highest standards of ethics
and governance in all that we do. Globe recognizes
the importance of good governance in realizing its
vision, carrying out its mission, and living out its
values to create and sustain increased value for all
its stakeholders. The impact of global conditions and
challenges further underscores the need to uphold the
Company’s high standards of corporate governance to
strengthen its structures and processes.
As strong advocates of accountability, transparency
and integrity in all aspects of the business, the
Board of Directors (“Board”), management, officers,
and employees of Globe commit themselves to the
principles and best practices of governance in the
attainment of its corporate goals.
The basic mechanisms for corporate governance are
principally contained in the Company’s Articles of
Incorporation and By-Laws. These documents lay
down, among others, the basic structure of governance,
minimum qualifications of directors, and the principal
duties of the Board and officers of the Company.
The Company’s Manual of Corporate Governance
supplements and complements the Articles of
Incorporation and By-Laws by setting forth the
principles of good and transparent governance. In
2009, the Company commissioned a review of the
manual to update and improve it. This review was
completed in February 2010 and new provisions have
been incorporated in the manual.
The Company has likewise adopted a Code of
Conduct, Conflict of Interest, and a Whistleblower
Policy for its employees, and has existing formal
policies concerning Unethical, Corrupt and Other
Prohibited Practices covering both its employees
and the members of the Board. These policies serve
as guide to matters involving work performance,
dealings with employees, customers and suppliers,
handling of assets, records and information, avoidance
of conflict of interest situations and corrupt practices,
as well as the reporting and handling of complaints
from whistleblowers, including reports of fraudulent
reporting practices.
61

PRIDE AND PERFORMANCE
Moreover, the Company adopted an expanded
corporate governance approach in managing business
risks. An Enterprise Risk Management Policy was
developed to provide a better understanding of the
different risks that could threaten the achievement of
the Company’s vision, mission, strategies and goals.
The policy also highlights the vital role that each
individual plays in the organization – from the Senior
Executive Group (SEG) to the staff – in managing
risks and in ensuring that the Company’s business
objectives are attained.
New initiatives are regularly pursued to develop
and adopt corporate governance best practices,
and to build the right corporate culture across the
organization. In 2009, Globe participated in various
activities of the Institute of Corporate Directors
(ICD) and the Philippine Securities and Exchange
Commission (SEC) to improve corporate governance
practices and refine the corporate governance selfrating
system and scorecard used by publicly listed
companies to assure good corporate governance.
The following sections summarize the key corporate
governance structures, processes and practices adopted
by Globe.
Board of Directors
Key Roles
The Board of Directors is the supreme authority
in matters of governance. The Board establishes
the vision, mission, and strategic direction of the
Company, monitors over-all corporate performance,
and protects the long-term interests of the various
stakeholders by ensuring transparency, accountability,
and fairness. The Board has oversight reponsibility
for risk management function while ensuring the
adequacy of internal control mechanisms, reliability
of financial reporting, and compliance with applicable
laws and regulations.
In addition, certain matters are reserved specifically
for the Board’s disposition, including the approval
of corporate operating and capital budgets, major
acquisitions and disposals of assets, major investments,
and changes in authority and approval limits.
Board Composition
The Board is composed of eleven (11) members,
elected by stockholders entitled to vote during the
Annual Stockholders Meeting (ASM). The Board
members hold office for one year and until their
successors are elected and qualified in accordance with
the By-laws of the Company.
62

PRIDE AND PERFORMANCE
The roles of the Chairman of the Board and the Chief
Executive Officer (CEO) are clearly delineated and are
held by two individuals to ensure balance of power
and authority and to promote independent decisionmaking.
Of the eleven members of the Board, only the
President & CEO is an executive director; the rest are
non-executive directors who are not involved in the
day-to-day management of the business.
The Board includes two independent directors of
the caliber necessary to effectively weigh in on
Board discussions and decisions. Globe defines an
independent director as a person who is independent
from management and free from any business or other
relationship which could materially interfere with his
exercise of independent judgment in carrying out his
responsibilities as a director.
All board members have the expertise, professional
experience, and background that allow for a thorough
examination and deliberation of the various issues and
matters affecting the Company. The members of the
Board have likewise attended trainings on corporate
governance prior to assuming office.
In accordance with the SEC Memorandum No. 16
Series of 2002, the qualifications of all board nominees
are reviewed by the Nominations Committee, which is
chaired by an independent director. The profiles of the
directors are found in the “Board of Directors” section
of this Annual Report.
As of December 31, 2009, the Board is comprised of the following members:
Jaime Augusto Zobel de Ayala*
Gerardo C. Ablaza, Jr.
Mark Chong Chin Kok
Romeo L. Bernardo
Ernest L. Cu
Roberto F. de Ocampo
Koh Kah Sek
Delfin L. Lazaro
Xavier P. Loinaz
Guillermo D. Luchangco
Fernando Zobel de Ayala*
Position
Chairman
Co-Vice Chairman
Co-Vice Chairman
Director
Director
Director
Director
Director
Director
Director
Director
Nature of Appointment
Non-executive
Non-executive
Non-executive
Non-executive
Executive
Non-executive
Non-executive
Non-executive
Non-executive/Independent
Non-executive/Independent
Non-executive
*Jaime Augusto Zobel de Ayala and Fernando Zobel de Ayala are brothers.
63

PRIDE AND PERFORMANCE
Board Remuneration
In accordance with the Company’s By-Laws, the Board
members receive stock options and remuneration in the
form of a specific sum for attendance at each regular or
special meeting of the Board. A per diem of P100,000
per Board or committee meeting was agreed and
approved by the shareholders during the ASM held last
April 1, 2003. The remuneration is intended to provide a
reasonable compensation to the directors in recognition
of their responsibilities and the potential liability they
assume as a consequence of the high standard of best
practices required of the Board as a body and of the
directors individually, under the SEC-promulgated Code
of Corporate Governance. Also, the level of per diem is
in line with standards currently practiced among publicly
listed companies similar to Globe.
Board Performance
Directors attend regular meetings of the Board, which
are normally held on a monthly basis, as well as
special meetings of the Board, and the ASM. A director
must have attended at least 50% of all meetings held
in a year in order to be qualified for re-election in the
following year.
The Board met eleven (11) times in 2009, including
the ASM. The attendance of the individual directors at
these meetings is duly recorded, as follows:
The Board met eleven (11) times in 2009, including the Annual Stockholders’ Meeting (ASM).
The attendance of the individual directors at these meetings is duly recorded, as follows:
Regular & Special
Meetings
2009 2008
ASM
Regular & Special
Meetings
Present Absent Present Absent Present Absent Present Absent
Jaime Augusto Zobel de Ayala 8 2 1 0 8 2 1 0
Gerardo C. Ablaza, Jr. 9 1 1 0 9 1 1 0
Mark Chong Chin Kok* 3 0 - - - - - -
Chang York Chye* 7 0 1 0 7 3 1 0
Romeo L. Bernardo 10 0 1 0 10 0 1 0
Ernest L. Cu** 10 0 1 0 - - - -
Roberto F. de Ocampo 9 1 1 0 8 2 1 0
Koh Kah Sek 9 1 1 0 8 2 1 0
Delfin L. Lazaro 10 0 1 0 9 1 1 0
Xavier P. Loinaz 8 2 1 0 8 2 1 0
Guillermo D. Luchangco 9 1 1 0 10 0 1 0
Jesus P. Tambunting** 3 0 1 0 8 2 1 0
Fernando Zobel de Ayala 7 3 1 0 7 3 1 0
*Mark Chong Chin Kok was appointed Director and Co-Vice Chairman in place of Chang York Chye at the 6 October 2009 Board Meeting.
**Ernest L. Cu was appointed Director while Ambassador Jesus P. Tambunting did not stand for re-election at the 2 April 2009 ASM.
ASM
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PRIDE AND PERFORMANCE
The average attendance rate of members of the Board
was at 91% for 2009 and 85% for 2008. All directors
have individually complied with the SEC’s minimum
attendance requirement of 50%.
Prior to the Board meetings, all of the directors are
provided with board papers which include reports on
the Company’s strategic, operational, and financial
performance and other regulatory matters. The Board
also has access to the Corporate Secretary who, among
other functions, oversees the flow of information to the
Board prior to the meetings and who serves as adviser to
the directors on their responsibilities and obligations. The
members of the Board also have access to management
should they need to clarify matters concerning items
submitted for their consideration.
The Board conducts an annual self-assessment to ensure
the continuing effectiveness of its processes and to identify
areas for improvement. During the last meeting of every
year, the Board meets in executive session to evaluate and
discuss various matters concerning the Board, including
that of its own performance and that of the Company’s
management team.
Board Committees
To further support the Board in the performance of its
functions and to aid in good governance, the Board has
established five (5) committees. The role and function of
each Board Committee is described in detail below.
Executive Committee
The Executive Committee (ExCom) is comprised of five
(5) members appointed by the Board. At least three of
the ExCom members are members of the Board. The
ExCom acts by majority vote and in accordance with the
authority granted by the Board. All actions of the ExCom
are reported to the Board at the meeting following such
action and are subject to ratification or revision and
alteration by the Board.
Audit Committee
The Audit Committee’s roles and responsibilities are
clearly defined in the Audit Committee Charter approved
by the Board. The Committee supports the corporate
governance process of the Company by fulfilling its
oversight responsibility relating to a) the integrity of the
financial statements and the financial reporting process;
b) internal controls and financial reporting principles,
policies, and systems; c) the qualifications, independence
and remuneration of the independent auditors; d)
internal audit function and independent auditors’
performance; and e) compliance with legal, regulatory,
and corporate governance requirements. Management
however has the primary responsibility for the financial
statements and the reporting process, including the
system of internal controls and risk management.
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PRIDE AND PERFORMANCE
The Committee is composed of three members, at least
one of whom is an independent director. An independent
director chairs the Audit Committee. All members of the
Audit Committee are appointed by the Board.
The Committee conducts tenders for independent
audit services, reviews audit fees, and recommends the
appointment and fees of the independent auditors to the
Board. The Board, in turn, submits the appointment of
the independent auditors and their fees for approval of
the shareholders at the ASM. The amount of audit fees is
disclosed in this Annual Report.
The Audit Committee also approves the work plan of the
Globe Internal Audit Group, as well as the overall scope and
work plan of the independent auditors.
The Audit Committee meets at least once every quarter
and invites non-members, including the President &
CEO, Chief Finance Officer, independent and internal
auditors, and other key persons involved in company
governance, to attend meetings where necessary. During
these meetings:
• The Committee reviews the financial statements and
all related disclosures and reports certified by the Chief
Finance Officer, and released to the public and/or
submitted to the Philippine SEC for compliance with
both the internal financial management handbook and
pertinent accounting standards, including regulatory
requirements. The Committee, after its review of the
quarterly unaudited and annual audited consolidated
financial statements of Globe Telecom, Inc. and
Subsidiaries, endorses these to the Board for approval.
• The Committee meets with the internal and
independent auditors, and discusses the results of their
audits, ensuring that management is taking appropriate
corrective actions in a timely manner, including
addressing internal controls and compliance issues.
• The Committee reviews the performance and
recommends the appointment, retention or
discharge of the independent auditors, including the
fixing of their remuneration, to the full Board. On
an annual basis, the Committee also assesses the
independent auditor’s qualifications, skills, resources,
effectiveness and independence. The Committee also
reviews and approves the proportion of audit and
non-audit work both in relation to their significance
to the auditor and in relation to the Company’s total
expenditure on consultancy, to ensure that non-audit
work will not be in conflict with the audit functions
of the independent auditor.
• The Committee reviews the plans, activities, staffing,
and organizational structure and assesses the
effectiveness of the internal audit function, including
conformance with the International Standards
for the Professional Practice of Internal Auditing
(ISPPIA).
• The Committee provides oversight of the financial
reporting and operational risks, specifically on
financial statements, internal controls, legal or
regulatory compliance, corporate governance, risk
management and fraud risks. The Committee also
reviews the results of management’s annual risk
assessment exercise.
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PRIDE AND PERFORMANCE
The Audit Committee reports after each meeting and
provides a copy of the minutes of its meetings to the
full Board.
To ensure compliance with regulatory requirements and
assess the appropriateness of the existing Charter for
enabling good corporate governance, the Committee also
reviews and assesses the adequacy of its Charter annually,
seeking Board approval for any amendments.
The Committee conducts an annual assessment of its
performance to benchmark its practices against the
expectations set out in the approved Charter, and to
ensure that it continues to fulfill its responsibilities in
accordance with global best practices and in compliance
with the Manual of Corporate Governance and other
relevant regulatory requirements. The results of the selfassessment
and any ensuing action plans formulated to
improve the Committee’s performance are reported to
the Board.
Compensation Committee
The Compensation Committee’s roles and
responsibilities are clearly defined in the Compensation
Committee Charter approved by the Board. The
Committee is composed of four (4) members, one of
whom is an independent director. All members of the
Compensation Committee are appointed by the Board.
The Committee is tasked to review the compensation
philosophy and structure of the Company and the
reasonableness of its compensation and incentive plans
and structures. The Committee also reviews and approves
the Company’s annual compensation plan and annual
incentive plan. In reviewing the plans, the Committee
considers relevant industry and multi-industry
benchmarks in order to assess the reasonableness of
management’s recommendations. The compensation
plan also includes retention structures for key positions.
The Compensation Committee usually meets at least
twice a year, or more often as required.
The Stock Options Committee is a sub-committee of the
Compensation Committee and has two (2) members. The
Stock Options Committee considers the framework for the
award of stock options to managers and executives, to the
directors, and to certain key consultants.
Nominations Committee
The Nominations Committee’s roles and responsibilities
are clearly defined in the Nominations Committee
Charter approved by the Board. The Committee
is composed of three (3) members, including one
independent director. An independent director chairs the
Committee. All members of the Nominations Committee
are appointed by the Board.
The Nominations Committee reviews the qualifications
of the members of the Board to ensure that they have
all the qualifications and none of the disqualifications
stated in the By-Laws and the Manual of Corporate
Governance of the Company. The Committee also
reviews the qualifications of candidates for the SEG —
consisting of the President & CEO and his direct reports
— and endorses them to the Board.
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PRIDE AND PERFORMANCE
The Committee meets at least once in the first quarter of
the year to review the qualifications and attendance of the
nominees to the Board prior to the list of nominees being
submitted to the stockholders at the ASM. Thereafter, it
meets as often as required to review specific nominations of
key hires and promotions to key positions as they come up
in the ordinary course of business.
Finance Committee
The Finance Committee is responsible for reviewing and
evaluating the financial affairs of the Company, including
conducting an annual review of all financial activities during
the immediately preceding year prior to each ASM. The
Committee is composed of three (3) members. All members
of the Finance Committee are appointed by the Board.
Management
The President & CEO, guided by the Company’s vision,
mission, and values statements, is accountable to the Board
for the development and recommendation of strategies,
and the execution of the defined strategic imperatives. The
President & CEO is assisted by the heads of each of the
major business units and support groups.
The members of each Board committee are set forth below:
Executive Committee Audit Committee Compensation Committee Nominations Committee Finance Committee
Gerardo C. Ablaza, Jr.* Xavier P. Loinaz* Gerardo C. Ablaza, Jr.* Guillermo D. Luchangco* Delfin L. Lazaro*
Mark Chong Chin Kok Romeo L. Bernardo Guillermo D. Luchangco Gerardo C. Ablaza, Jr. Koh Kah Sek
Ernest L. Cu Koh Kah Sek Mark Chong Chin Kok Mark Chong Chin Kok Delfin C. Gonzalez, Jr.
Ferdinand M. de la Cruz
Ernest L. Cu
*Chairman
At the October 6, 2009 Board meeting, Mr. Mark Chong Chin Kok was also appointed member of the Executive Committee, Nomination Committee and Compensation Committee in place of Mr. Chang York Chye.
Mr. Ernest L. Cu and Mr. Ferdinand M. de la Cruz were appointed members of the Executive Committee during the organizational meeting of the newly elected Board of Directors right after the 2 April 2009 ASM.
68
In 2009 the Executive Committee met seven (7) times, the Audit Committee met five (5) times, the Compensation Committee met
three (3) times, the Nominations and Finance Committees met twice (2). The attendance of the members of these committees is duly
recorded, as follows:
Executive
Committee
Audit
Committee
Compensation
Committee
Nominations
Committee
Finance
Committee
Present Absent Present Absent Present Absent Present Absent Present Absent
Gerardo C. Ablaza, Jr. 7 0 - - 3 0 2 0 - -
Chang York Chye 5 0 4 0 2 0 2 0 - -
Mark Chong Chin Kok 2 0 - - 1 0 - - - -
Guillermo D. Luchangco - - - - 3 0 2 0 - -
Gil B. Genio 2 0 - - - - - - - -
Ernest L. Cu 5 0 - - 3 0 - - - -
Ferdinand M. de la Cruz 5 0 - - - - - - - -
Jesus P. Tambunting - - 1 0 - - - - - -
Xavier P. Loinaz - - 4 0 - - - - - -
Romeo L. Bernardo - - 4 0 - - - - - -
Delfin L. Lazaro 2 0 - - - - - - 2 0
Koh Kah Sek - - 1 0 - - - - 2 0
Delfin C. Gonzalez, Jr. - - - - - - - - 2 0
Ms. Koh Kah Sek replaced Mr. Chang York Chye in the Audit Committee at the 6 October 2009 Board meeting.
Mr. Ferdinand M. de la Cruz replaced Mr. Gil B. Genio in the Executive Committee at the 2 April 2009 ASM.
Mr. Xavier P. Loinaz replaced Mr. Jesus P. Tambunting in the Audit Committee at the 2 April 2009 ASM.

PRIDE AND PERFORMANCE
The Office of Strategy Management (OSM) reports to the
President & CEO and oversees the Company’s strategy
management processes from strategy formulation,
translation to executable plans, horizontal alignment of
business objectives across the organization, to execution
and performance tracking linked to the Company’s
rewards system.
Every year, the Company reviews and formulates its
strategic priorities which then guide the formulation of
the key business strategies and goals for the year. Using
the balanced scorecard framework, each business group
identifies financial and non-financial objectives, and sets
targets and initiatives to achieve them. This is captured
in what is called the groups’ Terms of Reference (TOR).
To ensure line of sight, the group TORs are cascaded to
all employees, making sure that everyone understands
and appreciates their contribution to the group goals.
This helps in developing individual performance plans
that are aligned with the key strategies. Rewards and
incentives are given based on the achievement of the
committed group and individual targets.
Key programs, projects, and major organizational
initiatives are taken up at the SEG, composed of the
President and CEO, as well as the heads of each of the
major business units and support groups. All budgets
and major capital expenditures must be approved by the
SEG prior to endorsement to the Board for approval. The
Chief Operating Adviser and Chief Legal Adviser also
provide inputs to the SEG as required. The SEG meets at
least once a week.
Management is mandated to provide complete and accurate
information on the operations and affairs of the Company
in a timely manner. Management is also required to prepare
financial statements for each preceding financial year in
accordance with Philippine Financial Reporting Standards
(PFRS). Management’s statement of responsibility with
regards to the Company’s financial statements is included in
this annual report.
The annual compensation of the ten (10) top officers
of the Company, including the President & CEO, is
disclosed in the Definitive Information Statement
distributed to the shareholders. The total annual
compensation includes the basic salary, guaranteed
bonuses, fixed allowances, and variable pay
(performance-based annual incentive).
Recognition for Excellence in
Corporate Governance
The efforts of Globe in instituting good governance
practices were cited among Asia’s best at the 5th
Corporate Governance Asia Recognition Awards in Hong
Kong. This is the third citation for corporate governance
that Ayala and its companies received in 2009, following
top rankings in a separate poll by Finance Asia and the
Institute of Corporate Directors’ Corporate Governance
Scorecard Project.
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PRIDE AND PERFORMANCE
We were also featured for our internal audit practices
in the Asian Confederation of Institutes of Internal
Auditors (ACIIA) publication entitled “Governance,
Risk Management and Control: Internal Audit Leading
Practices, Case Studies in Asia.”
Enterprise Risk Management
Cognizant of the dynamism of the business and the
industry and in line with its goal to continuously enhance
value for its stakeholders, Globe Telecom has put in
place a robust risk management approach that is fully
integrated in its strategy planning, execution and day to
day operations.
Risk Management Approach
As part of its strategy management calendar, senior
management and key leaders regularly conduct
an enterprise–wide assessment of risks focused on
identifying the key risks that could threaten the
achievement of Globe’s business objectives, both at the
corporate and business unit level, as well as specific plans
to mitigate or manage such risks.
Risks are prioritized, depending on their impact to the
overall business and the effectiveness by which these
are managed. Risk mitigation strategies are developed,
updated and continuously reviewed for effectiveness, and
are also monitored through various control mechanisms.
Globe employs a two-dimensional view of risk
monitoring. Senior Management’s scorecard includes
the status of risk mitigation plans as they relate to the
attainment of a particular business objective. Enterprise
Risk Owners, on the other hand, regularly monitor and
report the status of the approved mitigation plans meant
to address the key risks.
Annually, Globe conducts an Enterprise Risk
Management Performance Evaluation which serves as a
basis for continuously improving our Risk Management
processes and capabilities.
Roles and Responsibilities
The Board of Directors, supported by the Executive
Committee (Excom) and Audit Committee, has an
oversight role over the Company’s risk management
activities and approves Globe’s risk management policies.
The Excom covers specific non-financial (e.g., strategic,
operational, human capital, regulatory) risks, while
the Audit Committee provides oversight of financial
reporting risks.
The Chief Financial Officer supports the President,
as the overall risk executive, in overseeing the risk
management activities of the Company, ensuring that
the responsibilities for managing specific risks are clear,
the level of risk accepted by the Company is appropriate,
and that an effective control environment exists for the
Company as a whole.
Risk Owners at the senior executive level have been
identified and made accountable for managing specific
risks, supported by business process owners who have
been designated, trained, and made responsible for the
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PRIDE AND PERFORMANCE
particular process or activity from which the risk arises.
This is consistent with management’s belief that risks are
best understood and managed by the employees who are
closest to the process.
The Enterprise Risk Management unit, under the Office
of Strategy Management, facilitates the enterprise risk
management activities, bringing these closer to and
more aligned with the Company’s strategic planning and
execution framework. This also supports the integration
of enterprise risk management with the Company’s
scorecard processes and more tightly link risk mitigation
efforts with its day-to-day operations.
Audit and Internal Controls
Internal Audit
It is the policy of Globe Telecom to establish and support
an Internal Audit function as a fundamental part of its
corporate governance practices. Internal audit is a service,
providing an independent, objective assurance and
consulting function within Globe Telecom, and sharing the
organization’s common goal of creating and enhancing
value for its stakeholders, through a systematic approach
in evaluating the effectiveness of the Company’s risk
management, internal control and governance processes.
The Audit Committee regards its relationship with
Globe Internal Audit having a vital role in supporting the
Committee in the effective discharge of its oversight role
and responsibilities.
The Internal Audit Group performs its auditing functions
faithfully by maintaining independence from management
and controlling shareholders as it reports functionally to the
Board, through the Audit Committee, and administratively,
to the President & CEO.
The Internal Audit Group maintains, reviews and
assesses the adequacy of its Charter annually to
ensure compliance with regulatory requirements and
appropriateness for enabling good corporate governance.
Any amendments to the Charter are submitted for Audit
Committee and Board approval.
Globe Internal Audit adopts a risk-based audit approach
in developing its annual work plan, re-assessed
quarterly to consider emerging risks and the changing
dynamics of the telecommunications industry. The Audit
Committee reviews and approves the annual work plan
and all deviations therefrom, and ensures that internal
audit examinations cover at least the evaluation of
adequacy and effectiveness of controls encompassing the
Company’s governance, operations, information systems,
reliability and integrity of financial and operational
information, effectiveness and efficiency of operations,
safeguarding of assets, and compliance with laws, rules,
and regulations. The Audit Committee also ensures that
audit resources are reasonably allocated to and focused
on the areas of highest risk.
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PRIDE AND PERFORMANCE
The Committee meets with the internal auditors, and
discusses the results of their audits, ensuring that
management is taking appropriate corrective actions in
a timely manner, including addressing internal controls
and compliance issues. The Committee also receives
periodic reports on the status of internal audit activities,
key performance indicators’ accomplishments, and quality
assurance and improvement programs.
Globe Internal Audit governs its activities in conformance
with the International Standards for the Professional
Practice of Internal Auditing (the “Standards”), the Institute
of Internal Auditor’s Code of Ethics, and the Company’s
Code of Conduct. In 2007, the group subjected its activities
to an external Quality Assurance Review (QAR) which
resulted to a “Generally Conforms” rating, the highest
rating that can be achieved in the QAR process, confirming
that internal audit activities are conducted in conformance
with the Standards.
In 2009, Globe was featured in the first project of the
Asian Confederation of IIA (ACIIA) entitled “Governance,
Risk Management and Control: Internal Audit Leading
Practices, Case Studies in Asia”, the first book published
by ACIIA (a confederation of 14 IIA affiliates in the Asia
Pacific region*). Aligned with the resolve of the Company
to uphold the principles of good governance, Globe Internal
Audit shares its practices on corporate governance and
internal auditing.
Geared towards excellence, the Internal Audit Group
provides for continuing personal and professional
development of all auditors to equip them in the conduct
of reviews, with focus on acquiring familiarity with Globe
internal processes and telecom technology, new accounting
and auditing standards, fraud investigation skills, and
regulatory updates.
External Audit
The Company engages the services of independent auditors
to conduct an audit and obtain reasonable assurance on
whether the financial statements and relevant disclosures
are free from material misstatements. The independent
auditors are directly responsible to the Audit Committee
in helping ensure the integrity of the Company’s financial
statements and reporting process.
The appointment of the independent auditors is submitted
to the shareholders for approval at the ASM. The
representatives of the independent auditors are expected to
be present at the ASM and have the opportunity to make
a statement on the Company’s financial statements and
results of operations if they desire to do so. The auditors
are also expected to be available to respond to appropriate
questions during the meeting.
SyCip, Gorres, Velayo & Company (SGV & Co.) is the
appointed independent auditors for Globe Telecom, Inc,
and its subsidiaries. In accordance with regulations issued
by the SEC, the audit partner principally handling the
Company’s account is rotated every five (5) years or sooner.
The most recent rotation occurred in 2007.
*Comprised of IIA Australia, IIA Azerbaijan, IIA China, IIA Chinese Hong Kong, IIA Indonesia,
IIA Japan, IIA Korea, IIA Papua New Guinea, IIA Malaysia, IIA Philippines, IIA Sri Lanka,
IIA Singapore, IIA Chinese Taiwan and IIA Thailand
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PRIDE AND PERFORMANCE
There were no disagreements with the Company’s
independent auditors on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure.
Fees approved in connection with the audit and auditrelated
services rendered by SGV & Co., pursuant to the
regulatory and statutory requirements amounted to P15.95
million for the year ended 31 December 2009 as compared
to P19.17 million for 2008.
In addition to performing the audit of Globe Group’s
financial statements, SGV & Co. was also selected, in
accordance with established procurement policies, to
provide other services in 2009 and 2008.
The Audit Committee has an existing policy to review and
to pre-approve the audit and non-audit services rendered
by the Company’s independent auditors. It does not allow
the Globe Group to engage the independent auditors for
certain non-audit services expressly prohibited by SEC
regulations to be performed by an independent auditor
for its audit clients. This is to ensure that the independent
auditors maintain the highest level of independence from
the Company, both in fact and appearance.
The Audit Committee has reviewed the nature of non-audit
services rendered by SGV & Co. and the corresponding fees
and concluded that these are not significant to impair the
independence of the auditors.
The aggregate fees billed by SGV & Co. are shown below
(with comparative figures for 2008):
(In P Millions)
2009 2008
Audit and Audit-Related Fees 15.95 19.17
Tax Fees - 0.20
All Other Fees 0.05 5.26
Total P16.00 P24.63
Audit and Audit-Related Fees. This includes audit of
Globe Group’s annual financial statements and review
of quarterly financial statements in connection with the
statutory and regulatory filings or engagements for the
years ended 2009 and 2008. This also includes assurance
and other services that are reasonably related to the
performance of the audit or review of Globe Group’s
financial statements pursuant to regulatory requirements.
Tax fees. This includes tax consultancy and advisory
services outside the scope of financial audits and reviews.
All Other Fees. This includes one-time, non-recurring
special projects/consulting services and seminars.
The fees presented above include out-of-pocket expenses
incidental to the independent auditor’s services.
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PRIDE AND PERFORMANCE
Financial Reporting
The annual audited consolidated financial statements
of Globe Telecom and its subsidiaries have been
prepared in accordance with PFRS, which are aligned
with International Financial Reporting Standards.
Management has the primary responsibility for the
financial statements and the financial reporting process.
The independent auditors are directly responsible to the
Audit Committee in helping ensure the integrity of the
Company’s financial statements and relevant disclosures,
and for expressing an opinion on Globe Group’s annual
audited consolidated financial statements. As part of its
oversight responsibility, the Audit Committee, with the
assistance of the internal auditors, reviews the financial
statements and all related disclosures and endorses these
to the Board for approval.
The financial statements comprise of the consolidated
statements of financial position, consolidated statements of
comprehensive income, consolidated statements of changes
in equity, and consolidated statements of cash flows.
Information showing the performance of the wireless and
wireline segments is also disclosed to show their respective
contributions to total corporate performance. Finally, the
financial statements also include a detailed discussion of
the Company’s significant accounting policies and other
explanatory notes.
Dealings in Securities
Globe has adopted strict policies and guidelines for
trades involving the Company’s shares made by key
officers and those with access to material non-public
information. Key officers and those with access to the
quarterly results in the course of its review are prohibited
from trading in Globe’s shares starting from the time
when quarterly results are internally reviewed until after
Globe publicly discloses its results. Notices of trading
blackouts are regularly issued to the officers concerned
and compliance is monitored by the Corporate
and Regulatory Affairs Group. Also, all key officers
are required to submit a report on their trades to a
designated compliance officer, for submission to the SEC
in accordance with the Securities Regulation Code.
The following are the major shareholders of Globe Telecom as of 31 December 2009:
Stockholders Common Shares % of Common Preferred Shares % of Preferred shares Total % of Total
Ayala Corp. 40,319,263 30.47% 0 - 40,319,263 13.86%
SingTel 62,646,486 47.34% 0 - 62,646,486 21.54%
Asiacom 0 0 158,515,021 100% 158,515,021 54.50%
Public 29,379,846 22.20% 0 - 29,379,846 10.10%
Total 132,345,595 100% 158,515,021 100% 290,860,616 100%
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PRIDE AND PERFORMANCE
Ownership Structure
Globe Telecom regularly discloses the top 20 shareholders
of the common and preferred equity securities of the
Company. Disclosure is also made of the security ownership
of certain record and beneficial owners who hold
more than 5% of the Company’s common and preferred
shares. Finally, the shareholdings and percentage ownership
of the directors and key officers are disclosed in the
Definitive Information Statement sent to the shareholders
prior to the ASM.
Shareholder Relations
Globe Telecom recognizes the importance of regular
communication with its investors, and is committed to high
standards of disclosure, transparency, and accountability.
The Company aims to provide a fair, accurate, and
meaningful assessment of the Company’s financial
performance and prospects through the annual report,
quarterly financial reports, and analyst presentations.
The Company’s quarterly financial results are disclosed to
the SEC and Philippine Stock Exchange (PSE) within 24
hours from their approval by the Board. The Company also
files its quarterly and year-end financial statements and
the detailed management’s discussion and analysis within
forty-five (45) and one hundred and five (105) calendar days
respectively from the end of the financial period covered
by the report, in compliance with the financial reporting
and disclosure requirements of the SEC and the PSE. These
reports are also made available to the analysts immediately
upon confirmation by the SEC of receipt of disclosure, and
are posted on the Company’s website.
Additionally, any material, market-sensitive information
such as dividend declarations are also disclosed to the
SEC and PSE, as well as released through various media
including press releases and Company website posting.
The Company regularly holds analysts and media
briefings to discuss the quarterly financial results. A
conference call facility is set up during these briefings to
enable wider participation. The company also participates
in both local and international investor conferences as
part of its investor communications program.
The Company likewise holds an annual stockholders’
meeting where shareholders are given the opportunity
to raise questions and clarify issues relevant to the
Company. The Board, President & CEO, members of
management, and external auditors are present to
address any questions raised at these meetings.
Enquiries by shareholders, whether by telephone, mail,
or electronic mail, are dealt with as promptly as possible.
Shareholders, investors, and the public may also access
the Company’s website (http://www.globe.com.ph) to
obtain information on the Company.
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PRIDE AND PERFORMANCE
Employee Relations
Life in Globe is as dynamic as the industry we are in. We are
each one’s Ka-Globe, striving to constantly deliver superior
and quality service to our customers. Whether we are
serving our subscribers in our stores, delivering customized
solutions to our enterprise and corporate clients, or ensuring
quality of our network and information technology systems,
we believe that our business lies at the heart of transforming
and enriching lives.
Building and Sustaining Talent Capability
We deliver results through our people. We bring
this thrust to life by providing opportunities that
enhance talent and by constantly improving on talent
management and development practices. We have put
in place structures, systems and initiatives that enable
high performance at all levels, all aimed at building and
sustaining our people’s productivity, effectiveness and
positive experience in the workplace.
In 2009, we strengthened our drive towards becoming
a learning organization by making our people
more accountable for their own career growth and
development within Globe.
our executives received world-class training in business
and entrepreneurship to make them better tooled and
effective managers of the business and their people.
During this year, we also launched the Globe Emerging
Leaders’ (GEL) Program, a Senior Executive Group-led
development program in partnership with the Harvard
Business School, to support our Leader-as-Teacher
culture in Globe. The program engaged our senior
executives and key successors as teachers and students
respectively for an eight-month combined instructor-led
and online training curriculum.
Given the unrelenting war for attracting and developing
talents, we have also been steadfast in keeping
our Pipeline Management Programs for defined
talent segments in the field of Sales, Marketing,
and Information Technology. For 2009, a total of
47 participants finished our Globe Management
Development Program, Globe Sales Development
Program, IT Cadetship Program and Business
Management Associate Program. This is in line with
proactively growing and developing the next generation
of leaders who will drive the business of the future.
Through synergistic efforts, we shared best management
practices and leveraged on strategic partnerships and
alliances with the Singtel and Ayala communities.
Through the Game for Global Growth (GGG),
Regional Leadership in Action (RLA) and Ayala
Leadership Excellence Acceleration Program (LEAP),
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PRIDE AND PERFORMANCE
As we nurture a strong performance-oriented culture
in the organization, we also ensure a holistic approach
in developing our talent by providing internal career
opportunities consistent with our employees’ aspirations.
In 2009, we introduced key changes in our Internal
Hiring Program which empowered 151 of our employees
to explore and fill out vacant positions in the Company.
The change in policy also strengthened communication
and performance conversations between people
managers and their direct reports.
This year also launched the collaborative efforts of
Globe, Technical Education and Skills Development
Authority (TESDA) and National College of Science and
Technology (NCST) with the Dual Training System (DTS)
program, a first of its kind in the Telco industry which
will allow select NCST faculty and out-of-school youth
students to undergo an intensive Telecommunications
and Broadband Certification Program. These
undertakings show that our people have made nationbuilding
a personal responsibility and commitment.
Employee Engagement Through Volunteerism
While our people keep up with the rapid pace of their
daily endeavors in the Company, we take pride in our
collective and relentless efforts to be of service not only
to the customer but to the larger society and community.
In 2009, a total of 1,727 man-days were spent by Globe
employees taking active part in various outreach and
volunteer activities that included building homes and
schools, teaching out-of-school youth, reforestation and
cleanup initiatives, and other socially-relevant programs in
partnership with our flagship corporate social responsibility
arm, Globe BridgeCom.
The men and women of Globe also quickly rose to the
occasion during Typhoons Ondoy and Pepeng with the
launch of Tulong Ka-Globe and Bangon Pinoy programs,
where a total of 886 employee volunteers participated in
the relief and rescue operations that include packing of and
distribution of relief goods to affected Globe colleagues and
the general public, manning hotlines and taking calls for
assistance and help, community-rebuilding activities and
other country-wide restoration efforts.
Forging Healthy Labor Relations
Globe employs 5,451 active regular employees as of
December 31, 2009, of which 520 or 9.5% are covered
by a Collective Bargaining Agreement (CBA) with the
Globe Telecom Employees’ Union – Federation of Free
Workers (GTEU-FFW). The Company maintains a
mutually supportive relationship with the GTEU-FFW as
demonstrated in joint projects and initiatives that affect
its members at large.
In March 2009, we have seen the strong partnership come
to play with the conclusion of the CBA Negotiations for
2009-2010. The partnership, centered on industrial peace
and harmony, is focused on shared goals and commitment
to quality service, growth and productivity.
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PRIDE AND PERFORMANCE
MANAGEMENT’S DISCUSSION AND ANALYSIS
Operational Performance
Results of Operations (P Mn)
31 Dec
2009
31 Dec
2008
YoY Change
(%)
Net Operating Revenues 63,861 64,818 -1%
Service Revenues 62,443 62,894 -1%
Mobile 1 53,321 55,436 -4%
Fixed line Voice 2 2,795 3,088 -9%
Fixed line Data 3 3,038 2,478 23%
Broadband 4 3,289 1,892 74%
Non-Service Revenues 1,418 1,924 -26%
introduced Personal Blackberry and Mobile Surfing addon
plans to enable subscribers to upgrade their mobile
internet browsing experience with incremental monthly
fees on top of their regular postpaid subscriptions. Globe
also launched entry-level iPhone plans with monthly fees
of as low as P399 to make the Apple TM iPhone 3GS more
accessible to its subscribers.
1
Includes mobile voice and data revenues
2
Includes revenues from landline and DUO services
3
Includes international and domestic data services, corporate internet access,
and data center solutions.
4
Includes revenues from wired, fixed wireless, and fully mobile broadband.
Mobile business
Globe provides digital mobile communication services
nationwide using a fully digital network based on the
Global System for Mobile Communication (GSM)
technology. It provides voice, data and value-added
services to its mobile subscribers through three major
brands: Globe Postpaid and Prepaid, Tattoo, and TM.
Globe Postpaid includes all postpaid plans such as
regular G-Plans, consumable G-Flex Plans, Load
Allowance Plans, Time Plans, Apple TM iPhone 3G plans
and high-end Platinum Plans. During the year, and to
serve the needs of specific market segments and promote
loyalty, the Company introduced various innovative
postpaid plans. This includes the Load Tipid Plans which
allow subscribers to set their plan limits and have better
control over their spend. Subscribers can reload their
accounts just like any prepaid customer if their actual
consumption exceeds their fixed credits. Globe also
Globe Prepaid, Globe Tattoo, and TM are the prepaid
brands of Globe. The Globe Tattoo brand is targeted
towards the youth segment with its convergent mobile
and broadband offerings, while the TM brand caters
to the value-conscious segment of the market. Globe
Prepaid, meanwhile, is targeted towards the adult,
mainstream market. Its unique brand proposition
revolves around its innovative product and service
offerings, superior customer service, and Globe’s
“worldwidest” services and global network reach.
To enhance usage and retention in the prepaid
segment, Globe sustained its popular bucket and
unlimited voice offerings such as Globe Tawag236
for a 20-minute call for P20, P10 for a 3-minute call,
TM’s TodoTawag P15 for a 15-minute call, as well as
UnliCalls Nyt and TodoTawag Magdamag which allows
unlimited voice calls during off-peak hours. Similarly,
the Company continued to offer its affordable text
promotions such as SuliTxt, EverybodyTxt, AstigTxt,
UnliTxt Dayshift and Nightshift, and TodoTxt. Globe
also further enhanced its unlimited offerings with the
launch of UNLI calls, SUPER-UNLI and SuperDuo.
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PRIDE AND PERFORMANCE
In addition to communications services, Globe also
provides its subscribers with mobile payment and
remittance services under the GCash brand. This
service enables the Company’s subscribers to perform
international and domestic remittance transactions, pay
fees, utility bills, income taxes, avail of micro-finance
transactions, donate to charitable institutions, and buy
Globe prepaid reloads.
In 2009, mobile revenues, which comprise 85% of total
consolidated revenues, reached P53.3 billion compared to
P55.4 billion the previous year. The 4% decline in mobile
revenues was mainly due to intense competition and
subscribers’ increasing preference for value offers on the
back of a weaker consumer economy.
Globe ended the year with a cumulative mobile
subscriber base of 23.2 million, 6% lower than last
year’s 24.6 million SIMs. The Company recalibrated its
subscriber acquisition efforts beginning in the second
quarter to focus on better quality subscribers, while
deliberately churning out its marginal users. As a result,
full year mobile gross additions were lower by 5% at 19.4
million SIMs from 20.5 million SIMs in 2008. Blended
churn rates were also elevated at 7.2% compared to
6.0% last year, resulting in a 1.4 million net reduction in
Globe’s SIM base.
Globe’s postpaid segment, which comprises about 4%
of its total subscriber base, grew 7% to end the year
with more than 851,000 customers. Growth was driven
by increased demand, particularly for hybrid plans such
as Load Tipid and Load Allowance Plans. The postpaid
brand registered gross and net additions of 224,354 and
55,673, with churn rate managed below the 2% level.
Globe Postpaid’s gross and net ARPUs of P1,822 and
P1,283, were lower than last year’s P1,967 and P1,394
on account of lower average voice usage offset by
higher take up of SMS and mobile browsing services.
Meanwhile, subscriber acquisition cost (SAC) of P5,382
for Globe Postpaid was 8% higher than last year’s P4,968
due to increased handset subsidies for new postpaid
offers, and higher advertising and promotion charges.
Despite the rise in SAC, costs remain recoverable within
the contract period for postpaid subscribers.
On the prepaid front, the segment posted a 6% decline
in its SIM base. Globe Prepaid and Globe Tattoo ended
the year with 13.0 million SIMs, 2% lower than last year’s
13.3 million. Gross additions were 5% higher at 10.4
million compared to last year’s 9.9 million. However,
higher churn resulting from intense market competition
and deliberate cycling out of marginal subscribers
Following the adjustments to its acquisition programs
and as Globe strengthened its loyalty and retention
campaigns, subscriber growth resumed in the last quarter
of the year with higher gross additions and lower churn
rates resulting in net additions of about 117,000 SIMs.
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PRIDE AND PERFORMANCE
resulted in net reductions of about 244,000 against last
year’s net additions of 1.2 million SIMs. Gross and net
ARPUs for Globe Prepaid declined by 14% and 13%,
respectively, as revenues continue to be impacted by
intense competition, declining yields, and multi-SIM
usage. Following the recalibration of its acquisition drives
to focus on better quality subscribers, Globe Prepaid
SAC also declined 8% year on year from P40 to P37. SAC
continues to be recoverable within a month’s net ARPU.
During the year, the Company relaunched Globe Tattoo as a
convergent brand to serve both the internet and telephony
needs of today’s digitally attuned youth. With hip and new
SIM card designs, Globe Tattoo SIMs can be used for both
mobile phone and for internet browsing using a laptop
through the Globe Broadband Tattoo USB stick.
TM, our mass market brand, ended the year with 9.3
million subscribers, 11% lower than last year’s 10.6
million SIMs. Gross additions were down 16% year
on year to 8.8 million as the Company scaled back on
some of its aggressive SIM pack promotions as part of
its recalibration efforts. Similarly, efforts to deliberately
churn out some of the marginal, lower-quality
subscribers resulted in a net reduction of 1.2 million
SIMs. TM subscribers now comprise 40% of the Globe
cumulative subscriber base compared to 43% in 2008.
TM’s net ARPU for 2009 was 5% lower compared to
prior year, but showed steady improvements particularly
during the last two quarters of the year. The brand also
posted a 5% growth in total revenues despite the 11%
contraction in its SIM base. The “Republika ng TM”
brand refresh campaign, the distinct positioning of the
brand, and the sustained efforts to drive usage through
affordable voice and text offerings all contributed to
the continued top-line growth of the TM brand. TM’s
SAC remained at P34 which is recoverable within half a
month’s net ARPU.
Fixed line and broadband business
Globe offers a full range of fixed line communications
services, wired and wireless broadband access, and endto-end
connectivity solutions customized for consumers,
SMEs (Small & Medium Enterprises), and large
enterprises and businesses.
Globe fixed line voice services include local, national, and
international long distance calling services in postpaid
and prepaid packages through its Globelines brand. For
corporate and enterprise customers, Globe offers voice
solutions that include regular and premium conferencing,
enhanced voice mail, IP-PBX solutions, and domestic and
international toll free services.
The Company’s fixed line data business provides endto-end
data solutions customized to the needs of
businesses. Offerings include international and domestic
data services, wholesale and corporate internet access,
data center services, and segment-specific solutions
customized to the needs of targeted industries.
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PRIDE AND PERFORMANCE
For its broadband business, Globe offers wired, fixed
wireless, and fully mobile internet-on-the-go services
across various technologies and connectivity speeds for
its residential and corporate customers. Wired or DSL
broadband packages bundled with voice or data-only
services are available at download speeds ranging from
256 kbps up to 3 mbps. In selected areas where DSL is
not yet available, Globe offers a fixed wireless broadband
service using its WiMAX network as a cost-effective
alternative to wired broadband. For consumers who
require a fully mobile internet-on-the-go broadband
connection, the Globe Broadband Tattoo service allows
subscribers to access the internet via 3G with HSDPA,
EDGE, GPRS or Wi-Fi at hotspots nationwide using a
plug-and-play USB modem, at speeds of up to 2 mbps.
This service is available in both postpaid and prepaid
packages. In addition, consumers who require faster
connections have the option to subscribe to Globe’s
Hyper Speed broadband plans using leading edge GPON
technology with speeds of up to 100 mbps.
In 2009, the fixed line and broadband business of Globe
posted year on year revenue growth of 22%. This is
driven by the strong performances of the broadband and
fixed line data segments whose revenues grew 74% and
23%, respectively.
lower by 9% from last year given the higher proportion
of bundled voice and data subscriptions compared to
stand-alone, voice-only plans (the monthly service fees
for bundled services are included in “Broadband”).
The Globe broadband business sustained strong growth
in both revenues and subscribers. Broadband subscribers
grew three-fold from 2008 to close the year with more
than 715,000 subscribers. The business delivered
P3.3 billion in service revenues in 2009, up a robust 74%
from prior year. Broadband revenues now comprise 5%
of consolidated revenues compared to 3% last year.
A key contributor to the growth of the Company’s
broadband business is its fully mobile broadband service
sold under the Globe Broadband Tattoo brand.
For the prepaid variant, Globe lowered entry costs for
the service by reducing the price of its Globe Broadband
Tattoo prepaid kit from P2,500 to P895. The package
comes with a USB modem stick and P200 prepaid credit
so subscribers can immediately use the service. Tattoo
SIMs are also voice, SMS, international roaming and VAS
capable. Reloads can be made through the usual prepaid
top-up channels including over-the-air reload facility
through any of the Globe AutoLoad Max retailers.
Globe’s fixed line voice segment expanded its subscriber
base by 40% to close the year with more than 589,000
subscribers. Growth was largely driven by demand for
bundled voice and broadband plans, as well as the Duo
and SuperDuo service. Revenues, meanwhile, were
New postpaid Tattoo plans were also introduced starting
from Plan 799 up to Plan 1499. Plans include free
browsing hours and affordable per-hour charges for
usage in excess of the monthly limit.
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PRIDE AND PERFORMANCE
Globe also offers fixed wireless broadband service
delivered through its WiMAX network, complementing
the Company’s existing 3G with HSDPA service which
is primarily used for mobile, on-the-go broadband.
Following its commercial launch in 2008, the Company’s
WiMAX service is now available in over 190 towns and
cities nationwide. The service has gained good traction
with customer satisfaction ratings remaining high.
Globe’s WiMAX service is available in data-only plans
at 512kbps and 1mbps for P795 and P995 per month,
respectively. WiMAX bundled voice and data plans are
also offered at 512kbps and 1 mbps for P995 and P1,295
per month, respectively.
Wireless subscribers now account for 70% of cumulative
broadband subscribers, up from 35% at the end of 2008.
3G and broadband networks. Services costs were also
higher due to increases in security charges and costs
for certain outsourced customer service and logistics
functions. The impact of these increases were mitigated
by lower marketing costs and provisions. Marketing
effectiveness ratio for 2009 improved to 8% of service
revenues compared to 9% in 2008.
Consolidated EBITDA and EBIT posted declines of 3%
and 6% year on year on the back of softer revenues
and higher operating expenses, bringing consolidated
EBITDA and EBIT margins down to 58% and 31%,
respectively. On a per-segment basis, mobile EBITDA
margins remained healthy at 65% of service revenues,
while broadband and fixed line margins improved to 22%
from 17% last year.
Financial Performance
Globe closed the year with consolidated service revenues
of P62.4 billion, slightly lower than last year’s P62.9
billion. The double-digit growth of broadband and fixed
line data revenues partially offset the softer performance
of the Company’s mobile business. Consolidated nonservice
revenues declined by 26% to P1.4 billion from
last year with lower handset sales during the year.
Operating expenses and subsidy increased by 2% year
on year to P26.0 billion from P25.5 billion in 2008 driven
by higher subsidies, rent, and services partially offset by
lower marketing costs and provisions. Network-related
charges such as rent, electricity and fuel charges were
higher compared to last year as a result of expanded 2G,
Despite the challenging market environment, Globe
closed the year with net income after tax of P12.6 billion,
which was an 11% increase from prior year’s level.
Excluding foreign exchange, mark-to-market gains and
losses, and non-recurring items, the Company’s core
net income closed at P12.0 billion or 2% higher than the
previous year.
Consolidated basic earnings per share also increased to
P94.59 from P84.75 in 2008, while consolidated diluted
earnings per common share were at P94.31 from
P84.61 a year ago. Consolidated return on equity was
26% in 2009 compared to 21% in 2008 using average
equity balances for the year ended.
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PRIDE AND PERFORMANCE
Globe’s financial position remains strong, supported
by improvements in its operating cash flows and
conservative gearing levels.
Total assets amounted to P127,644 million in 2009
compared to P119,751 million in 2008. Cash balances
were higher at P5,943 million as of end of 2009 compared
to last year’s P5,782 million. Investments in property,
plant and equipment were also higher to support an
expanding mobile and broadband operation.
Consolidated net cash provided by operations increased
by 35% year on year to P30,367 million due to higher
collections coupled with lower taxes.
Meanwhile, consolidated net cash used in investing
activities was higher by 32% to P21,829 million from
last year’s P16,581 million. Capital expenditures for 2009
amounted to P24,702 million, 21% more than last year
due to additional investments in one-time international
cable facilities and domestic transmission systems, as
well as sustained expenditures to upgrade Globe mobile
networks and to expand the coverage and capacities of its
broadband networks.
Consolidated net cash used in financing activities was up
31% to P8,334 million due to higher loan repayments,
and dividend payments offset by increased borrowings.
During the year, Globe successfully raised over P14.0
billion in fresh funds from both domestic and overseas
banks, and export credit agencies. The Company
retained its PRS Aaa rating from Philratings, which is
the highest possible rating that can be assigned and
which reflects the lowest level of default risk. Demand
for the Company’s P5.0 billion issuance of 3-year and
5-year retail bonds was strong, with issue size increased
due to oversubscription. The Globe retail bonds were
subsequently listed on Philippine Dealing and Exchange
Corporation (PDEX) in mid-2009, becoming only the
fifth local company and the first telecom issue to be listed
on PDEX. As of end of the year, the Company had total
debt of P47,477 million with maturities well spread-out.
Through Globe’s capital management efforts over the past
three years, the Company has made significant headway in
making its balance sheet more efficient. With the additional
debt, special dividend pay-outs and changes in its dividend
policy, Globe has gradually raised its debt to equity ratio
from 0.55 as of end of 2007 to 1.0 as of end of 2009, closer to
its target gearing ratio of 1.1 times.
Return on Equity
Net Income (P Bn)
19%
22%
24%
21%
26%
10.3
11.8
13.3
11.3
12.6
2005 2006 2007 2008 2009
2005 2006 2007 2008 2009
83

