A. [Reserved] B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors You should carefully consider all of the information in this annual report and in the other documents we file with or furnish to the SEC, including the risks and uncertainties described below, before deciding to invest in or to maintain an investment in our securities. If any of these risks materialize, they could have a material adverse effect on our business, financial condition or results of operations and may cause the trading price of our ADSs to decline, potentially resulting in the loss of all or part of your investment. Additional risks not presently known to us or that we currently deem immaterial may also impair our business, financial condition and results of operations. Risks Relating to Us Increased competition in the telecommunications sector may diminish our market share and profitability, while changes in the competitive and regulatory landscape could further exacerbate adverse effects on our business. Increasing competition among telecommunications services providers, including new operators, as well as small telecommunications companies, cable TV providers, and P2P resellers with VAS license from the NTC, could significantly impact our business and prospects by, among other factors, necessitating price reductions, hindering growth of our customer base and reducing usage of our services. Competition is intense for both mobile and fixed line services, with factors such as network coverage, service quality, product offerings, and price as considerations for subscriber preference, potentially requiring increased capital expenditures for capacity and coverage expansion. The mobile telecommunications industry has experienced intense price competition as operators have attempted to expand market share, especially in light of a maturing voice and SMS market. Competition has now pivoted to data services, prioritizing customer experience over pricing. Our competitors in fixed line broadband, Globe Telecom, Inc. (Globe), and Converge ICT Solutions, Inc. (Converge), a pure fiber broadband provider, are heavily investing in expanding their respective fiber presence. Meanwhile, DITO Telecommunity Corporation (DITO) is aggressively expanding its footprint. In addition, we face competition from regional and niche service providers, including members of PAPTELCO, cable television operators offering broadband services, small and regional internet service providers (ISPs), and other community-based access providers, whose participation has increased as regulatory developments have lowered barriers to entry, particularly in underserved and rural areas. 7 Table of Contents Our ability to compete depends on factors like network coverage and capacity, government regulations and policies, service quality, pricing, product innovation, sales channels, and financial resources. Our competitive stance hinges on our ability to anticipate and respond to industry shifts, including technological advancements, regulatory changes, evolving consumer preferences, and economic trends. Failure to identify and respond to these challenges could adversely impact our business. In addressing the intense competition, we may need to adjust our pricing strategies and allocate resources to network upgrades, which could lead to lower revenues and higher costs. Moreover, the potential entry of new competitors and customer churn may require increasing marketing and capital expenditures, thereby impacting our overall profitability. We cannot assure you that the number of providers of telecommunications services will not increase in the future or that competition for customers will not result in the loss of customers, including due to our mobile and fixed line subscribers switching to other operators. Any of the foregoing events could reduce our profitability. Developments in law, regulations and/or Government initiatives may increase competition and cause us to lose customers. In the past, the Philippine government has introduced various measures to encourage competition within the telecommunications industry and facilitate and enable the operation of new players, including a tower sharing policy, the Mobile Number Portability (MNP) Act which allows qualified customers to retain their mobile numbers when they move mobile service providers (MSP) or change their subscription package, and removal of mobile interconnect charges. In 2022, the Republic Act No. 11659 or “An Act Amending Commonwealth Act No. 146, otherwise known as the Public Service Act, as amended" (Amendment to the Public Service Act) effectively removed the 40% foreign ownership restriction on telecommunication companies resulting in increased competition. More recently, in 2025, Republic Act 12234, or the Konektadong Pinoy (KP) Act came into effect and further reshaped the competitive landscape by liberalizing the data transmission sector and reducing regulatory barriers for new entrants. The KP Act establishes an open-access regime in the data transmission sector, removes the legislative franchise requirement for such services, mandates infrastructure sharing for items included in the regulators’ Access List, and introduces a Spectrum Management Policy Framework (SMPF) allowing periodic review, potential recall, reassignment and revaluation of spectrum holdings. Spectrum assignments may be subject to review for underutilization or concentration, and future assignments may be influenced by market-based or competition-driven considerations. These regulatory changes may heighten competitive intensity in the Philippine data transmission market, including the entry of new DTIPs, mandatory infrastructure sharing, expanded regulatory reporting obligations, enhanced competition oversight, and possible designation of significant market power (SMP) with corresponding ex-ante obligations. Compliance with eligibility thresholds, rollout commitments, performance standards, pricing disclosure, cybersecurity audits, and spectrum review processes may affect operating flexibility, capital allocation strategies, cost structures, and margins. While Management does not expect the KP Act and related issuances to result in any immediate material impairment of existing assets, the long-term financial and operational impact remains subject to the finalization of the initial Access List, the implementation of the SMPF, spectrum review outcomes, regulatory classification under the DTIP framework, possible SMP designation, future regulatory issuances, and evolving enforcement practices. The Group continues to monitor these developments and assess their potential impact on its business, financial condition, results of operations, and cash flows. In addition, the Data Rollover Bill, which mandates public telecommunications entities to carry over unused data allocations for both prepaid and postpaid users to the next billing cycle, was approved by the House of Representatives in December 2025 and is awaiting action in the Senate. This reduces breakage revenue, affects predictability of consumption behavior, and may diminish the effectiveness of volume-tiered plans. If the bill is passed, it may materially and adversely affect our revenue profile and product‑design strategies. The mandated rollover of unused data could intensify price‑based competition, pressure ARPU and require adjustments to network-capacity planning to accommodate more variable usage patterns. Failure to adapt our service offerings and systems to these requirements may adversely affect customer experience and profitability. We cannot guarantee that in the future, there will not be similar changes in law, regulations or Government initiatives that may adversely affect our competitiveness. The rapid advancement of disruptive innovations by new and emerging technologies may outpace our ability to compete and/or manage the risk appropriately, resulting in a possible decline in demand for our services, significant changes to our business model and a material adverse effect on our business, results of operations, financial condition and prospects. The growing use of mobile data in the Philippines, along with the widespread adoption of OTT services and video conferencing applications, have negatively impacted our traditional revenue sources such as SMS and domestic calling services in recent years. We also face growing competition from providers utilizing alternative wireless technologies and IP-based networks, including the Philippine Government's initiatives to roll-out its free WiFi services in select areas within various municipalities. Moreover, net settlement payments between PLDT and other foreign telecommunications carriers for origination and termination of international call traffic between the Philippines and other countries, which have been our predominant source of foreign currency revenues, are expected to