PRIDE AND PERFORMANCE
Report of the Audit Committee to the Board of Directors
For the Year Ended 31 December 2009
The Audit Committee’s roles and responsibilities are defined in the Audit Committee Charter approved by the Board of Directors (Board).
It is appointed by the Board to assist in fulfilling its oversight responsibilities with respect to: (i) the integrity of the Company’s financial
statements, financial reporting process and systems of internal controls, (ii) the Company’s legal and regulatory compliance, (iii) the quality
and integrity of the Company’s risk management processes, (iv) the qualifications, independence, and remuneration of the Company’s
independent auditors, their conduct of the annual audit of the Company’s financial statements, and their engagement to provide any other
services, and (v) the performance of the Company’s internal audit function and independent auditors.
In compliance with the Audit Committee Charter, we confirm that:
• An independent director chairs the Audit Committee;
• We had five meetings during the year;
• We have reviewed and discussed the quarterly unaudited and the annual audited consolidated financial statements of Globe Telecom,
Inc. and Subsidiaries (Globe Group), including the Management’s Discussion and Analysis of Financial Condition and Results of
Operations, with the management, internal auditors and SGV & Co., the independent auditors of the Globe Group. These activities
were performed in the following context:
- Management has the primary responsibility for the financial statements and the financial reporting process; and
- SGV & Co. is responsible for expressing an opinion on Globe Group’s annual audited consolidated financial statements in
accordance with Philippine Financial Reporting Standards.
• We have reviewed and discussed with management the updates on the Company’s hedging activities to ensure the reasonableness of
risk and control assessments done by management;
• We have discussed and approved the 2009 Work Plan of the internal auditors. We have also reviewed the reports of the internal
auditors, ensuring that management is taking appropriate corrective actions in a timely manner, including addressing internal controls
and compliance issues. All the activities performed by Internal Audit were conducted in conformance with the International Standards
for the Professional Practice of Internal Auditing;
• We have reviewed and approved the changes in the IA Report Rating Framework as part of IA’s Quality Assurance & Improvement
Program (QA&IP) meant to strengthen communication of the overall opinion on audit results;
• We have reviewed the Internal Audit’s annual and quarterly reports to the Audit Committee covering:
- Work plan and Key Performance Indicators (KPI) Accomplishments
- Critical Risk Areas Covered, including investigative reviews and the resulting key contributions
- Quality Assurance and Improvement Programs
- Organizational Structure, Resource Utilization and Staff Competencies
• We have discussed and approved the overall scope and the audit plan of SGV & Co. We have also discussed the results of their audits,
including their 2008 and 2009 Management Letter of Comments, ensuring that management is taking appropriate corrective actions in
a timely manner;
• We have reviewed and approved the changes in the Policy on Pre-Approval of Audit and Non-Audit Services as part of the Audit
Committee’s oversight of the independent auditors’ work to comply with the Philippine Securities & Exchange Commission’s
requirement;
• We have reviewed and approved all audit, audit-related and permitted non-audit services provided by SGV & Co. to the Globe Group
and the related fees for such services, in accordance with existing policies, standards, and regulatory requirements, and concluded that
the non-audit fees are not significant to impair their independence;
• We have reviewed and endorsed to the Board of Directors for approval the revised Audit Committee Charter and Corporate
Governance Manual pursuant to SEC Memorandum Circular No. 6, Series of 2009, “The Revised Code of Corporate Governance,”
effective 15 July 2009; and
• We have reviewed and discussed the adequacy of the Globe Group’s risk management process specifically on financial statement
and reporting, business continuity, fraud, revenue assurance and regulatory risks. The reviews were performed in the context that
management is primarily responsible for the risk management process.
Based on the reviews and discussions undertaken, and subject to the limitations on our roles and responsibilities referred to above, the
Audit Committee recommends to the Board of Directors that the annual audited consolidated financial statements be included in the
Annual Report for the year ended 31 December 2009 for filing with the Securities and Exchange Commission. We are also recommending
to the Board of Directors the re-appointment of SGV & Co. as the Globe Group’s independent auditor for 2010 based on the review of their
performance and qualifications.
3 February 2010
XAVIER P. LOINAZ
Chairman
ROMEO L. BERNARDO
Member
KOH KAH SEK
Member
84

PRIDE AND PERFORMANCE
STATEMENT OF MANAGEMENT’S RESPONSIBILITY
FOR FINANCIAL STATEMENTS
The management of Globe Telecom, Inc. is responsible for all information and representations contained in
the consolidated financial statements as at and for each of the three years in the period ended 31 December
2009. The consolidated financial statements have been prepared in accordance with Philippine Financial
Reporting Standards and reflect amounts that are based on the best estimates and informed judgment of
management with an appropriate consideration to materiality.
In this regard, management maintains a system of accounting and reporting which provides for the necessary
internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded
against unauthorized use or disposition and liabilities are recognized. The management likewise discloses
to the Company’s Audit Committee and its external auditors: (i) all significant deficiencies in the design or
operation of internal controls that could adversely affect its ability to record, process, and report financial
data; (ii) material weakness in the internal controls ; and (iii) any fraud that involves management or other
employees who exercise significant roles in internal controls.
The Board of Directors reviews the consolidated financial statements before such statements are approved
and submitted to the stockholders of the company.
SyCip Gorres Velayo & Co., the independent auditors appointed by the stockholders, has audited the
consolidated financial statements of the Company and its Subsidiaries in accordance with Philippine
Standards on Auditing and has expressed their opinion on the fairness of presentation upon completion of
such audit, in its report to Stockholders and the Board of Directors dated 4 February 2010.
JAIME AUGUSTO ZOBEL DE AYALA
Chairman, Board of Directors
ERNEST L. CU
President and Chief Executive Officer
DELFIN C. GONZALEZ, JR.
Chief Financial Officer
85

SyCip Gorres Velayo & Co.
6760 Ayala Avenue
1226 Makati City
Philippines
Phone: (632) 891 0307
Fax: (632) 819 0872
www.sgv.com.ph
INDEPENDENT AUDITOR’S REPORT
BOA/PRC Reg. No. 0001
SEC Accreditation No. 0012-FR-2
The Stockholders and the Board of Directors
Globe Telecom, Inc.
We have audited the accompanying consolidated financial statements of Globe Telecom, Inc. and Subsidiaries,
which comprise the consolidated statement of financial position as at December 31, 2009, 2008 and 2007, and the
consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated
statements of cash flows for the years then ended, and a summary of significant accounting policies and other
explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with Philippine Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining
internal control relevant to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our
audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
Globe Telecom, Inc. and Subsidiaries as of December 31, 2009, 2008 and 2007, and its financial performance and its
cash flows for the years then ended in accordance with Philippine Financial Reporting Standards.
SYCIP GORRES VELAYO & CO.
Arnel F. de Jesus
Partner
CPA Certificate No. 43285
SEC Accreditation No. 0075-AR-1
Tax Identification No. 152-884-385
PTR No. 2087528, January 04, 2010, Makati City
February 4, 2010
86

GLOBE TELECOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
December 31
Notes 2009 2008 (As restated) 2007
(In Thousand Pesos)
ASSETS
Current Assets
Cash and cash equivalents 28, 30 P5,939,927 P5,782,224 P6,191,004
Short-term investments 28 2,784 – 500,000
Held-to-maturity investments 28 – – 2,350,032
Receivables - net 4, 28 6,583,228 7,473,346 6,383,541
Inventories and supplies 5 1,653,750 1,124,322 1,112,146
Derivative assets 28 36,305 169,012 528,646
Prepayments and other current assets - net 6, 28 4,199,320 5,106,429 2,667,216
Total Current Assets 18,415,314 19,655,333 19,732,585
Noncurrent Assets
Property and equipment - net 7 101,693,868 93,540,390 91,527,820
Investment property - net 8 236,739 259,223 291,207
Intangible assets and goodwill - net 9 2,982,856 3,338,796 2,434,623
Investments in joint ventures 10 233,800 73,529 83,257
Deferred income tax - net 24 742,538 523,722 637,721
Other noncurrent assets - net 11 3,338,410 2,360,195 1,913,639
Total Noncurrent Assets 109,228,211 100,095,855 96,888,267
P127,643,525 P119,751,188 P116,620,852
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses 12, 28 P20,838,681 P17,032,474 P18,435,453
Provisions 13 89,404 202,514 219,687
Derivative liabilities 28 85,867 163,989 326,721
Income tax payable 24 1,107,721 1,237,969 1,361,420
Unearned revenues 4 2,981,880 3,247,711 1,866,531
Notes payable 14, 28 2,000,829 4,002,160 500,000
Current portion of:
Long-term debt 14, 28 5,667,965 7,742,227 4,803,341
Other long-term liabilities 15, 28 803,617 99,145 86,416
Total Current Liabilities 33,575,964 33,728,189 27,599,569
Noncurrent Liabilities
Deferred income tax - net 24 4,627,294 4,590,429 5,502,890
Long-term debt - net of current portion 14, 28 39,808,057 28,843,711 25,069,511
Derivative liabilities 28 6,589 21,665 14,110
Other long-term liabilities - net of current portion 15, 28 1,916,707 2,475,639 3,017,962
Total Noncurrent Liabilities 46,358,647 35,931,444 33,604,473
Total Liabilities 79,934,611 69,659,633 61,204,042
Equity
Paid-up capital 17 33,912,158 33,861,398 33,720,380
Cost of share-based payments 16, 18 468,367 386,905 306,358
Other reserves 17, 28 18,518 (35,382) 184,408
Retained earnings 17 13,309,871 15,878,634 21,205,664
Total Equity 47,708,914 50,091,555 55,416,810
P127,643,525 P119,751,188 P116,620,852
See accompanying Notes to Consolidated Financial Statements.
87

GLOBE TELECOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31
Notes 2009 2008 2007
(In Thousand Pesos, Except Per Share Figures)
REVENUES
Service revenues 16 P62,443,518 P62,894,488 P63,208,652
Nonservice revenues 1,418,614 1,923,560 2,300,064
Interest income 19 271,806 420,425 728,621
Others - net 20 1,064,476 700,874 1,789,571
65,198,414 65,939,347 68,026,908
Gain on disposal of property
and equipment - net 7 608,400 24,837 14,910
65,806,814 65,964,184 68,041,818
COSTS AND EXPENSES
General, selling and administrative 21 24,496,882 23,757,126 21,304,473
Depreciation and amortization 7, 8, 9 17,388,430 17,028,068 17,188,998
Cost of sales 5 2,947,950 3,117,172 3,322,777
Financing costs 22 2,182,881 3,000,391 5,224,939
Impairment losses and others 23 810,960 1,205,679 941,260
Equity in net losses of joint ventures 10 7,009 9,728 9,023
47,834,112 48,118,164 47,991,470
INCOME BEFORE INCOME TAX 17,972,702 17,846,020 20,050,348
PROVISION FOR (BENEFIT FROM)
INCOME TAX 24
Current 5,583,809 7,268,584 6,841,240
Deferred (179,980) (698,442) (67,911)
5,403,829 6,570,142 6,773,329
NET INCOME 12,568,873 11,275,878 13,277,019
OTHER COMPREHENSIVE INCOME
(EXPENSE) 17
Transactions on cash flow hedges - net 25,040 (310,099) 167,096
Changes in fair value of available-for-sale investment
in equity securities 14,553 (19,734) 16,158
Exchange differences arising from translations of
foreign investments 24,682 1,508 –
Tax effect relating to components of other
comprehensive income (10,375) 108,535 194,944
53,900 (219,790) 378,198
TOTAL COMPREHENSIVE INCOME P12,622,773 P11,056,088 P13,655,217
Earnings Per Share 27
Basic P94.59 P84.75 P100.07
Diluted P94.31 P84.61 P99.58
Cash dividends declared per common share 17 P114.00 P125.00 P116.00
See accompanying Notes to Consolidated Financial Statements.
88

GLOBE TELECOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Capital Additional Cost of Other
Stock Paid-in Share-based Reserves Retained
Notes (Notes 17) Capital Payment (Notes 17) Earnings Total
For the year ended December 31, 2009 (In Thousand Pesos)
As of January 1, 2009 P7,408,075 P26,453,323 P386,905 (P35,382) P15,878,634 P50,091,555
Total comprehensive income for the year – – – 53,900 12,568,873 12,622,773
Dividends on: 17.3
Common stock – – – – (15,087,144) (15,087,144)
Preferred stock – – – – (50,492) (50,492)
Cost of share-based payments 18.1 – – 126,437 – – 126,437
Collection of subscriptions receivable 732 – – – – 732
Exercise of stock options 272 49,756 (44,975) – – 5,053
As of December 31, 2009 P7,409,079 P26,503,079 P468,367 P18,518 P13,309,871 P47,708,914
For the Year Ended December 31, 2008 (In Thousand Pesos)
As of January 1, 2008 P7,367,002 P26,353,378 P306,358 P184,408 P21,205,664 P55,416,810
Total comprehensive income (expense)
for the year – – – (219,790) 11,275,878 11,056,088
Dividends on: 17.3
Common stock – – – – (16,542,271) (16,542,271)
Preferred stock – – – – (60,637) (60,637)
Cost of share-based payments 18.1 – – 182,324 – – 182,324
Collection of subscriptions receivable 40,742 – – – – 40,742
Exercise of stock options 331 99,945 (101,777) – – (1,501)
As of December 31, 2008 P7,408,075 P26,453,323 P386,905 (P35,382) P15,878,634 P50,091,555
For the Year Ended December 31, 2007 (In Thousand Pesos)
As of January 1, 2007 P7,349,654 P26,134,707 P340,743 (P193,790) P23,316,837 P56,948,151
Total comprehensive income for the year – – – 378,198 13,277,019 13,655,217
Dividends on: 17.3
Common stock – – – – (15,338,743) (15,338,743)
Preferred stock – – – – (49,449) (49,449)
Cost of share-based payments 18.1 – – 129,914 – – 129,914
Collection of subscriptions receivable 4,660 – – – – 4,660
Exercise of stock options 12,688 218,671 (164,299) – – 67,060
As of December 31, 2007 P7,367,002 P26,353,378 P306,358 P184,408 P21,205,664 P55,416,810
See accompanying Notes to Consolidated Financial Statements.
89

GLOBE TELECOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31
Notes 2009 2008 2007
(In Thousand Pesos)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax P17,972,702 P17,846,020 P20,050,348
Adjustments for:
Depreciation and amortization 7, 8, 9 17,388,430 17,028,068 17,188,998
Interest expense 22 2,096,945 2,255,878 2,996,347
Bond redemption cost 14, 22 – – 614,697
Cost of share-based payments 16, 18 126,437 182,324 129,914
Gain on disposal of property and equipment 7 (608,400) (24,837) (14,910)
Equity in net losses of a joint venture 10 7,009 9,728 9,023
Provisions for (reversals of) other probable losses 23 (88,047) (5,031) 3,179
Loss (gain) on derivative instruments 22 64,547 (105,642) (61,463)
Impairment losses (reversal of impairment losses) on
property and equipment 23 85,631 (31,172) (71,431)
Foreign exchange losses (gains) - net 20, 22 (286,530) 759,299 (1,431,214)
Interest income 19 (271,806) (420,425) (728,621)
Dividend income (592) (27) –
Operating income before working capital changes 36,486,326 37,494,183 38,684,867
Changes in operating assets and liabilities:
Decrease (increase) in:
Receivables 833,760 (751,361) (1,095,336)
Inventories and supplies (529,428) (12,176) (118,652)
Prepayments and other current assets 754,837 (2,482,801) (1,332,436)
Increase (decrease) in:
Accounts payable and accrued expenses 1,617,432 (2,778,052) 3,229,966
Unearned revenues (265,831) 1,381,180 596,456
Other long-term liabilities 68,345 (818,774) 1,463,490
Cash generated from operations 38,965,441 32,032,199 41,428,355
Interest paid (3,009,233) (2,407,243) (3,231,924)
Income tax paid (5,589,227) (7,117,556) (6,193,383)
Net cash flows provided by operating activities 30,366,981 22,507,400 32,003,048
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to:
Property and equipment 7 (20,988,768) (18,754,502) (13,824,879)
Intangible assets 9 (99,164) (196,052) (191,738)
Proceeds from sale of property and equipment 58,145 137,124 36,979
Decrease (increase) in:
Short-term investments (2,784) 500,000 5,655,349
Available-for-sale investments – – 293,567
Held-to-maturity investments – 2,350,032 (1,492,469)
Other noncurrent assets (863,889) (619,397) (273,333)
Acquisition of subsidiaries 9 (141,330) (351,499) –
Dividend received 592 27 –
Interest received 208,094 352,990 696,015
Net cash flows used in investing activities (21,829,104) (16,581,277) (9,100,509)
(Forward)
90

Years Ended December 31
Notes 2009 2008 2007
(In Thousand Pesos)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings: 14
Long-term P18,629,170 P11,500,000 P13,121,044
Short-term 2,000,000 6,603,375 500,000
Repayments of borrowings: 14
Long-term (9,820,330) (4,814,990) (22,107,813)
Short-term (4,001,330) (3,100,540) –
Payments of dividends to stockholders: 17
Common (15,087,144) (16,542,271) (15,338,743)
Preferred (60,637) (49,449) (64,669)
Collection of subscriptions receivable and exercise of
stock options 5,785 39,241 71,720
Net cash flows used in financing activities (8,334,486) (6,364,634) (23,818,461)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 203,391 (438,511) (915,922)
NET FOREIGN EXCHANGE DIFFERENCE (45,688) 29,731 (398,789)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE YEAR 5,782,224 6,191,004 7,505,715
CASH AND CASH EQUIVALENTS AT
END OF YEAR 28, 30 P5,939,927 P5,782,224 P6,191,004
See accompanying Notes to Consolidated Financial Statements.
91

GLOBE TELECOM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
Globe Telecom, Inc. (hereafter referred to as “Globe Telecom”) is a stock corporation organized under the laws of the
Philippines, and enfranchised under Republic Act (RA) No. 7229 and its related laws to render any and all types of
domestic and international telecommunications services. Globe Telecom is one of the leading providers of digital
wireless communications services in the Philippines under the Globe and Touch Mobile (TM) brand using a fully
digital network. It also offers domestic and international long distance communication services or carrier services.
Globe Telecom’s principal executive offices are located at 5th Floor, Globe Telecom Plaza, Pioneer Highlands,
Pioneer corner Madison Streets, Mandaluyong City, Metropolitan Manila, Philippines. Globe Telecom is listed in the
Philippine Stock Exchange (PSE) and has been included in the PSE composite index since September 17, 2001. Major
stockholders of Globe Telecom include Ayala Corporation (AC), Singapore Telecom, Inc. (STI) and Asiacom Philippines,
Inc. None of these companies exercise control over Globe Telecom.
Globe Telecom owns 100% of Innove Communications, Inc. (Innove). Innove is a stock corporation organized
under the laws of the Philippines and enfranchised under RA No. 7372 and its related laws to render any and
all types of domestic and international telecommunications services. Innove holds a license to provide digital
wireless communication services in the Philippines. Innove also offers a broad range of wireline voice and data
communication services, including domestic and international long distance communication services or carrier
services as well as broadband internet services. Innove also has a license to establish, install, operate and maintain a
nationwide local exchange carrier (LEC) service, particularly integrated local telephone service with public payphone
facilities and public calling stations, and to render and provide international and domestic carrier and leased line
services.
Globe Telecom owns 100% of G-Xchange, Inc. (GXI), a corporation formed for the purpose of developing,
designing, administering, managing and operating software applications and systems, including systems designed
for the operations of bill payment and money remittance, payment and delivery facilities through various
telecommunications systems operated by telecommunications carriers in the Philippines and throughout the world
and to supply software and hardware facilities for such purposes. GXI is registered with the Bangko Sentral ng
Pilipinas (BSP) as a remittance agent. GXI handles the mobile payment and remittance service using Globe Telecom’s
network as transport channel under the GCash brand. The service, which is integrated into the cellular services
of Globe Telecom and Innove, enables easy and convenient person-to-person fund transfers via short messaging
services (SMS) and allows Globe Telecom and Innove subscribers to easily and conveniently put cash into and get
cash out of the GCash system.
Globe Telecom acquired 100% of Entertainment Gateway Group Corporation (EGGC) and EGGstreme (Hong Kong)
Limited (EHL) (collectively referred here as “EGG Group”) on June 26, 2008 (see Note 9). EGG Group is engaged in
the development and creation of wireless products and services accessible through telephones or other forms of
communication devices. EGGC is registered with the Department of Transportation and Communication (DOTC) as a
content provider.
Globe Telecom owns 100% of GTI Business Holdings, Inc. (GTI). The primary purpose of this company is to invest,
purchase, subscribe for or otherwise acquire and own, hold, sell or otherwise dispose of real and personal property
of every kind and description. GTI was incorporated on November 25, 2008. In July 2009, GTI incorporated its wholly
owned subsidiary, GTI Corporation (GTIC), a company organized under the General Corporation Law of the State of
Delaware for the purpose of engaging in any lawful act or activity for which corporations may be organized under
the Delaware General Corporation Law. GTIC has not yet started commercial operations as of December 31, 2009.
92