continue declining as a percentage of our total service revenues. While increasing mobile data usage positively impacted our data revenues and is expected to continue driving growth, there is no guarantee that such increase will fully offset the decline in revenues from our traditional services. We may not be able to maintain 8 Table of Contents and attract customers more effectively than our competitors. We must also invest in additional capacity, infrastructure, cybersecurity, systems and personnel to provide high quality services that accommodate increasing mobile data usage. As a result, our capital costs could increase as we phase out outdated and unprofitable technologies and invest in new ones. We may not be able to accurately predict further technological trends or successfully adopt or implement new technologies in our business. Some of our competitors may be more successful than us in the development and implementation of new technologies to address customer demand or improve operations, including services and platforms using artificial intelligence (AI). If we are unable to adequately advance our capabilities in these areas or fail to keep pace with others in our industry, we may be at a competitive disadvantage. In addition, there could be legal or regulatory constraints on our introduction of new services. If our new services fail to gain acceptance in the marketplace, or if costs associated with the implementation and completion of the introduction of these new services is higher than expected and require us to charge a higher price than what customers are willing to pay for such services, our ability to retain and attract customers could be adversely affected and we may not be able to generate a return on investments. Developments in AI technologies, and its governing legal and regulatory frameworks, are rapidly evolving, and could significantly disrupt the telecommunications industry and subject us to increased competition, legal and regulatory risks and compliance costs, which could have a material adverse effect on our business, financial condition and results of operations. The full extent of risks related thereto is difficult to predict. We are integrating AI into pre-identified focused-areas of our operations. In 2025, we deployed AI‑enabled solutions across revenue assurance, customer engagement, and operational support functions, including fraud detection, smart voice and chatbot assistants for collections and customer interactions, and workflow automation to support credit evaluation, payment processing, and selected service inquiries. We have also introduced AI tools to augment employee productivity, with appropriate human oversight. As we continue to assess AI capabilities and associated risks, we are incrementally embedding AI to improve efficiency, enhance customer experience, and support data‑driven decision‑making. Certain AI initiatives are intended to support wireless growth and monetization strategies, including those related to 5G services. Our AI deployments remain selective and use‑case driven, and their long‑term impact and commercial benefits continue to be evaluated. Market demand, acceptance of AI technologies and the business case for AI are uncertain at this point. Potential litigation or government regulation related to AI may also increase the burden and cost of research and development in this area, subjecting us to reputational harm, competitive harm or legal liability. Among other pitfalls, such tools may inadvertently generate or reveal confidential information, or may produce responses that are erroneous, biased, inaccurate, illegal or unethical. Failure to address perceived or actual technical, legal, compliance, privacy, security, ethical or other issues relating to the use of AI technologies could adversely affect our business and operating results. Regulations relating to AI technologies may also impose on us certain obligations and costs related to monitoring and compliance. There is uncertainty around the regulation of AI technologies as the Philippine government is in the process of defining its own laws and policies amidst the creation of new AI-related laws in other jurisdictions. The Department of Trade and Industry has developed the National AI Strategy for the Philippines. Bills have been filed in Congress proposing the creation of an AI regulatory body and are pending with the Committee on Information and Communications Technology. PLDT has an Ethical AI Policy that governs its approach and initiatives involving AI. The success of our business depends on our ability to maintain and enhance our brands. We believe that our reputation and brands in the industry are crucial to the success of our business. To maintain and enhance our reputation and brands, we must continue providing relevant products and services, combined with the best customer experience, such that we not only maintain our current customer base but also attract new subscribers. If we are unsuccessful in maintaining our reputation and improving our brands, our business, financial position and results of operations may be negatively affected. Our reliance on arrangements with technology vendors, other partnerships and/or joint ventures, and any disruptions to such arrangements may result in disruption to our business operations and adversely affect our supply of equipment and results of operations, financial condition, reputation and business prospects. As part of our extensive capital expenditures program to enhance our fixed and wireless networks infrastructure and IT systems to fully support business requirements, we have entered into agreements with vendors, to upgrade and modernize significant portions of our IT infrastructure. However, we cannot guarantee that these initiatives will be completed on schedule, or at all, or as intended. Furthermore, we cannot guarantee that such initiatives will not result in service disruptions, network outages or other issues that may detrimentally affect our service delivery and consumer experience. This may adversely affect our business, financial condition and results of operations. Due to our reliance on third party vendors, our business operations may be negatively impacted by global geopolitical and public health developments (such as COVID-19), which can disrupt supply chains, delay network construction, and impact service delivery. Any adverse changes in import policies, including increases in import duties and tariffs, or any embargo on imports 9 Table of Contents from countries from which our vendors supply or countries supplying our vendors, may also adversely impact our business, prospects, results of operations and cash flows. Trade tensions between the United States and major trading partners continue to escalate following the introduction of a series of tariff measures by the United States and/or its trading partners. Economic and trade sanctions have been threatened and/or imposed by the U.S. government on a number of People’s Republic of China (PRC)-based technology companies, including Huawei Technologies Co., Ltd. (Huawei), a key vendor for our telecommunications equipment and software licenses, and with whom we have partnered with to develop and offer outcome-based cloud solutions. The United States has also in certain circumstances imposed and threatened to impose further sanctions, trade embargoes and other heightened regulatory requirements on the PRC and PRC-based technology companies. The United States government has brought enforcement actions against Huawei and companies who engaged in unauthorized transactions with Huawei. While our partnership with Huawei is not currently subject to such sanctions or trade embargoes, there is no assurance that the United States or other jurisdictions will not impose similar or more expansive restrictions that may materially and adversely affect or restrict our relationships or collaborations with our vendors, including Huawei and its designated entities, thereby adversely affecting our reputation, competitiveness and business operations. Some of our third-party vendors may encounter financial difficulties or consolidate with other vendors. This may result in a shrinking of the already limited pool of qualified vendors which may in turn, materially impact the third-party vendors’ ability to fulfill their obligations and thereby impact our operations. The limited number of available vendors may also result in our dependence on a single vendor to provide critical services. Our ability to generate revenues could be disrupted if our suppliers are no longer able or willing to supply us. In the event that any of our suppliers cannot or will not provide us with the required products, we may be forced to find alternative suppliers. There is no guarantee that we will be able to obtain our products or products of a similar quality from alternate