2. Summary of Significant Accounting Policies
2.1 Basis of Financial Statement Preparation
The accompanying consolidated financial statements of Globe Telecom and its wholly-owned subsidiaries,
collectively referred to as the “Globe Group”, have been prepared under the historical cost convention method,
except for derivative financial instruments and availablefor- sale (AFS) investments that are measured at fair
value.
The consolidated financial statements of the Globe Group are presented in Philippine Peso (PHP), Globe
Telecom’s functional currency, and rounded to the nearest thousands except when otherwise indicated.
On February 4, 2010, the Board of Directors (BOD) approved and authorized the release of the consolidated
financial statements of Globe Telecom, Inc. and Subsidiaries as of and for the years ended December 31, 2009,
2008 and 2007.
2.2 Statement of Compliance
The consolidated financial statements of the Globe Group have been prepared in compliance with Philippine
Financial Reporting Standards (PFRS).
2.3 Basis of Consolidation
The accompanying consolidated financial statements include the accounts of Globe Telecom and its
subsidiaries as of and for the years ended December 31, 2009, 2008 and 2007. The subsidiaries, are as follows:
Percentage of
Name of Subsidiary Place of Incorporation Principal Activity Ownership
Innove Philippines Wireless and wireline voice and data
communication services 100%
GXI Philippines Software development for
telecommunications applications
and money remittance services 100%
EGG Group
EGGC Philippines Mobile content and application
development services 100%
EHL Hong Kong Mobile content and application
development services 100%
GTI Philippines Investment and holding company 100%
GTIC United States No operations 100%
Subsidiaries are consolidated from the date on which control is transferred to the Globe Group and cease to be
consolidated from the date on which control is transferred out of the Globe Group. The financial statements of
the subsidiaries are prepared for the same reporting year as Globe Telecom using uniform accounting policies
for like transactions and other events in similar circumstances. All significant intercompany balances and
transactions, including intercompany profits and losses, were eliminated during consolidation in accordance
with the accounting policy on consolidation.
2.4 Changes in Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year except for the
adoption of the following new and amended PFRS and Philippine Interpretations of International Financial
Reporting Interpretations Committee (IFRIC) which became effective on January 1, 2009. Except as otherwise
indicated, the adoption of the new and amended Standards and Interpretations did not have a significant
impact on the consolidated financial statements.
Amendments to PAS 1,
• Presentation of Financial Statements
In accordance with the Amendments to PAS 1, the statement of changes in equity shall include only
transactions with owners, while all non-owner changes will be presented in equity as a single line with
details included in a separate statement. Owners are defined as holders of instruments classified as equity.
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In addition, the Amendments to PAS 1 provide for the introduction of a new statement of comprehensive
income that combines all items of income and expenses recognized in the profit or loss together with
“Other comprehensive income”. Entities may choose to present all items in one statement, or to present
two linked statements, a separate statement of income and a statement of comprehensive income. These
Amendments also require enhancements in the presentation of the consolidated statements of financial
position and owner’s equity as well as additional disclosures to be included in the financial statements.
Adoption of these Amendments resulted in the following: (a) change in the title from consolidated balance
sheet to consolidated statements of financial position; (b) change in the presentation of changes in equity
and of comprehensive income, i.e., non-owner changes in equity are now presented in one consolidated
statement of comprehensive income; and (c) additional disclosures in the notes to the consolidated
financial statements relating to the movement in and income tax effects of other reserves (see Note 17).
• Amendment to PAS 23, Borrowing Costs
This Amendment requires the capitalization of borrowing costs when such costs relate to a qualifying
asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready
for its intended use or sale. Accordingly, borrowing costs are capitalized on qualifying assets with a
commencement date after January 1, 2009. No changes will be made for borrowing costs incurred to this
date that have been expensed.
• PFRS 8, Operating Segments
It replaces PAS 14, Segment Reporting, and adopts a full management approach to identifying, measuring
and disclosing the results of an entity’s operating segments. The information reported would be that
which management uses internally for evaluating the performance of operating segments and allocating
resources to those segments. Such information may be different from that reported in the consolidated
statements of financial position and consolidated statements of comprehensive income and the Globe
Group will provide explanations and reconciliations of the differences. This Standard is only applicable to
an entity that has debt or equity instruments that are traded in a public market or that files (or is in the
process of filing) its financial statements with a securities commission or similar party. The Globe Group
has enhanced its current manner of reporting segment information to include additional information used
by management internally (see Note 29). Segment information for prior years was restated to include the
additional information.
• Philippine Interpretation FRIC 16, Hedges of a Net Investment in a Foreign Operation
This Interpretation provides guidance on identifying foreign currency risks that qualify for hedge
accounting in the hedge of net investment; where within the group the hedging instrument can be held as
a hedge of a net investment; and how an entity should determine the amount of foreign currency gains or
losses, relating to both the net investment and the hedging instrument, to be recycled on disposal of the
net investment.
• PFRS 1, First-time Adoption of Philippine Financial Reporting Standards - Cost of an Investment
in a Subsidiary, Jointly Controlled Entity or Associate
The amended PFRS 1 allows an entity to determine the ‘cost’ of investments in subsidiaries, jointly
controlled entities or associates in its opening PFRS financial statements in accordance with PAS 27,
Consolidated and Separate Financial Statements, or using a deemed cost method. The amendment to PAS
27 required all dividends from a subsidiary, jointly controlled entity or associate to be recognized in the
statements of comprehensive income in the separate financial statement.
PFRS 2, • Share-based Payment - Vesting Condition and Cancellations
This Standard has been revised to clarify the definition of a vesting condition and prescribes the treatment
for an award that is effectively cancelled. It defines a vesting condition as a condition that includes an
explicit or implicit requirement to provide services. It further requires non-vesting conditions to be treated
in a similar fashion to market conditions. Failure to satisfy a non-vesting condition that is within the
control of either the entity or the counterparty is accounted for as cancellation. However, failure to satisfy
a non-vesting condition that is beyond the control of either party does not give rise to a cancellation.
94

• Amendments to PFRS 7, Financial Instruments: Disclosures - Improving Disclosures about
Financial Instruments
The amendments to PFRS 7 introduce enhanced disclosures about fair value measurement and liquidity
risk. The amendments to PFRS 7 require fair value measurements for each class of financial instruments
to be disclosed by the source of inputs, using the following three-level hierarchy: (a) quoted prices
(unadjusted) in active markets for identical assets or liabilitites (Level 1); (b) inputs other than quoted
prices included in level 1 that are observable for the asset or liability, either directly (as prices) or
indirectly (derived from prices) (Level 2); and (c) inputs for the asset or liability that are not based on
observable market data (unobservable inputs) (Level 3). The level within which the fair value measurement
is categorized must be based on the lowest level of input to the instrument’s valuation that is significant
to the fair value measurement in its entirety.
Additional disclosures required in the amendments to PFRS 7 are shown in Note 28 - Capital and Risk
Management and Financial Instruments. The amendments to PFRS 7 also introduce two major changes in
liquidity risk disclosures as follows: (a) exclusion of derivative liabilities from maturity analysis unless the
contractual maturities are essential for an understanding of the timing of the cash flows and (b) inclusion
of financial guarantee contracts in the contractual maturity analysis based on the maximum amount
guaranteed.
• Amendments to PAS 32, Financial Instruments: Presentation, and PAS 1, Presentation of
Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation
These Amendments specify, among others, that puttable financial instruments will be classified as equity
if they have all of the following specified features: (a) the instrument entitles the holder to require the
entity to repurchase or redeem the instrument (either on an ongoing basis or on liquidation) for a pro rata
share of the entity’s net assets; (b) the instrument is in the most subordinate class of instruments, with no
priority over other claims to the assets of the entity on liquidation; (c) all instruments in the subordinate
class have identical features; (d) the instrument does not include any contractual obligation to pay cash or
financial assets other than the holder’s right to a pro rata share of the entity’s net assets; and (e) the total
expected cash flows attributable to the instrument over its life are based substantially on the profit or
loss, a change in recognized net assets, or a change in the fair value of the recognized and unrecognized
net assets of the entity over the life of the instrument.
• Philippine Interpretation IFRIC-9 and PAS 39 Amendments - Embedded Derivatives
This Amendment to Philippine Interpretation IFRIC-9, Reassessment of Embedded Derivatives, requires an
entity to assess whether an embedded derivative must be separated from a host contract when the entity
reclassifies a hybrid financial asset out of the fair value through profit or loss category. This assessment
is to be made based on circumstances that existed on the later of the date the entity first became a party
to the contract and the date of any contract amendments that significantly change the cash flows of the
contract. PAS 39, Financial Instruments: Recognition and Measurement, now states that if an embedded
derivative cannot be reliably measured, the entire hybrid instrument must remain classified as at fair value
through profit or loss.
2.4.1 Improvements to PFRSs
In May 2008 and April 2009, the International Accounting Standards Board (IASB) issued omnibus
amendments to certain standards, primarily with a view to removing inconsistencies and clarifying
wordings. There are separate transitional provisions for each standard. The adoption of these amended
standards did not have any significant impact on the consolidated financial statements of the Globe
Group, unless otherwise indicated.
PAS 18, • Revenue
The Amendment adds guidance (which accompanies the Standard) to determine whether an entity is
acting as a principal or as an agent. The features to consider are whether the entity (a) has primary
responsibility for providing the goods or service; (b) has inventory risk; (c) has discretion in establishing
prices; and (d) bears the credit risk. The Group assessed its revenue arrangements against these criteria
and concluded that it is acting as principal in some arrangements and as an agent in other arrangements.
95