suppliers, in part or at all. Failure to find alternative suppliers will disrupt our operations and hinder our ability to generate revenues. Our vendors/suppliers may be affected by the effects of climate change and extreme weather conditions which could affect their ability to fulfill their commitments to us. This, in turn may disrupt our operations and business continuity. The mobile telecommunications industry in the Philippines may not continue to grow. The majority of our total revenues are derived from mobile services provided to customers in the Philippines, making us highly dependent on the continued development and growth of the local mobile telecommunications industry. We believe the country's mobile penetration rate reached approximately 125% as at December 31, 2025, based on the number of SIM cards issued. Given this penetration level, the market for SMS and domestic voice may be considered mature. Data has emerged as the key driver for revenues. While data traffic on our network has increased, further market expansion depends on many factors beyond our control, including the continued introduction of new and enhanced mobile devices, the price levels of mobile handsets, consumer tastes and preferences, alternative means of access, and the amount of disposable income of existing and potential subscribers. Any economic, technological or other developments resulting in a reduction in demand for mobile services or otherwise causing the Philippine mobile telecommunications industry to stop growing or slow down its growth, could materially harm our business, results of operations, financial condition and prospects. The franchises, licenses and regulatory approvals, upon which PLDT relies, may be subject to revocation or delay in issuance, which could result in the suspension of our services or abandonment of any planned expansions and could thereby have a material adverse effect on our business, results of operations, financial condition and prospects. We operate our business in a highly regulated environment. We cannot assure you that there will be no adverse changes in applicable public ownership requirements or interpretations thereof, or that none of our franchises, permits or licenses will be revoked or fail to be renewed. Any such occurrences could have a material adverse effect on our business, financial conditions and prospects. PLDT has obtained Certificates of Public Convenience and Necessity (CPCN) for its international gateway facilities, local exchange carriers, and interexchange carrier services. While CPCNs are typically co-terminus with the term of a public utility’s franchise, the NTC may amend certain terms of a CPCN, or revoke a CPCN for cause, subject to due process procedures. Following the enactment of the KP Act and the issuance of its Implementing Rules and Regulations (IRR), the requirement for a legislative franchise and CPCN for data transmission services was removed and replaced with a registration-based regulatory regime administered by the relevant government agencies. We cannot guarantee that the NTC will not impose additional obligations on us that, if unmet, could lead to the revocation of our licenses and/or a reduction in our total revenues or profitability. The NTC could amend applicable regulations or implement additional guidelines governing our interconnection with other telecommunications companies or the rates and terms upon which we provide services to our customers. In addition, any future expansions in our services, particularly in our mobile services, could subject us to additional conditions in the granting of our provisional authorities by the NTC and to increased regulatory scrutiny, which could have a material adverse effect on our growth and prospects. The occurrence of any of the foregoing could impose substantial costs on us, cause interruptions or 10 Table of Contents considerable delays in the provision, development or expansion of our services, or materially reduce our revenues and profitability. There is no assurance that the regulatory environment will support increases in our business and financial activity. We continue to hold various provisional authorities, CPCNs, spectrum assignments, and other regulatory approvals, some of which are transitional in nature and will expire between now and 2042. Certain CPCNs and provisional authorities have already expired; however, applications for renewal were filed prior to their expiry. Under Executive Order No. 292 (Philippine Revised Administrative Code of 1987) and Republic Act No. 11032 (Ease of Doing Business and Efficient Government Service Delivery Act of 2018), such authorizations are deemed effective until the regulator acts on the renewal applications. Failure to maintain the necessary regulatory authority, approvals, or compliance status may materially and adversely affect our ability to conduct essential business operations, result in penalties, suspension of authority, or increased compliance costs, and adversely affect our financial condition and results of operations. See Item 4. “Information on the Company – Franchises, Licenses and Regulations” for more information. Our business is subject to extensive laws and regulations, including regulations in respect of our public ownership, service rates and taxes, as well as antitrust laws. Any changes in such laws and regulations or interpretations thereto, or failure to comply with regulatory changes, could adversely affect our business, financial performance and prospects. Our business is subject to extensive laws and regulations, including regulations in respect of our public ownership, service rates and taxes, in addition to antitrust laws. Republic Act No. 7925, otherwise known as the “Public Telecommunications Policy of the Philippines” (R.A. 7925), requires a telecommunications entity with regulated types of services to make a bona fide public offering through the stock exchange of its shares representing at least 30% of its aggregate common shares within five years from: (a) the date the law became effective; or (b) the entity’s commencement of commercial operations, whichever date is later. Republic Act No. 10926 provides an exemption from the public listing requirement if the grantee is wholly-owned by a company that has publicly listed at least 30% of its authorized capital stock. PLDT is a publicly listed company and therefore in compliance with this requirement. Smart, as a wholly-owned subsidiary of PLDT, a publicly listed company, is not required to offer any of its shares to the public. Meanwhile, DMPI takes the position that it has satisfied the public offering requirement under R.A. 7925 and Republic Act No. 9180 (R.A. 9180), or the legislative franchise of DMPI (DMPI’s Franchise), by virtue of the fact that PLDT, a publicly listed company, holds a 99.6% equity interest in DMPI’s parent company, Digitel Telecommunications Philippines, Inc. (DTPI), which in turn, holds a 100% equity interest in DMPI. The NTC regulates the rates we are permitted to charge for services that have not been deregulated, such as local exchange services. We are subject to various national and local taxes, and regulatory fees imposed by LGUs through their respective ordinances. We cannot assure you that we will not be subject to new, increased and/or additional taxes or that we will be able to pass on such additional expenses to our customers. See Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion. Moreover, we are subject to antitrust laws and regulations. Republic Act No. 10667, otherwise known as the Philippine Competition Act (Philippine Competition Act), came into effect on August 8, 2015, and prohibits practices that restrict market competition through anti-competitive agreements or the abuse of dominant position. The Philippine Competition Act also requires parties to provide notification and obtain clearance for certain mergers and acquisitions. Violators may be subject to administrative and criminal penalties. While our business practices have not in the past been found to have violated any antitrust laws and regulations, we cannot assure you that any new or existing governmental regulators will not, in the future, take the position that our current or past business practices have an anti-competitive effect on the Philippine telecommunications industry. Smart is currently subject to an ongoing inquiry by the Philippine Competition Commission (PCC) involving multiple subpoenas, hearings, and continuing requests for information in relation to its operations as a public telecommunications entity (PTE), interconnection arrangements with other carriers, and International Simple Resale (ISR)-related matters involving DITO. As of this writing, no final ruling has been issued. See Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion. In 2025, House Bill 178, otherwise known as the Automatic Refund for Internet and Telecommunications Services Outages and Disruptions Act, was transmitted by Congress to the Senate, where it remained pending. The bill would require PTEs, including ISPs, to automatically refund or adjust a customer's bill when they experience a cumulative internet service outage or interruption lasting twenty-four (24) hours or more within a month. However, the bill provides exemptions in the case of scheduled maintenance (with a 48-hour advance notice and not exceeding 48 hours per month), fortuitous events, or acts of third parties or subscribers. The implementation of House Bill 178 would require PLDT Group to implement granular, per-customer service-quality monitoring and undertake substantial adjustments to operations, processes, and network infrastructure, which could entail significant capital expenditure and operating expenditure, and may present challenges in meeting regulatory transition timelines. 11 Table of Contents The KP Act lapsed into law on August 24, 2025. The IRR, published on December 1, 2025, establishes a comprehensive and liberalized regulatory framework that removes the requirement for a legislative franchise and Certificate of Public Convenience and Necessity (CPCN) for data transmission industry participants, and opens all segments of the data transmission network to competition. Under the IRR, entities classified as Data Transmission Industry Participants must comply with new eligibility, registration, reporting, and performance standards, including mandatory annual submissions, adherence to minimum quality-of-service benchmarks, separate accounting per network segment, and compliance with cybersecurity certification requirements. The IRR also requires access providers, including incumbent operators such as us, to publish Reference Access Offers on open, fair, reasonable, and non‑discriminatory terms, while granting regulators the authority to impose ex‑ante obligations on entities designated as having significant market power. Further, the forthcoming SMPF contemplates periodic spectrum audits and potential recall of unutilized or underutilized spectrum, which may affect network planning and asset utilization. These changes substantially increase compliance obligations and lower barriers for new entrants, thereby intensifying competitive pressures. The KP Act and its IRR may introduce operational, financial, and strategic challenges for incumbent players that may materially affect our business, results of operations, or financial condition. House Bill 87, approved by the House of Representatives in December 2025 and pending Senate action, proposes to mandate a roll-over data allocation scheme requiring ISPs to carry over unused data to the next billing cycle and impose penalties for non‑compliance. The roll-over regime outlined under the bill, if enacted, would require extensive changes to data‑management frameworks, billing systems, and related operational processes to ensure accurate tracking, accumulation, and application of unused data entitlements. These requirements may result in significant capital expenditure and operating expenditure for the PLDT Group, and any failure to meet the prescribed standards or timelines may subject us to penalties or sanctions. On September 29, 2025, the NTC issued Memorandum Order No. ###-##-####. The memorandum requires internet intermediaries under the supervision of the NTC, including us, to submit quarterly compliance reports on the implementation of R.A. No. 11930 or the Anti-Online Sexual Abuse or Exploitation of Children and Anti-Child Sexual Abuse or Exploitation Materials Act, including blocking and preservation of data traffic and any measures adopted to strengthen safeguards. As part of its advocacy on online safety, PLDT has invested in a child protection platform to detect and access malicious sites and URLs, and continually monitors and submits reports as required. It also undertakes regular awareness campaigns on internet safety. However, there is no assurance that our users are fully protected against the dangers of the internet. On January 26, 2026, the SEC issued SEC Memorandum Circular No. 7, Series of 2026 (effective February 1, 2026 after publication in two newspapers of general and national circulation), which covers PSE-listed companies and limits an individual's ability to serve as an independent director in the same company to a maximum cumulative term of nine years, with the maximum term for incumbent independent directors generally reckoned from calendar year 2012. An independent director who has served the maximum cumulative term is perpetually barred from re-election as an independent director of the same company, subject to a transitory provision allowing incumbents who have already reached the maximum term upon effectivity to continue until the 2026 annual stockholders’ meeting (or another date approved by the SEC). Covered companies that breach the maximum cumulative term limit are subject to a basic penalty of Php1,000,000.00 per independent director per year and a continuing penalty of Php30,000.00 for every month that the independent director holds the seat, and a third or succeeding offense for the same violation may result in the suspension or revocation of the company’s secondary or primary license. While the Company is taking steps to comply with the SEC Memorandum Circular and update relevant corporate policies to align with the amended guidelines, nonetheless, if not timely implemented, the Company may be exposed to penalties. Regulators have been increasingly focused on online and mobile payment services, and other developments could reduce the convenience or utility of our payment services for users. Governmental regulation of certain aspects of mobile payment systems which PLDT utilizes could result in obligations or restrictions with respect to the types of products that we may offer to consumers, the payment card systems that link to our mobile payments systems, the jurisdictions in which our payment services or apps may be used, and higher costs, such as fees charged by banks to process funds through our mobile payments systems. We may be subject to more obligations and restrictions as more jurisdictions regulate payment systems. Moreover, if new regulations provide resources, preferential treatment or protection to selected payments and processing providers, we could be displaced, prevented or substantially restricted from participating in the relevant geographies. Any adverse changes in applicable laws and regulations can have an adverse impact on our business, results of operations, financial condition and prospects. For additional details of the impact of regulations on our business, see “Franchises, Licenses and Regulations.” Changes in regulations or user concerns regarding the privacy and protection of user data, or any failure to comply with data privacy laws, could adversely affect our business. We are subject to various laws and regulations regulating data privacy matters, including Republic Act No. 10173, otherwise known as the Data Privacy Act of 2012 (Data Privacy Act). The Data Privacy Act regulates the processing of personal data in the public and private sectors, within and outside the Philippines. Pursuant to Republic Act No. 11934, otherwise known as the SIM Registration Act, we are required to maintain a SIM register of all our end users, exposing us to heightened risks of data breaches 12 Table of Contents and cybersecurity attacks. Bills impacting privacy and the processing of personal data have been filed with the Philippine Congress. While these bills do not directly seek to amend the Data Privacy Act, if signed into law, these legislation could increase our compliance costs and impact business innovation. In addition, various foreign legislative or regulatory bodies continue to enact new or additional laws and regulations concerning privacy, data retention and data protection issues, including laws or regulations mandating disclosure to domestic or international law enforcement bodies, which could adversely impact our results of operations, businesses, brand or reputation with users. Transfers of personal data across jurisdictions subject us to regulation by foreign authorities, which may require us to incur additional costs in complying with such regulations. The interpretation and application of privacy, data protection and data retention laws and regulations in each jurisdiction may be subject to change and such laws and regulations may be interpreted and applied inconsistently from country to country, complicating long-term business planning decisions. Complying with varying international requirements could cause us to incur substantial costs or require us to change our business practices or operating platforms in a manner adverse to our business. While the PLDT Group periodically conducts