• PAS 1, Presentation of Financial Statements
Assets and liabilities classified as held for trading are not automatically classified as current in the
consolidated statements of financial position.
• PAS 16, Property, Plant and Equipment
The Amendment replaces the term ‘net selling price’ with ‘fair value less costs to sell’, to be consistent
with PFRS 5, Non-current Assets Held for Sale and Discontinued Operations, and PAS 36, Impairment of
Asset.
In addition, items of property, plant and equipment held for rental that are routinely sold in the ordinary
course of business after rental, are transferred to inventory when rental ceases and they are held for
sale. Proceeds of such sales are subsequently shown as revenue. Cash payments on initial recognition of
such items, the cash receipts from rents and subsequent sales are all shown as cash flows from operating
activities.
• PAS 19, Employee Benefits
It revises the definition of: (a) “past service costs” to include reductions in benefits related to past services
(“negative past service costs”) and to exclude reductions in benefits related to future services that arise
from plan amendments. Amendments to plans that result in a reduction in benefits related to future
services are accounted for as a curtailment, (b) “return on plan assets” to exclude plan administration
costs if they have already been included in the actuarial assumptions used to measure the defined benefit
obligation, and (c) “short-term” and “other long-term” employee benefits to focus on the point in time
at which the liability is due to be settled. Also, it deletes the reference to the recognition of contingent
liabilities to ensure consistency with PAS 37, Provisions, Contingent Liabilities and Contingent Assets.
• PAS 23, Borrowing Costs
This revises the definition of borrowing costs to consolidate the types of items that are considered
components of ‘borrowing costs’, i.e., components of the interest expense calculated using the effective
interest rate method.
• PAS 28, Investment in Associates
If an associate is accounted for at fair value in accordance with PAS 39, only the requirement of PAS 28
to disclose the nature and extent of any significant restrictions on the ability of the associate to transfer
funds to the entity in the form of cash or repayment of loans applies. Also, an investment in an associate
is a single asset for the purpose of conducting the impairment test. Therefore, there is no separate
allocation to the goodwill included in the investment balance.
• PAS 31, Interests in Joint Ventures
If a joint venture is accounted for at fair value in accordance with PAS 39, only the requirements of PAS
31 to disclose the commitments of the venturer and the joint venture, as well as summary of financial
information about the assets, liabilities, income and expenses will apply.
• PAS 36, Impairment of Assets
When discounted cash flows are used to estimate “fair value less cost to sell” additional disclosure is
required about the discount rate, consistent with disclosures required when the discounted cash flows are
used to estimate “value in use”.
• PAS 38, Intangible Assets
Expenditure on advertising and promotional activities is recognized as an expense when the Group either
has the right to access the goods or has received the services.
PAS 39, • Financial Instruments: Recognition and Measurement
Improvements to PAS 39 are: (a) changes in circumstances relating to derivatives - specifically derivatives
designated or de-designated as hedging instruments after initial recognition - are not reclassifications;
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(b) when financial assets are reclassified as a result of an insurance company changing its accounting
policy in accordance with paragraph 45 of PFRS 4, Insurance Contracts, this is a change in circumstance,
not a reclassification; (c) removes the reference to a “segment” when determining whether an instrument
qualifies as a hedge; and (d) requires use of the revised effective interest rate (rather than the original
effective interest rate) when re-measuring a debt instrument on the cessation of fair value hedge
accounting.
• PAS 40, Investment Properties
It revises the scope (and the scope of PAS 16) to include property that is being constructed or developed
for future use as an investment property. Where an entity is unable to determine the fair value of an
investment property under construction, but expects to be able to determine its fair value on completion,
the investment under construction will be measured at cost until such time as fair value can be
determined or construction is complete.
2.5 Future Changes in Accounting Policies
The Globe Group will adopt the following standards and interpretations enumerated below when these
become effective. Except as otherwise indicated, the Globe Group does not expect the adoption of these new
and amended PFRS and Philippine Interpretations to have significant impact on the consolidated financial
statements.
• Revised PFRS 3, Business Combinations and PAS 27, Consolidated and Separate Financial Statements
The revised standards are effective for annual periods beginning on or after July 1, 2009. The revised
PFRS 3 introduces a number of changes in the accounting for business combinations that will impact the
amount of goodwill recognized, the reported results in the period that an acquisition occurs, and future
reported results. The revised PAS 27 requires, among others, that (a) change in ownership interests of a
subsidiary (that do not result in loss of control) will be accounted for as an equity transaction and will
have no impact on goodwill nor will it give rise to a gain or loss; (b) losses incurred by the subsidiary will
be allocated between the controlling and non-controlling interests (previously referred to as ‘minority
interests’), even if the losses exceed the noncontrolling equity investment in the subsidiary; and (c) on loss
of control of a subsidiary, any retained interest will be remeasured to fair value and this will impact the
gain or loss recognized on disposal.
The changes introduced by the revised PFRS 3 must be applied prospectively, while changes introduced by
the revised PAS 27 must be applied retrospectively with a few exceptions. The changes will affect future
acquisitions and transactions with noncontrolling interests.
• Philippine Interpretation IFRIC 15, Agreement for Construction of Real Estate
This Interpretation, which will be effective January 1, 2012, covers accounting for revenue and associated
expenses by entities that undertake the construction of real estate directly or through subcontractors.
This Interpretation requires that revenue on construction of real estate be recognized only upon
completion, except when such contract qualifies as construction contract to be accounted for under PAS
11, Construction Contracts, or involves rendering of services in which case revenue is recognized based
on stage of completion. Contracts involving provision of services with the construction materials and
where the risks and reward of ownership are transferred to the buyer on a continuous basis, will also be
accounted for based on stage of completion. This Interpretation will not be applicable to the Globe Group.
Philippine Interpretation IFRIC 17,
• Distributions of Non-cash Assets to Owners
This Interpretation provides guidance on non-reciprocal distribution of assets by an entity to its owners
acting in their capacity as owners, including distributions of non-cash assets and those giving the
shareholders a choice of receiving non-cash assets or cash, provided that: (a) all owners of the same
class of equity instruments are treated equally; and (b) the non-cash assets distributed are not ultimately
controlled by the same party or parties both before and after the distribution, and as such, excluding
transactions under common control. This Interpretation is applied prospectively and is applicable for
annual periods beginning on or after July 1, 2009 with early application permitted.
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• Amendment to PAS 39, Financial Instruments: Recognition and Measurement Eligible Hedged
Items
This Amendment, which will be effective for annual periods beginning on or after July 1, 2009, addresses
only the designation of a one-sided risk in a hedged item, and the designation of inflation as a hedged
risk or portion in particular situations. The Amendment clarifies that an entity is permitted to designate a
portion of the fair value changes or cash flow variability of a financial instrument as a hedged item. The
Globe Group will assess the impact of this Amendment on its current manner of accounting for hedged
items.
• Amendments to PFRS 2, Share-based Payment: Group Cash-settled Transactions
The IASB amended the IFRS 2 to clarify its scope and the accounting for group cash-settled sharebased
payment transactions in the separate or individual financial statement of the entity receiving the
goods or services when that entity has no obligation to settle the share-based payment transaction. This
Amendment is effective January 1, 2010. It supersedes IFRIC 8, Scope of IFRS 2 and IFRIC 11, IFRIC 2 -
Group and Treasury Share Transactions.
• Philippine Interpretation IFRIC 18, Transfer of Assets from Customers
This Interpretation is to be applied prospectively to transfers of assets from customers received on or
after July 1, 2009. The Interpretation provides guidance on how to account for items of property, plant
and equipment received from customers or cash that is received and used to acquire or construct assets
that are used to connect the customer to a network or to provide ongoing access to a supply of goods or
services or both. When the transferred item meets the definition of an asset, the asset is measured at fair
value on initial recognition as part of an exchange transaction. The service(s) delivered are identified and
the consideration received (the fair value of the asset) allocated to each identifiable service. Revenue is
recognized as each service is delivered by the entity.
2.5.1. Improvements to PFRSs
The omnibus amendments to PFRSs issued in 2009 were issued primarily with a view to removing
inconsistencies and clarifying wordings. There are separate transitional provisions for each standard and
will become effective January 1, 2010. Except otherwise stated, the Globe Group does not except the
adoption of these new standards to have significant impact on the consolidated financial statements.
• PFRS 2, Share-based Payment
This Amendment clarifies that the contribution of a business on formation of a joint venture and
combinations under common control are not within the scope of PFRS 2 even though they are out of
scope of PFRS 3. The amendment is effective for financial years on or after July 1, 2009.
• PFRS 5, Non-current Assets Held for Sale and Discontinued Operations
This Amendment clarifies that the disclosures required in respect of non-current assets and disposal
groups classified as held for sale or discontinued operations are only those set out in PFRS 5. The
disclosure requirements of other PFRSs only apply if specifically required for such non-current assets
or discontinued operations.
• PFRS 8, Operating Segments
The Amendment clarifies that segment assets and liabilities need only be reported when those assets
and liabilities are included in measures that are used by the chief operating decision maker.
• PAS 1, Presentation of Financial Statements
The Amendment clarifies that the terms of a liability that could result, at anytime, in its settlement by
the issuance of equity instruments at the option of the counterparty do not affect its classification.
PAS 7, • Statement of Cash Flows
This Amendment explicitly states that only expenditure that results in a recognized asset can be
classified as a cash flow from investing activities.
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• PAS 17, Leases
Removes the specific guidance on classifying land as a lease. Prior to the amendment, leases of land
were classified as operating leases. The Amendment now requires that leases of land are classified as
either ‘finance’ or ‘operating’ in accordance with the general principles of PAS 17. The amendments
will be applied retrospectively.
• PAS 36, Impairment of Assets
This Amendment clarifies that the largest unit permitted for allocating goodwill, acquired in a
business combination, is the operating segment as defined in PFRS 8 before aggregation for reporting
purposes.
• PAS 38, Intangible Assets
This Amendment clarifies that if an intangible asset acquired in a business combination is identifiable
only with another intangible asset, the acquirer may recognize the group of intangible assets as a
single asset provided the individual assets have similar useful lives. Also clarifies that the valuation
techniques presented for determining the fair value of intangible assets acquired in a business
combination that are not traded in active markets are only examples and are not restrictive on the
methods that can be used.
• PAS 39, Financial Instruments: Recognition and Measurement
This Amendment clarifies the following: 1) that a prepayment option is considered closely related
to the host contract when the exercise price of a prepayment option reimburses the lender up to
the approximate present value of lost interest for the remaining term of the host contract; 2) that
the scope exemption for contracts between an acquirer and a vendor in a business combination to
buy or sell an acquiree at a future date applies only to binding forward contracts, and not derivative
contracts where further actions by either party are still to be taken and 3) that gains or losses on
cash flow hedges of a forecast transaction that subsequently results in the recognition of a financial
instrument or on cash flow hedges of recognized financial instruments should be reclassified in the
period that the hedged forecast cash flows affect profit or loss.
• Philippine Interpretation IFRIC 9, Reassessment of Embedded Derivatives
This Interpretation clarifies that it does not apply to possible reassessment, at the date of acquisition,
to embedded derivatives in contracts acquired in a combination between entities or businesses under
common control or the formation of a joint venture.
• Philippine Interpretation IFRIC 16, Hedges of a Net Investment in a Foreign Operation
This Interpretation states that, in a hedge of a net investment in a foreign operation, qualifying
hedging instruments may be held by any entity or entities within the group, including the foreign
operation itself, as long as the designation, documentation and effectiveness requirements of PAS 39
that relate to a net investment hedge are satisfied.
2.6 Significant Accounting Policies
2.6.1. Revenue Recognition
The Globe Group provides mobile and wireline voice and data communication services which are both
provided under postpaid and prepaid arrangements.
The Globe Group assesses its revenue arrangements against specific criteria in order to determine if
it is acting as principal or agent. The following specific recognition criteria must also be met before
revenue is recognized.
Revenue is recognized when the delivery of the products or services has occurred and collectibility is
reasonably assured.
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Revenue is stated at amounts invoiced and accrued to customers, taking into consideration the bill
cycle cut-off (for postpaid subscribers), the amount charged against preloaded airtime value (for
prepaid subscribers), switch-monitored traffic (for carriers and content providers) and excludes
value-added tax (VAT) and overseas communication tax. Inbound traffic charges, net of discounts and
outbound traffics charges, are accrued based on actual volume of traffic monitored by Globe Group’s
network and in the traffic settlement system.
2.6.1.1 Service Revenue
2.6.1.1.1 Subscribers
Revenues from subscribers principally consist of: (1) fixed monthly service
fees for postpaid wireless and wireline voice and data subscribers and
wireless prepaid subscription fees for discounted promotional short
messaging services (SMS); (2) usage of airtime and toll fees for local,
domestic and international long distance calls in excess of consumable
fixed monthly service fees, less (a) bonus airtime credits and airtime
on free Subscribers’ Identification module (SIM), and (b) prepaid reload
discounts, (3) revenues from value-added services (VAS) such as SMS in
excess of consumable fixed monthly service fees (for postpaid) and free SMS
allocations (for prepaid), multimedia messaging services (MMS), content
and infotext services, net of amounts settled with carriers owning the
network where the outgoing voice call or sms terminates and payout to
content providers; (4) inbound revenues from other carriers which terminate
their calls to the Globe Group’s network less discounts; (5) revenues from
international roaming services; (6) usage of broadband and internet services
in excess of fixed monthly service fees; and (7) one-time service connection
fees (for wireline voice and data subscribers).
Postpaid service arrangements include fixed monthly service fees, which are
recognized over the subscription period on a prorata basis. Monthly service
fees billed in advance are initially deferred and recognized as revenues
during the period when earned. Telecommunications services provided to
postpaid subscribers are billed throughout the month according to the
bill cycles of subscribers. As a result of bill cycle cut-off, monthly service
revenues earned but not yet billed at the end of the month are estimated
and accrued. These estimates are based on actual usage less estimated
consumable usage using historical ratio of consumable usage over billable
usage.
Proceeds from over-the-air reloading channels and the sale of prepaid
cards are deferred and shown as “Unearned revenues” in the consolidated
statements of financial position. Revenue is recognized upon actual usage
of airtime value net of discounts on promotional calls and net of discounted
promotional SMS usage and bonus reloads. Unused airtime value is
recognized as revenue upon expiration.
The Globe Group offers loyalty programmes which allow its subscribers to
accumulate points when they purchase services from the Globe Group. The
points can then be redeemed for free services, discounts and raffle coupons,
subject to a minimum number of points being obtained. The consideration
received or receivable is allocated between the sale of services and award
credits. The portion of the consideration allocated to the award credits is
accounted for as unearned revenues. This will be recognized as revenue upon
the award redemption.
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2.6.1.1.2 Traffic
Inbound revenues refer to traffic originating from other telecommunications
providers terminating to the Globe Group’s network, while outbound
charges represent traffic sent out or mobile content delivered using agreed
termination rates and/or revenue sharing with other foreign and local
carriers and content providers. Adjustments are made to the accrued amount
for discrepancies between the traffic volume per Globe Group’s records and
per records of the other carriers as these are determined and/or mutually
agreed upon by the parties. Uncollected inbound revenues are shown
as traffic settlements receivable under the “Receivables” account, while
unpaid outbound charges are shown as traffic settlements payable under
the “Accounts payable and accrued expenses” account in the consolidated
statements of financial position unless a legal right of offset exists.
2.6.1.2 Nonservice revenues
Proceeds from sale of handsets, phonekits, SIM packs, modems and accessories are
recognized upon delivery of the item. The related cost or net realizable value of handsets,
phonekits, modems, SIM packs and accessories sold to customers are presented as “Cost of
sales”, in the consolidated statements of comprehensive income.
2.6.1.3 Others
Interest income is recognized as it accrues using the effective interest rate method.
Lease income from operating lease is recognized on a straight-line basis over the lease
term.
Dividend income is recognized when the Globe Group’s right to receive payment is
established.
2.6.2 Subscriber Acquisition and Retention Costs
The related costs incurred in connection with the acquisition of subscribers are charged against
current operations. Subscriber acquisition costs primarily include commissions, handset, phonekit and
device subsidies and selling expenses. Subsidies represent the difference between the cost of handsets,
phonekits, SIM cards, modems and accessories (included in the “Cost of sales” and “Impairment losses
and others” account), and the price offered to the subscribers (included in the “Nonservice revenues”
account). Retention costs for existing postpaid subscribers are in the form of free handsets and bill
credits. Free handsets are charged against current operations and included under the “General, selling and
administrative expenses” account in the consolidated statements of comprehensive income upon delivery
or when there is a contractual obligation to deliver. Bill credits are deducted from service revenues upon
application against qualifying subscriber bills.
2.6.3 Cash and Cash Equivalents
Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that
are readily convertible to known amounts of cash with original maturities of three months or less from
date of placement and that are subject to an insignificant risk of changes in value.
2.6.4 Financial Instruments
2.6.4.1 General
2.6.4.1.1 Initial recognition and fair value measurement
Financial instruments are recognized in the Globe Group’s consolidated
statements of financial position when the Globe Group becomes a party to
the contractual provisions of the instrument. Purchases or sales of financial
assets that require delivery of assets within the time frame established by
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egulation or convention in the marketplace are recognized (regular way
trades) on the trade date, i.e., the date that the Group commits to purchase
or sell the asset.
Financial instruments are recognized initially at fair value. Except for
financial instruments at fair value through profit or loss (FVPL), the initial
measurement of financial assets includes directly attributable transaction
costs.
The Globe Group classifies its financial assets into the following categories:
financial assets at FVPL, held-to-maturity (HTM) investments, AFS
investments, and loans and receivables. The Globe Group classifies its
financial liabilities into financial liabilities at FVPL and other financial
liabilities. The classification depends on the purpose for which the
investments were acquired and whether they are quoted in an active
market. Management determines the classification of its investments at
initial recognition and, where allowed and appropriate, reevaluates such
designation every reporting date.
The fair value for financial instruments traded in active markets at the
end of reporting date is based on their quoted market price or dealer price
quotations (bid price for long positions and ask price for short positions),
without any deduction for transaction costs. When current bid and ask prices
are not available, the price of the most recent transaction provides evidence
of the current fair value as long as there has not been a significant change
in economic circumstances since the time of the transaction.
For all other financial instruments not listed in an active market, the fair
value is determined by using appropriate valuation techniques. Valuation
techniques include net present value techniques, comparison to similar
instruments for which market observable prices exist, option pricing models,
and other relevant valuation models. Any difference noted between the fair
value and the transaction price is treated as expense or income, unless it
qualifies for recognition as some type of asset or liability.
Where the transaction price in a non-active market is different from the
fair value of other observable current market transactions in the same
instrument or based on a valuation technique whose variables include only
data from observable market, the Globe Group recognizes the difference
between the transaction price and fair value (a “Day 1” profit) in profit or
loss. In cases where no observable data is used, the difference between the
transaction price and model value is only recognized in profit or loss when
the inputs become observable or when the instrument is derecognized. For
each transaction, the Globe Group determines the appropriate method of
recognizing the “Day 1” profit amount.
2.6.4.1.2 Financial Assets or Financial Liabilities at FVPL
This category consists of financial assets or financial liabilities that are held
for trading or designated by management as FVPL on initial recognition.
Derivative instruments, except those designated as hedging instruments in
hedge relationships as defined by PAS 39, are classified under this category.
Derivatives, including separated embedded derivatives, are also classified as
held for trading unless they are designated as effective hedging instruments.
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Financial assets or financial liabilities at FVPL are recorded in the
consolidated statements of financial position at fair value, with changes
in fair value being recorded in profit and loss. Interest earned or incurred
is recorded as “Interest income or expense”, respectively, in profit and loss
while dividend income is recorded when the right of payment has been
established.
Financial assets or financial liabilities are classified in this category as
designated by management on initial recognition when any of the following
criteria are met:
• the designation eliminates or significantly reduces the inconsistent
treatment that would otherwise arise from measuring the assets or
liabilities or recognizing gains or losses on a different basis; or
• the assets and liabilities are part of a group of financial assets, financial
liabilities or both which are managed and their performance are evaluated
on a fair value basis in accordance with a documented risk management
or investment strategy; or
• the financial instrument contains an embedded derivative, unless the
embedded derivative does not significantly modify the cash flows or it is
clear, with little or no analysis, that it would not be separately recorded.
As of December 31, 2009, 2008 and 2007, the Globe Group has not classified
any financial asset or liability as Financial Assets or Financial Liabilities at
FVPL.
2.6.4.1.3 HTM investments
HTM investments are quoted non-derivative financial assets with fixed or
determinable payments and fixed maturities for which the Globe Group’s
management has the positive intention and ability to hold to maturity.
Where the Globe Group sells other than an insignificant amount of HTM
investments, the entire category would be tainted and reclassified as AFS
investments. After initial measurement, HTM investments are subsequently
measured at amortized cost using the effective interest rate method, less
any impairment losses. Amortized cost is calculated by taking into account
any discount or premium on acquisition and fees that are an integral part of
the effective interest rate. The amortization is included in “Interest income”
in the consolidated statements of comprehensive income. Gains and losses
are recognized in profit or loss when the HTM investments are derecognized
and impaired, as well as through the amortization process. The effects
of restatement of foreign currency-denominated HTM investments are
recognized in profit or loss.
As of December 31, 2007, the Globe Group has classified certain special
deposits as HTM investments. These investments matured in 2008. There are
no outstanding HTM investments as of December 31, 2009 and 2008.
2.6.4.1.4 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
not entered into with the intention of immediate or short-term resale and
are not classified as financial assets held for trading, designated as AFS
investments or designated at FVPL.
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This accounting policy relates to the consolidated statements of financial
position caption “Receivables”, which arise primarily from subscriber and
traffic revenues and other types of receivables, “Short-term investments”,
which arise primarily from unquoted debt securities, and other nontrade
receivables included under “Prepayments and other current assets” and loans
receivable included under “Other noncurrent assets”.
Receivables are recognized initially at fair value, which normally pertains to
the billable amount. After initial measurement, receivables are subsequently
measured at amortized cost using the effective interest rate method, less any
allowance for impairment losses. Amortized cost is calculated by taking into
account any discount or premium on the issue and fees that are an integral
part of the effective interest rate. Penalties, termination fees and surcharges
on past due accounts of postpaid subscribers are recognized as revenues
upon collection. The losses arising from impairment of receivables are
recognized in the “Impairment losses and others” account in the consolidated
statements of comprehensive income. The level of allowance for impairment
losses is evaluated by management on the basis of factors that affect the
collectibility of accounts (see accounting policy on 2.6.4.2 Impairment of
Financial Assets).
Short-term investments, other nontrade receivables and loans receivable
are recognized initially at fair value, which normally pertains to the
consideration paid. Similar to receivables, subsequent to initial recognition,
short-term investments, other nontrade receivables and loans receivables are
measured at amortized cost using the effective interest rate method, less any
allowance for impairment losses.
2.6.4.1.5 AFS investments
AFS investments are those investments which are designated as such or do
not qualify to be classified as designated as FVPL, HTM investments or loans
and receivables. They are purchased and held indefinitely, and may be sold
in response to liquidity requirements or changes in market conditions. They
include equity investments, money market papers and other debt
instruments.
After initial measurement, AFS investments are subsequently measured
at fair value. Interest earned on holding AFS investments are reported as
interest income using the effective interest rate. The unrealized gains and
losses arising from the fair valuation of AFS investments are excluded from
reported earnings and are reported as “Other reserves” (net of tax where
applicable) in the equity section of the consolidated statements of financial
position. When the investment is disposed of, the cumulative gains or losses
previously recognized in equity is recognized in profit or loss.
When the fair value of AFS in vestments cannot be measured reliably
because of lack of reliable estimates of future cash flows and discount rates
necessary to calculate the fair value of unquoted equity instruments, these
investments are carried at cost, less any allowance for impairment losses.
Dividends earned on holding AFS investments are recognized in profit or loss
when the right of payment has been established.
The Globe Group evaluates its AFS investments whether the ability and
intention to sell them in the near term is still appropriate. When the Globe
Group is unable to trade the AFS investments due to inactive markets and
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management intent significantly changes to do so in the foreseeable future,
the Globe Group may elect to reclassify it in rare circumstances.
The losses arising from impairment of such investments are recognized as
“Impairment losses and others” in consolidated statements of comprehensive
income.
2.6.4.1.6 Other financial liabilities
Issued financial instruments or their components, which are not designated
at FVPL are classified as other financial liabilities where the substance of the
contractual arrangement results in the Globe Group having an obligation
either to deliver cash or another financial asset to the holder, or to satisfy
the obligation other than by the exchange of a fixed amount of cash
or another financial asset for a fixed number of own equity shares. The
components of issued financial instruments that contain both liability and
equity elements are accounted for separately, with the equity component
being assigned the residual amount after deducting from the instrument as
a whole the amount separately determined as the fair value of the liability
component on the date of issue. After initial measurement, other financial
liabilities are subsequently measured at amortized cost using the effective
interest rate method. Amortized cost is calculated by taking into account
any discount or premium on the issue and fees that are an integral part of
the effective interest rate. Any effects of restatement of foreign currency
denominated liabilities are recognized in profit or loss.
This accounting policy applies primarily to the Globe Group’s debt, accounts
payable and other obligations that meet the above definition (other than
liabilities covered by other accounting standards, such as income tax
payable).
2.6.4.1.7 Derivative Instruments
2.6.4.1.7.1 General
The Globe Group enters into short-term deliverable and
nondeliverable currency forward contracts to manage its
currency exchange exposure related to short-term foreign
currency-denominated monetary assets and liabilities and foreign
currency linked revenues. The Globe Group also enters into
structured currency forward contracts where call options are sold
in combination with such currency forward contracts.
The Globe Group enters into deliverable prepaid forward contracts
that entitle the Globe Group to a discount on the contracted
forward rate. Such contracts contain embedded currency
derivatives that are bifurcated and market-to-market
through earnings, with the host debt instrument being accreted to
its face value.
The Globe Group enters into short-term interest rate swap
contracts to manage its interest rate exposures on certain shortterm
floating rate peso investments. The Globe Group also enters
into long-term currency and interest rate swap
contracts to manage its foreign currency and interest rate
exposures arising from its long-term loan. Such swap contracts
are sometimes entered into in combination with options. The
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Globe Group also sells covered currency options as cost subsidy
for outstanding currency swap contracts.
2.6.4.1.7.2 Recognition and measurement
Derivative financial instruments are initially recognized at fair
value on the date on which a derivative contract is entered into
and are subsequently remeasured at fair value. Derivatives are
carried as financial assets when the fair value is positive and as
financial liabilities when the fair value is negative. The method
of recognizing the resulting gain or loss depends on whether
the derivative is designated as a hedge of an identified risk
and qualifies for hedge accounting treatment. The objective of
hedge accounting is to match the impact of the hedged item
and the hedging instrument in profit or loss. To qualify for
hedge accounting, the hedging relationship must comply with
strict requirements such as the designation of the derivative as
a hedge of an identified risk exposure, hedge documentation,
probability of occurrence of the forecasted transaction in a cash
flow hedge, assessment (both prospective and retrospective bases)
and measurement of hedge effectiveness, and reliability of the
measurement bases of the derivative instruments.
Upon inception of the hedge, the Globe Group documents the
relationship between the hedging instrument and the hedged
item, its risk management objective and strategy for undertaking
various hedge transactions, and the details of the hedging
instrument and the hedged item. The Globe Group also documents
its hedge effectiveness assessment methodology, both at the
hedge inception and on an ongoing basis, as to whether the
derivatives that are used in hedging transactions are highly
effective in offsetting changes in fair values or cash flows of
hedged items.
Hedge effectiveness is likewise measured, with any ineffectiveness
being reported immediately in profit or loss.
2.6.4.1.7.3 Types of Hedges
The Globe Group designates derivatives which qualify as
accounting hedges as either: (a) a hedge of the fair value of a
recognized fixed rate asset, liability or unrecognized firm
commitment (fair value hedge); or (b) a hedge of the cash flow
variability of recognized floating rate asset and liability or
forecasted sales transaction (cash flow hedge).
Fair Value Hedges
Fair value hedges are hedges of the exposure to variability in
the fair value of recognized assets, liabilities or unrecognized
firm commitments. The gain or loss on a derivative instrument
designated and qualifying as a fair value hedge, as well as the
offsetting loss or gain on the hedged item attributable to the
hedged risk are recognized in profit or loss in the same accounting
period. Hedge effectiveness is determined based on the hedge
ratio of the fair value changes of the hedging instrument and
the underlying hedged item. When the hedge ceases to be highly
effective, hedge accounting is discontinued.
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As of December 31, 2009, 2008 and 2007, there were no
derivatives designated and accounted for as fair value hedges.
Cash Flow Hedges
The Globe Group designates as cash flow hedges the following
derivatives: (a) interest rate swaps as cash flow hedge of the
interest rate risk of a floating rate foreign currency-denominated
obligation and (b) certain foreign exchange forward contracts as
cash flow hedge of expected United States Dollar (USD) revenues.
A cash flow hedge is a hedge of the exposure to variability in
future cash flows related to a recognized asset, liability or a
forecasted sales transaction. Changes in the fair value of a
hedging instrument that qualifies as a highly effective cash flow
hedge are recognized in “Other reserves,” which is a component
of equity. Any hedge ineffectiveness is immediately recognized in
profit or loss.
If the hedged cash flow results in the recognition of a
nonfinancial asset or liability, gains and losses previously
recognized directly in equity are transferred from equity and
included in the initial measurement of the cost or carrying value
of the asset or liability. Otherwise, for all other cash flow hedges,
gains and losses initially recognized in equity are transferred from
equity to profit or loss in the same period or periods during which
the hedged forecasted transaction or recognized asset or liability
affect earnings.
Hedge accounting is discontinued prospectively when the
hedge ceases to be highly effective. When hedge accounting
is discontinued, the cumulative gains or losses on the hedging
instrument that has been reported in “Other reserves” is retained
in other comprehensive income until the hedged transaction
impacts profit or loss. When the forecasted transaction is no
longer expected to occur, any net cumulative gains or losses
previously reported in “Other reserves” is recognized immediately
in profit or loss.
The effective portion of the hedge transaction coming from the
fair value changes of the currency forwards are subsequently
recycled from equity to profit or loss and is presented as part of
the US dollar-based revenues.
2.6.4.1.7.4 Other Derivative Instruments Not Accounted for as Accounting
Hedges
Certain freestanding derivative instruments that provide economic
hedges under the Globe Group’s policies either do
not qualify for hedge accounting or are not designated as
accounting hedges. Changes in the fair values of derivative
instruments not designated as hedges are recognized immediately
in profit or loss. For bifurcated embedded derivatives in financial
and nonfinancial contracts that are not designated or do not
qualify as hedges, changes in the fair values of such transactions
are recognized in profit or loss.
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2.6.4.1.8 Offsetting
Financial assets and financial liabilities are offset and the net amount is
reported in the consolidated statements of financial position if, and only if,
there is a currently enforceable legal right to offset the recognized amounts
and there is an intention to settle on a net basis, or to realize the asset and
settle the liability simultaneously. This is not generally the case with master
netting agreements; thus, the related assets and liabilities are presented
gross in the consolidated statements of financial position.
2.6.4.2 Impairment of Financial Assets
The Globe Group assesses at end of the reporting date whether a financial asset or group
of financial assets is impaired.
2.6.4.2.1 Assets carried at amortized cost
If there is objective evidence that an impairment loss on financial assets
carried at amortized cost (e.g. receivables) has been incurred, the amount of
the loss is measured as the difference between the asset’s carrying amount
and the present value of estimated future cash flows discounted at the
asset’s original effective interest rate. Time value is generally not considered
when the effect of discounting is not material. The carrying amount of the
asset is reduced through the use of an allowance account. The amount of the
loss shall be recognized in profit or loss.
The Globe Group first assesses whether objective evidence of impairment
exists individually for financial assets that are individually significant, and
individually or collectively for financial assets that are not individually
significant. If it is determined that no objective evidence of impairment
exists for an individually assessed financial asset, whether significant or not,
the asset is included in a group of financial assets with similar credit risk
characteristics and that group of financial assets is collectively assessed for
impairment. Assets that are individually assessed for impairment and for
which an impairment loss is or continues to be recognized are not included
in a collective assessment of impairment.
If, in a subsequent period, the amount of the impairment loss decreases
and the decrease can be related objectively to an event occurring after the
impairment was recognized, the previously recognized impairment loss is
reversed. Any subsequent reversal of an impairment loss is recognized in
profit or loss to the extent that the carrying value of the asset does not
exceed its amortized cost at the reversal date.
With respect to receivables, the Globe Group performs a regular review of
the age and status of these accounts, designed to identify accounts with
objective evidence of impairment and provide the appropriate allowance
for impairment losses. The review is accomplished using a combination of
specific and collective assessment approaches, with the impairment losses
being determined for each risk grouping identified by the Globe Group.
2.6.4.2.1.1 Subscribers
Full allowance for impairment losses is provided for receivables
from permanently disconnected wireless and wireline subscribers.
Permanent disconnections are made after a series of collection
steps following nonpayment by postpaid subscribers. Such
permanent disconnections generally occur within a predetermined
period from statement date.
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The allowance for impairment loss on wireless subscriber accounts
is determined based on the results of the net flow to write-off
methodology. Net flow tables are derived from account-level
monitoring of subscriber accounts between different age brackets,
from current to 1 day past due to 210 days past due. The net flow
to write-off methodology relies on the historical data of net flow
tables to establish a percentage (“net flow rate”) of subscriber
receivables that are current or in any state of delinquency as
of reporting date that will eventually result in write-off. The
allowance for impairment losses is then computed based on the
outstanding balances of the receivables at the end of reporting
date and the net flow rates determined for the current and each
delinquency bracket.
For active residential and business wireline voice subscribers, full
allowance is generally provided for outstanding receivables that
are past due by 90 and 150 days, respectively. Full allowance is
likewise provided for receivables from wireline data corporate
accounts that are past due by 150 days.
Regardless of the age of the account, additional impairment losses
are also made for wireless and wireline accounts specifically
identified to be doubtful of collection when there is information
on financial incapacity after considering the other contractual
obligations between the Globe Group and the subscriber.
2.6.4.2.1.2 Traffic
For traffic receivables, impairment losses are made for accounts
specifically identified to be doubtful of collection regardless of the
age of the account. For receivable balances that appear doubtful
of collection, allowance is provided after review of the status of
settlement with each carrier and roaming partner, taking into
consideration normal payment cycles, recovery experience and
credit history of the parties.
2.6.4.2.1.3 Other receivables
Other receivables from dealers, credit card companies and other
parties are provided with allowance for impairment losses if
specifically identified to be doubtful of collection regardless of the
age of the account.
2.6.4.2.2 AFS investments carried at cost
If there is objective evidence that an impairment loss has been incurred on
an unquoted equity instrument that is not carried at fair value because its
fair value cannot be reliably measured, or on a derivative asset that is linked
to and must be settled by delivery of such unquoted equity instrument,
the amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows
discounted at the current market rate of return for a similar financial asset.
The carrying amount of the asset is reduced through the use of an allowance
account.
2.6.4.2.3 AFS investments carried at fair value
If an AFS investments carried at fair value is impaired, an amount comprising
the difference between its cost (net of any principal repayment and
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amortization) and its current fair value, less any impairment loss previously
recognized in profit or loss, is transferred from equity to profit or loss.
Reversals of impairment losses in respect of equity instruments classified as
AFS are not recognized in profit or loss. Reversals of impairment losses on
debt instruments are made through profit or loss if the increase in fair value
of the instrument can be objectively related to an event occurring after the
impairment loss was recognized in profit or loss.
2.6.4.3 Derecognition of Financial Instruments
2.6.4.3.1 Financial Asset
A financial asset (or, where applicable a part of a financial asset or part of a
group of financial assets) is derecognized where:
• the rights to receive cash flows from the asset have expired;
• the Globe Group retains the right to receive cash flows from the
asset, but has assumed an obligation to pay them in full without material
delay to a third party under a “pass-through” arrangement; or
• the Globe Group has transferred its rights to receive cashflows
from the asset and either (a) has transferred substantially all the risks and
rewards of ownership or (b) has neither transferred nor retained the risk
and rewards of the asset but has transferred the control of the asset.
Where the Globe Group has transferred its rights to receive cash flows from
an asset and has neither transferred nor retained substantially all the risks
and rewards of the asset nor transferred control of the asset, the asset is
recognized to the extent of the Globe Group’s continuing involvement in the
asset.
2.6.4.3.2 Financial Liability
A financial liability is derecognized when the obligation under the liability
is discharged or cancelled or expires. Where an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange
or modification is treated as a derecognition of the original liability and the
recognition of a new liability, and the difference in the respective carrying
amounts is recognized in profit or loss.
2.6.5 Inventories and Supplies
Inventories and supplies are stated at the lower of cost or net realizable value (NRV). NRV for handsets,
modems and accessories is the selling price in the ordinary course of business less direct costs to sell,
while NRV for SIM packs, call cards, spare parts and supplies consists of the related replacement costs.
In determining the NRV, the Globe Group considers any adjustment necessary for obsolescence, which is
generally provided 100% for nonmoving items after a certain period. Cost is determined using the moving
average method.
2.6.6 Property and Equipment
Property and equipment, except land, are carried at cost less accumulated depreciation, amortization and
impairment losses. Land is stated at cost less any impairment losses.
The initial cost of an item of property and equipment includes its purchase price and any cost attributable
in bringing the property and equipment to its intended location and working condition. Cost also includes:
(a) interest and other financing charges on borrowed funds used to finance the acquisition of property
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and equipment to the extent incurred during the period of installation and construction; and (b) asset
retirement obligations (ARO) specifically on property and equipment installed/constructed on leased
properties.
Subsequent costs are capitalized as part of property and equipment only when it is probable that future
economic benefits associated with the item will flow to the Globe Group and the cost of the item can be
measured reliably. All other repairs and maintenance are charged against current operations as incurred.
Assets under construction (AUC) are carried at cost and transferred to the related property and equipment
account when the construction or installation and related activities necessary to prepare the property and
equipment for their intended use are complete, and the property and equipment are ready for service.
Depreciation and amortization of property and equipment commences once the property and equipment
are available for use and computed using the straight-line method over the estimated useful lives (EUL) of
the property and equipment.
Leasehold improvements are amortized over the shorter of their EUL or the corresponding lease terms.
The EUL of property and equipment are reviewed annually based on expected asset utilization as anchored
on business plans and strategies that also consider expected future technological developments and
market behavior to ensure that the period of depreciation and amortization is consistent with the
expected pattern of economic benefits from items of property and equipment.
When property and equipment is retired or otherwise disposed of, the cost and the related accumulated
depreciation, amortization and impairment losses are removed from the accounts and any resulting gain
or loss is credited to or charged against current operations.
2.6.7 ARO
The Globe Group is legally required under various contracts to restore leased property to its original condition
and to bear the cost of dismantling and deinstallation at the end of the contract period. The Globe
Group recognizes the present value of these obligations and capitalizes these costs as part of the balances
of the related property and equipment accounts, which are depreciated on a straight-line basis over the
useful life of the related property and equipment or the contract period, whichever is shorter.
The amount of ARO is accrued and such accretion is recognized as interest expense.
2.6.8 Investment Property
Investment property is initially measured at cost, including transaction costs. Subsequent to initial recognition,
investment property is carried at cost less accumulated depreciation and any impairment losses.
Expenditures incurred after the investment property has been put in operation, such as repairs and maintenance
costs, are normally charged against income in the period in which the costs are incurred.
Depreciation of investment property is computed using the straight-line method over its useful life,
regardless of utilization. The EUL and the depreciation method are reviewed periodically to ensure that the
period and method of depreciation are consistent with the expected pattern of economic benefits from
items of investment properties.
Transfers are made to investment property, when, and only when, there is a change in use, evidenced by
the end of the owner occupation, commencement of an operating lease to another party or completion of
construction or development. Transfers are made from investment property when, and only when, there
is a change in use, evidenced by the commencement of owner occupation or commencement of development
with the intention to sell.
Investment property is derecognized when it has either been disposed of or permanently withdrawn from
use and no future benefit is expected from its disposal.
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Any gain or loss on derecognition of an investment property is recognized in profit or loss in the period of
derecognition.
2.6.9 Intangible Assets
Intangible assets consist of 1) costs incurred to acquire application software (not an integral part of its
related hardware or equipment) and telecommunications equipment software licenses; and 2) intangible
assets identified to exist during the acquisition of EGG Group for its existing customer contracts. Costs
directly associated with the development of identifiable software that generate expected future benefits
to the Globe Group are recognized as intangible assets. All other costs of developing and maintaining
software programs are recognized as expense when incurred.
Subsequent to initial recognition, intangible assets are measured at cost less accumulated amortization
and any impairment losses. The EUL of intangible assets with finite lives are assessed at the individual
asset level. Intangible assets with finite lives are amortized on a straight-line basis over their useful lives.
The periods and method of amortization for intangible assets with finite useful lives are reviewed annually
or more frequently when an indicator of impairment exists.
A gain or loss arising from derecognition of an intangible asset is measured as the difference between the
net disposal proceeds and the carrying amount of the asset and is recognized in the consolidated statements
of comprehensive income when the asset is derecognized.
2.6.10 Business Combinations and Goodwill
Business combinations are accounted for using the purchase method. The cost of an acquisition is measured
as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed
at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets (including
previously unrecognized intangible assets) acquired and liabilities and contingent liabilities assumed in
a business combination are measured initially at fair values at the date of acquisition, irrespective of the
extent of any minority interest.
Goodwill is initially measured at cost being the excess of the cost of the business combination over the
Group’s share in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities.
If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the
difference is recognized directly in the consolidated statements of comprehensive income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the
purpose of the impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to each of the Group’s cash-generating units (CGU) that are expected to benefit from the
synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned
to those units.
Goodwill allocated to a cash-generating unit is included in the carrying amount of the CGU being disposed
when determining the gain or loss on disposal. For partial disposal of operation within the CGU, the
goodwill associated with the disposed operation is included in the carrying amount of the operation when
determining gain or loss on disposal and measured on the basis of the relative values of the operation
disposed of and the portion of the CGU retained, unless another method better reflects the goodwill associated
with the operation disposed of.
2.6.11 Investments in Joint Ventures
Investments in joint ventures (JV) are accounted for under the equity method, less any impairment losses.
A JV is an entity, not being a subsidiary nor an associate, in which the Globe Group exercises joint control
together with one or more venturers.
Under the equity method, the investments in JV are carried in the consolidated statements of financial
position at cost plus post-acquisition changes in the Globe Group’s share in net assets of the JV, less
any allowance for impairment losses. The profit or loss includes Globe Group’s share in the results of
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operations of its JV. Where there has been a change recognized directly in the JV’s equity, the Globe Group
recognizes its share of any changes and discloses this, when applicable, in other comprehensive income.
2.6.12 Impairment of Nonfinancial Assets
For assets excluding goodwill, an assessment is made at the end of the reporting date to determine
whether there is any indication that an asset may be impaired, or whether there is any indication that
an impairment loss previously recognized for an asset in prior periods may no longer exist or may have
decreased. If any such indication exists and when the carrying value of an asset exceeds its estimated
recoverable amount, the asset or CGU to which the asset belongs is written down to its recoverable
amount. The recoverable amount of an asset is the greater of its net selling price and value in use.
Recoverable amounts are estimated for individual assets or investments or, if it is not possible, for the
CGU to which the asset belongs. For impairment loss on specific assets or investments, the recoverable
amount represents the net selling price.
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset.
An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable amount.
An impairment loss is charged against operations in the year in which it arises. A previously recognized
impairment loss is reversed only if there has been a change in estimate used to determine the recoverable
amount of an asset, however, not to an amount higher than the carrying amount that would have
been determined (net of any accumulated depreciation and amortization for property and equipment,
investment property and intangible assets) had no impairment loss been recognized for the asset in prior
years. A reversal of an impairment loss is credited to current operations.
For assessing impairment of goodwill, a test for impairment is performed annually and when
circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by
assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. Where
the recoverable amount of the CGU is less than their carrying amount an impairment loss is recognized.
Impairment losses relating to goodwill cannot be reversed in future periods.
2.6.13 Income Tax
2.6.13.1 Current Tax
Current tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the tax authority. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted as at
the end of the reporting period.
2.6.13.2 Deferred Income Tax
Deferred income tax is provided using the liability method on all temporary differences,
with certain exceptions, at the end of the reporting period between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, with
certain exceptions. Deferred income tax assets are recognized for all deductible temporary
differences, with certain exceptions, and carryforward benefits of unused tax credits from
excess minimum corporate income tax (MCIT) over regular corporate income
tax and net operating loss carryover (NOLCO) to the extent that it is probable that taxable
income will be available against which the deductible temporary differences and the
carryforward benefits of unused MCIT and NOLCO can be used.
Deferred income tax is not recogni zed when it arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of
transaction, affects neither the accounting income nor taxable income or loss. Deferred
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income tax liabilities are not provided on nontaxable temporary differences associated with
investments in JV.
Deferred income tax relating to items recognized directly in equity or other comprehensive
income is included in the related equity or other comprehensive income account and not in
profit or loss.
The carrying amounts of deferred income tax assets are reviewed every end of reporting
period and reduced to the extent that it is no longer probable that sufficient taxable
income will be available to allow all or part of the deferred income tax assets to be utilized.
Deferred income tax assets and liabilities are offset, if a legally enforceable right exists to
set off current income tax assets against current income tax liabilities and the deferred
income taxes relate to the same taxable entity and the same taxation authority.
Deferred income tax assets and liabilities are measured at the tax rates that are expected
to apply in the year when the assets are realized or the liabilities are settled based on tax
rates (and tax laws) that have been enacted or substantively enacted as at the end of the
reporting period.
Movements in the deferred income tax assets and liabilities arising from changes in tax
rates are charged or credited to income for the period.
2.6.14 Provisions
Provisions are recognized when: (a) the Globe Group has present obligation (legal or constructive) as a
result of a past event; (b) it is probable (i.e., more likely than not) that an outflow of resources embodying
economic benefits will be required to settle the obligation; and (c) a reliable estimate can be made of
the amount of the obligation. Provisions are reviewed every end of the reporting period and adjusted
to reflect the current best estimate. If the effect of the time value of money is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessment of the time value of money and, where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time is recognized as interest
expense under “Financing costs” in consolidated statements of comprehensive income.
2.6.15 Share-based Payment Transactions
Certain employees (including directors) of the Globe Group receive remuneration in the form of sharebased
payment transactions, whereby employees render services in exchange for shares or rights over
shares (“equity-settled transactions”) (see Note 18).
The cost of equity-settled transactions with employees is measured by reference to the fair value at
the date at which they are granted. In valuing equity-settled transactions, vesting conditions, including
performance conditions, other than market conditions (conditions linked to share prices), shall not be
taken into account when estimating the fair value of the shares or share options at the measurement
date. Instead, vesting conditions are taken into account in estimating the number of equity instruments
that will vest.
The cost of equity-settled transactions is recognized in profit or loss, together with a corresponding
increase in equity, over the period in which the service conditions are fulfilled, ending on the date on
which the relevant employees become fully entitled to the award (‘vesting date’). The cumulative expense
recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent
to which the vesting period has expired and the number of awards that, in the opinion of the management
of the Globe Group at that date, based on the best available estimate of the number of equity instruments,
will ultimately vest.
No expense is recognized for awards that do not ultimately vest, except for awards where vesting is
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conditional upon a market condition, which are treated as vesting irrespective of whether or not the
market condition is satisfied, provided that all other performance conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum, an expense is recognized as if
the terms had not been modified. In addition, an expense is recognized for any increase in the value of the
transaction as a result of the modification, measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognized for the award is recognized immediately. However, if a new award
is substituted for the cancelled award, and designated as a replacement award on the date that it is
granted, the cancelled and new awards are treated as if they were a modification of the original award, as
described in the previous paragraph. The dilutive effect of outstanding options is reflected as additional
share dilution in the computation of earnings per share (EPS) (see Note 27).
2.6.16 Treasury Stock
Treasury stock is recorded at cost and is presented as a deduction from equity. When the shares are
retired, the capital stock account is reduced by its par value and the excess of cost over par value upon
retirement is debited to additional paid-in capital to the extent of the specific or average additional paidin
capital when the shares were issued and to retained earnings for the remaining balance.
2.6.17 Pension Cost
Pension cost is actuarially determined using the projected unit credit method. This method reflects
services rendered by employees up to the date of valuation and incorporates assumptions concerning
employees’ projected salaries. Actuarial valuations are conducted with sufficient regularity, with option
to accelerate when significant changes to underlying assumptions occur. Pension cost includes current
service cost, interest cost, expected return on any plan assets, actuarial gains and losses and the effect of
any curtailment or settlement.
The net pension asset recognized by the Globe Group in respect of the defined benefit pension plan is
the lower of: (a) the fair value of the plan assets less the present value of the defined benefit obligation
at the end of the reporting period, together with adjustments for unrecognized actuarial gains or losses
that shall be recognized in later periods; or (b) the total of any cumulative unrecognized net actuarial
losses and past service cost and the present value of any economic benefits available in the form of
refunds from the plan or reductions in future contributions to the plan. The defined benefit obligation is
calculated annually by an independent actuary using the projected unit credit method. The present value
of the defined benefit obligation is determined by using risk-free interest rates of government bonds that
have terms to maturity approximating the terms of the related pension liabilities or by applying a single
weighted average discount rate that reflects the estimated timing and amount of benefit payments.
A portion of actuarial gains and losses is recognized as income or expense if the cumulative unrecognized
actuarial gains and losses at the end of the previous reporting period exceeded the greater of 10% of the
present value of defined benefit obligation or 10% of the fair value of plan assets. These gains and losses
are recognized over the expected average remaining working lives of the employees participating in the
plan.
2.6.18 Borrowing Costs
Borrowing costs are capitalized if these are directly attributable to the acquisition, construction or
production of a qualifying asset. Capitalization of borrowing costs commences when the activities for the
asset’s intended use are in progress and expenditures and borrowing costs are being incurred. Borrowing
costs are capitalized until the assets are ready for their intended use. These costs are amortized using
the straight-line method over the EUL of the related property and equipment. If the resulting carrying
amount of the asset exceeds its recoverable amount, an impairment loss is recognized. Borrowing costs
include interest charges and other related financing charges incurred in connection with the borrowing
of funds, as well as exchange differences arising from foreign currency borrowings used to finance these
projects to the extent that they are regarded as an adjustment to interest costs. Premiums on long-term
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debt are included under the “Long-term debt” account in the consolidated statements of financial position
and are amortized using the effective interest rate method.
Other borrowing costs are recognized as expense in the period in which these are incurred.
2.6.19 Leases
The determination of whether an arrangement is, or contains a lease, is based on the substance of the
arrangement and requires an assessment of whether the fulfillment of the arrangement is dependent on
the use of a specific asset or assets and the arrangement conveys a right to use the asset. A reassessment
is made after inception of the lease only if one of the following applies:
• there is a change in contractual terms, other than a renewal or extension of the arrangement;
• a renewal option is exercised or an extension granted, unless that term of the renewal or extension
was initially included in the lease term;
• there is a change in the determination of whether fulfillment is dependent on a specified asset; or
• there is a substantial change to the asset.
Where a reassessment is made, lease accounting shall commence or cease from the date when the change
in circumstances gave rise to the reassessment for any of the scenarios above, and at the date of renewal
or extension period for the second scenario.
2.6.19.1 Group as Lessee
Finance leases, which transfer to the Globe Group substantially all the risks and benefits
incidental to ownership of the leased item, are capitalized at the inception of the lease at
the fair value of the leased property or, if lower, at the present value of the minimum lease
payments and included in the “Property and equipment” account with the corresponding
liability to the lessor included in the “Other long-term liabilities” account in the consolidated
statements of financial position. Lease payments are apportioned between the finance charges
and reduction of the lease liability so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly as “Interest expense” in the
consolidated statements of comprehensive income.
Capitalized leased assets are depreciated over the shorter of the EUL of the assets and the
respective lease terms.
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset
are classified as operating leases. Operating lease payments are recognized as an expense in
profit or loss on a straight-line basis over the lease term.
2.6.19.2 Group as Lessor
Finance leases, where the Globe Group transfers substantially all the risk and benefits incidental
to ownership of the leased item to the lessee, are included in the consolidated statements of
financial position under “Prepayments and other current assets” account. A lease receivable is
recognized equivalent to the net investment (asset cost) in the lease. All income resulting from
the receivable is included in the “Interest income” account in the consolidated statements of
comprehensive income.
Leases where the Globe Group does not transfer substantially all the risk and benefits of
ownership of the assets are classified as operating leases. Initial direct costs incurred in
negotiating operating leases are added to the carrying amount of the leased asset and
recognized over the lease term on the same basis as the rental income. Contingent rents are
recognized as revenue in the period in which they are earned.
2.6.20 General, Selling and Administrative Expenses
General, selling and administrative expenses, except for rent, are charged against current operations as
incurred.
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2.6.21 Foreign Currency Transactions
The functional and presentation currency of the Globe Group is the Philippine Peso, except for EHL whose
functional currency is the Hongkong Dollar (HKD). Transactions in foreign currencies are initially recorded
at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at
the end of reporting period.
Nonmonetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate as at the date of the initial transaction and are not subsequently restated.
Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rate
at the date when the fair value was determined. All foreign exchange differences are taken to profit or
loss, except where it relates to equity securities where gains or losses are recognized directly in other
comprehensive income.
As at the reporting date, the assets and liabilities of EHL are translated into the presentation currency of
the Globe Group at the rate of exchange prevailing at the end of reporting period and its profit or loss
is translated at the monthly weighted average exchange rates during the year. The exchange differences
arising on the translation are taken directly to a separate component of equity under “Other reserves”
account. Upon disposal of EHL, the cumulative translation adjustments relating to EHL shall be recognized
in profit or loss.
2.6.22 EPS
Basic EPS is computed by dividing earnings applicable to common stock by the weighted average number
of common shares outstanding, after giving retroactive effect for any stock dividends, stock splits or
reverse stock splits during the period.
Diluted EPS is computed by dividing net income by the weighted average number of common shares
outstanding during the period, after giving retroactive effect for any stock dividends, stock splits or
reverse stock splits during the period, and adjusted forn the effect of dilutive options and dilutive
convertible preferred shares. Outstanding stock options will have a dilutive effect under the treasury stock
method only when the average market price of the underlying common share during the period exceeds
the exercise price of the option. If the required dividends to be declared on convertible preferred shares
divided by the number of equivalent common shares, assuming such shares are converted, would decrease
the basic EPS, then such convertible preferred shares would be deemed dilutive. Where the effect of the
assumed conversion of the preferred shares and the exercise of all outstanding options have anti-dilutive
effect, basic and diluted EPS are stated at the same amount.
2.6.23 Operating Segment
The Globe Group’s major operating business units are the basis upon which the Globe Group reports its
primary segment information. The Globe Group’s business segments consist of: (1) mobile communication
services; (2) wireline communication services; and (3) others. The Globe Group generally accounts for
intersegment revenues and expenses at agreed transfer prices.
2.6.24 Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. These are disclosed
unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent
assets are not recognized in the consolidated financial statements but are disclosed when an inflow of
economic benefits is probable.
2.6.25 Events after the Reporting Period
Any post period-end event up to the date of approval of the BOD of the consolidated financial statements
that provides additional information about the Globe Group’s position at the end of reporting period
(adjusting event) is reflected in the consolidated financial statements. Any post period-end event that is
not an adjusting event is disclosed in the consolidated financial statements when material.
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3. Management’s Significant Accounting Judgments and Use of Estimates
3.1 Judgments and Estimates
The preparation of the accompanying consolidated financial statements in conformity with PFRS requires
management to make estimates and assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. The estimates and assumptions used in the accompanying
consolidated financial statements are based upon management’s evaluation of relevant facts and
circumstances as of the date of the consolidated financial statements. Actual results could differ from such
estimates.
Judgments and estimates are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
3.1.1 Judgments
3.1.1.1 Leases
The Globe Group has entered into various lease agreements as lessee and lessor. The Globe
Group has determined that it retains all the significant risks and rewards on equipment and
office spaces leased out on operating lease and various items of property and equipment
acquired through finance lease.
3.1.1.2 Fair value of financial instruments
Where the fair values of financial assets and financial liabilities recorded on the
consolidated statements of financial position cannot be derived from active markets,
they are determined using a variety of valuation techniques that include the use of
mathematical models. The input to these models is taken from observable markets where
possible, but where this is not feasible, a degree of judgment is required in establishing
fair values. The judgments include considerations of liquidity and model inputs such as
correlation and volatility for longer dated derivatives.
As of December 31, 2009, 2008 and 2007, the fair value of financial assets and liabilities
that were determined using valuation techniques, inputs and assumptions are based
on market observable data and conditions and reflect appropriate risk adjustments that
market participants would make for credit and liquidity risks existing as of the periods
indicated.
The Globe Group considers a market as active if it is one in which transactions are taking
place regularly on an arm’s length basis. On the other hand, the Globe Group considers
a market as inactive if there is a significant decline in the volume and level of trading
activity and the available prices vary significantly over time among market participants or
the prices are not current.
3.1.1.3 HTM investments
The classification as HTM investments requires significant judgment. In making this
judgment, the Globe Group evaluates its intention and ability to hold such investments
to maturity. If the Globe Group fails to keep these investments to maturity other than
in certain specific circumstances - for example, selling an insignificant amount close to
maturity - it will be required to reclassify the entire portfolio as AFS investments. The
investments would therefore be measured at fair value and not at amortized cost.
3.1.1.4 Financial assets not quoted in an active market
The Globe Group classifies financial assets by evaluating, among others, whether the asset
is quoted or not in an active market. Included in the evaluation on whether a financial
asset is quoted in an active market is the determination on whether quoted prices are
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3.1.2 Estimates
readily and regularly available, and whether those prices represent actual and regularly
occurring market transactions on an arm’s length basis.
3.1.1.5 Allocation of goodwill to cash-generating units
The Globe Group allocated the carrying amount of goodwill to the mobile content and
application development services business CGU, for the Group believes that this CGU
represents the lowest level within the Globe Group at which the goodwill is monitored
for internal management reporting purposes; and not larger than an operating segment
determined in accordance with PFRS 8.
3.1.1.6 Determination of whether the Globe Group is acting as a principal or an agent
The Globe Group assesses its revenue arrangements against the following criteria to
determine whether it is acting as a principal or an agent:
• whether the Group has primary responsibility for providing the goods and services;
• whether the Group has inventory risk;
• whether the Group has discretion in establishing prices; and
• whether the Group bears the credit risk.
If the Globe Group has determined it is acting as a principal, the Group recognizes revenue
on a gross basis with the amount remitted to the other party being accounted for as part
of costs and expenses.
If the Globe Group has determined it is acting as an agent, only the net amount retained is
recognized as revenue.
The Group assessed its revenue arrangements and concluded that it is acting as principal in
some arrangements and as an agent in other arrangements.
3.1.2.1 Revenue recognition
The Globe Group’s revenue recognition policies require management to make use of
estimates and assumptions that may affect the reported amounts of revenues and
receivables.
The Globe Group estimates the fair value of points awarded under its loyalty programmes,
which are within the scope of Philippine Interpretation IFRIC 13, based on historical trend
of availment. The Group has no outstanding liability related to unredeemed points as of
December 31, 2009. As of December 31, 2008, the estimated liability for unredeemed points
included in “Unearned revenues” amounted to P8.05 million. There are no loyalty programs
qualifying under IFRIC 13 as of December 31, 2009.
3.1.2.2 Allowance for impairment losses on receivables
The Globe Group maintains an allowance for impairment losses at a level considered
adequate to provide for potential uncollectible receivables. The Globe Group performs a
regular review of the age and status of these accounts, designed to identify accounts with
objective evidence of impairment and provide the appropriate allowance for impairment
losses. The review is accomplished using a combination of specific and collective
assessment approaches, with the impairment losses being determined for each risk
grouping identified by the Globe Group. The amount and timing of recorded expenses for
any period would differ if the Globe Group made different judgments or utilized different
methodologies. An increase in allowance for impairment losses would increase the
recorded operating expenses and decrease current assets.
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Impairment losses on receivables for the years ended December 31, 2009, 2008 and 2007
amounted to P754.63 million, P979.78 million and P711.40 million, respectively (see
Note 23). Receivables, net of allowance for impairment losses, amounted to P6,583.23
million, P7,473.35 million and P6,383.54 million as of December 31, 2009, 2008 and 2007,
respectively (see Note 4).
3.1.2.3 Obsolescence and market decline
The Globe Group, in determining the NRV, considers any adjustment necessary for
obsolescence which is generally provided 100% for nonmoving items after a certain
period. The Globe Group adjusts the cost of inventory to the recoverable value at a level
considered adequate to reflect market decline in the value of the recorded inventories.
The Globe Group reviews the classification of the inventories and generally provides
adjustments for recoverable values of new, actively sold and slow-moving inventories by
reference to prevailing values of the same inventories in the market.
The amount and timing of recorded expenses for any period would differ if different
judgments were made or different estimates were utilized. An increase in allowance for
obsolescence and market decline would increase recorded operating expenses and decrease
current assets.
Inventory obsolescence and market decline for the years ended December 31, 2009, 2008
and 2007 amounted to P58.74 million, P262.10 million and P298.12 million, respectively
(see Note 23).
Inventories and supplies, net of allowances, amounted to P1,653.75 million, P1,124.32
million and P1,112.15 million as of December 31, 2009, 2008 and 2007, respectively (see
Note 5).
3.1.2.4 ARO
The Globe Group is legally required under various contracts to restore leased property to
its original condition and to bear the costs of dismantling and deinstallation at the end
of the contract period. These costs are accrued based on an in-house estimate, which
incorporates estimates of asset retirement costs and interest rates. The Globe Group
recognizes the present value of these obligations and capitalizes the present value of these
costs as part of the balance of the related property and equipment accounts, which are
being depreciated and amortized on a straight-line basis over the EUL of the
related asset or the lease term, whichever is shorter. The market risk premium was excluded
from the estimate of the fair value of the ARO because a reasonable and reliable estimate
of the market risk premium is not obtainable.
Since a market risk premium is unavailable, fair value is assumed to be the present value of
the obligations. The present value of dismantling costs is computed based on an average
credit adjusted risk free rate of 10.09%, 11.17% and 6.96% in 2009, 2008 and 2007,
respectively. Assumptions used to compute ARO are reviewed and updated annually.
The amount and timing of recorded expenses for any period would differ if different
judgments were made or different estimates were utilized. An increase in ARO would
increase recorded operating expenses and increase noncurrent liabilities.
In 2008, the Globe Group updated its assumptions on timing of settlement and estimated
cash outflows arising from ARO on its leased premises. As a result of the changes in
estimates reckoned as of January 1, 2008, the Globe Group adjusted downward its ARO
liability (included under “Other long-term liabilities” account) by P714.78 million against
the book value of the assets on leased premises (see Note 15).
As of December 31, 2009, 2008 and 2007, ARO amounted to P1,269.29 million, P1,081.41
million and P1,623.83 million, respectively (see Note 15).
120
3.1.2.5 EUL of property and equipment, investment property and intangible assets
Globe Group reviews annually the EUL of these assets based on expected asset utilization