compliance audits and regularly holds privacy and information security training and awareness campaigns, it cannot guarantee that personal data breaches resulting from failure of our personnel to comply with PLDT policies will not occur. Furthermore, while PLDT periodically releases public advisories to remind our customers of safe online behavior, there is no guarantee that our customers will not be victims of data breaches. If our current policies and practices are found to be incompatible with privacy, data protection or data retention laws, we may be fined or ordered to change our business practices in a manner that adversely impacts our operating results. Any failure, or perceived failure, by us to comply with any privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles, including the Data Privacy Act, could result in proceedings or actions against us by governmental entities or affected parties, loss of user confidence, damage to the PLDT brands and reputation, or the loss of users or advertising partners. Any of the foregoing could have a material adverse impact on our business operations, financial conditions and prospects. Limitations in the amount of frequency spectrum or facilities made available to us could negatively affect our ability to maintain and improve our service quality and level of customer satisfaction, increase our costs and reduce our competitiveness. Available radio frequency spectrum is one of the principal constraints on wireless network capacity, and our ability to provide high-quality mobile and data services depends on continued access to adequate spectrum resources. While the NTC grants authorizations and assigns spectrum for specific services and service areas, the KP Act and its IRR introduced a reformed spectrum management regime that may significantly affect future spectrum availability and the conditions under which we operate. Under the KP Act's IRR, the NTC is mandated to periodically review spectrum allocations, assignments, and utilization, and to undertake measures such as spectrum recall, restacking, or reassignment to ensure efficient and optimal use of this finite national resource. The forthcoming SMPF will establish new methodologies for spectrum valuation, pricing, assignment, and renewal, and will require the identification and potential recall of unutilized or underutilized spectrum within defined periods. These regulatory mechanisms may subject us to heightened scrutiny regarding the utilization of our current assignments and expose us to the risk of partial or full spectrum recall if our holdings are determined to be underutilized. The KP Act's IRR also reinforces compliance obligations applicable to all data transmission industry participants, including the requirement to meet performance standards, maintain segment-level reporting, and ensure service availability consistent with quality-of-service benchmarks. Non-compliance may result in administrative penalties, suspension, or revocation of authorizations, including spectrum assignments. Moreover, as all network segments are exposed to greater competition under an open‑access framework pursuant to the KP Act, new entrants may seek access to digital infrastructure, increasing the competitive demand for scarce spectrum resources. If the Philippine Government reallocates spectrum, imposes new conditions for its use, applies updated pricing or valuation mechanisms, or revokes or recalls spectrum previously granted to us, or if we are unable to acquire, retain, or fully utilize sufficient spectrum to meet customer needs, our ability to expand capacity, maintain service quality, and compete effectively in the market may be materially and adversely affected. We may not be successful in our acquisitions of, and investments in, other companies and businesses, and may therefore be unable to fully implement our business strategy. We have in the past made certain acquisitions of, and investments in, various businesses. As our traditional fixed line and mobile businesses mature, and as part of our strategy to grow other business segments, we may continue to make acquisitions and 13 Table of Contents investments in companies or businesses to enter new businesses or defend our existing markets. The success of our acquisitions and investments depends on a number of factors, such as: •our ability to identify suitable opportunities for investment or acquisition; •our ability to reach an acquisition or investment agreement on terms that are satisfactory to us or at all; •the extent to which we are able to influence or exercise control over the acquired or investee company; •the compatibility of the economic, business or other strategic objectives and goals of the acquired or investee company with those of the PLDT Group, as well as the ability to execute the identified strategies to generate fair returns on the investment; •our ability to successfully integrate the acquired company or business with our existing businesses; and •economic and competitive conditions in which the business operates. Any of our contemplated acquisitions and investments may not be consummated due to reasons or factors beyond our control. Even if we successfully consummate contemplated acquisitions and/or investments, we may not be able to realize any or all of the anticipated benefits of such acquisitions and/or investments and we cannot assure you that the consummation of such acquisitions and/or investments will not result in losses for a prolonged period of time. On the other hand, if we are unsuccessful in our contemplated acquisitions and investments, we may not be able to fully implement our business strategy to maintain or grow certain of our businesses and our results of operations and financial position could be materially and adversely affected. We are exposed to the fluctuations in the market values of our investments. Given the nature of our business and our foray into the digital business, we have made investments in various start-up companies which may take several years to become profitable or may not achieve profitability at all. For example, we hold an investment in MIH, an important player in the financial technology space and an integral part of our digital payment ecosystem. In accordance with IAS 28, Investments in Associates and Joint Ventures, we account for our investment in MIH using the equity method, whereby we recognize our proportionate share of MIH’s results. Our share in MIH losses amounted to Php935 million and Php2,277 million for the years ended December 31, 2024 and 2023, respectively. MIH turned profitable in 2025 and our share in MIH’s profit amounted to Php681 million for the year ended December 31, 2025. Credit ratings and the value of this investment and similar investments can be negatively impacted by liquidity, credit deterioration or losses, financial results, foreign exchange rates, or other factors. As a result, our investments could decline and result in a material impairment, which could have a material adverse effect on our financial condition and operating results. If we are unable to install and maintain telecommunications facilities and equipment in a timely manner, we may not be able to maintain our current market share and the quality of our services, which could have a material adverse effect on our results of operations and financial condition. Our business requires the regular installation of new telecommunications facilities and equipment, and the regular maintenance of such facilities and equipment, which are continually being undertaken. The installation and maintenance of these facilities and equipment are subject to a number of risks and uncertainties, such as: •shortages of equipment, materials and labor; •delays in the issuance of national and local government building permits; •theft of telecommunication cables and equipment; •work stoppages and labor disputes; •interruptions resulting from man-made events (e.g., sabotage), outbreak of epidemics, pandemics or other public health crises, severe weather conditions and other natural disasters; •rapid technological obsolescence; •inability of vendors and/or suppliers to deliver on commitments; •unforeseen engineering, environmental/climate-related and geological problems; and •unanticipated cost increases including those resulting from foreign exchange movements. Any of these factors could give rise to delays and/or cost overruns in the installation of new facilities or equipment or prevent us from deploying our networks and properly maintaining the equipment used in our networks, and hence affect our ability to maintain existing services and roll-out new services, for example, which could have a material adverse effect on our results of operations and financial condition. 