as anchored on business plans and strategies that also consider expected future
technological developments and market behavior. It is possible that future results of
operations could be materially affected by changes in these estimates brought about by
changes in the factors mentioned.
A reduction in the EUL of property and equipment, investment property and intangible
assets would increase the recorded depreciation and amortization expense and decrease
noncurrent assets.
The EUL of property and equipment of the Globe Group are as follows:
Years
Telecommunications equipment:
Tower 20
Switch 7 and 10
Outside plant, cellsite structures
and improvements 10-20
Distribution dropwires and other
wireline assets 2-10
Cellular equipment and others 2-10
Buildings 20
Leasehold improvements
5 years or lease term, whichever is shorter
Investments in cable systems 15
Office equipment 3-5
Transportation equipment 3-5
The EUL of investment property is 20 years.
Intangible assets comprising of licenses and application software are amortized over
the EUL of the related hardware or equipment ranging from 3 to 10 years or life of the
telecommunications equipment where it is assigned. Customer contracts acquired during
business combination are amortized over 5 years.
In 2009, 2008 and 2007, the Globe Group changed the EUL of certain wireless and
wireline telecommunications equipment resulting from new information affecting the
expected utilization of these assets. The net effect of the change in EUL resulted in
higher depreciation of P347.62 million for the year ended December 31, 2009 and lower
depreciation of P159.76 million and P105.31 million for the years ended December 31, 2008
and 2007.
As of December 31, 2009, 2008 and 2007, property and equipment, investment property
and intangible assets amounted to P104,586.34 million, P96,811.28 million and P94,253.65
million, respectively (see Notes 7, 8 and 9).
3.1.2.6 Asset impairment
3.1.2.6.1 Impairment of nonfinancial assets other than goodwill
The Globe Group assesses impairment of assets (property and equipment,
investment property, intangible assets and investments in joint ventures)
whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. The factors that the Globe Group
considers important which could trigger an impairment review include the
following:
• significant underperformance relative to expected historical or projected
future operating results;
• significant changes in the manner of use of the acquired assets or the
strategy for the overall business; and
• significant negative industry or economic trends.
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An impairment loss is recognized whenever the carrying amount of an asset
or investment exceeds its recoverable amount. The recoverable amount is
the higher of an asset’s net selling price and value in use. The net selling
price is the amount obtainable from the sale of an asset in an arm’s length
transaction while value in use is the present value of estimated future cash
flows expected to arise from the continuing use of an asset and from its
disposal at the end of its useful life. Recoverable amounts are estimated for
individual assets or investments or, if it is not possible, for the CGU to which
the asset belongs.
For impairment loss on specific assets or investments, the recoverable
amount represents the net selling price.
In 2007, the Globe Group reversed a portion of estimated provision for
impairment losses amounting to P178.80 million on a certain network
asset component based on adjusted component values resulting from its
continuing implementation of comprehensive asset component accounting.
For the Globe Group, the CGU is the combined mobile and wireline asset
groups of Globe Telecom and Innove. This asset grouping is predicated
upon the requirement contained in Executive Order (EO) No.109 and RA
No.7925 requiring licensees of Cellular Mobile Telephone System (CMTS) and
International Digital Gateway Facility (IGF) services to provide 400,000 and
300,000 LEC lines, respectively, as a condition for the grant of such licenses.
In determining the present value of estimated future cash flows expected
to be generated from the continued use of the assets or holding of an
investment, the Globe Group is required to make estimates and assumptions
that can materially affect the consolidated financial statements.
Property and equipment, investment property, intangible assets, and
investments in joint ventures amounted to P104,820.14 million, P96,884.81
million and P94,336.91 million as of December 31, 2009, 2008 and 2007,
respectively (see Notes 7, 8, 9 and 10).
3.1.2.6.2 Impairment of goodwill
The Globe Group’s impairment test for goodwill is based on value in
use calculations that use a discounted cash flow model. The cash flows
are derived from the budget for the next five years and do not include
restructuring activities that the Group is not yet committed to or significant
future investments that will enhance the asset base of the CGU being tested.
The recoverable amount is most sensitive to the discount rate used for the
discounted cash flow model as well as the expected future cash inflows and
the growth rate used for extrapolation purposes. As of December 31, 2009
and 2008 (restated), the carrying value of goodwill amounted to P327.13
million (see Note 9).
Goodwill acquired through business combination with EGG Group was
allocated to the mobile content and applications development services
business CGU, which is part of the “Others” reporting segment.
The recoverable amount of the CGU which exceeds the carrying amount
by P63.00 million and P98.00 million as of December 31, 2009 and 2008,
respectively, has been determined based on value in use calculations using
cash flow projections from financial budgets covering a 5-year period. The
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pretax discount rate applied to cash flow projections is 12% and 15% in
2009 and 2008, respectively, and cash flows beyond the 5-year period are
extrapolated using a 3% long-term growth rate in 2009 and 2008.
The calculations of value in use for the CGU are most sensitive to the
following assumptions: (a) 5-year growth rates on VAS subscriber base and
average revenue per unit (ARPU) based on management’s projections; (b)
contract values of application development services contracts based on
management’s target growth rates; (c) discount rate based on the weighted
average cost of capital of Globe Telecom; and (d) long-term growth rate
beyond the 5-year period based on the expected long-term GDP growth of
the Philippines.
With regard to the assessment of value in use of the combined VAS and
applications development services business, there are reasonably possible
changes in key assumptions which could cause the carrying value of the
CGU to exceed its recoverable amount. Specifically, this pertains to the
5-year growth rate assumptions. A reduction in the assumed 27% and 21%
compounded annual growth rate in 2009 and 2008, respectively, the during
the 5-year period to 26% and 12%, respectively, would give a value in use
equal to the carrying amount of the CGU.
3.1.2.7 Deferred income tax assets
The carrying amounts of deferred income tax assets are reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient taxable income will
be available to allow all or part of the deferred income tax assets to be utilized (see Note
24).
As of December 31, 2009, 2008 and 2007, Innove and EGG Group has net deferred income
tax assets amounting to P742.54 million, P523.72 million and P637.72 million, respectively.
As of December 31, 2009, 2008 and 2007, Globe Telecom has net deferred income tax
liabilities amounting to P4,627.29 million, P4,590.43 million and P5,502.89 million,
respectively (see Note 24). Globe Telecom and Innove have no unrecognized deferred
income tax assets as of December 31, 2009, 2008 and 2007. GXI has not recognized
deferred income tax assets since there is no assurance that GXI will generate sufficient
taxable income to allow all or part of it to be utilized. As of December 31, 2009, Innove and
EGG Group’s recognized deferred income tax assets from NOLCO and MCIT amounted to
P138.05 million and P46.71 million, respectively (see Note 24).
3.1.2.8 Financial assets and liabilities
Globe Group carries certain financial assets and liabilities at fair value, which requires
extensive use of accounting estimates and judgment. While significant components of
fair value measurement were determined using verifiable objective evidence (i.e., foreign
exchange rates, interest rates, volatility rates), the amount of changes in fair value would
differ if the Globe Group utilized different valuation methodologies. Any changes in fair
value of these financial assets and liabilities would affect the consolidated statements of
comprehensive income and consolidated statements of changes in equity.
Financial assets comprising AFS investments and derivative assets carried at fair values
as of December 31, 2009, 2008 and 2007, amounted to P118.03 million, P230.34 million
and P584.11 million, respectively, and financial liabilities co pricing of derivative liabilities
carried at fair values as of December 31, 2009, 2008 and 2007, amounted to P92.46 million,
P185.65 million and P340.83 million, respectively (see Note 28.10).
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3.1.2.9 Pension and other employee benefits
The determination of the obligation and cost of pension is dependent on the selection
of certain assumptions used in calculating such amounts. Those assumptions include,
among others, discount rates, expected returns on plan assets and salary rates increase
(see Note 18). In accordance with PAS 19, actual results that differ from the Globe Group’s
assumptions, subject to the 10% corridor test, are accumulated and amortized over future
periods and therefore, generally affect the recognized expense and recorded obligation in
such future periods.
As of December 31, 2009, 2008 and 2007, Globe Group has unrecognized net actuarial
losses of P799.54 million, P115.40 million and P511.80 million, respectively (see Note 18.2).
The Globe Group also determines the cost of equity-settled transactions using assumptions
on the appropriate pricing model. Significant assumptions for the cost of share-based
payments include, among others, share price, exercise price, option life, risk-free interest
rate, expected dividend and expected volatility rate.
Cost of share-based payments for the years ended December 31, 2009, 2008 and 2007
amounted to P126.44 million, P182.32 million and P129.91 million, respectively (see Notes
16 and 18.1).
The Globe Group also estimates other employee benefit obligations and expenses, including
cost of paid leaves based on historical leave availments of employees, subject to the Globe
Group’s policy. These estimates may vary depending on the future changes in salaries and
actual experiences during the year.
The accrued balance of other employee benefits (included in the “Accounts payable
and accrued expenses” account and in the “Other long-term liabilities” account in the
consolidated statements of financial position) as of December 31, 2009, 2008 and 2007
amounted to P371.61 million, P340.47 million and P294.35 million, respectively.
While the Globe Group believes that the assumptions are reasonable and appropriate,
significant differences between actual experiences and assumptions may materially affect
the cost of employee benefits and related obligations.
3.1.2.10 Contingencies
Globe Telecom and Innove are currently involved in various legal proceedings. The estimate
of the probable costs for the resolution of these claims has been developed in consultation
with internal and external counsel handling Globe Telecom and Innove’s defense in these
matters and is based upon an analysis of potential results. Globe Telecom and Innove
currently do not believe that these proceedings will have a material adverse effect on the
consolidated statements of financial position. It is possible, however, that future results of
operations could be materially affected by changes in the estimates or in the effectiveness
of the strategies relating to these proceedings (see Note 26).
3.1.2.11 Purchase Price Allocation
As of December 31, 2008, the purchase price allocation relating to the Globe Group’s
acquisition of EGG Group has been prepared on a preliminary basis. The provisional fair
values of the assets acquired and liabilities assumed as of date of acquisition were based
on the net book values of the identifiable assets and liabilities since these approximate the
fair values. The difference between the total consideration and the net assets amounting to
P346.99 million was initially allocated to goodwill as of December 31, 2008.
The valuation of the intangible assets was completed in June 2009 and showed that the
fair value at the date of acquisition was P28.38 million. The 2008 comparative information
124

has been restated to reflect this adjustment. The value of intangible assets and deferred
tax liability increased by P28.38 million and P8.51 million, respectively. This resulted in a
reduction in goodwill by P19.87 million (see Note 9).
4. Receivables
This account consists of receivables from:
Notes 2009 2008 2007
(In Thousand Pesos)
Subscribers 28.2.2 P4,980,195 P4,563,825 P4,759,249
Traffic settlements - net 16, 28.2.2 2,319,273 3,618,010 2,605,913
Others 28.2.2 634,751 478,170 401,854
7,934,219 8,660,005 7,767,016
Less allowance for impairment losses
Subscribers 28.2.2 1,162,792 785,812 1,097,423
Traffic settlements and others 28.2.2 188,199 400,847 286,052
1,350,991 1,186,659 1,383,475
P6,583,228 P7,473,346 P6,383,541
Subscriber receivables arise from wireless and wireline communications and data services provided under
postpaid arrangements.
Amounts collected from wireless subscribers under prepaid arrangements are reported under “Unearned
revenues” in the consolidated statements of financial position and recognized as revenues upon actual usage
of airtime value or upon expiration of the prepaid credit. The unearned revenues from these subscribers
amounted to P2,981.88 million, P3,247.71 million and P1,866.53 million as of December 31, 2009, 2008 and
2007, respectively.
Traffic settlements receivable are presented net of traffic settlements payable from the same carrier
amounting to P3,130.28 million, P5,297.07 million and P7,297.75 million as of December 31, 2009, 2008 and
2007, respectively.
Receivables are non-interest bearing and are generally collectible in the short-term.
5. Inventories and Supplies
This account consists of:
2009 2008 2007
(In Thousand Pesos)
At cost:
Modems and accessories P237,288 P49,982 P277,509
SIM packs 1,624 2,749 –
Spare parts and supplies – 292 7,030
238,912 53,023 284,539
At NRV:
Modems and accessories 615,514 200,005 63,476
Spare parts and supplies 469,663 354,157 310,919
Handsets and accessories 255,205 437,023 382,192
SIM packs 69,347 76,172 62,847
Call cards and others 5,109 3,942 8,173
1,414,838 1,071,299 827,607
P1,653,750 P1,124,322 P1,112,146
Inventories recognized as expense during the year amounted to P3,006.69 million, P3,379.28 million and
P3,620.89 million in 2009, 2008 and 2007, respectively, is included as part of “Cost of sales” and “Impairment
losses and others” accounts (see Note 23) in the consolidated statements of comprehensive income. An
insignificant amount is included under “General, selling and administrative expenses” as part of “Utilities,
supplies and other administrative expenses” account (see Note 21).
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6. Prepayments and Other Current Assets
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Advance payments to suppliers and
contractors 25.3 P1,143,891 P2,114,203 P992,212
Input VAT – net 889,941 334,579 8,521
Miscellaneous receivables – net 28.10 853,243 515,966 483,949
Prepayments 534,304 617,379 534,959
Loan receivable from Globe Telecom
retirement fund 11, 28.10 – 800,000 –
Other current assets 16, 28.10 777,941 724,302 647,575
P4,199,320 P5,106,429 P2,667,216
As of December 31, 2009, Innove and GXI reported net input VAT amounted to P889.94 million, net of output
VAT of P89.26 million. As of December 31, 2008, Innove, GXI and EGG Group reported net input VAT amounted
to P334.58 million, net of output VAT of P157.05 million. GXI’s net input VAT amounted to P8.52 million as of
December 31, 2007 is presented net of output VAT of P0.16 million.
The “Prepayments” account includes prepaid insurance, rent, among others.
In 2008, the Globe Group granted a loan to the retirement fund amounted to P800.00 million with interest
at 6.20%. Upon maturity in 2009, the loan was rolled over until September 2014 with 7.75% interest and
reclassified under “Other noncurrent assets” account (see Note 11).
The “Other current assets” account includes accrued interest receivable and creditable taxes withheld, among others.
7. Property and Equipment
The rollforward analysis of this account follows:
2009
Buildings and
Telecommunications Leasehold Investments in Office Transportation Assets Under
Equipment Improvements Cable Systems Equipment Equipment Land Construction Total
(In Thousand Pesos)
Cost
At January 1 P148,988,985 P22,235,361 P10,185,208 P5,479,851 P2,125,186 P1,495,841 P13,980,362 P204,490,794
Additions 1,308,160 169,162 353 379,911 225,515 50,511 22,469,550 24,603,162
Retirements/disposals (9,013,358) (13,228) – (9,418) (111,951) – (24,258) (9,172,213)
Reclassifications/adjustments 20,109,866 1,697,636 4,258,448 199,087 (164,601) 5,206 (22,399,993) 3,705,649
At December 31 161,393,653 24,088,931 14,444,009 6,049,431 2,074,149 1,551,558 14,025,661 223,627,392
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 91,235,779 9,984,888 3,918,995 4,558,370 1,252,372 – – 110,950,404
Depreciation and amortization 13,800,566 969,115 787,648 497,005 305,715 – – 16,360,049
Retirements/disposals (5,367,847) 55,760 51,567 10,445 (126,854) – – (5,376,929)
At December 31 99,668,498 11,009,763 4,758,210 5,065,820 1,431,233 – – 121,933,524
Net Book Value at
December 31 P61,725,155 P13,079,168 P9,685,799 P983,611 P642,916 P1,551,558 P14,025,661 P101,693,868
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2008
Buildings and
Telecommunications Leasehold Investments in Office Transportation Assets Under
Equipment Improvements Cable Systems Equipment Equipment Land Construction Total
(In Thousand Pesos)
Cost
At January 1 P139,902,905 P21,364,791 P9,928,378 P5,127,124 P1,643,361 P948,315 P8,380,425 P187,295,299
Additions (see Note 9) 5,134,081 71,342 97,936 494,805 495,182 547,526 13,345,254 20,186,126
Retirements/disposals (304,569) (5,377) – (13,325) (226,391) – (30,008) (579,670)
Reclassifications/adjustments 4,256,568 804,605 158,894 (128,753) 213,034 – (7,715,309) (2,410,961)
At December 31 148,988,985 22,235,361 10,185,208 5,479,851 2,125,186 1,495,841 13,980,362 204,490,794
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 78,114,745 9,087,641 3,246,716 4,247,291 1,071,086 – – 95,767,479
Depreciation and amortization 13,790,032 898,730 672,279 593,715 279,015 – – 16,233,771
Retirements/disposals (668,998) (1,483) – (282,636) (97,729) – – (1,050,846)
At December 31 91,235,779 9,984,888 3,918,995 4,558,370 1,252,372 – – 110,950,404
Net Book Value at
December 31 P57,753,206 P12,250,473 P6,266,213 P921,481 P872,814 P1,495,841 P13,980,362 P93,540,390
2007
Buildings and
Telecommunications Leasehold Investments in Office Transportation Assets Under
Equipment Improvements Cable Systems Equipment Equipment Land Construction Total
(In Thousand Pesos)
Cost
At January 1 P130,620,854 P20,377,768 P10,017,962 P4,515,457 P1,478,232 P897,914 P6,643,502 P174,551,689
Additions 3,253,235 145,563 181,975 269,558 316,667 – 9,563,221 13,730,219
Retirements/disposals (34,080) (9,157) – (15,476) (147,596) – (50,019) (256,328)
Reclassifications/adjustments 6,062,896 850,617 (271,559) 357,585 (3,942) 50,401 (7,776,279) (730,281)
At December 31 139,902,905 21,364,791 9,928,378 5,127,124 1,643,361 948,315 8,380,425 187,295,299
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 65,330,126 7,114,230 2,641,340 3,439,085 974,189 – – 79,498,970
Depreciation and amortization 12,973,133 1,910,873 659,958 781,626 218,888 – – 16,544,478
Retirements/disposals (188,514) 62,538 (54,582) 26,580 (121,991) – – (275,969)
At December 31 78,114,745 9,087,641 3,246,716 4,247,291 1,071,086 – – 95,767,479
Net Book Value at
December 31 P61,788,160 P12,277,150 P6,681,662 P879,833 P572,275 P948,315 P8,380,425 P91,527,820
Assets under construction include intangible components of a network system which are reclassified to
depreciable intangible assets only when assets become available for use (see Note 9).
Investments in cable systems include the cost of the Globe Group’s ownership share in the capacity of certain
cable systems under a joint venture or a consortium or private cable set-up and indefeasible rights of use
(IRUs) of circuits in various cable systems. It also includes the cost of cable landing station and transmission
facilities where the Globe Group is the landing party.
Fully depreciated property and equipment still being used in the network amounted to P35,832.53 million,
P29,537.04 million and P15,268.34 million in 2009, 2008 and 2007, respectively.
The carrying values of property and equipment held under finance leases where the Globe Group is the lessee
are immaterial.
The Globe Group uses its borrowed funds to finance the acquisition of property and equipment and bring it
to its intended location and working condition. Borrowing costs incurred relating to these acquisitions were
included in the cost of property and equipment using 3.96%, 2.29% and 0.57% capitalization rates in 2009,
2008 and 2007, respectively. The Globe Group’s total capitalized borrowing costs amounted to P979.03 million,
P466.19 million and P99.16 million for the years ended December 31, 2009, 2008 and 2007, respectively (see
Note 22).
In 2009, the Globe Group entered into an exchange transaction with an equipment supplier whereby Globe
Group conveyed and transferred ownership of certain equipment and licenses in exchange for more advanced
systems. This exchange resulted in a gain amounted to P568.12 million, equivalent to the difference between
the fair value of the new equipment stipulated in the purchase agreement and the carrying amount of the old
platforms and equipment at the time the exchange was consummated.
In 2008, the Globe Group purchased a parcel of land from a related party amounting to P547.53 million.
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8. Investment Property
The rollforward analysis of this account follows:
2009 2008 2007
(In Thousand Pesos)
Cost
At January 1 P390,641 P403,687 P403,687
Reclassifications/adjustments – (13,046) –
At December 31 390,641 390,641 403,687
Accumulated Depreciation
At January 1 131,418 112,480 89,184
Depreciation 22,547 23,297 23,296
Reclassifications/adjustments (63) (4,359) –
At December 31 153,902 131,418 112,480
Net Book Value at December 31 P236,739 P259,223 P291,207
Investment property represents the portion of a building that is currently being held for lease to third parties
(see Note 25.1b).
The details of income and expenses related to the investment property follow:
2009 2008 2007
(In Thousand Pesos)
Lease income P31,274 P41,690 P40,570
Direct expenses 23,396 19,973 23,564
The fair value of the investment property, as determined by market data approach, amounted to P570.64
million based on the report issued by an independent appraiser dated December 21, 2009.
9. Intangible Assets and Goodwill
The rollforward analysis of this account follows:
2009
Total
Licenses and
Intangible
Application Customer Total Intangible Assets and
Software Contracts Assets Goodwill Goodwill
(In Thousand Pesos)
Cost
At January 1 P6,968,572 P28,381 P6,996,953 P327,125 P7,324,078
Additions 99,164 – 99,164 – 99,164
Retirements/disposals (685,577) – (685,577) – (685,577)
Reclassifications/
adjustments (Note 7) 1,049,000 – 1,049,000 – 1,049,000
At December 31 7,431,159 28,381 7,459,540 327,125 7,786,665
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 P3,985,282 P– P3,985,282 P– P3,985,282
Amortization 997,320 8,514 1,005,834 – 1,005,834
Retirements/disposals (211,736) – (211,736) – (211,736)
Reclassifications/adjustments 24,429 – 24,429 – 24,429
At December 31 4,795,295 8,514 4,803,809 – 4,803,809
Net Book Value at December 31 P2,635,864 P19,867 P2,655,731 P327,125 P2,982,856
128

2008 (As restated)
Total
License and
Intangible
Application Customer Total Intangible Assets and
Software Contracts Assets Goodwill Goodwill
Cost
At January 1 P5,548,510 P– P5,548,510 P– P5,548,510
Additions 167,671 28,381 196,052 327,125 523,177
Retirements/disposals (11,904) – (11,904) – (11,904)
Reclassifications/
adjustments (Note 7) 1,264,295 – 1,264,295 – 1,264,295
At December 31 6,968,572 28,381 6,996,953 327,125 7,324,078
Accumulated Depreciation,
Amortization and
Impairment Losses
At January 1 3,113,887 – 3,113,887 – 3,113,887
Amortization 771,000 – 771,000 – 771,000
Retirements/disposals (3,727) – (3,727) – (3,727)
Reclassifications/adjustments 104,122 – 104,122 – 104,122
At December 31 3,985,282 – 3,985,282 – 3,985,282
Net Book Value at December 31 P2,983,290 P28,381 P3,011,671 P327,125 P3,338,796
2007
Licenses and
Application Software
(In Thousand Pesos)
Cost
At January 1
P4,626,740
Additions 191,738
Retirements/disposals (249)
Reclassifications/adjustments (Note 7) 730,281
At December 31 5,548,510
Accumulated Depreciation, Amortization and Impairment Losses
At January 1 2,476,422
Amortization 621,224
Retirements/disposals (11)
Reclassifications/adjustments 16,252
At December 31 3,113,887
Net Book Value at December 31
P2,434,623
Intangible assets pertain to 1) telecommunications equipment software licenses, corporate application software and
licenses and other VAS software applications that are not integral to the hardware or equipment; and 2) intangible
assets identified to exist during acquisition of EGG Group for its existing customer contracts. The fair value of customer
contracts was determined at P28.38 million based on multiple excess earnings approach using a discount rate of 15%.
The fair values of the identified assets and liabilities of EGG Group acquired in 2008 were:
Provisional fair
Final fair value value upon
Notes upon acquisition acquisition
(In Thousand Pesos)
Receivables - net 4 P35,308 P35,308
Prepayments and other current assets - net 28 8,842 8,842
Property and equipment - net 7 8,306 8,306
Intangible assets - net 28,381 –
80,837 52,456
Accounts payable and accrued expenses 12 47,949 47,949
Deferred tax liability 24 8,514 –
56,463 47,949
Net assets 24,374 4,507
Goodwill arising from acquisition 327,125 346,992
Total consideration, satisfied by cash P351,499 P351,499
129

The goodwill is attributable to the significant synergies expected to arise after the Globe Group’s acquisition of
the EGG Group.
The business revenues and profit and loss of the EGG Group from June 26, 2008 to December 31, 2008 are
insignificant. If the acquisition had occurred on January 1, 2008, the Globe Group’s service revenues and net
income as of December 31, 2008 would have been P62,948.16 million and P11,260.38 million, respectively.
10. Investments in Joint Ventures
This account consists of:
2009 2008 2007
(In Thousand Pesos)
Acquisition cost
At January 1 P111,280 P111,280 P111,280
Acquisition during the year 141,330 – –
At December 31 252,610 111,280 111,280
Accumulated equity in net gains (losses):
At January 1 (37,751) (28,023) (19,000)
Add:
Equity in net losses (7,009) (9,728) (9,023)
Net foreign exchange difference 25,950 – –
At December 31 (18,810) (37,751) (28,023)
P233,800 P73,529 P83,257
10.1 Investment in BPI Globe BanKO Inc., A Savings Bank (BPI Globe BanKO)
On July 17, 2009, Globe acquired a 40% stake in BPI Globe BanKO (formerly Pilipinas Savings Bank, Inc. or
PS Bank) for P141.33 million, pursuant to a Shareholder Agreement with Bank of the Philippine Islands (BPI),
AC and PS Bank, and a Deed of Absolute Sale with BPI. BPI Globe BanKO will have the capability to provide
services to micro-finance institutions and retail clients through mobile and related technology.
The Globe Group’s interest in BPI Globe BanKO is accounted for as follows:
2009
(In Thousand Pesos)
Assets:
Current P147,745
Non-current 3,650
Liabilities:
Current (10,064)
Non-current –
Income 12,572
Expenses (9,627)
10.2 Investment in Bridge Mobile Pte. Ltd. (BMPL)
Globe Telecom and other leading Asia Pacific mobile operators (JV partners) signed an Agreement in 2004 (JV
Agreement) to form a regional mobile alliance, which will operate through a Singapore-incorporated company,
BMPL. The joint venture company is a commercial vehicle for the JV partners to build and establish a regional
mobile infrastructure and common service platform and deliver different regional mobile services to their
subscribers.
The other joint venture partners with equal stake in the alliance include Bharti TeleVentures Limited, Maxis
Communications Berhad, Optus Mobile Pty. Limited, Singapore Telecom Mobile Pte. Ltd., Taiwan Cellular
Corporation, PT Telekomunikasi Selular and Hongkong CSL Ltd. Under the JV Agreement, each partner shall
contribute USD4.00 million based on an agreed schedule of contribution. Globe Telecom may be called upon to
contribute on dates to be determined by the JV. As of December 31, 2009, Globe Telecom has invested a total
of USD2.20 million in the joint venture.
130

The Globe Group’s interest in BMPL is accounted for as follows:
2009 2008 2007
(In Thousand Pesos)
Assets:
Current P104,280 P79,110 P93,088
Non-current 1,769 13,014 13,319
Liabilities:
Current (6,571) (8,867) (10,927)
Non-current – – (3,344)
Income 17,872 18,083 21,465
Expenses (27,826) (27,811) (30,344)
The Globe Group has no share of any contingent liabilities as of December 31, 2009, 2008 and 2007.
11. Other Noncurrent Assets
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Prepaid pension 18.2 P1,055,444 P1,140,923 P162,754
Loan receivable from Globe Telecom
retirement fund 6 968,000 – –
Loan receivable from Bethlehem Holdings,
Inc. (BHI) 25.5 295,000 – –
Miscellaneous deposits 431,221 386,678 364,628
Deferred input VAT 372,618 751,000 1,112,370
AFS investment in equity securities - net 28.10, 28.11 81,727 61,324 55,461
Others - net 134,400 20,270 218,426
P3,338,410 P2,360,195 P1,913,639
In 2008, the Globe Group granted a short-term loan to the Globe Telecom retirement fund amounting to
P800.00 million with interest at 6.20% (see Note 6). Upon maturity in 2009, the loan was rolled over until
September 2014 and bears interest at 7.75%. Further, in 2009, the Globe Group granted an additional loan to
the retirement fund amounting to P168.00 million which bears interest at 7.75% and is due also in September
2014.
The Globe Telecom retirement fund utilized the loan to fund its investments in BHI, a company it organized to
invest in media ventures. In 2009, BHI acquired two operating companies.
On August 13 and December 21, 2009, the Globe Group granted five-year loans amounting to P250.00 million
and P45.00 million, respectively to BHI at 8.275% interest. The P250.00 million loan is covered by a pledge
agreement whereby in the event of default, the Globe Group shall be entitled to set-off whatever amount is
due to BHI from any unpaid fees of Broadcast Enterprises and Affiliated Media Inc. (BEAM), BHI’s subsidiary,
from the Globe Group. The P45.00 million loan is fully secured by a chattel mortgage agreement dated
December 21, 2009 between Globe Group and BEAM (see Notes 16.3 and 25.5).
12. Accounts Payable and Accrued Expenses
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Accrued project costs 25.3 P8,081,684 P5,258,619 P4,448,646
Accounts payable 16 5,769,355 5,156,011 6,747,779
Accrued expenses 16 4,898,403 4,837,196 4,893,285
Traffic settlements - net 1,866,012 1,545,539 2,085,881
Output VAT 172,735 174,472 210,413
Dividends payable 17.3 50,492 60,637 49,449
P20,838,681 P17,032,474 P18,435,453
131

Traffic settlements payable are presented net of traffic settlements receivable from the same carrier
amounting to P1,019.65 million, P4,313.98 million and P7,011.72 million as of December 31, 2009, 2008 and
2007, respectively.
As of December 31, 2009, Globe Telecom and EGG Group reported net output VAT amounting to P172.74
million, net of input VAT of P361.59 million. As of December 31, 2008, Globe Telecom reported net output VAT
amounting to P174.47 million, net of input VAT of P330.34 million. As of December 31, 2007, Globe Telecom
and Innove reported net output VAT amounting to P210.41 million, net of input VAT of P384.49 million.
The “Accrued expenses” account includes accruals for general, selling and administrative expenses.
13. Provisions
The rollforward analysis of this account follows:
Notes 2009 2008 2007
(In Thousand Pesos)
At beginning of year P202,514 P219,687 P248,310
Provisions/ reversals 23 (88,047) (5,031) 3,179
Adjustments (25,063) (12,142) (31,802)
At end of year P89,404 P202,514 P219,687
Provisions relate to various pending unresolved claims and assessments over the Globe Group’s mobile and
wireline business. The information usually required by PAS 37, Provisions, Contingent Liabilities and Contingent
Assets, is not disclosed on the grounds that it can be expected to prejudice the outcome of these claims and
assessments. As of February 4, 2010, the remaining pending claims and assessments are still being resolved.
The provisions for National Telecommunications Commission (NTC) permit fees amounting to P117.26
million for an assessment by the NTC on March 27, 1996 and contested by Innove and other members
of the Telecommunications Operators of the Philippines was reversed in 2009 after taking into account
all available evidence including the merits of the ruling of the Court of Appeals (CA) in favor of another
telecommunications service provider.
14. Notes Payable and Long-term Debt
Notes payable consist of short-term promissory notes from local banks for working capital requirements
amounted to P2,000.83 million, P4,002.16 million and P500.00 million as of December 31, 2009, 2008 and
2007, respectively. These notes bear interest ranging from 4.35%b to 10.00%, 8.38% to 10.00% and 5.25% per
annum in 2009, 2008 and 2007, respectively.
Long-term debt consists of:
2009 2008 2007
(In Thousand Pesos)
Banks:
Local P15,933,027 P15,160,390 P6,534,518
Foreign 6,810,357 4,836,265 6,193,028
Corporate notes 17,775,866 13,846,398 14,407,000
Retail bonds 4,956,772 2,742,885 2,738,306
45,476,022 36,585,938 29,872,852
Less current portion 5,667,965 7,742,227 4,803,341
P39,808,057 P28,843,711 P25,069,511
132

The maturities of long-term debt at nominal values excluding unamortized debt issuance costs as of December
31, 2009 follow (in thousand pesos):
Due in:
2010 P5,687,510
2011 7,993,100
2012 14,539,018
2013 8,499,793
2014 and thereafter 8,954,593
P45,674,014
Unamortized debt issuance costs included in the above long-term debt as of December 31, 2009 amounted to
P197.99 million.
The interest rates and maturities of the above debt are as follows:
Banks:
Maturities
Interest Rates
Local 2010-2014 5.12% to 7.87% in 2009
5.21% to 9.11% in 2008
5.09% to 11.02% in 2007
Foreign 2010-2012 0.74% to 6.44% in 2009
3.14% to 6.44% in 2008
5.65% to 8.61% in 2007
Corporate notes 2011-2016 5.62% to 8.80% in 2009
5.77% to 13.79% in 2008
5.15% to 16.00% in 2007
Retail bonds 2012-2014 7.50% to 8.00% in 2009
5.49% to 11.70% in 2008
5.16% to 11.70% in 2007
14.1 Bank Loans and Corporate Notes
Globe Telecom’s unsecured bank loans and corporate notes, which consist of fixed and floating rate notes
and peso-denominated bank loans, bear interest at stipulated and prevailing market rates. The US dollardenominated
unsecured loans extended by commercial banks bear interest based on US Dollar London
Interbank Offered Rate (USD LIBOR) or Commercial Interest Reference Rate (CIRR) plus margins.
The loan agreements with banks and other financial institutions provide for certain restrictions and
requirements with respect to, among others, maintenance of financial ratios and percentage of ownership of
specific shareholders, incurrence of additional long-term indebtedness or guarantees and creation of property
encumbrances.
As of February 4, 2010, the Globe Group is not in breach of any loan covenants.
14.2 Retail Bonds
On February 25, 2009, Globe Group issued the P5,000.00 million fixed rate bonds. This amount comprises
P1,974.00 million and P3,026.00 million fixed rate bonds due in 2012 and 2014, respectively, with interest of
7.50% and 8.00%, respectively. The proceeds of the retail bonds will be used to fund Globe Group’s various
capital expenditures.
The five-year retail bonds may be redeemed in whole, but not in part, on the twelfth (12th) interest payment
date at a price equal to 102.00% of the principal amount of the bonds and all accrued interest to the date
of redemption. Globe Group may not redeem the retail bonds unless allowed under conditions specified in
the agreements with respect to redemption for tax reasons, purchase and cancellation and change in law or
circumstance.
133