14 Table of Contents Our business relies on secure network infrastructure and computer systems, and any successful cyber attacks against them, or the perception of such attacks, may materially adversely affect our operations, financial condition, results of operations and reputation. We need to constantly upgrade our cybersecurity capabilities to support our business needs and keep up with the rapidly changing cyber threat environment. As we rely on information and digital services to run our business and deliver value, we face the following challenges in an era of connectivity, digital identity, decentralized decisions, information monetization, transparency, and variable trust: •An increase in the variety of products and services that we provide to our customers (e.g., customer premise equipment, systems, devices, IoT, data and their dynamic relationships) exposes relevance issues, as well as scalability issues in our existing security control solutions; •Our existing deterrence measures against cybersecurity breaches may become less effective. For instance, defensible gates and impermeable walls that are designed to secure our service and information infrastructure may have become less effective. While such tools and measures make it difficult to breach our system, these tools may not stop breaches altogether; •The infrastructure underpinning the digitalization of consumer and enterprise services has become more complex; •The consequences of a cybersecurity breach could be severe. Breaches resulting in leakage of our Company’s and/or our customers' confidential commercial and/or personal information may result in irreparable damage to our reputation and brand. Moreover, leakage of sensitive personal customer information could, in some cases, result in a threat to personal safety, as well as legal and/or regulatory liability; •Perpetrators are adopting more sophisticated technologies (e.g., AI) in their attempts to breach our defensive security measures; and •While encrypted internet traffic protects private information, it inadvertently hampers cyber protection efforts. Perpetrators could abuse encrypted communication tools and use them in their efforts to breach our systems, with less risk of such efforts being discovered by cybersecurity measures. Our Cybersecurity Operations Group (CSOG) is responsible for managing cyber threats and attacks. While the Company has been able to contain the effects of past cybersecurity attacks on its network and system performance, and such cybersecurity attacks did not have any material financial, legal, reputational or regulatory repercussions for the Company, there is no assurance that we will be able to successfully safeguard our systems against all cyber attacks, particularly as cyber attacks have become more sophisticated and prevalent. Any successful attack on our infrastructure could result in legal and/or regulatory liabilities, disruptions to our business operations, damage to our reputation, and financial losses. See Item 16K. "CyberSecurity" for a detailed discussion of our cybersecurity measures. Climate change could increase the likelihood of natural disasters and environmental legislation and regulations, which may damage our infrastructure and hinder our operations, and also spur the Philippine Government to introduce new regulations that result in higher compliance costs. Climate change poses infrastructural and regulatory risks for telecommunications operators like us. Climate change may exacerbate the severity and frequency of natural disasters, such as typhoons, flooding and earthquakes. The occurrence of such natural disasters increases the likelihood of damage to our infrastructure and failure of our wired and wireless networks. Should severe natural disasters occur in quick succession, we may not have sufficient resources to repair and restore our infrastructure in a timely and cost-effective manner. Natural disasters could also affect and disrupt our supply chain, resulting in delays in the delivery of our supplies, and further hampering efforts to repair and restore our infrastructure. The cost of restoring and/or repair damaged infrastructure and any failure of our networks could have a material adverse impact on our operations, financial performance, reputation and prospects. Climate change and resulting natural disasters may also affect certain communities’ livelihoods and adversely impact our customers' ability to afford our services. The Philippine Government could introduce new and more stringent environmental legislation and regulations. The KP Act and its IRR impose specific obligations on data transmission providers during natural disasters and emergencies. During such times, we are required to design and maintain infrastructure in accordance with nationally and internationally accepted resiliency standards, ensure the prompt restoration of services, and provide temporary shared-access data services where feasible. The IRR also mandates strict outage reporting, including immediate notification to regulators for service interruptions caused by natural events such as typhoons, floods, earthquakes, or cable cuts. Failure to comply with these requirements may subject us to administrative penalties or sanctions, including the suspension or revocation of authorizations. These heightened obligations may increase our operating and capital expenditures as we work to meet strengthened compliance requirements. 15 Table of Contents We are also now subject to expanded sustainability reporting obligations under the Philippine Financial Reporting Standards on Sustainability Disclosures, particularly PFRS S1 and PFRS S2. These standards require entities to disclose material sustainability-related and climate-related risks and opportunities in a manner aligned with global International Sustainability Standards Board (ISSB) expectations. PFRS S2, in particular, introduces extensive climate‑related disclosure requirements covering greenhouse gas emissions, transition risks, physical climate risks, scenario analysis, and the anticipated financial impacts of climate-related events. In addition, Extended Producers Responsibility (EPR) Act (R.A. 11898) requires companies with assets exceeding Php100 million and generating plastic packaging waste to manage the full environmental lifecycle of their products and to recover or remove an equivalent volume of the plastic they introduce into the market. PLDT and Smart have strengthened their commitment to the EPR Act. The Group has engaged PCX Markets Philippines, Inc. as its Producer Responsibility Organization for the implementation of its EPR programs and reporting. Our businesses require substantial capital investment, which we may not be able to finance. Our projects under development and the continued maintenance and improvement of our networks and services, including Smart’s projects, networks, platforms and services, require substantial and sustained capital investment. Our consolidated capital expenditures, net of additions subject to sale and leaseback from tower companies, totaled Php60,336 million, Php78,246 million and Php85,083 million for the years ended December 31, 2025, 2024 and 2023, respectively. In 2026, we will continue to prioritize projects that support the growing demand from our customers, enhance our ability to deliver superior customer experiences, enable our corporate clients to grow their businesses, and respond to changing market preferences and emerging technologies. Adverse changes in global financial markets could limit our ability to access capital or increase the cost of capital needed to fund our business operations. We have obtained and may seek external financing for a portion of our future capital expenditures. There can be no assurance that financing for new projects will be available on terms acceptable to us, or at all. If we cannot complete our development programs or other capital projects due to our failure to obtain the required financing, our growth, results of operations, financial condition and prospects could be materially and adversely affected. Furthermore, if we are unable to monetize our investments and generate the expected revenues, our cash flows and gearing may be negatively impacted. If we face difficulties in funding our capital expenditures or if our capital expenditure requirements exceed our budget, we may opt to postpone our projects which may limit our ability to serve our customers or require us to negotiate with our vendors on revised payment arrangements. Any cancellations or amendments of agreements with vendors may cause us to incur penalties and adversely affect our business, reputation and share prices. See Item 5. “Operating and Financial Review and Prospects". Our results of operations and our financial position could be materially and adversely affected if the Philippine peso significantly fluctuates against the U.S. dollar. A substantial portion of our capital expenditures, a portion of our indebtedness and related interest expense and a portion of our operating expenses are denominated in U.S. dollars and other foreign currencies, whereas most of our revenues are denominated in Philippine pesos, with 15% of revenues denominated in U. S. dollars for the year ended December 31, 2025. Of our total consolidated debts, approximately 13% was denominated in U.S. dollars as at December 31, 2025. A depreciation of the Philippine peso against the U.S. dollar would increase the amount of our U.S. dollar-denominated debt obligations, capital expenditures, and operating and interest expenses in Philippine peso terms. In the event that the Philippine peso depreciates against the U.S. dollar, we may be unable to generate enough funds through operations and other means to offset the resulting increase in our obligations in Philippine peso terms. Moreover, a depreciation of the Philippine peso against the U.S. dollar may result in our recognition of significant foreign exchange losses, which could materially and adversely affect our results of operations. A depreciation of the Philippine peso could also cause us to be non-compliant with the financial covenants imposed on us by our lenders under certain loan agreements and other indebtedness. Further, fluctuations in the Philippine peso value and of interest rates impact the mark-to-market gains/losses of certain of our financial debt instruments, which were designated as non-hedged items. While we have entered into hedging arrangements to hedge our exposure to foreign exchange fluctuations, such arrangements may not adequately protect us against a peso depreciation. The Philippine peso may be subject to fluctuations due to a range of factors, including: •political and economic developments affecting the Philippines, including the level of remittances from overseas Filipino workers and movements in the country's balance-of-payments position; •global economic, political and financial conditions; •the volatility of emerging market currencies; 16 Table of Contents •changes in the Philippines' sovereign credit rating or outlook by major credit rating agencies, which may influence investor sentiment, capital flows and corresponding movements in the Philippine peso; •changes in monetary policy by the United States Federal Reserve Bank and/or the BSP, including any adjustments in interest rates or policy guidance; and •higher demand for U.S. dollars by both banks and domestic businesses to service their maturing U.S. dollar obligations or foreign exchange traders including banks covering their short U.S. dollar positions, among others. Our debt instruments contain restrictive covenants which require us to maintain certain financial tests and our indebtedness could impair our ability to fulfill our financial obligations and service our other debt. Our existing debt instruments contain covenants which, among other things, require PLDT to maintain certain financial ratios and other financial tests, calculated on the basis of IFRS Accounting Standards at relevant measurement dates, principally at the end of each quarter period. In addition, PLDT’s bonds contain covenants that limit our ability to take certain actions. Our indebtedness and the requirements and limitations imposed by our debt covenants could have important consequences. For example, we may be required to dedicate a substantial portion of our cash flow to payments on our indebtedness, which could reduce the availability of our cash flow to fund working capital, capital expenditures and other general corporate requirements. The principal factors that could negatively affect our ability to comply with these financial ratio covenants and other financial tests are the poor operating performance of PLDT and its subsidiaries, the depreciation of the Philippine peso relative to the U.S. dollar, the impairment or similar charges in respect of investments or other long-lived assets that may be recognized by PLDT and its subsidiaries, and increases in our interest expense. Interest expense may increase as a result of various factors including the issuance of new debt, the refinancing of lower cost indebtedness by higher cost indebtedness, the depreciation of the Philippine peso relative to the U.S. dollar, the lowering of PLDT’s credit ratings or the credit ratings of the Philippines, the increase in reference interest rates, and general market conditions. If we are unable to meet our debt service obligations or comply with our debt covenants, we may need to restructure or refinance our indebtedness, seek additional equity capital or sell assets. An inability to implement these measures successfully could result in a declaration of default and an acceleration of maturities of some or all of our indebtedness, which could have a material adverse effect on our business, results of operations and financial condition. Our subsidiaries could be limited in their ability to pay dividends to us due to internal cash requirements and their creditors having superior claims over their assets and cash flows, which could materially and adversely affect our financial condition. A significant part of our total revenues and cash flows from operating activities are derived from our subsidiaries, particularly Smart. Smart has significant internal cash requirements for debt service, capital expenditures and operating expenses and as a result, may be financially unable to pay any dividends to PLDT. Although Smart has been making dividend payments to PLDT regularly since December 2002, there can be no assurance that PLDT will continue to receive these dividends or other distributions, or otherwise be able to derive liquidity from Smart or any other subsidiary or investee in the future. Creditors of our subsidiaries generally have priority claims over our subsidiaries’ assets and cash flows. We and our creditors will effectively be subordinated to the existing and future indebtedness and other liabilities, including trade payables, of our subsidiaries, except that we may be recognized as a creditor with respect to loans we have made to subsidiaries. If we are recognized as a creditor of a subsidiary, our claim will still be subordinated to any indebtedness secured by assets of the subsidiary and any indebtedness of the subsidiary otherwise deemed superior to the indebtedness we hold. We may have difficulty meeting our debt payment obligations if we do not continue to receive cash dividends from our subsidiaries and our financial condition could be materially and adversely affected as a result. A significant number of shares of PLDT’s voting stock are held by four shareholders, which may not act in the interests of other shareholders or stakeholders in PLDT. As at December 31, 2025, the First Pacific and its Philippine affiliates (together, the FP Parties), NTT Communications and NTT DOCOMO and the JG Summit Group, collectively, beneficially own 57.19% in PLDT’s outstanding common stock (representing 33.75% of our overall voting stock). Additionally, all of PLDT’s shares of voting preferred stock, which represent 40.98% of PLDT’s total outstanding shares of voting stock as at December 31, 2025, are owned by a single stockholder, BTF Holdings, Inc. (BTFHI). 17 Table of Contents The FP Parties, NTT Communications, NTT DOCOMO, JG Summit Group and/or BTFHI may exercise their respective voting rights over certain decisions and transactions in a manner that could be contrary to the interests of other shareholders or stakeholders in PLDT. See Note 3 – Key Information to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion. We are unionized and are vulnerable to work stoppages, slowdowns or increased labor costs. As at December 31, 2025, PLDT has three employee unions, representing in the aggregate 7,533 employees, or 53%, of the employees of the PLDT Group. This unionized workforce could result in demands that may increase our operating expenses and adversely affect our profitability. Each of our different employee unions require separate collective bargaining agreements. If PLDT and any of its unions are unable to reach an agreement on the terms of their collective bargaining agreement or if PLDT were to experience widespread employee dissatisfaction, PLDT could be subject to collective bargaining deadlocks, strikes, work slowdowns or stoppages. Any of these events would be disruptive to our operations and could have a material adverse effect on our business. On February 14, 2024, the Supreme Court resolved the consolidated Petitions relating to a Compliance Order from the Department of Labor and Employment (DOLE), in connection with the non-payment of statutorily required monetary benefits, including the 13th month pay by certain PLDT contractors to their employees, as well as the regularization of 7,344 contractor employees. The Decision set aside the Secretary of Labor's orders for PLDT