The Globe Group has to meet certain bond covenants including a maximum debt-to-equity ratio of 2 to 1. As
of February 4, 2010, the Globe Group is not in breach of any bond covenants.
14.3 Senior Notes
On February 23, 2007, Globe Telecom exercised its option to call its USD293.54 million 2012 Senior Notes. On
April 16, 2007, Globe Telecom fully settled and redeemed the 2012 Senior Notes through the Bank of New York.
Under the bond indenture, Globe Telecom was liable to pay the bondholders 104.875% of the outstanding
principal of the 2012 Senior Notes. Globe Telecom charged to other financing costs (included in the “Financing
costs” account) the bond redemption premium of 4.875%, accelerated the unamortized bond premium of
P356.48 million over the remaining period up to settlement, and derecognized the carrying value of the
bifurcated call option on the Senior Notes of P971.18 million.
Consequently, the total amount of bond redemption-related financing costs incurred for the year ended
December 31, 2007 amounted to P1,301.51 million of which the cash component amounted to only P686.81
million, representing the 4.875% bond redemption premium (see Note 22).
Loss on derivative instruments for the year ended December 31, 2007 includes the losses on the bond option
value prior to the bond call date amounted to P454.09 million. Following the bond redemption, the mark-tomarket
(MTM) losses amounted to P263.88 million on Globe Telecom’s cross currency swaps entered into to
hedge the Senior Notes and deferred under “Other reserves” account was charged to consolidated statements
of comprehensive income in 2007 (see Note 22).
15. Other Long-term Liabilities
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
ARO P1,269,291 P1,081,408 P1,623,830
Noninterest bearing liabilities 25.4 735,944 821,805 830,637
Accrued lease obligations and others 25.1 647,416 591,642 564,881
Advance lease 25.4 67,673 79,929 85,030
2,720,324 2,574,784 3,104,378
Less current portion 803,617 99,145 86,416
P1,916,707 P2,475,639 P3,017,96
The maturities of other long-term liabilities at nominal amounts as of December 31, 2009 follow (in thousand pesos):
Due in:
2010 P803,617
2011 and thereafter 1,916,707
P2,720,324
In 2008, Globe Group updated its assumptions on the timing of settlement and estimated cash outflows
arising from ARO on its leased premises. As a result of the changes in estimates reckoned as of January 1,
2008, Globe Group adjusted downward its ARO liability by P714.78 million against the book value of the assets
on leased premises.
The rollforward analysis of the Globe Group’s ARO follows:
Notes 2009 2008 2007
(In Thousand Pesos)
At beginning of year P1,081,408 P1,623,830 P1,316,612
Capitalized to property and equipment
during the year - net of reversal 30 96,959 95,086 150,051
Accretion expense during the year 22 98,117 77,269 157,167
Adjustments due to changes in estimates (7,193) (714,777) –
At end of year P1,269,291 P1,081,408 P1,623,830
134

16. Related Party Transactions
Globe Telecom and Innove, in their regular conduct of business, enter into transactions with their major
stockholders, AC and STI, joints ventures and certain related parties. These transactions, which are accounted for at
market prices normally charged to unaffiliated customers for similar goods and services, include the following:
16.1 Entities with joint control over Globe Group
• Globe Telecom has interconnection agreements with STI. The related net traffic settlements
receivable (included in “Receivables” account in the consolidated statements of financial position) and the
interconnection revenues earned (included in “Service revenues” account in the consolidated statements
of comprehensive income) are as follows:
2009 2008 2007
(In Thousand Pesos)
Traffic settlements receivable - net P34,487 P216,348 P63,391
Interconnection revenues 2,097,734 1,817,912 1,573,686
• Globe Telecom and STI have a technical assistance agreement whereby STI will provide
consultancy and advisory services, including those with respect to the construction and operation of
Globe Telecom’s networks and communication services (see Notes 25.6), equipment procurement and
personnel services. In addition, Globe Telecom has software development, supply, license and support
arrangements, lease of cable facilities, maintenance and restoration costs and other transactions with STI.
The details of fees (included in repairs and maintenance under the “General, selling and administrative
expenses” account in the consolidated statements of comprehensive income) incurred under these
agreements are as follows:
2009 2008 2007
(In Thousand Pesos)
Maintenance and restoration costs and
other transactions P216,701 P216,813 P201,576
Software development, supply, license
and support 26,924 2,637 2,074
Technical assistance fee 99,903 83,514 86,935
The net outstanding balances due to STI (included in the “Accounts payable and accrued expenses”
account in the consolidated statements of financial position) arising from these transactions are as
follows:
2009 2008 2007
(In Thousand Pesos)
Maintenance and restoration costs and
other transactions P33,555 P115,243 P54,047
Software development, supply, license
and support 45,734 28,569 14,218
Technical assistance fee 24,180 23,838 25,080
• Globe Telecom reimburses AC for certain operating expenses. The net outstanding liabilities to AC related
to these transactions amounted to P31.34 million, P23.68 million and P28.47 million as of December 31,
2009, 2008 and 2007, respectively.
• Globe Telecom earns subscriber revenues from AC. The outstanding subscribers receivable from AC
(included in “Receivables” account in the consolidated statements of financial position) and the amount
earned as service revenue (included in the “Service revenues” account in the consolidated statements of
comprehensive income) are as follows:
2009 2008 2007
(In Thousand Pesos)
Subscriber receivables P59 P182 P122
Service revenues 5,245 5,504 5,400
135

16.2 Joint Ventures in which the Globe Group is a venturer
• Globe Telecom has preferred roaming service contract with BMPL. Under this contract,
Globe Telecom will pay BMPL for services rendered by the latter which include, among others, coordination
and facilitation of preferred roaming arrangement among JV partners, and procurement and maintenance
of telecommunications equipment necessary for delivery of seamless roaming experience to customers.
Globe Telecom also earns or incurs commission from BMPL for regional top-up service provided by the JV
partners. As of December 31, 2009, 2008 and 2007, balances related to these transactions amounted to
P1.02 million, P2.12 million and P1.91 million, respectively.
• On October 2009, the Globe Group entered into an agreement with BPI Globe BanKO for the
pursuit of services that will expand the usage of GCash technology. As a result, the Globe Group
recognized revenue of P9.99 million in 2009.
16.3 Transactions with the retirement fund (see Note 11)
• On February 1, 2009, the Globe Group entered into a memorandum of agreement (MOA) with
BEAM for the latter to render mobile television broadcast service to Globe subscribers using the mobile
TV service. As a result, the Globe Group recognized an expense (included in “Professional and other
contracted services”) amounting to P245.58 million in 2009.
• On October 1, 2009, the Globe Group entered into a MOA with Altimax Broadcasting Co., Inc.
(Altimax), a subsidiary of BHI, for the Globe Group’s co-use of specific frequencies of Altimax’s for the
rollout of broadband wireless access to the Globe Group’s subscribers. As a result, the Globe Group
recognized an expense (included in “General, selling and administrative Expenses”) amounting to P70.00
million in 2009.
16.4 Transactions with other related parties
Globe Telecom has subscriber receivables (included in “Receivables” account in the consolidated statements of
financial position) and earns service revenues (included in the “Service revenues” account in the consolidated
statements of comprehensive income) from its other related parties namely, Ayala Land Inc., Ayala Property
Management Corporation, BPI, Manila Water Company, Inc., Integrated Microelectronics, Inc. and eTelecare
Global Solutions, Inc. These amounted to:
2009 2008 2007
(In Thousand Pesos)
Subscriber receivables P46,755 P48,712 P57,570
Service revenues 150,233 206,635 186,762
The total expenses incurred on leases, utilities, customer contact services and other miscellaneous services
provided to the Globe Group by these other related parties (included under “General, selling and administrative
expenses” account in the consolidated statements of comprehensive income) amounted to P241.75 million,
P205.76 million and P135.85 million as of December 31, 2009, 2008 and 2007, respectively. The outstanding
balances due related to these expenses amounted to P13.68 million and P1.20 million as of December 1, 2009
and 2008, respectively. There was no outstanding payable to other related parties as of December 31, 2007.
These related parties are either controlled or significantly influenced by AC.
16.5 Transactions with key management personnel of the Globe Group
The Globe Group’s compensation of key management personnel by benefit type are as follows:
Notes 2009 2008 2007
(In Thousand Pesos)
Short-term employee benefits 21 P1,867,128 P1,833,508 P1,499,760
Share-based payments 18 126,437 182,324 129,914
Post-employment benefits 18 53,290 112,620 65,563
P2,046,855 P2,128,452 P1,695,237
136

There are no agreements between the Globe Group and any of its directors and key officers providing for
benefits upon termination of employment, except for such benefits to which they may be entitled under the
Globe Group’s retirement plans.
The Globe Group granted short-term loans to its key management personnel amounting to P33.37 million,
P21.32 million and P10.56 million as of December 31, 2009, 2008 and 2007, respectively, included in the
“Prepayments and other current assets” in the consolidated statements of financial position.
The summary of consolidated outstanding balances resulting from transactions with related parties follows:
Notes 2009 2008 2007
(In Thousand Pesos)
Subscriber receivables (included in
“Receivables” account) P46,814 P48,894 P57,692
Traffic settlements receivable - net
(included in “Receivables”
account) 4 34,487 216,348 63,391
Other current assets 6 1,475 2,602 1,925
Accounts payable and accrued
expenses 12 149,512 194,657 123,731
In May 2008, the NTC approved the assignment of Innove’s prepaid consumer subscriber contracts in favor of Globe
Telecom. The transfer did not result in the recognition of a gain or loss in the consolidated financial statements.
17. Equity and Other Comprehensive Income
Globe Telecom’s authorized capital stock consists of:
2009 2008 2007
Shares Amount Shares Amount Shares Amount
(In Thousand Pesos and Number of Shares)
Preferred stock - Series “A” -
P5 per share 250,000 P1,250,000 250,000 P1,250,000 250,000 P1,250,000
Common stock - P50 per share 179,934 8,996,719 179,934 8,996,719 179,934 8,996,719
Globe Telecom’s issued and subscribed capital stock consists of:
2009 2008 2007
Shares Amount Shares Amount Shares Amount
(In Thousand Pesos and Number of Shares)
Preferred stock 158,515 P792,575 158,515 P792,575 158,515 P792,575
Common stock 132,346 6,617,280 132,340 6,617,008 132,334 6,616,677
Subscriptions receivable (776) (1,508) (42,250)
P7,409,079 P7,408,075 P7,367,002
17.1 Preferred Stock
Preferred stock - Series “A” has the following features:
(a) Convertible to one common share after 10 years from issue date on June 29, 2001 at not less
than the prevailing market price of the common stock less the par value of the preferred shares;
(b) Cumulative and nonparticipating;
(c) Floating rate dividend;
(d) Issued at P5 par;
(e) With voting rights;
(f) Globe Telecom has the right to redeem the preferred shares at par plus accrued dividends at
any time after 5 years from date of issuance; and
(g) Preferences as to dividend in the event of liquidation.
The dividends for preferred shares are declared upon the sole discretion of the Globe Telecom’s BOD.
As of December 31, 2009, the Globe Group has no dividends in arrears to its preferred stockholders.
137

17.2 Common Stock
The rollforward of outstanding common shares are as follows:
2009 2008 2007
Shares Amount Shares Amount Shares Amount
(In Thousand Pesos and Number of Shares)
At beginning of year 132,340 P6,617,008 132,334 P6,616,677 132,080 P6,603,989
Exercise of stock options 6 272 6 331 254 12,688
At end of year 132,346 P6,617,280 132,340 P6,617,008 132,334 P6,616,677
17.3 Cash Dividends
Information on Globe Telecom’s declaration of cash dividends follows:
Date
Per share Amount Record Payable
(In Thousand Pesos, Except Per Share Figures)
Preferred stock dividends declared on:
December 7, 2007 P0.31 P49,449 December 18, 2007 March 17, 2008
December 2, 2008 0.38 60,637 December 18, 2008 March 17, 2009
December 4, 2009 0.32 50,492 December 18, 2009 March 18, 2010
Common stock dividends declared on:
February 5, 2007 P33.00 P4,359,650 February 19, 2007 March 15, 2007
August 10, 2007 33.00 4,362,385 August 29, 2007 September 14, 2007
November 6, 2007 50.00 6,616,708 November 20, 2007 December 17, 2007
February 4, 2008 37.50 4,962,508 February 18, 2008 March 13, 2008
August 5, 2008 87.50 11,579,763 August 21, 2008 September 15, 2008
February 3, 2009 32.00 4,234,885 February 17, 2009 March 10, 2009
August 4, 2009 32.00 4,234,979 August 19, 2009 September 15, 2009
November 6, 2009 50.00 6,617,280 November 20, 2009 December 15, 2009
The dividend policy of Globe Telecom as approved by the BOD is to declare cash dividends to its common
stockholders on a regular basis as may be determined by the BOD. The dividend payout rate starting 2006 is
approximately 75% of prior year’s net income payable semi-annually in March and September of each year.
This is reviewed annually, taking into account Globe Telecom’s operating results, cash flows, debt covenants,
capital expenditure levels and liquidity.
On November 6, 2007, the BOD declared a special cash dividend of P50.00 per common share based on
shareholders on record as of November 20, 2007 with the payment date of December 17, 2007. The special
dividend was in consideration of the record profitability and strong operating cash flows of Globe Telecom,
and to optimize Globe Telecom’s capital structure and enhance shareholder value.
On August 5, 2008, the BOD approved the declaration of the second semi-annual cash dividends in 2008 of
P4,962.61 million (P37.50 per common share) and additional special dividend of P6,616.81 million (P50.00 per
common share) to common stockholders of record as of August 21, 2008 and payable on September 15, 2008.
On November 6, 2009, the BOD amended the dividend payment rate from 75% to a range of 75% - 90% and
declared a special dividend of P50.00 per common share based on shareholders on record as of November 20,
2009 with the payment date of December 15, 2009.
Cash Dividends Declared After the End of Reporting Period
On February 4, 2010, the BOD approved the declaration of the first semi-annual cash dividend of P40.00 per
common share, payable to shareholders on record as of February 19, 2010. Total dividends of P5,293.84 million
will be paid on March 15, 2010.
138
17.4 Retained Earnings Available for Dividend Declaration
The total unrestricted retained earnings available for dividend declaration amounted to P9,604.56 million
as of December 31, 2009. This amount excludes the undistributed net earnings of consolidated subsidiaries,
accumulated equity in net earnings of joint ventures accounted for under the equity method, and unrealized
gains recognized on asset and liability currency translations and unrealized gains on fair value adjustments.
The Globe Group is also subject to loan covenants that restrict its ability to pay dividends (see Note 14).

17.5 Other Comprehensive Income
Other Reserves
Exchange
Available-for- differences arising
sale financial from translations of
Cash flow hedges assets foreign investments Total
For the Year Ended December 31, 2009 (In Thousand Pesos)
As of January 1, 2009 (P37,219) P329 P1,508 (P35,382)
Fair value changes (35,116) 14,553 – (20,563)
Transferred to income and
expenses 60,156 – – 60,156
Tax effect of items taken directly
to or transferred from equity (10,375) – – (10,375)
Exchange differences – – 24,682 24,682
As of December 31, 2009 (P22,554) P14,882 P26,190 P18,518
For the Year Ended December 31, 2008 (In Thousand Pesos)
As of January 1, 2008 P164,345 P20,063 P– P184,408
Fair value changes (457,080) (19,734) – 476,814)
Transferred to income and
expenses 146,981 – – 146,981
Tax effect of items taken directly
to or transferred from equity 108,535 – – 108,535
Exchange differences – – 1,508 1,508
As of December 31, 2008 (P37,219) P329 P1,508 (P35,382)
For the Year Ended December 31, 2007 (In Thousand Pesos)
As of January 1, 2007 (P197,695) P3,905 P– (P193,790)
Fair value changes 193,165 16,158 – 209,323
Transferred to income and
expenses (26,069) – – (26,069)
Tax effect of items taken directly
to or transferred from equity 194,944 – – 194,944
As of December 31, 2007 P164,345 P20,063 P– P184,408
18. Employee Benefits
18.1 Stock Option Plans
The Globe Group has a share-based compensation plan called the Executive Stock Option Plan (ESOP). The
number of shares allocated under the ESOP shall not exceed the aggregate equivalent of 6% of the authorized
capital stock.
On October 1, 2009, the Globe Group granted additional stock options to key executives and senior
management personnel under the ESOP. The grant requires the grantees to pay a nonrefundable option
purchase price of P1,000.00 until October 30, 2009, which is the closing date for the acceptance of the offer.
In order to avail of the privilege, the grantees must remain with Globe Telecom or its affiliates from grant date
up to the beginning of the exercise period of the corresponding shares.
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The following are the stock option grants to key executives and senior management personnel of the Globe
Group under the ESOP from 2003 to 2009:
Number of
Fair Value
Option of each Fair Value
Date of Grant Granted Exercise Price Exercise Dates Option Measurement
April 4, 2003 680,200 P547.00 per share 50% of options exercisable from P283.11 Black-Scholes
April 4, 2005 to April 14, 2013; the
option pricing
remaining 50% exercisable from
model
April 4, 2006 to April 14, 2013
July 1, 2004 803,800 P840.75 per share 50% of options exercisable from P357.94 Black-Scholes
July 1, 2006 to June 30, 2014; the
option pricing
remaining 50% from July 1, 2007 to
model
June 30, 2014
March 24, 2006 749,500 P854.75 per share 50% of the options become P292.12 Trinomial option
exercisable from March 24, 2008 to
pricing model
March 23, 2016; the remaining
50% become exercisable from
March 24, 2009 to March 23, 2016
May 17, 2007 604,000 P1,270.50 per share 50% of the options become P375.89 Trinomial option
exercisable from May 17, 2009 to
pricing model
May 16, 2017, the remaining 50%
become exercisable from May 17,
2010 to May 16, 2017
August 1, 2008 635,750 P1,064.00 per share 50% of the options become P305.03 Trinomial option
exercisable from August 1, 2010 to
pricing model
July 31, 2018, the remaining 50%
become exercisable from August 1,
2011 to July 31, 2018
October 1, 2009 298,950 P993.75 per share 50% of the options become P346.79 Trinomial option
exercisable from October 1, 2011
pricing model
to September 30, 2019, the
remaining 50% become exercisable
from October 1, 2012 to
September 30, 2019
The exercise price is based on the average quoted market price for the last 20 trading days preceding the
approval date of the stock option grant.
A summary of the Globe Group’s ESOP activity and related information follows:
2009 2008 2007
Weighted Weighted Weighted
Average Average Average
Number of Exercise Number of Exercise Number of Exercise
Shares Price Shares Price Shares Price
(In Thousands and Per Share Figures)
Outstanding, at beginning of year 1,929,732 P1,035.76 1,617,114 P994.57 1,590,940 P811.62
Granted 298,950 993.75 650,450 1,052.32 604,000 1,270.50
Exercised (137,626) 843.22 (247,332) 846.80 (465,776) 782.32
Expired/forfeited (52,950) 1,073.58 (90,500) 935.02 (112,050) 766.69
Outstanding, at end of year 2,038,106 P1,041.62 1,929,732 P1,035.76 1,617,114 P994.57
Exercisable, at end of year 828,281 P962.78 363,032 P792.12 309,614 P785.65
140

The average share prices at dates of exercise of stock options as of December 31, 2009, 2008 and 2007 amounted to
P975.26, P1,461.82 and P1,242.57, respectively.
As of December 31, 2009, 2008 and 2007, the weighted average remaining contractual life of options outstanding is
7.59 years, 8.13 years and 8.29 years, respectively.
The following assumptions were used to determine the fair value of the stock options at effective grant dates:
October 1, 2009 August 1, 2008 May 17, 2007 June 30, 2006 July 1, 2004 April 4, 2003
Share price P995.00 P1,130.00 P1,340.00 P930.00 P835.00 P580.00
Exercise price P993.75 P1,064.00 P1,270.50 P854.75 P840.75 P547.00
Expected volatility 48.49% 31.73% 38.14% 29.51% 39.50% 34.64%
Option life 10 years 10 years 10 years 10 years 10 years 10 years
Expected dividends 6.43% 6.64% 4.93% 5.38% 4.31% 2.70%
Risk-free interest rate 8.08% 9.62% 7.04% 10.30% 12.91% 11.46%
The expected volatility measured at the standard deviation of expected share price returns was based on
analysis of share prices for the past 365 days.
Cost of share-based payments for the years ended December 31, 2009, 2008 and 2007 amounted to P126.44
million, P182.32 million and P129.91 million, respectively.
18.2 Pension Plan
The Globe Group has a funded, noncontributory, defined benefit pension plan covering substantially all
of its regular employees. The benefits are based on years of service and compensation on the last year of
employment.
The components of pension expense (included in staff costs under “General, selling and administrative
expenses”) in the consolidated statements of comprehensive income are as follows:
2009 2008 2007
(In Thousand Pesos)
Current service cost P163,382 P221,289 P168,374
Interest cost on benefit obligation 156,182 136,160 80,224
Expected return on plan assets (234,018) (138,301) (127,872)
Net actuarial losses (41) 28,314 11,157
Total pension expense P85,505 P247,462 P131,883
Actual return (loss) on plan assets P181,051 (P184,599) P96,495
The funded status for the pension plan of Globe Group is as follows:
2009 2008 2007
(In Thousand Pesos)
Benefit obligation P2,079,316 P1,319,742 P1,690,615
Plan assets (2,334,772) (2,344,764) (1,341,568)
(255,456) (1,025,022) 349,047
Unrecognized net actuarial losses (799,539) (115,403) (511,801)
Asset recognized in the consolidated statements
of financial position* (P1,054,995) (P1,140,425) (P162,754)
*Of this amount, P1,055.44 million is included in “Other noncurrent assets” account, while the P0.45 million is included in
“Accrued expenses” under “Accounts payable and accrued expenses” account as of December 31, 2009.
141

The following tables present the changes in the present value of defined benefit obligation and fair value of
plan assets:
Present value of defined benefit obligation
2009 2008 2007
(In Thousand Pesos)
Balance at beginning of year P1,319,742 P1,690,615 P1,267,209
Interest cost 156,182 136,160 80,224
Current service cost 163,382 221,289 168,374
Benefits paid (129,761) (87,941) (58,635)
Actuarial losses (gains) 569,770 (640,381) 233,443
Balance at end of year P2,079,315 P1,319,742 P1,690,615
Fair value of plan assets
2009 2008 2007
(In Thousand Pesos)
Balance at beginning of year P2,344,764 P1,341,568 P1,254,906
Expected return 234,018 138,301 127,872
Contributions 104 1,225,345 47,200
Benefits paid (129,761) (87,941) (58,635)
Actuarial losses (114,353) (272,509) (29,775)
Balance at end of year P2,334,772 P2,344,764 P1,341,568
The Globe Group does not expect to make additional contributions to its retirement fund in 2010.
As of December 31, 2009 and 2008, the allocation of the fair value of the plan assets of the Globe Group
follows:
2009 2008
Investments in fixed income securities:
Corporate 60.43% 69.38%
Government 18.71% 12.80%
Investments in equity securities 18.78% 15.76%
Others 2.08% 2.06%
In 2008, Globe, Innove and GXI pooled its plan assets for single administration by the fund managers. The
EGG Group’s retirement fund is being managed separately and the amount of defined benefit obligation is
immaterial.
The allocation of the fair value of the plan assets of December 31, 2007 for Globe Telecom and Innove follows:
Globe Telecom
Innove
Investments in debt securities 68.00% 66.00%
Investments in equity securities 30.00% 32.00%
Others 2.00% 2.00%
As of December 31, 2009, the pension plan assets of the Globe Group include shares of stock of Globe Telecom
with total fair value of P50.15 million, and shares of stock of other related parties with total fair value of
P72.03 million.
The assumptions used to determine pension benefits of Globe Group are as follows:
2009 2008 2007
Discount rate 9.00% 12.33% 8.25%
Expected rate of return on plan assets 10.00% 10.00% 10.00%
Salary rate increase 7.00% 7.00% 7.00%
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In 2009 and 2008, the Globe Group applied a single weighted average discount rate that reflects the estimated
timing and amount of benefit payments and the currency in which the benefits are to be paid. In 2007, the
Globe Group used risk-free interest rates of government securities that have terms to maturity approximating
the terms of the related pension liabilities.
The overall expected rate of return on plan assets is determined based on the market prices prevailing on that
date, applicable to the period over which the obligation is to be settled.
Amounts for the current and previous four years are as follows:
2009 2008 2007 2006 2005
(In Thousand Pesos)
Defined benefit obligation P2,079,316 P1,319,742 P1,690,615 P1,267,209 P648,825
Plan assets 2,334,772 2,344,764 1,341,568 1,254,906 1,066,441
Deficit (surplus) (255,456) (1,025,022) 349,047 12,303 (417,616)
2009 2008 2007 2006
(In Thousand Pesos)
Experience adjustments:
Gain (loss) on plan liabilities P18,390 (P51,340) (P170,819) (P72,950)
Gain (loss) on plan assets (114,327) (272,539) 29,780 102,010)
19. Interest Income
Interest income is earned from the following sources:
2009 2008 2007
(In Thousand Pesos)
Short-term placements P145,623 P394,824 P566,358
Cash in banks 67,288 23,033 161,630
Others 58,895 2,568 633
P271,806 P420,425 P728,621
20. Other Income
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Lease income 8, 25.1.b P204,505 P210,003 P220,258
Foreign exchange gain - net 22, 28.2.1.2 286,530 – 1,431,214
Others 573,441 490,871 138,099
P1,064,476 P700,874 P1,789,571
The peso to US dollar exchange rates amounted to P46.425, P47.655 and P41.411 for the years ended December
31, 2009, 2008 and 2007, respectively.
The Globe Group’s net foreign currency-denominated liabilities amounted to USD207.18 million, USD85.37
million and USD166.29 million as of December 31, 2009, 2008 and 2007, respectively (see Note 28.2.1.2).
These combinations of net liability movements and peso rate depreciation/appreciation resulted in foreign
exchange gains in 2009 and 2007 and loss in 2008 (see Note 22).
The “Others” account includes actual recoveries of operating losses recognized in previous years.
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21. General, Selling and Administrative Expenses
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Staff costs 16.5, 18 P4,980,769 P5,076,635 P4,536,508
Selling, advertising and promotions 3,766,390 4,494,329 4,469,486
Rent 25 3,469,319 2,883,397 2,569,773
Professional and other contracted services 16 2,695,598 2,429,615 1,831,121
Utilities, supplies and other administrative
expenses 5 2,692,958 2,709,850 2,243,308
Repairs and maintenance 16 2,581,565 2,495,162 2,205,476
Insurance and security services 1,732,888 1,731,878 1,578,296
Courier, delivery and miscellaneous
expenses 906,451 898,488 918,244
Others 1,670,944 1,037,772 952,261
P24,496,882 P23,757,126 P21,304,473
The “Others” account includes miscellaneous expenses, taxes and licenses, delivery charges and various other
items that are individually immaterial.
22. Financing Costs
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Interest expense* 7 P2,096,945 P2,255,878 P2,996,347
Foreign exchange loss - net 20, 28.2.1.2 – 759,299 –
Loss (gain) on derivative instruments 14.3, 28 46,943 (1,681) 801,617
Swap and other financing costs - net 14.3 38,993 (13,105) 1,426,975
P2,182,881 P13,000,391 P15,224,939
*This account is net of capitalized expense and amortization of debt issuance cost.
In 2009 and 2007, net foreign exchange gain amounted to P286.53 million and P1,431.21 million, respectively,
was presented as part of “Others - net” account in the consolidated statements of comprehensive income (see
Note 20).
Interest expense - net is incurred on the following:
Notes 2009 2008 2007
(In Thousand Pesos)
Long-term debt 14 P1,751,423 P2,035,281 P2,726,466
Short term notes payable 14 170,205 57,391 1,491
Accretion expense 15, 25.4 175,317 163,206 268,390
P2,096,945 P2,255,878 P2,996,347
23. Impairment Losses and Others
This account consists of:
Notes 2009 2008 2007
(In Thousand Pesos)
Impairment loss (reversal of impairment loss) on:
Receivables 28 P754,633 P979,779 P711,396
Property and equipment 85,631 (31,172) (71,431)
Provisions for (reversal of):
Inventory obsolescence and market decline 5 58,743 262,103 298,116
Other probable losses 13 (88,047) (5,031) 3,179
P810,960 P1,205,679 P941,260
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24. Income Tax
The significant components of the deferred income tax assets and liabilities of the Globe Group
represent the deferred income tax effects of the following:
2009 2008 2007
(In Thousand Pesos)
Deferred income tax assets on:
Unearned revenues already subjected to
income tax P918,938 P1,003,875 P686,740
Allowance for impairment losses on
receivables 400,352 369,120 496,717
ARO 346,668 317,732 291,521
Accrued rent expense under PAS 17 130,805 122,030 110,959
NOLCO 138,054 – –
Accumulated impairment losses on property
and equipment 88,808 67,195 126,320
Inventory obsolescence and market decline 87,311 94,045 73,017
Accrued vacation leave 76,402 52,095 68,129
MCIT 46,711 – –
Provision for other probable losses 33,097 27,928 38,829
Cost of share-based payments 23,555 7,796 300,714
Unrealized foreign exchange losses 21,202 21,607 36,470
Unrealized loss on derivative transactions 16,845 4,993 –
Others – 235 489
2,328,748 2,088,651 2,229,905
Deferred income tax liabilities on:
Excess of accumulated depreciation and
amortization of Globe Telecom equipment
for tax reporting (a) over financial
reporting (b) 5,116,298 5,342,712 4,763,990
Undepreciated capitalized borrowing costs
already claimed as deduction for tax
reporting 839,330 591,238 1,404,139
Unrealized foreign exchange gain 160,761 92,504 687,341
Unamortized discount on noninterest bearing
liability 67,178 108,041 133,822
Prepaid pension 21,709 12,349 49,454
Unrealized gains on derivative transactions – – 56,328
Customer contracts of acquired company 8,228 8,514 –
6,213,504 6,155,358 7,095,074
Net deferred income tax liabilities P3,884,756 P4,066,707 P4,865,169
(a) Sum-of-the-years digit method
(b) Straight-line method
Net deferred tax assets and liabilities presented in the consolidated statements of financial
position on a net basis by entity are as follows:
2008
2009 (As restated) 2007
(In Thousand Pesos)
Net deferred tax assets (Innove and EGG Group) P742,538 P523,722 P637,721
Net deferred tax liabilities (Globe Telecom) 4,627,294 4,590,429 5,502,890
GXI did not recognize its deferred income tax assets amounting to P38.60 million, P47.75 million and P30.95
million as of December 31, 2009, 2008 and 2007, respectively, which includes deferred income tax assets
on NOLCO amounting to P33.90 million, P43.90 million and P30.82 million as of December 31, 2009, 2008
and 2007, respectively, because the management believes that there is no assurance that GXI will generate
sufficient taxable income to allow all or part of its deferred income tax assets to be utilized.
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The details of Innove’s, GXI’s and EGG Group’s NOLCO and MCIT and the related tax effects are as follows (in
thousand pesos):
Tax Effect of
Inception Year MCIT NOLCO NOLCO Expiry Year
2009 P47,885 P425,343 P127,603 2012
2008 238 97,884 29,365 2011
2007 – 54,025 16,208 2010
P48,123 P577,252 P173,176
GXI’s NOLCO amounting to P36.72 million expired in 2009.
The reconciliation of the provision for income tax at statutory tax rate and the actual current and deferred
provision for income tax follows:
2009 2008 2007
(In Thousand Pesos)
Provision at statutory income tax rate P5,391,811 P6,246,107 P7,017,622
Add (deduct) tax effects of:
Deferred tax on unexercised stock options and
basis differences on deductible and reported
stock compensation expense 15,405 294,620 (205,738)
Tax rate difference arising from the change in
expected timing of deferred tax
assets’/liabilities’ reversal – 25,911 (84,299)
Equity in net losses of joint ventures 2,103 3,405 3,158
Income subjected to lower tax rates (62,175) (77,364) (107,454)
Others 56,685 77,463 150,040
Actual provision for income tax P5,403,829 P6,570,142 P6,773,329
The current provision for income tax includes the following:
2009 2008 2007
(In Thousand Pesos)
Regular corporate income tax P5,543,242 P7,194,104 P6,723,422
Final tax 40,567 74,480 117,818
P5,583,809 P7,268,584 P6,841,240
The corporate tax rates are 30%, 35% and 35% in 2009, 2008 and 2007, respectively.
Globe Telecom and Innove are entitled to certain tax and nontax incentives and have availed of incentives for
tax and duty-free importation of capital equipment for their services under their respective franchises.
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25. Agreements and Commitments
25.1 Lease Commitments
(a) Operating lease commitments - Globe Group as lessee
Globe Telecom and Innove lease certain premises for some of its telecommunications facilities and
equipment and for most of its business centers and network sites. The operating lease agreements are for
periods ranging from 1 to 10 years from the date of the contracts and are renewable under certain terms
and conditions. The agreements generally require certain amounts of deposit and advance rentals, which
are shown as part of the “Other noncurrent assets” account in the consolidated statements of financial
position. The Globe Group also has short term renewable leases on transmission cables and equipment.
The Globe Group’s rentals incurred on these various leases (included in “General, selling and administrative
expenses” account in the consolidated statements of comprehensive income) amounted toP3,469.32
million, P2,883.40 million and P2,569.77 million for the years ended December 31, 2009, 2008 and 2007,
respectively (see Note 21).
As of December 31, 2009, the future minimum lease payments under these operating leases are as follows
(in thousand pesos):
Not later than one year
P6,091,957
After one year but not more than five years 8,166,834
After five years 2,628,873
P16,887,664
(b) Operating lease commitments - Globe Group as lessor
Globe Telecom and Innove have certain lease agreements on equipment and office spaces. The operating
lease agreements are for periods ranging from 1 to 14 years from the date of contracts. These include
Globe Telecom’s lease agreement with C2C Pte. Ltd. (C2C) (see related discussion on Agreements with C2C).
Total lease income amounted to P171.48 million, P198.10 million and P207.73 million for the years ended
December 31, 2009, 2008 and 2007, respectively.
The future minimum lease receivables under these operating leases are as follows (in thousand pesos):
Within one year P165,700
After one year but not more than five years 662,799
After five years 207,125
P1,035,624
c) Finance lease commitments - Globe Group as lessee and lessor
Globe Telecom and Innove have entered into finance lease agreements for various items of property and
equipment. The said leased assets are capitalized and are depreciated over the EUL of three years, which is
also equivalent to the lease term. As of December 31, 2009, 2008 and 2007, residual present value of net
minimum lease payments due and receivable are immaterial.
25.2 Agreements and Commitments with Other Carriers
Globe Telecom and Innove have existing international telecommunications service agreements with various
foreign administrations and interconnection agreements with local telecommunications companies for their
various services. Globe also has international roaming agreements with other foreign operators, which allow its
subscribers access to foreign networks. The agreements provide for sharing of toll revenues derived from the
mutual use of telecommunication networks.
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25.3 Arrangements and Commitments with Suppliers
Globe Telecom and Innove have entered into agreements with various suppliers for the development or
construction, delivery and installation of property and equipment. Under the terms of these agreements,
advance payments are made to suppliers and delivery, installation, development or construction commences
only when purchase orders are served. While the development or construction is in progress, project costs are
accrued based on the billings received. Billings are based on the progress of the development or construction
and advance payments are being applied proportionately to the milestone billings. When development or
construction and installation are completed and the property and equipment is ready for service, the balance
of the value of the related purchase orders is accrued. In 2009, the Globe Group reclassified its Advances to
Suppliers and Contractors to “Prepayments and other current assets” based on agreed contract terms. The
impact of the reclassification is an increase in prepayment and other current assets by P1,143.89 million,
P2,114.20 million, and P992.21 million as of December 31, 2009, 2008 and 2007, respectively (see Note 6).
The consolidated accrued project costs as of December 31, 2009, 2008 and 2007 included in the “Accounts
payable and accrued expenses” account in the consolidated statements of financial position amounted to
P8,081.68 million, P5,258.62 million and P4,448.65 million, respectively (see Note 12). As of December 31,
2009, the consolidated expected future billings on the unaccrued portion of purchase orders issued amounted
to P10,778.06 million. The settlement of these liabilities is dependent on the payment terms and project
milestones agreed with the suppliers and contractors. As of December 31, 2009 also, the unapplied advances
made to suppliers and contractors relating to purchase orders issued amounted to P1,143.89 million (see Note
6).
25.4 Agreements with C2C
In 2001, Globe Telecom signed a cable equipment supply agreement with C2C. In March 2002, Globe Telecom
entered into an equipment lease agreement for the said equipment with GB21 Hong Kong Limited (GB21).
Subsequently, GB21, in consideration of C2C’s agreement to assume all payment obligations pursuant to the
lease agreement, assigned all its rights, obligations and interest in the equipment lease agreement to C2C.
As a result of the said assignment of payables by GB21 to C2C, Globe Telecom’s liability arising from the
cable equipment supply agreement with C2C was effectively converted into a noninterest bearing long-term
obligation accounted for at net present value under PAS 39 starting 2005 with carrying values amounting to
P735.95 million, P821.81 million and P830.64 million as of December 31, 2009, 2008 and 2007, respectively
(see Note 15).
In January 2003, Globe Telecom received advance lease payments from C2C for its use of a portion of Globe
Telecom’s cable landing station facilities. Accordingly, based on the amortization schedule, Globe Telecom
recognized lease income amounted to P12.26 million, P11.90 million and P12.53 million for the years ended
December 31, 2009, 2008 and 2007, respectively.
The current and noncurrent portions of the said advances shown as part of the “Other long-term liabilities”
account in the consolidated statements of financial position are as follows (see Note 15):
2009 2008 2007
(In Thousand Pesos)
Current P67,673 P12,256 P11,305
Noncurrent – 67,673 73,725
P67,673 P79,929 P85,030
On November 17, 2009, Globe Telecom and Pacnet Cable Ltd. (Pacnet), formerly C2C, signed a memorandum
of agreement (MOA) to terminate and unwind their Landing Party Agreement dated August 15, 2000 (LPA).
The MOA further requires Globe Telecom, being duly licensed and authorized by the NTC to land the C2C Cable
Network in the Philippines and operate the C2C Cable Landing Station (CLS) in Nasugbu, Batangas, Philippines,
to transfer to Pacnet’s designated qualified partner, the license of the C2C CLS, the CLS, a portion of the
property on which the CLS is situated, certain equipment and associated facilities thereof.
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In return, Pacnet will compensate Globe in cash and by way of C2C cable capacities deliverable upon
completion of certain closing conditions. The MOA also provided for novation of abovementioned equipment
supply and lease agreements and reciprocal options for Globe to purchase future capacities from Pacnet and
Pacnet to purchase backhaul and ducts from Globe at agreed prices. The closing documents are expected to be
fully executed within 2010.
25.5 Agreement with BHI
On August 11, 2009, Globe signed a credit facility agreement with BHI amounting to P750.00 million. The
total drawdown under this loan made by BHI in 2009 amounted to P295.00 million. The loan is payable in one
full payment, five years from the date of initial drawdown with a prepayment option in whole or in part on
an interest payment date. Interest is at the rate of 8.275% payable semi-annually in arrears and the loan is
secured by a chattel mortgage. As of December 31, 2009, the undrawn balance of the credit facility is P455.00
million (see Note 11).
25.6 Agreement with STI
In 2009, STI agreed to sell to Globe its own capacity in a certain cable system. In 2009 also, Globe agreed to
sell to STI capacities that it owns in a certain cable system (see Note 16).
25.7 Construction Maintenance Agreement for South-East Asia Japan Cable System (SJC)
Globe signed a Construction Maintenance Agreement with 5 other international carriers to construct the SJC
system, a 6-fiber pair, high capacity submarine cable system that will link Singapore, Hong Kong, Indonesia,
Philippines and Japan. Globe’s estimated investment for this project amounts to USD60.00 million.
25.8 Commitment to increase GXI’s paid-up capital
On May 5, 2009, the BOD of Globe Telecom approved the issuance of a guarantee to the Bangko Sentral ng
Pilipinas (BSP) for the proposal of GXI to increase its paid-up capital to P100.00 million on a staggered basis
over a period of two (2) years to meet the required minimum capital and qualify as E-Money Issuer-Others
in compliance with BSP Circular No. 649. On August 27, 2009, the Monetary Board of the BSP approved GXI’s
compliance with this circular under Resolution No. 1223.
26. Contingencies
On July 23, 2009, the NTC issued NTC Memorandum Circular (MC) No. 05-07-2009 (Guidelines on Unit of
Billing of Mobile Voice Service). The MC provides that the maximum unit of billing for the cellular mobile
telephone service (CMTS) whether postpaid or prepaid shall be six (6) seconds per pulse. The rate for the first
two (2) pulses, or equivalent if lower period per pulse is used, may be higher than the succeeding pulses to
recover the cost of the call set-up. Subscribers may still opt to be billed on a one (1) minute per pulse basis or
to subscribe to unlimited service offerings or any service offerings if they actively and knowingly enroll in the
scheme.
In compliance with NTC MC 05-07-2009, Globe Telecom refreshed and offered to the general public its
existing per-second rates that, it bears emphasizing, comply with the NTC MC. Globe Telecom made per second
charging for Globe-Globe/TM-TM/Globe available for Globe Telecom subscribers dialing prefix 232 (GLOBE) OR
803 plus 10-digit TM or Globe number for TM subscribers. The NTC, however, contends that Globe Telecom’s
offering does not comply with the circular and with the NTC’s Order as of December 7, 2009 which imposed
a three-tiered rate structure with a mandated flag-down of P3.00, a rate of P0.4375 for the 13th to the 60th
second of the first minute and P0.65 for every second thereafter. On December 9, 2009, the NTC issued a Cease
and Desist Order requiring the carriers to refrain from charging under the previous billing system or regime
and refund consumers.
Globe maintains that the Order of the NTC as of December 7, 2009 and the Cease and Desist Order are void as
being without basis in fact and law and in violation of Globe Telecom’s rights to due process. Globe Telecom,
Smart Communications Inc. and Sun Cellular all filed petitions before the CA seeking the nullification of the
questioned orders of the NTC. The NTC is currently conducting hearings on its show cause order. On January
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27, 2010, the telecom carriers moved to suspend the hearings before the NTC in order to give way to hearings
on the Temporary Restraining Order that the three carriers have asked the CA to issue.
Globe Telecom believes that its legal position is strong and that its offering is compliant with the NTC’s MC 05-
07-2009, and therefore believes that it would not be obligated to make a refund to its subscribers. If however,
Globe Telecom would be held as not being in compliance with the circular, Globe may be contingently liable
to refund to any complaining subscribers any charges it may have collected in excess of what it could have
charged under the NTC’s disputed Order as of December 7, 2009, if indeed it is proven by any complaining
party that Globe charged more with its per second scheme than it could have under the NTC’s 6-second pulse
billing scheme stated in the disputed December 7, 2009 Order. As of February 4, 2010, the management has no
estimate of what amount this could be at this time.
The Globe Group are contingently liable for various claims arising in the ordinary conduct of business and
certain tax assessments which are either pending decision by the courts or are being contested, the outcome
of which are not presently determinable. In the opinion of management and legal counsel, the eventual liability
under these claims, if any, will not have a material or adverse effect on the Globe Group’s financial position
and results of operations.
27. Earnings Per Share
The Globe Group’s earnings per share amounts were computed as follows:
2009 2008 2007
(In Thousand Pesos and Number of Shares,
Except Per Share Figures)
Net income attributable to common shareholders
for basic earnings per share P12,518,381 P11,215,241 P13,227,570
Add dividends on preferred shares 50,492 60,637 49,449
Net income attributable to shareholders for diluted
earnings per share 12,568,873 11,275,878 13,277,019
Weighted average number of shares for basic
earnings per share 132,342 132,337 132,184
Dilutive shares arising from:
Convertible preferred shares 66 262 564
Stock options 867 674 576
Adjusted weighted average number of common
stock for diluted earnings per share 133,275 133,273 133,324
Basic earnings per share P94.59 P84.75 P100.07
Diluted earnings per share P94.31 P84.61 P99.58
28. Capital and Risk Management and Financial Instruments
28.1 General
The Globe Group adopts an expanded corporate governance approach in managing its business risks. An
Enterprise Risk Management Policy was developed to systematically view the risks and to provide a better
understanding of the different risks that could threaten the achievement of the Globe Group’s mission,
vision, strategies, and goals, and to provide emphasis on how management and employees play a vital role in
achieving the Globe Group’s mission of transforming and enriching lives through communications.
The policies are not intended to eliminate risk but to manage it in such a way that opportunities to create
value for the stakeholders are achieved. Globe Group risk management takes place in the context of the normal
business processes such as strategic planning, business planning, operational and support processes.
The application of these policies is the responsibility of the BOD through the Chief Executive Officer. The
Chief Financial Officer and concurrent Chief Risk Officer champions and oversees the entire risk management
function. Risk owners have been identified for each risk and they are responsible for coordinating and
continuously improving risk strategies, processes and measures on an enterprise-wide basis in accordance with
established business objectives.
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The risks are managed through the delegation of management and financial authority and individual
accountability as documented in employment contracts, consultancy contracts, letters of authority, letters
of appointment, performance planning and evaluation forms, key result areas, terms of reference and other
policies that provide guidelines for managing specific risks arising from the Globe Group’s business operations
and environment.
The Globe Group continues to monitor and manage its financial risk exposures according to its BOD approved
policies.
The succeeding discussion focuses on Globe Group’s capital and financial risk management.
28.2 Capital and Financial Risk Management Objectives and Policies
The primary objective of the Globe Group’s capital management is to ensure that it maintains a strong credit
rating and healthy capital ratios in order to support its business and maximize shareholder value.
The Globe Group monitors its use of capital using leverage ratios, such as debt to total capitalization and
makes adjustments to it in light of changes in economic conditions and its financial position.
The Globe Group is not subject to externally imposed capital requirements. The ratio of debt to total
capitalization for the years ended December 31, 2009, 2008 and 2007 was at 50%, 45%, and 35%, respectively.
The main purpose of the Globe Group’s financial risk management is to fund its operations and capital
expenditures. The risks arising from the use of financial instruments are market risk, credit risk and liquidity
risk. Globe Telecom also enters into derivative transactions, the purpose of which is to manage the currency
and interest rate risk arising from its financial instruments.
Globe Telecom’s BOD reviews and approves the policies for managing each of these risks. The Globe Group
monitors market price risk arising from all financial instruments and regularly reports financial management
activities and the results of these activities to the BOD.
The Globe Group’s risk management policies are summarized below:
28.2.1 Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. Globe Group is mainly exposed to two types of market risk: interest
rate risk and currency risk. Financial instruments affected by market risk include loans and borrowings, AFS
investments, and derivative financial instruments.
The sensitivity analyses in the following sections relate to the position as at December 31, 2009, 2008 and
2007. The analyses exclude the impact of movements in market variables on the carrying value of pension
and other post-retirement obligations, provisions and on the non-financial assets and liabilities of foreign
operations.
The following assumptions have been made in calculating the sensitivity analyses:
• The statement of financial position sensitivity relates to derivatives and AFS debt instruments.
• The sensitivity of the relevant income statement item is the effect of the assumed changes
in respective market risks. This is based on the financial assets and financial liabilities held as at
December 31, 2009, 2008 and 2007 including the effect of hedge accounting.
• The sensitivity of equity is calculated by considering the effect of any associated cash flow
hedges for the effects of the assumed changes the underlying.
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28.2.1.1 Interest Rate Risk
The Globe Group’s exposure to market risk from changes in interest rates relates primarily
to the Globe Group’s long-term debt obligations. Please refer to table presented under
28.2.3 Liquidity Risk.
Globe Group’s policy is to manage its interest cost using a mix of fixed and variable rate
debt, targeting a ratio of between 31-62% fixed rate USD debt to total USD debt, and
between 44-88% fixed rate PHP debt to total PHP debt. To manage this mix in a costefficient
manner, Globe Group enters into interest rate swaps, in which Globe Group agrees
to exchange, at specified intervals, the difference between fixed and variable interest
amounts calculated by reference to an agreed-upon notional principal amount.
After taking into account the effect of currency and interest rate swaps, 34% and 45% of
the Globe Group’s USD and PHP borrowings, respectively, as of December 31, 2009, 35%
and 55% of the Globe Group’s USD and PHP borrowings, respectively, as of December 31,
2008 and 38% and 56% of the Globe Group’s USD and PHP borrowings, respectively, as of
December 31, 2007, are at a fixed rate of interest.
The following tables demonstrate the sensitivity of income before tax to a reasonably possible change
in interest rates after the impact of hedge accounting, with all other variables held constant.
2009
Effect on income
Increase/decrease before tax Effect on equity
in basis points Increase (decrease) Increase (decrease)
(In Thousand Pesos)
USD +200bps (P31,983) P38,989
-200bps 29,784 (17,214)
PHP +100bps (121,820) –
-100bps 121,747 –
2008
Effect on income
Increase/decrease before tax Effect on equity
in basis points Increase (decrease) Increase (decrease)
(In Thousand Pesos)
USD +200 bps (P29,780) P27,412
-200 bps 30,815 (28,606)
PHP +100 bps (63,938) (1,790)
-100 bps 63,840 1,818
2007
Effect on income
Increase/decrease before tax Effect on equity
in basis points Increase (decrease) Increase (decrease)
(In Thousand Pesos)
USD +5 bps (P1,424) P2,288
-5 bps 1,425 (2,291)
PHP +100 bps 6,257 (24,760)
-100 bps (6,689) 25,157
The impact to equity is caused by the change in MTM of derivatives classified as hedges. As
of December 31, 2009, Globe Group has no outstanding PHP interest rate swaps and nondeliverable
forwards accounted for as hedges.
28.2.1.2 Foreign Exchange Risk
The Globe Group’s foreign exchange risk results primarily from movements of the PHP
against the USD with respect to USD-denominated financial assets, USD-denominated
financial liabilities and certain USD-denominated revenues. Majority of revenues are
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generated in PHP, while substantially all of capital expenditures are in USD. In addition,
14%, 12% and 20% of debt as of December 31, 2009, 2008 and 2007, respectively, are
denominated in USD before taking into account any swap and hedges.
Information on the Globe Group’s foreign currency-denominated monetary assets and
liabilities and their PHP equivalents are as follows:
2009 2008 2007
US Peso US Peso US Peso
Dollar Equivalent Dollar Equivalent Dollar Equivalent
(In Thousands)
Assets
Cash and cash equivalents $45,684 P2,120,901 $40,776 P1,943,159 $24,081 P997,203
Receivables 50,359 2,337,915 68,004 3,240,744 59,324 2,456,648
Prepayments and other
current assets – 5 14 661 9 389
96,043 4,458,821 108,794 5,184,564 83,414 3,454,240
Liabilities
Accounts payable and
accrued expenses 155,085 7,199,819 92,464 4,406,395 99,873 4,135,830
Long-term debt 148,133 6,877,090 101,696 4,846,310 149,832 6,204,685
303,218 14,076,909 194,160 9,252,705 249,705 10,340,515
Net foreign currencydenominated
liabilities $207,175 P9,618,088 $85,366 P4,068,141 $166,291 P6,886,275
*This table excludes derivative transactions disclosed in Note 28.3
The following tables demonstrate the sensitivity to a reasonably possible change in the PHP
to USD exchange rate, with all other variables held constant, of the Globe Group’s income
before tax (due to changes in the fair value of financial assets and liabilities).
2009
2008
2007
Increase/decrease
in Peso to Effect on income before tax Effect on equity
US Dollar exchange rate Increase (decrease) Increase (decrease)
(In Thousand Pesos)
+.40 (P81,857) (P278)
-.40 81,857 278
Increase/decrease
in Peso to Effect on income before tax Effect on equity
US Dollar exchange rate Increase (decrease) Increase (decrease)
(In Thousand Pesos)
+.40 (P37,971) (P4,291)
-.40 37,971 4,291
Increase/decrease
in Peso to Effect on income before tax Effect on equity
US Dollar exchange rate Increase (decrease) Increase (decrease)
(In Thousand Pesos)
+.125 (P22,133) (P15,453)
-.125 22,133 15,453
The movement on the post-tax effect is a result of a change in the fair value of derivative
financial instruments not designated in a hedging relationship and monetary assets
and liabilities denominated in US dollars, where the functional currency of the Group is
Philippine Peso.
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Although the derivatives have not been designated in a hedge relationship, they act as a
commercial hedge and will offset the underlying transactions when they occur.
The movement on equity arises from changes in USD borrowings, accounts payable and
accrued expenses (net of cash and cash equivalents) in cash flow hedges.
In addition, the consolidated expected future payments on foreign currency-denominated
purchase orders related to capital projects amounted to USD255.79 million, USD264.66
million and USD225.00 million as of December 31, 2009, 2008 and 2007, respectively. The
settlement of these liabilities is dependent on the achievement of project milestones and
payment terms agreed with the suppliers and contractors. In 2009, 2008 and 2007, foreign
exchange exposure assuming a +/-40 centavos, +/- 40 centavos and +/- 12.50 centavos
movement in PHP to USD rate on commitments amounted to P91.39 million, P105.86
million and P28.13 million gain or loss, respectively.
The Globe Group’s foreign exchange risk management policy is to maintain a hedged
financial position, after taking into account expected USD flows from operations and
financing transactions. Globe Telecom enters into short-term foreign currency forwards
and long-term foreign currency swap contracts in order to achieve this target.
28.2.2 Credit Risk
Applications for postpaid service are subjected to standard credit evaluation and verification procedures.
The Credit Management unit of the Globe Group continuously reviews credit policies and processes and
implements various credit actions, depending on assessed risks, to minimize credit exposure. Receivable
balances of postpaid subscribers are being monitored on a regular basis and appropriate credit treatments
are applied at various stages of delinquency. Likewise, net receivable balances from carriers of traffic are
also being monitored and subjected to appropriate actions to manage credit risk. The maximum credit
exposure relates to receivables net of any allowances provided.
With respect to credit risk arising from other financial assets of the Globe Group, which comprise
cash and cash equivalents, short-term investments, AFS financial investments, HTM investments, and
certain derivative instruments, the Globe Group’s exposure to credit risk arises from the default of the
counterparty, with a maximum exposure equal to the carrying amount of these instruments. The Globe
Group’s investments comprise short-term bank deposits and government securities. Credit risk from these
investments is managed on a Globe Group basis. For its investments with banks, the Globe Group has
a counterparty risk management policy which allocates investment limits based on counterparty credit
rating and credit risk profile.
The Globe Group makes a quarterly assessment of the credit standing of its investment counterparties,
and allocates investment limits based on size, liquidity, profitability, and asset quality. For investments
in government securities, these are denominated in local currency and are considered to be relatively
risk-free. The usage of limits is regularly monitored. For its derivative counterparties, the Globe Group
deals only with counterparty banks with investment grade ratings and large local banks. Credit ratings of
derivative counterparties are reviewed quarterly.
Following are the Globe Group exposures with its investment counterparties for cash and cash equivalents
as of December 31:
2009 2008 2007
Local bank deposits 48% 53% 35%
Onshore foreign bank 25% 27% 37%
Offshore bank deposit 12% 13% –
Special deposit account
(BSP) 15% 7% 28%
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2009
The Globe Group has not executed any credit guarantees in favor of other parties. There is also no
concentration of credit risk within the Globe Group. Credit exposures from subscribers and carrier partners
continue to be managed closely for possible deterioration. When necessary, credit management measures
are proactively implemented and identified collection risks are being provided for accordingly. Outstanding
credit exposures from financial instruments are monitored daily and allowable exposures are reviewed
quarterly.
The tables below show the aging analysis of the Globe Group’s receivables as of December 31.
Neither Past Past Due But Not Impaired Impaired
Due Nor Less than 31 to 60 61 to 90 More than Financial
Impaired 30 days days days 90 days Assets Total
(In Thousand Pesos)
Wireless receivables:
Consumer P262,965 P354,222 P151,239 P93,469 P255,714 P88,088 P1,205,697
Key corporate accounts 32,777 133,249 106,967 69,193 116,094 20,154 478,434
Other corporations and
Small and Medium
Enterprises (SME) 95,547 81,038 35,447 19,608 43,187 47,690 322,517
391,289 568,509 293,653 182,270 414,995 155,932 2,006,648
Wireline receivables:
Consumer 318,053 214,863 120,909 117,642 40,240 643,047 1,454,754
Key corporate accounts 352,769 27,591 14,040 7,777 – 167,282 569,459
Other corporations and
SME 87,388 341,818 240,709 145,834 14,462 97,320 927,531
758,210 584,272 375,658 271,253 54,702 907,649 2,951,744
Other trade receivables – 19,121 – – – 2,682 21,803
Traffic receivables:
Foreign 1,838,777 – – – – 97,971 1,936,748
Local 303,090 – – – – 79,435 382,525
2,141,867 – – – – 177,406 2,319,273
Other receivables 626,640 – – – – 8,111 634,751
Total P3,918,006 P1,171,902 P669,311 P453,523 P469,697 P1,251,780 P7,934,219
2008
Neither Past Past Due But Not Impaired Impaired
Due Nor Less than 31 to 60 61 to 90 More than Financial
Impaired 30 days days days 90 days Assets Total
Wireless receivables:
Consumer P403,189 P370,507 P193,777 P100,177 P255,357 P131,423 P1,454,430
Key corporate accounts 20,824 116,519 104,325 51,295 53,863 62,132 408,958
Other corporations and
SME 98,183 79,355 42,239 20,586 50,188 139,099 429,650
522,196 566,381 340,341 172,058 359,408 332,654 2,293,038
Wireline receivables:
Consumer 211,371 120,057 91,340 71,724 – 288,433 782,925
Key corporate accounts 280,441 37,900 20,637 15,581 336,903 87,958 779,420
Other corporations and
SME 79,239 247,028 172,190 116,153 11,994 60,579 687,183
571,051 404,985 284,167 203,458 348,897 436,970 2,249,528
Other trade receivables – 12,625 3,281 3,686 1,667 – 21,259
Traffic receivables:
Foreign 2,879,081 – – – – 79,559 2,958,640
Local 349,642 – – – – 309,728 659,370
3,228,723 – – – – 389,287 3,618,010
Other receivables 466,610 – – – – 11,560 478,170
Total P4,788,580 P983,991 P627,789 P379,202 P709,972 P1,170,471 P8,660,005
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2007
Neither Past Past Due But Not Impaired Impaired
Due Nor Less than 31 to 60 61 to 90 More than Financial
Impaired 30 days days days 90 days Assets Total
Wireless receivables:
Consumer P383,776 P349,596 P151,452 P70,953 P155,202 P266,268 P1,377,247
Key corporate accounts 13,950 116,406 95,807 46,418 181,610 191,683 645,874
Other corporations and
SME 67,501 61,985 29,066 16,763 73,691 216,574 465,580
465,227 527,987 276,325 134,134 410,503 674,525 2,488,701
Wireline receivables:
Consumer 234,259 129,635 71,227 55,060 7,941 163,053 661,175
Key corporate accounts 314,822 35,681 13,728 12,499 188,545 143,251 708,526
Other corporations and
SME 110,065 336,910 205,634 172,296 11,365 64,577 900,847
659,146 502,226 290,589 239,855 207,851 370,881 2,270,548
Traffic receivables:
Foreign 1,644,169 – – – – 38,449 1,682,618
Local 690,035 – – – – 233,260 923,295
2,334,204 – – – – 271,709 2,605,913
Other receivables 387,511 – – – – 14,343 401,854
Total P3,846,088 P1,030,213 P566,914 P373,989 P618,354 P1,331,458 P7,767,016
Total allowance for impairment losses amounted to P1,350.99 million, P1,186.66 million and P1,383.48
million includes allowance for impairment arising from collective assessment amounted to P99.21 million,
P16.19 million and P52.02 million as of December 31, 2009, 2008 and 2007, respectively (see Note 4).
The table below provides information regarding the credit risk exposure of the Globe Group by classifying
assets according to the Globe Group’s credit ratings of receivables as of December 31. The Globe Group’s
credit rating is based on individual borrower characteristics and their relationship to credit event experiences.
2009
Neither past-due nor impaired
High Quality Medium Quality Low Quality Total
(In Thousand Pesos)
Wireless receivables:
Consumer P183,594 P41,292 P38,079 P262,965
Key corporate accounts 27,339 3,867 1,571 32,777
Other corporations and SME 10,075 37,692 47,780 95,547
221,008 82,851 87,430 391,289
Wireline receivables:
Consumer 141,281 21,199 155,573 318,053
Key corporate accounts 296,269 2,494 54,006 352,769
Other corporations and SME 50,480 4,096 32,812 87,388
488,030 27,789 242,391 758,210
Total P709,038 P110,640 P329,821 P1,149,499
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2008
Neither past-due nor impaired
High Quality Medium Quality Low Quality Total
(In Thousand Pesos)
Wireless receivables:
Consumer P278,522 P64,959 P59,708 P403,189
Key corporate accounts 17,006 2,338 1,480 20,824
Other corporations and SME 11,171 37,113 49,899 98,183
306,699 104,410 111,087 522,196
Wireline receivables:
Consumer 82,158 44,684 84,529 211,371
Key corporate accounts 273,941 6,499 1 280,441
Other corporations and SME 30,481 12,146 36,612 79,239
386,580 63,329 121,142 571,051
Total P693,279 P167,739 P232,229 P1,093,247
2007
Neither past-due nor impaired
High Quality Medium Quality Low Quality Total
(In Thousand Pesos)
Wireless receivables:
Consumer P338,862 P41,007 P3,907 P383,776
Key corporate accounts 12,354 923 673 13,950
Other corporations and SME 54,692 7,755 5,054 67,501
405,908 49,685 9,634 465,227
Wireline receivables:
Consumer 95,950 127,670 10,639 234,259
Key corporate accounts 308,286 – 6,536 314,822
Other corporations and SME 68,009 40,053 2,003 110,065
472,245 167,723 19,178 659,146
Total P878,153 P217,408 P28,812 P1,124,373
High quality accounts are accounts considered to be high value and have consistently exhibited good
paying habits. Medium quality accounts are active accounts with propensity of deteriorating to mid-range
age buckets. These accounts do not flow through to permanent disconnection status as they generally
respond to credit actions and update their payments accordingly. Low quality accounts are accounts
which have probability of impairment based on historical trend. These accounts show propensity to
default in payment despite regular follow-up actions and extended payment terms. Impairment losses are
also provided for these accounts based on net flow rate.
Traffic receivables that are neither past due nor impaired are considered to be high quality given the
reciprocal nature of the Globe Group’s interconnect and roaming partner agreements with the carriers and
the Globe Group’s historical collection experience.
Other receivables are considered high quality accounts as these are substantially from credit card
companies and Globe dealers.
The following is a reconciliation of the changes in the allowance for impairment losses for receivables as
of December 31 (in thousand pesos) (see Note 4):
2009
Subscribers
Other Traffic
Key corporate corporations Settlements Non-trade
Consumer accounts and SME and Others (Note 6) Total
At beginning of year P400,926 P119,986 P264,900 P400,847 P43,753 P1,230,412
Charges for the year 856,184 35,900 79,898 (211,351) (5,998) 754,633
Reversals/write offs/
adjustments (436,707) 21,087 (179,382) (1,297) (2,979) (599,278)
At end of year P820,403 P176,973 P165,416 P188,199 P34,776 P1,385,767
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2008
Subscribers
Other Traffic
Key corporate corporations Settlements Non-trade
Consumer accounts and SME and Others (Note 6) Total
At beginning of year P481,599 P336,558 P279,266 P286,052 P35,720 P1,419,195
Charges for the year 501,426 146,725 187,523 134,504 9,601 979,779
Reversals/write offs/
adjustments (582,099) (363,297) (201,889) (19,709) (1,568) (1,168,562)
At end of year P400,926 P119,986 P264,900 P400,847 P43,753 P1,230,412
2007
Subscribers
Other Traffic
Key corporate corporations Settlements Non-trade
Consumer accounts and SME and Others (Note 6) Total
At beginning of year P1,740,442 P430,435 P314,311 P199,595 P43,581 P2,728,364
Charges for the year 463,312 80,959 77,614 90,507 (996) 711,396
Reversals/write offs/
adjustments (1,722,155) (174,836) (112,659) (4,050) (6,865) (2,020,565)
At end of year P481,599 P336,558 P279,266 P286,052 P35,720 P1,419,195
28.2.3 Liquidity Risk
The Globe Group seeks to manage its liquidity profile to be able to finance capital expenditures and service
maturing debts. As of December 31, 2009, 2008 and 2007, Globe Group has available uncommitted shortterm
credit facilities of USD19.00 million and P9,000.00 million, USD39.00 million and P5,297.10 million,
and USD39.00 million and P4,520.00 million, respectively. As of December 31, 2009, the Globe Group also
has USD93.00 million committed long-term facilities which remain undrawn.
As part of its liquidity risk management, the Globe Group regularly evaluates its projected and actual cash
flows. It also continuously assesses conditions in the financial markets for opportunities to pursue fund
raising activities, in case any requirements arise. Fund raising activities may include bank loans, export
credit agency facilities and capital market issues.
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The following tables show comparative information about the Globe Group’s financial instruments as of December 31 that are exposed to liquidity risk and interest
rate risk and presented by maturity profile including forecasted interest payments for the next five years from December 31 figures (in thousands).
Long-term Liabilities:
2009
2014 and Total Total Debt Carrying Value Fair Value
2010 2011 2012 2013 thereafter (in USD) (in PHP) Issuance Costs (in PHP) (in PHP)
Liabilities:
Long-term debt
Fixed rate
Philippine peso P13,700 P4,093,700 P6,988,150 P933,700 P6,450,750 $– P18,480,000 P95,604 P18,384,396 P19,413,016
5.97%; 5.97%;
6.68%; 7.03%; 6.68%; 7.03%; 6.68%; 7.0; 7.24%; 7.50%;
Interest rate 7.24%; 8.36% 7.24%; 8.36% 7.50%; 8.00% 7.24%; 8.00%; 8.36%
Floating rate
USD notes $66,622 $68,511 $13,000 $– $– 148,133 – 66,734 6,810,357 5,472,014
Interest rate
6mo LIBOR+.85%
;6mo LIBOR+3%
margin; 1mo
or 3mo or 6mo
LIBOR+2%
margin; 3mo or
6mo LIBOR+.43%
margin
(rounded to 1/16%)
Philippine peso 2,580,873 718,771 6,947,343 7,566,093 2,503,843 – 20,316,923 35,654 20,281,269 20,245,723
Interest rate
PDSTF3mo + 1%
margin; PDSTF
3mo+ 1.30% ,
PDSTF3mo + 1.10%
margin, PDSTF3mo +
1% margin; PDSTF
6mo + 1.25% margin
6mo LIBOR+ .85%;
6mo LIBOR + 3%
margin; 1mo or 3mo
or 6mo LIBOR+ 2%
margin; 3mo or 6mo
LIBOR + .43%
margin (rounded to
1/16%)
PDSTF3mo + 1%
margin;
PDSTF3mo+
1.30% , PDSTF3mo +
1.10% margin,
PDSTF3mo + 1%
margin; PDSTF6mo
+1.25% margin
6mo LIBOR + 3%
margin; 3mo
or 6mo LIBOR
+ .43% margin
(rounded to
1/16%)
PDSTF3mo + 1%
margin; PDSTF
3mo+ 1.30% ,
PDSTF3mo +
1.10% margin,
PDSTF 3mo + 1%
margin; PDSTF6mo
+ 1.25% margin;
PDSTF3mo +
1.50% margin
PDSTF3mo +
1% margin;
PDSTF3
mo+ 1.30% ,
PDSTF3mo +
1.10% margin,
PDSTF3mo +
1% margin;
PDSTF6mo +
1.25% margin
PDSTF3mo
+ 1%
margin;
PDSTF6mo +
1.25% margin
Interest payable*
$148,133 P38,796,923 P197,992 P45,476,022 P45,130,753
PHP debt P2,369,013 P2,181,085 P1,483,347 P1,020,253 P638,566 P– P7,692,264 P– P– P–
USD debt $2,727 $1,305 $157 $– $– $4,189 $– $– $– $–
*Used month-end Libor and Philippine Dealing and Exchange Corporation (PDEX) rates.
*Using P46.425 - USD exchange rate as of December 31, 2009.
159

2008
2013 and Total Total Debt Carrying Value Fair Value
2009 2010 2011 2012 thereafter (in USD) (in PHP) Issuance Costs (in PHP) (in PHP)
Liabilities:
Long-term debt
Fixed rate
USD notes $6,140 $– $– $– $– $6,140 P– P– P292,610 P299,267
Interest rate 6.44% – – – –
Philippine peso P4,700,000 P– P4,080,000 P6,087,000 P920,000 – 15,787,000 47,091 15,739,909 16,314,939
Interest rate 11.70% – 13.79%; 5.97%; 13.79%; 5.97%; 13.79%; 5.97%;
6.68%; 7.03% 6.68%; 7.03% 6.68%; 7.03%
Floating rate
USD notes $32,222 $32,222 $26,112 $5,000 $– 95,556 – 10,045 4,543,655 4,588,401
Interest rate
3mo/6mo
LIBOR+.43%
margin
(rounded
to .06%);
LIBOR+.85%
3mo/6mo
LIBOR+.43%
margin
(rounded
to .06%);
LIBOR+.85%
3mo/6mo
LIBOR+.43%
margin
(rounded
to .06%);
LIBOR+.85%
3mo/6mo
LIBOR+.43%
margin
(rounded
to .06%)
Philippine peso P1,240,373 P2,503,173 P25,000 P5,825,000 P6,443,750 – 16,037,296 27,532 16,009,764 16,009,764
Interest rate
PDSTF3mo+
1.38%;
PDSTF1mo+
1% margin
PDSTF3mo+1.30%;
PDSTF1mo+1.10%
margin;
PDSTF3mo+1%
margin;
PDSTF1mo+1%
margin
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin;
PDSTF3mo+1%
margin
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin;
PDSTF3mo+1%
margin;
PDSTF1mo+
1.50% margin
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin;
PDSTF3mo+
1% margin;
PDSTF1mo+
1.25% margin
Interest payable*
*Used month-end LIBOR and Philippine Dealing and Exchange Corporation (PDEX) rates.
*Using P47.655-USD exchange rate as of December 31, 2008.
$101,696 P31,824,296 P84,668 P36,585,938 P37,212,371
PHP debt P2,244,472 P1,870,132 P1,522,663 P845,511 P391,305 P– P6,874,083 P– P– P–
USD debt $1,775 $824 $263 $63 $– $2,925 $– $– $– $–
160

2007
Liabilities:
Long-term debt
Fixed rate
2012 and Total Total Debt Carrying Value Fair Value
2008 2009 2010 2011 thereafter (in USD Debt) (in PHP Debt) Issuance Costs (in PHP) (in PHP)
USD notes $11,116 $6,140 $– $– $– $17,256 P– P– P714,596 P731,506
Interest rate 6.44% 6.44% – – –
Philippine peso P2,208,550 P4,700,000 P– P520,000 P6,087,000 – 13,515,550 – 13,515,550 14,700,078
Interest rate 10.72%-11.70% 11.70% – 16.00% 13.79%, 5.97%
Floating rate
USD notes $35,421 $33,822 $32,222 $26,111 $5,000 132,576 – 11,657 5,478,432 5,579,271
Interest rate
LIBOR+1.2%,
LIBOR+.85%,
3mo/6mo
LIBOR+.43%
LIBOR+1.20%,
LIBOR+.85%,
3mo/6mo
LIBOR+.43%
LIBOR+.85%,
3mo/6mo
LIBOR+.43%
LIBOR+.85%,
3mo/6mo,
LIBOR+.43%
3mo/6mo
LIBOR+.43%
Philippine peso P684,423 P1,240,373 P2,496,923 P– P5,800,000 – 10,221,719 57,445 10,164,274 10,221,719
Interest rate
PDSTF1mo+1%
margin;
PDSTF1mo+
1.30%
margin
PDSTF3mo
+1.38%;
PDSTF1mo+1%
margin;
PDSTF1mo
+1.30%
margin
PDSTF1mo+1%
margin;
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin
PDSTF1mo+
1.50% margin;
PDSTF3mo+
1.30%;
PDSTF1mo+
1.10% margin
Interest payable*
$149,832 P23,737,269 P69,102 P29,872,852 P31,232,574
PHP debt P1,801,058 P1,388,110 P1,021,604 P837,860 P309,631 P– P5,358,263 P– P– P–
USD debt $6,925 $4,818 $2,814 $951 $130 $15,638 $– $– $– $–
*Used month-end LIBOR and PDEX rates.
*Using P41.411-USD exchange rate as of December 31, 2007.
161

The following tables present the maturity profile of the Globe Group’s other liabilities and derivative instruments (undiscounted cash flows including swap costs
payments/receipts except for other long-term liabilities) as of December 31 (in thousands):
2009
Other Financial Liabilities:
Less than
On demand 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
Accounts payable and accrued expenses* P2,201,314 P16,458,817 P– P– P– P– P– P18,660,131
Derivative liabilities – 85,867 5,515 – 1,074 – – 92,456
Notes payable – 2,000,829 – – – – – 2,000,829
Other long-term liabilities – 735,944 – – – – 647,416 1,383,360
P2,201,314 P19,281,457 P5,515 P– P1,074 P– P647,416 P22,136,776
*Excludes taxes payable which is not a financial instrument.
Derivative Instruments:
2010 2011 2012 2013 2014 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Swap Coupons*:
Principal Only Swaps P– P4,290 P– P5,436 P– P2,726 P– P– P– P–
Interest Rate Swaps – 21,424 – 4,401 4,240 – – – – –
*Projected USD swap coupons were converted to PHP at the balance sheet rate. Further, it was assumed that 3m Libor, 3m PDSTF, and 6m PDSTF would stay at December 31, 2009 levels.
2010 2011 2012 2013 2014 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Principal Exchanges*:
Principal Only Swaps $– P– $– P– $2,500 P140,825 $- P– $– P–
Forward Purchase of USD $20,000 P959,500 – – – – – – – –
Forward Sale of USD P964,150 $20,000 – – – – – – – –
*Projected principal exchanges represent commitments to purchase USD for payment of USD debts with the same maturities.
162

2008
Other Financial Liabilities:
Less than
On demand 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
Accounts payable and accrued expenses* P1,522,730 P14,196,610 P– P– P– P– P– P15,719,340
Derivative liabilities – 163,989 – – 21,665 – – 185,654
Notes payable 4,002,160 – – – – – – 4,002,160
Other long-term liabilities – 86,099 93,632 102,107 111,348 121,426 898,835 1,413,447
P5,524,890 P14,446,698 P93,632 P102,107 P133,013 P121,426 P898,835 P21,320,601
*Excludes taxes payable which is not a financial instrument.
Derivative Instruments:
2009 2010 2011 2012 2013 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Swap Coupons*:
Principal Only Swaps P– P5,580 P– P5,580 P– P5,580 P– P2,798 P– P–
Interest Rate Swaps – 3,293 – 15,306 4,093 – 4,491 – – –
*Projected USD swap coupons were converted to PHP at the balance sheet rate. Further, it was assumed that 3m Libor, 3m PDSTF, and 6m PDSTF would stay at December 31, 2008 levels.
2009 2010 2011 2012 2013 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Principal Exchanges*:
Principal Only Swaps $– P– $– P– $– P– $2,500 P140,825 $– P–
Forwards (Deliverable and
Nondeliverable) P1,018,058 $22,000 – – – – – – – –
*Projected principal exchanges represent commitments to purchase USD for payment of USD debts with the same maturities.
163

2007
Other Financial Liabilities:
Less than
On demand 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Total
Accounts payable and accrued expenses* P1,151,747 P15,240,407 P– P– P– P– P– P16,392,154
Derivative liabilities – 326,721 – – – 14,110 – 340,831
Notes payable – 500,000 – – – – – 500,000
Other long-term liabilities – 72,623 79,196 86,364 94,181 102,705 591,486 1,026,555
P1,151,747 P16,139,751 P79,196 P86,364 P94,181 P116,815 P591,486 P18,259,540
*Excludes taxes payable which is not a financial instrument.
Derivative Instruments:
2008 2009 2010 2011 2012 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Swap Coupons*:
Principal Only Swaps P– P21,447 P– P13,259 P– P13,259 P– P13,259 P– P6,648
Interest Rate Swaps 50,058 – 22,902 – 756 – 1,680 – 956 –
*Projected USD swap coupons were converted to PHP at the balance sheet rate. Further, it was assumed that 3m Libor, 3m PDSTF, and 6m PDSTF would stay at December 31, 2007 levels.
2008 2009 2010 2011 2012 and beyond
Receive Pay Receive Pay Receive Pay Receive Pay Receive Pay
Projected Principal Exchanges*:
Principal Only Swaps $5,000 P280,850 $– P– $– P– $– P– $5,000 P281,650
Forwards (Deliverable and
Nondeliverable) P242,256 $– P964 $– – – – – – –
*Projected principal exchanges represent commitments to purchase USD for payment of USD debts with the same maturities.
164

28.2.4 Hedging Objectives and Policies
The Globe Group uses a combination of natural hedges and derivative hedging to manage its foreign
exchange exposure. It uses interest rate derivatives to reduce earnings volatility related to interest rate
movements.
It is the Globe Group’s policy to ensure that capabilities exist for active but conservative management of
its foreign exchange and interest rate risks. The Globe Group does not engage in any speculative derivative
transactions. Authorized derivative instruments include currency forward contracts (freestanding
and embedded), currency swap contracts, interest rate swap contracts and currency option contracts
(freestanding and embedded). Certain currency swaps are entered with option combination or structured
provisions.
28.3 Derivative Financial Instruments
The Globe Group’s freestanding and embedded derivative financial instruments are accounted for as hedges
or transactions not designated as hedges. The table below sets out information about the Globe Group’s
derivative financial instruments and the related fair values as of December 31 (in thousands):
2009
Notional Notional Derivative Derivative
Amount Amount Asset Liability
Derivative instruments designated as hedges:
Cash flow hedges:
Interest rate swaps $51,000 P– P– P32,221
Derivative instruments not designated
as hedges:
Freestanding:
Nondeliverable forwards* 40,000 – 14,424 9,775
Interest rate swaps 10,000 – 15,468 5,084
Cross-currency swaps 2,500 – – 26,789
Embedded
Currency forwards** 9,972 – 6,413 18,587
Net P36,305 P92,456
* Buy position: USD20,000; Sell position: USD20,000.
** The embedded currency forwards are at a net sell position.
2008
Notional Notional Derivative Derivative
Amount Amount Asset Liability
Derivative instruments designated as hedges:
Cash flow hedges:
Nondeliverable forwards* $10,000 P– P– P19,456
Interest rate swaps 25,000 – – 37,804
Derivative instruments not designated
as hedges:
Freestanding:
Deliverable and nondeliverable forwards** 75,100 – 109,454 70,705
Interest rate swaps 13,333 2,000,000 8,086 14,752
Currency swaps and cross currency swaps 2,500 – – 29,731
Embedded:
Currency forwards 25,564 – 51,470 13,206
Currency options*** 3 – 2 –
Net P169,012 P185,654
*All sell position
**Buy position: USD31,550; Sell position: USD43,550
****All embedded options are long call positions.
165

2007
Notional Notional Derivative Derivative
Amount Amount Asset Liability
Derivative instruments designated as hedges:
Cash flow hedges:
Nondeliverable forwards* $120,000 P– P267,865 P–
Interest rate swaps 35,000 – – 15,026
Derivative instruments not designated
as hedges:
Freestanding:
Nondeliverable forwards** 46,000 – 115,064 97,027
Interest rate swaps 15,000 2,000,000 58,922 11,613
Currency swaps and cross
currency swaps 10,000 – – 172,194
Embedded:
Currency forwards*** 34,305 – 86,781 44,971
Currency options**** 430 – 14 –
Net P528,646 P340,831
*Sell position: USD120,000
**Buy position: USD20,000; Sell position: USD26,000
***Buy position: USD10,118; Sell position USD24,187
****All embedded options are long call positions.
The table below also sets out information about the maturities of Globe Group’s derivative instruments as
of December 31 that were entered into to manage interest and foreign exchange risks related to the longterm
debt and US dollar-based revenues (in thousands).
2009
1-2-3-4-

2008
1-2-3-4-

The Globe Group’s other financial instruments which are non-interest bearing and therefore not subject to
interest rate risk are trade and other receivables, accounts payable and accrued expenses and long-term liabilities.
The subsequent sections will discuss the Globe Group’s derivative financial instruments according to the type
of financial risk being managed and the details of derivative financial instruments that are categorized into
those accounted for as hedges and those that are not designated as hedges.
28.4 Derivative Instruments Accounted for as Hedges
The following sections discuss in detail the derivative instruments accounted for as cash flow hedges.
· Interest Rate Swaps
As of December 31, 2009, 2008 and 2007, the Globe Group has USD51.00 million, USD25.00 million and
USD35.00 million, respectively, in notional amount of interest rate swap that has been designated as cash
flow hedge. The interest rate swaps effectively fixed the benchmark rate of the hedged loan at 1.64% to
4.84% over the duration of the agreement, which involves semi-annual or quarterly payment intervals up
to April 2012.
As of December 31, 2009, 2008 and 2007, the fair value of the outstanding swap amounted to P32.22
million loss, P37.80 million loss and P15.03 million loss, respectively, of which P22.56 million, P26.46 million
and P9.77 million (net of tax), respectively, is reported as “Other reserves” in the equity section of the
consolidated statements of financial position.
Accumulated swap income/ (cost) for the years ended December 31, 2009, 2008 and 2007 amounted to
(P40.21 million), (P19.46 million) and P7.36 million, respectively.
· Nondeliverable Forwards
The Globe group has no outstanding short-term nondeliverable currency forward contracts accounted as
hedge as of December 31, 2009.
Hedging gain or loss on derivatives intended to manage foreign currency fluctuations on dollar based
revenues for the years ended December 31, 2009, 2008 and 2007 amounted to P18.47 million loss, P127.52
million loss and P4.97 million gain, respectively. These hedging losses are reflected under service revenues
in the consolidated statements of comprehensive income.
28.5 Other Derivative Instruments not Designated as Hedges
The Globe Group enters into certain derivatives as economic hedges of certain underlying exposures. Such
derivatives, which include embedded and freestanding currency forwards, embedded call options, and certain
currency swaps with option combination or structured provisions, are not designated as accounting hedges.
The gains or losses on these instruments are accounted for directly in the other comprehensive income. This
section consists of freestanding derivatives and embedded derivatives found in both financial and nonfinancial
contracts.
28.6 Freestanding Derivatives
Freestanding derivatives that are not designated as hedges consist of currency forwards, options, currency and
interest rate swaps entered into by the Globe Group. Fair value changes on these instruments are accounted
for directly in the consolidated statements of comprehensive income.
· Deliverable and Nondeliverable Forwards
The Globe Group entered into short-term deliverable and nondeliverable currency forward contracts
which have maturities until October 2010. These currency forward contracts have a notional amount
of USD40.00 million, USD75.10 million and USD46.00 million as of December 31, 2009, 2008 and 2007,
respectively. The net fair value gain amounted to P4.65 million, P38.75 million and P18.04 million in
December 31, 2009, 2008 and 2007, respectively.
168

· Interest Rate Swaps
The Globe Group has outstanding interest rate swap contracts which swap certain fixed and floating
USD-denominated loans into floating and fixed rate with semi-annual payments interval up to April 2012.
The swaps have outstanding notional of USD10.00 million as of December 31, 2009, USD13.33 million
and PHP2,000.00 million as of December 31, 2008 and USD15.00 million and PHP2,000.00 million as of
December 31, 2007.
The fair values on the interest rate swaps as of December 31, 2009, 2008 and 2007 amounted to P10.38
million net gain, P6.67 million net loss, and P47.31 million net gain, respectively.
· Currency Swaps and Cross-Currency Swaps
The Globe Group also has an outstanding foreign currency swap agreement with a certain bank, under
which it swaps the principal of USD-denominated loans into PHP up to April 2012. Under these contracts,
swap costs are payable in semi-annual intervals in PHP or USD. The notional of the swaps amounted to
USD2.50 million as of December 31, 2009 and 2008, and USD10.00 million as of December 31, 2007. The
fair value loss of the currency swaps as of December 31, 2009, 2008 and 2007 amounted to P26.79 million,
P29.73 million and P172.19 million, respectively.
28.7 Embedded Derivatives
The Globe Group has instituted a process to identify any derivatives embedded in its financial or non financial
contracts. Based on PAS 39, the Globe Group assesses whether these derivatives are required to be bifurcated
or are exempted based on the qualifications provided by the said standard. The Globe Group’s embedded
derivatives include embedded currency derivatives noted in non-financial contracts.
· Embedded Currency Forwards
As of December 31, 2009, 2008 and 2007, the total outstanding notional amount of currency forwards
embedded in nonfinancial contracts amounted to USD9.97 million, USD25.56 million and USD34.30
million, respectively. The nonfinancial contracts consist mainly of foreign currency-denominated purchase
orders with various expected delivery dates. The net fair value of the embedded currency forwards as
of December 31, 2009, 2008 and 2007 amounted to P12.18 million loss, P38.26 million gain and P41.81
million gain, respectively.
· Embedded Currency Options
As of December 31, 2009, the Globe Group does not have an outstanding currency option embedded in
non-financial contracts.
28.8 Fair Value Changes on Derivatives
The net movements in fair value changes of all derivative instruments are as follows:
December 31
2009 2008 2007
(In Thousand Pesos)
At beginning of year (P16,642) P187,815 P540,544
Net changes in fair value of derivatives:
Designated as accounting hedges (35,116) (457,080) 193,165
Not designated as accounting hedges (44,253) 34,265 (1,512,636)
(96,011) (235,000) (778,927)
Less fair value of settled instruments (39,860) (218,358) (966,742)
At end of year (P56,151) (P16,642) P187,815
169

28.9 Hedge Effectiveness Results
As of December 31, 2009, 2008 and 2007, the effective fair value changes on the Globe Group’s cash flow
hedges that were deferred in equity amounted to P22.56 million, P40.08 million loss and P164.34 million
gain, net of tax, respectively. Total ineffectiveness for the years ended December 31, 2009, 2008 and 2007 is
immaterial.
The distinction of the results of hedge accounting into “Effective” or “Ineffective” represent designations based
on PAS 39 and are not necessarily reflective of the economic effectiveness of the instruments.
28.10 Categories of Financial Assets and Financial Liabilities
The table below presents the carrying value of Globe Group’s financial instruments by category as of December 31:
2009 2008 2007
(In Thousand Pesos)
Financial assets:
Financial assets at FVPL:
Derivative assets designated as cash flow hedges P– P– P267,865
Derivative assets not designated as hedges 36,305 169,012 260,781
AFS investment in equity securities - net (Note 11) 81,727 61,324 55,461
HTM investments – – 2,350,032
Loans and receivables - net* 13,441,734 14,491,808 13,384,165
Financial liabilities:
Financial liabilities at FVPL:
Derivative liabilities designated as cash flow hedges P32,221 P57,260 P15,026
Derivative liabilities not designated as hedges 60,235 128,394 325,805
Financial liabilities at amortized cost** 67,520,342 57,720,885 49,151,283
* This consists of cash and cash equivalents, short-term investments and long-term investments, receivables, other nontrade receivables
and loans receivables.
**This consists of accounts payable, accrued expenses, accrued project cost, traffic settlement-net, dividends payable, notes payable,
long-term debt (including current portion) and other long-term liabilities (including current portion).
As of December 31, 2009, 2008 and 2007, the Globe Group has no investments in foreign securities.
28.11 Fair Values of Financial Assets and Financial Liabilities
The table below presents a comparison of the carrying amounts and estimated fair values of all the Globe
Group’s financial instruments as of:
Financial assets:
December 31
2009 2008 2007
Carrying Value Fair Value Carrying Value Fair Value Carrying Value Fair Value
(In Thousand Pesos)
Cash and cash equivalents P5,939,927 P5,939,927 P5,782,224 P5,782,224 P6,191,004 P6,191,004
Short-term investments 2,784 2,784 – – 500,000 500,000
HTM investments – – – – 2,350,032 2,350,032
Receivables - net 6,583,228 6,583,228 7,473,346 7,473,346 6,383,541 6,383,541
Derivative assets (including
noncurrent portion) 36,305 36,305 169,012 169,012 528,646 528,646
Other nontrade receivables* 915,795 915,795 1,236,238 1,236,238 261,279 261,279
AFS investment in equity
securities - net (Note 11) 81,727 81,727 61,324 61,324 55,461 55,461
Financial liabilities:
Accounts payable and accrued
expenses ** 18,660,131 18,660,131 15,719,340 15,719,340 16,392,154 16,392,154
Derivative liabilities (including
noncurrent portion) 92,456 92,456 185,654 185,654 340,831 340,831
Notes payable 2,000,829 2,000,829 4,002,160 4,002,160 500,000 500,000
Long-term debt (including
current portion) 45,476,022 45,130,753 36,585,938 37,212,371 29,872,852 31,232,574
Other long-term liabilities
(including current portion) 1,383,360 1,383,360 1,413,447 1,413,447 1,026,555 1,026,555
* This consists of loan, accrued interest and miscellaneous receivables included under “Prepayments and other current assets” and “Other
noncurrent assets” (see Notes 6 and 11).
** This consists of accounts payable, accrued expenses, accrued project cost, traffic settlement-net and dividends payable.
170

The following discussions are methods and assumptions used to estimate the fair value of each class of
financial instrument for which it is practicable to estimate such value.
28.11.1 Non-derivative Financial Instruments
The fair values of cash and cash equivalents, short-term investments, AFS investments, subscriber
receivables, traffic settlements receivable, loan receivable, miscellaneous receivables, accrued interest
receivables, accounts payable, accrued expenses and notes payable are approximately equal to their
carrying amounts considering the short-term maturities of these financial instruments.
The fair value of AFS investments are based on quoted prices. Unquoted AFS equity securities are carried
at cost, subject to impairment.
For variable rate financial instruments that reprice every three months, the carrying value approximates
the fair value because of recent and regular repricing based on current market rates. For variable rate
financial instruments that reprice every six months, the fair value is determined by discounting the
principal amount plus the next interest payment using the prevailing market rate for the period up to the
next repricing date. The discount rates used range from 0.08% to 1.64% (for USD loans) and from 4.37%
to 6.55% (for PHP loans). The variable rate PHP loans reprice every six months. For noninterest bearing
obligations, the fair value is estimated as the present value of all future cash flows discounted using the
prevailing market rate of interest for a similar instrument.
28.11.2. Derivative Instruments
The fair value of freestanding and embedded forward exchange contracts is calculated by using the net
present value concept.
The fair values of interest rate swaps, currency and cross currency swap transactions are determined
using valuation techniques with inputs and assumptions that are based on market observable data and
conditions and reflect appropriate risk adjustments that market participants would make for credit and
liquidity risks existing at the end each of reporting period. The fair value of interest rate swap transactions
is the net present value of the estimated future cash flows. The fair values of currency and cross currency
swap transactions are determined based on changes in the term structure of interest rates of each
currency and the spot rate.
Embedded currency options are valued using the simple option pricing model of Bloomberg.
28.11.3. Fair Value Hierarchy
The Globe Group held the following financial instruments measured at fair value.
The Group uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value
are observable, either directly or indirectly
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are
not based on observable market data.
December 31
2009 2008 2007
(In Thousand Pesos)
Level 1
AFS investment in equity securities - net P81,727 P61,324 P55,461
Level 2
Derivative assets (including noncurrent portion) 36,305 169,012 528,646
Derivative liabilities (including noncurrent portion) 92,456 185,654 340,831
171

There were no transfers from Level 1 and Level 2 fair value measurements for the years ended
December 31, 2009, 2008 and 2007. The Globe Group has no financial instruments classified under
Level 3.
29. Operating Segment Information
The Globe Group’s reportable segments consist of: (1) mobile communications services; (2) wireline
communication services; and (3) others, which the Globe Group operate and manage as strategic business
units and organize by products and services. The Globe Group presents its various operating segments based
on segment net income.
Intersegment transfers or transactions are entered into under the normal commercial terms and conditions
that would also be available to unrelated third parties. Segment revenue, segment expense and segment result
include transfers between business segments. Those transfers are eliminated in consolidation.
Most of revenues are derived from operations within the Philippines, hence, the Globe Group does not present
geographical information required by PFRS 8. The Globe Group does not have a single customer that will meet
the 10% reporting criteria.
The Globe Group also presents the different product types that are included in the report that is regularly
reviewed by the chief operating decision maker in assessing the operating segments performance.
Segment assets and liabilities are not measures used by the chief operating decision maker since the assets
and liabilities are managed on a group basis.
The Globe Group’s segment information is as follows (in thousand pesos):
2009
Mobile
Wireline
Communications Communications Intersegment
Services Services Others Transactions Consolidated
REVENUES:
Service revenues
External customers:
Voice P26,497,050 P2,794,855 P– P– P29,291,905
Data 26,736,627 3,037,749 87,775 – 29,862,151
Broadband – 3,289,462 – – 3,289,462
Intersegment revenues:
Voice 1,101,882 56,180 – (1,158,062) –
Data (55,567) 96,637 57,013 (98,083) –
Broadband – 19,693 – (19,693) –
Nonservice revenues:
External customers 916,655 501,959 – – 1,418,614
Intersegment revenues – 115 – (115) –
Segment revenues 55,196,647 9,796,650 144,788 (1,275,953) 63,862,132
EBITDA 35,547,646 901,447 7,128 6,687 36,462,908
Depreciation and
amortization (13,535,502) (3,642,803) (2,914) (207,211) (17,388,430)
EBIT 22,012,144 (2,741,356) 4,214 (200,524) 19,074,478
NET INCOME ( LOSS)
BEFORE TAX 20,923,569 (2,791,545) 3,933 (203,822) 17,932,135
Benefit from (provision
for) income tax* (5,866,931) 501,115 2,554 – (5,363,262)
NET INCOME (LOSS) P15,056,638 (P2,290,430) P6,487 (P203,822) P12,568,873
*Excluding final taxes
172

Other segment information:
Subsidy 1 (P1,146,915) (P382,306) P– (P115) (P1,529,336)
Interest income 2 192,620 38,511 108 – 231,239
Interest expense (2,086,307) (10,455) (183) – (2,096,945)
Equity in net losses of
joint ventures (7,009) – – – (7,009)
Impairment losses and
others (694,335) (116,625) – – (810,960)
Capital expenditure 17,609,324 7,086,349 6,653 – 24,702,326
Cash Flows
Net cash provided by (used in):
Operating activities 25,718,316 3,796,387 3,818 848,460 30,366,981
Investing activities (15,927,101) (5,215,702) (9,824) (676,477) (21,829,104)
Financing activities (8,333,155) (12,000) (1,331) 12,000 (8,334,486)
1 Computed as non-service revenues less cost of sales
2 Net of final taxes
2008 (As restated)
Mobile
Wireline
Communications Communications Intersegment
Services Services Others Transactions Consolidated
REVENUES:
Service revenues
External customers:
Voice P26,971,442 P3,087,685 P– P– P30,059,127
Data 28,434,219 2,477,900 31,169 – 30,943,288
Broadband – 1,892,073 – – 1,892,073
Intersegment revenues:
Voice 455,335 13,229 – (468,564) –
Data 4,242 134,689 14,140 (153,071) –
Broadband – 7,395 – (7,395) –
Nonservice revenues:
External customers 1,582,653 340,907 – – 1,923,560
Intersegment revenues – 352 – (352) –
Segment revenues 57,447,891 7,954,230 45,309 (629,382) 64,818,048
EBITDA 36,631,217 724,359 (16,275) 58,744 37,398,045
Depreciation and
amortization (13,649,575) (3,166,975) (1,061) (210,457) (17,028,068)
EBIT 22,981,642 (2,442,616) (17,336) (151,713) 20,369,977
NET INCOME (LOSS)
BEFORE TAX 20,033,238 (2,091,677) (18,308) (151,713) 17,771,540
Benefit from (provision
for) income tax* (7,242,264) 746,602 – – (6,495,662)
NET INCOME (LOSS) P12,790,974 (P1,345,075) (P18,308) (P151,713) P11,275,878
*Excluding final taxes
Other segment information:
Subsidy1 (P1,109,632) (P83,980) P– P– (P1,193,612)
Interest income2 300,596 45,326 23 – 345,945
Interest expense (2,254,107) (1,771) – – (2,255,878)
Equity in net losses of
joint ventures (9,728) – – – (9,728)
Impairment losses and
others (498,227) (707,452) – – (1,205,679)
Capital expenditure 14,931,556 5,442,877 7,745 – 20,382,178
Cash Flows
Net cash provided by (used in):
Operating activities 20,669,605 1,981,905 8,228 (152,338) 22,507,400
Investing activities (13,150,317) (868,806) (507) (2,561,647) (16,581,277)
Financing activities (7,047,656) (2,000,000) (2,340) 2,685,362 (6,364,634)
1 Computed as non-service revenues less cost of sales
2 Net of final taxes
173

2007 (As restated)
Mobile
Wireline
Communications Communications Intersegment
Services Services Transactions Consolidated
REVENUES:
Service revenues
External customers:
Voice P27,976,477 P3,397,538 P– P31,374,015
Data 28,433,864 2,197,044 – 30,630,908
Broadband – 1,203,729 – 1,203,729
Intersegment revenues:
Voice 439,424 (1,874) (437,550) –
Data (1,601) 137,599 (135,998) –
Broadband – – – –
Nonservice revenues:
External customers 2,263,186 36,878 – 2,300,064
Intersegment revenues – 166 (166) –
Segment revenues 59,111,350 6,971,080 (573,714) 65,508,716
EBITDA 42,839,077 1,879,421 (4,498,612) 40,219,886
Depreciation and amortization (13,938,120) (2,938,844) (312,034) (17,188,998)
EBIT 28,900,957 (1,059,423) (4,810,646) 23,030,888
NET INCOME (LOSS) BEFORE TAX 25,784,024 (1,040,848) (4,810,646) 19,932,530
Benefit from (provision
for) income tax* (7,023,381) 367,870 – (6,655,511)
NET INCOME (LOSS) P18,760,643 (P672,978) (P4,810,646) P13,277,019
*Excluding final taxes
Other segment information:
Subsidy 1 (P968,674) (P54,039) P– (P1,022,713)
Interest income 2 263,377 347,426 – 610,803
Interest expense (2,979,104) (17,243) – (2,996,347)
Equity in net losses of joint
ventures (9,023) – – (9,023)
Impairment losses and others (547,803) (393,457) – (941,260)
Capital expenditure 10,151,435 3,770,522 – 13,921,957
Cash Flows
Net cash provided by (used in):
Operating activities 24,781,924 7,074,197 146,927 32,003,048
Investing activities (3,193,754) (1,543,518) (4,363,237) (9,100,509)
Financing activities (23,816,624) (4,512,000) 4,510,163 (23,818,461)
1 Computed as non-service revenues less cost of sales
2 Net of final taxes
A reconciliation of segment revenue to the total revenues presented in the consolidated statements of
comprehensive income is shown below:
2009 2008 2007
(In Thousand Pesos)
Segment revenues P63,862,132 P64,818,048 P65,508,716
Interest income 271,806 420,425 728,621
Other income - net 1,064,476 700,874 1,789,571
Gain on disposal of property and
equipment - net 608,400 24,837 14,910
Total revenues P65,806,814 P65,964,184 P68,041,818
174

The reconciliation of the EBITDA to income before income tax presented in the consolidated statements of
comprehensive income is shown below:
2009 2008 2007
(In Thousand Pesos)
EBITDA P36,462,908 P37,398,045 P40,219,886
Depreciation and amortization (17,388,430) (17,028,068) (17,188,998)
Interest income 271,806 420,425 728,621
Gain on disposal of property and
equipment - net 608,400 24,837 14,910
Financing costs (2,182,881) (3,000,391) (5,224,939)
Equity in net losses of joint ventures (7,009) (9,728) (9,023)
Other items 207,908 40,900 1,509,891
INCOME BEFORE INCOME TAX P17,972,702 P17,846,020 P20,050,348
29.1 Mobile Communications Services
This reporting segment is made up of digital cellular telecommunications services that allow subscribers to
make and receive local, domestic long distance and international long distance calls, international roaming
calls and other value added services in any place within the coverage areas.
29.1.1 Mobile communication voice net service revenues include the following:
a) Monthly service fees on postpaid plans;
b) Charges for intra-network and outbound calls in excess of the consumable minutes for
various Globe Postpaid plans, including currency exchange rate adjustments (CERA) net of loyalty
discounts credited to subscriber billings; and
c) Airtime fees for intra network and outbound calls recognized upon the earlier of
actual usage of the airtime value or expiration of the unused value of the prepaid reload
denomination (for Globe Prepaid and TM) which occurs between 1 and 60 days after activation
depending on the prepaid value reloaded by the subscriber net of (i) bonus credits and (ii) prepaid
reload discounts; and revenues generated from inbound international and national long distance
calls and international roaming calls.
Revenues from (a) to (c) are net of any settlement payouts to international and local carriers.
29.1.2 Mobile communication data net service revenues consist of revenues from valueadded services
such as inbound and outbound SMS and MMS, content downloading and infotext, subscription fees on
unlimited and bucket prepaid SMS services net of any settlement payouts to international and local carriers
and content providers.
29.1.3 Globe Telecom offers its wireless communications services to consumers, corporate and SME clients through
the following three (3) brands: Globe Postpaid, Globe Prepaid and Touch Mobile.
The Globe Group also provides its subscribers with mobile payment and remittance services under the GCash
brand.
29.2 Wireline Communications Services
This reporting segment is made up of fixed line telecommunications services which offer subscribers local,
domestic long distance and international long distance voice services in addition to broadband and mobile
internet services and a number of VAS in various areas covered by the Certificate of Public Convenience and
Necessity (CPCN) granted by the NTC.
175

29.2.1 Wireline voice net service revenues consist of the following:
a) Monthly service fees including CERA of voice-only subscriptions;
b) Revenues from local, international and national long distance calls made by postpaid, prepaid
wireline subscribers and payphone customers, as well as broadband customers who have subscribed
to data packages bundled with a voice service. Revenues are net of prepaid and payphone call card
discounts;
c) Revenues from inbound local, international and national long distance calls from other carriers
terminating on our network;
d) Revenues from additional landline features such as caller ID, call waiting, call forwarding, multi-calling,
voice mail, duplex and hotline numbers and other value-added features; and
e) Installation charges and other one-time fees associated with the establishment of the service.
Revenues from (a) to (c) are net of any settlement payments to domestic and international carriers.
29.2.2 Wireline data net service revenues consist of the following:
a) Monthly service fees from international and domestic leased lines. This is net of any settlement
payments to other carriers;
b) Other wholesale transport services;
c) Revenues from value-added services; and
d) One-time connection charges associated with the establishment of service.
29.2.3 Broadband service revenues consist of the following:
a) Monthly service fees on mobile and wired broadband plans and charges for usage
in excess of plan minutes; and
b) Prepaid usage charges consumed by mobile broadband subscribers.
29.2.4 Innove provides wireline voice communications (local, national and international long distance), data and
broadband and data services to consumers, corporate and SME clients in the Philippines.
• Consumers - the Globe Group’s postpaid voice service provides basic landline services including
toll-free NDD calls to other Globe landline subscribers for a fixed monthly fee. For wired broadband,
consumers can choose between broadband services bundled with a voice line, or a broadband dataonly
service. For fixed wireless broadband connection using 3G with High-Speed Downlink Packet
Access (HSDPA) network, the Globe Group offers broadband packages bundled with voice, or broadband
data-only service. For subscribers who require full mobility, Globe Broadband Tattoo service come in
postpaid and prepaid packages and allow them to access the internet via 3G with HSDPA, Enhanced
Datarate for GSM Evolution (EDGE), General Packet Radio Service (GPRS) or WiFi at hotspots located
nationwide.
• Corporate/SME clients - for corporate and SME enterprise clients wireline voice communication needs,
the Globe Group offers postpaid service bundles which come with a business landline and unlimited
dial-up internet access. The Globe Group also provides a full suite of telephony services from basic
direct lines to Integrated Services Digital Network (ISDN) services, 1-800 numbers, International Direct
Dialing (IDD) and National Direct Dialing (NDD) access as well as managed voice solutions such as
Voice Over Internet Protocol (VOIP) and managed Internet Protocol (IP) communications. Value-priced,
high speed data services, wholesale and corporate internet access, data center services and segmentspecific
solutions customized to the needs of vertical industries.
29.3 Others
This reporting segment represents mobile value added data content and application development services.
Revenues principally consist of revenue share with various carriers on content downloaded by their subscribers
and contracted fees for other application development services provided to various partners.
176

30. Notes to Consolidated Statements of Cash Flows
The principal noncash transactions are as follows:
2009 2008 2007
(In Thousand Pesos)
Increase (decrease) in liabilities related to the
acquisition of property and equipment P2,548,409 P870,346 (P343,874)
Capitalized ARO 96,959 95,086 150,051
Dividends on preferred shares 50,492 60,637 49,449
The cash and cash equivalents account consists of:
2009 2008 2007
(In Thousand Pesos)
Cash on hand and in banks P1,104,231 P1,479,948 P1,679,081
Short-term placements 4,835,696 4,302,276 4,511,923
P5,939,927 P5,782,224 P6,191,004
Cash in banks earn interest at the respective bank deposit rates. Short-term placements represent
short-term money market placements.
The ranges of interest rates of the above placements are as follows:
2009 2008 2007
Placements:
PHP 2.00% to 5.00% 2.50% to 6.50% 2.25% to 7.79%
USD 0.05% to 1.63% 0.05% to 4.30% 4.01% to 5.50%
177

Corporate Offices Directory
Globe Telecom Plaza
Pioneer corner Madison Streets,
Mandaluyong City
The Professional Tower
6th, 7th, & 9th Floors,
The Professional Tower
37 EDSA, Mandaluyong City
IT Cebu
6th Floor Asia Town IT Park
Salinas Drive, Lahug, Cebu City
Valero Telepark
111 Valero Street,
Salcedo Village, Makati City
BPI-Buendia Center
11th, 12th, & 14th Floors,
BPI Buendia Center,
Buendia Avenue, Makati City
New Solid Building
2nd, 3rd, & 4th Floors,
New Solid Building
357 Buendia Avenue,
Makati City
Cagayan De Oro
Corporate Office
Don Alfredo Gothong Building,
Caanbucayan Street,
Cagayan de Oro City
Davao Corporate Office
15th Floor Pryce Tower
Condominium
Pryce Business Park,
J.P. Laurel Avenue, Davao City
Innove Plaza
Innove IT Plaza Samar Loop
corner Panay Road,
Cebu Business Park,
Cebu City
Entertainment
Gateway GrouP
3/F Bloomingdale Building
Salcedo Street, Legaspi Village
Makati City
Corporate Information
Head Office
Globe Telecom, Inc.
Globe Telecom Plaza
Pioneer corner Madison Streets,
1552 Mandaluyong City
Trunkline: (02)730-2000
Fax: (02)739-2000
Website: www.globe.com.ph
Subsidiaries
Innove Communications, Inc.
18th Floor Innove IT Plaza
Samar Loop corner Panay Road
Cebu Business Park
Cebu City
Trunkine: (032)415-8888
G-Xchange, Inc.
4th Floor Globe Telecom Plaza 2
Pioneer corner Madison Streets
1552 Mandaluyong City
Trunkline: (02)730-3392
Entertainment
Gateway Group
3rd Floor Bloomingdale Building
Salcedo Street, Legaspi Village
1200 Makati City
Trunkline: (02)892-8101
Shareholder Services
For inquiries regarding dividend
payments, change of address,
account status, and lost/damaged
stock certificates, please contact
our stock transfer agent:
Bank of the
Philippine Islands
Stock Transfer Office
16th Floor, BPI Building
Ayala Avenue corner
Paseo de Roxas
Makati City, Philippines
Tel: (02)816-9067, (02)816-9321
Fax: (02)845-5515
Investor Relations
5th Floor, Globe Telecom Plaza 1
Pioneer corner Madison Streets
1552 Mandaluyong City
Philippines
Tel: (02)730-2820, (02)730-3521
Fax: (02)739-0072
Email: ir@globetel.com.ph
Corporate
Communications
5th Floor, Globe Telecom Plaza 1
Pioneer corner Madison Streets
1552 Mandaluyong City
Philippines
Tel: (02)730-2627
Fax: (02)739-3075
Stock Trading Information
Globe Telecom, Inc. is listed on the
Philippine Stock Exchange.
Ticker symbol: GLO
Customer Services
For inquiries about our products
and services, please contact:
Mobile: 211
Hotline: (02)730-1000
Email: custhelp@globetel.com.ph
Globe Chat Assist:
www.globe.com.ph/support
Twitter:
http://Twitter.com/talk2Globe
Facebook:
http://Facebook.com/GlobePH
Cover Design: K2 Interactive
Content Design and Layout: Affinity Express Inc.
Photography (inside pages): Jay Javier
This Globe Telecom, Inc. 2009 Annual Report Cover is printed on FSC ® - certified Beckett Expression 30% PC, which is made of 30% process chlorine-free post-consumer recycled fiber
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