to regularize the 7,344 workers of its contractors, except those workers performing installation, repair and maintenance services, whose regularization is subject to a remand of proceedings before the Regional Director of the DOLE. PLDT filed a Motion for Partial Reconsideration on April 4, 2024, and received MKP’s separate motion on April 16, 2024. The Supreme Court, First Division, in its Resolution dated November 5, 2025, which was received by counsel on February 24, 2026, resolved to deny with finality the motions for partial reconsideration filed by PLDT and MKP and held that no further pleadings, motions, letters, or other communications will be entertained. Accordingly, the Decision of the Supreme Court to remand the case stands. See Item 8. “Financial Information – Legal Proceedings” and Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion. We cannot guarantee that PLDT or its subsidiaries will not be subject to similar proceedings or other labor-related regulatory activities, the results of which may have an adverse reputational and/or financial impact. While we believe that PLDT has a strong legal position in its pending labor cases, we note that labor tribunals are mandated to resolve cases in favor of employees in the case of any doubt. The loss of key personnel or the failure to attract and retain highly qualified personnel could compromise our ability to effectively manage our business and pursue our growth strategy. Our future performance depends on our ability to attract and retain highly qualified key technical, marketing, sales, and management personnel. The loss of key employees could result in significant disruptions to our business, and the integration of replacement personnel could be costly and time consuming, cause additional disruptions to our business and be unsuccessful. We cannot guarantee the continued employment of any of the members of our senior leadership team, who may depart our Company for any number of reasons, such as other business opportunities, differing views on our strategic direction or other personal reasons. Any inability to attract, retain or motivate our personnel could have a material adverse effect on our results of operations and prospects. Adverse results of any pending or future litigation, internal or external investigations and/or disputes may impact PLDT’s cash flows, results of operations and financial condition. We are currently involved in various legal proceedings. Our estimate of the probable costs for the resolution of these claims have been developed in consultation with our counsel and is based upon our analysis of potential results. See Item 8. “Financial Information – Legal Proceedings” and Note 26 – Provisions and Contingencies to the accompanying audited consolidated financial statements in Item 18. “Financial Statements” for further discussion. While PLDT believes that the positions it has taken in these cases have strong legal bases, the final outcome of these cases may prove to be different from its expectations. In addition, we cannot assure you that PLDT will not be involved in future litigation or other disputes, the results of which may materially and adversely impact its business and financial conditions. We have and may continue to incur significant expenses defending such suits or government charges and may be required to pay amounts or otherwise change our operations in ways that could materially adversely affect our operations or financial results. 18 Table of Contents Our financial condition and operating results will be impaired if we experience high fraud rates related to device financing, credit cards, dealers, or subscriptions. Our operating costs could increase substantially as a result of fraud, including those arising from device financing, customer credit card, subscription or dealer fraud. If our fraud detection strategies and processes are not successful in detecting and controlling fraud, whether directly or by way of the systems, processes, and operations of third parties such as customers, national retailers, dealers, and others, the resulting loss of revenue or increased expenses could have a material adverse effect on our financial condition and operating results. Escalation of geopolitical tensions in the Middle East, including the Iran regional conflict, could disrupt global energy markets, supply chains, and financial conditions, which may indirectly adversely affect our business, financial condition, and results of operations. Ongoing geopolitical tensions in the Middle East, including the Iran regional conflict, present risks to global economic stability. Any escalation of hostilities could disrupt international energy markets, shipping routes, and supply chains, leading to volatility in fuel prices, inflationary pressures, and tighter global financial conditions. Such developments may adversely affect foreign exchange rates, interest rates, and capital markets, and could reduce consumer and business spending in the Philippines. Although our operations are primarily domestic, we rely on global supply chains for network equipment, technology, fuel, and other critical inputs. Disruptions arising from geopolitical instability, including sanctions, trade restrictions, or logistical constraints, could increase our operating and capital expenditures, delay network deployments or maintenance activities, and impact service delivery. In addition, heightened global risk aversion may increase borrowing costs or limit access to financing. Any of these developments could have a material adverse effect on our business, financial condition, results of operations, and cash flows. There can be no assurance that the Iran regional conflict or related geopolitical tensions will not intensify further. RISKS RELATING TO THE PHILIPPINES Political and social instability in the Philippines may have a negative effect on the general economic conditions in the Philippines which could have a material adverse impact on our results of operations and financial condition. The Philippines has, from time to time, experienced episodes of political uncertainty and unrest, including recent public and political protests arising from alleged misconduct involving the current and prior administrations, as well as ongoing legislative and institutional controversies. Over the past two decades, the Philippines has also faced hearings and investigations into graft and corruption involving senior government officials, impeachment proceedings against two former presidents and a chief justice of the Supreme Court, the nullification of the appointment of another chief justice, allegations of electoral fraud, and instances of extra‑judicial killings. There can be no assurance that acts of election-related or other political violence will not occur in the future, and any such events could negatively impact the Philippine economy. We may be affected by political and social developments in the Philippines and changes in the political leadership and/or government policies in the Philippines. Any major deviation from the policies of the previous administration or fundamental change of direction, including a change in the form of government, may lead to an increase in political or social uncertainty and instability. Such political or regulatory changes may include (but are not limited to) the introduction of new laws and regulations that could impact our business. We cannot assure you that the political environment in the Philippines will be stable or that the current or future administration will adopt economic policies that are conducive to sustained economic growth or which do not materially and adversely impact the current regulatory environment for the telecommunications and other companies. An unstable political or social environment in the Philippines could negatively affect the general economic conditions and business environment in the Philippines which, in turn, could have a material and adverse impact on our business, financial position and financial performance. Natural disasters, terrorist acts or acts of war could cause damage to our infrastructure and/or result in significant disruptions to our operations and financial condition. Our business operations are subject to interruption by natural disasters such as flooding, typhoons, pandemics and epidemics, terrorist or other hostile acts, and other events beyond our control. The Philippines is particularly susceptible to natural hazards, including tropical cyclones, earthquakes and volcanic risks. Any of the aforementioned events could cause significant damage to our infrastructure upon which our business operations rely, resulting in degradation or disruption of service to our customers. While we maintain insurance coverage for most of these events, the potential impact of damage or loss of assets to our financial condition as well as liabilities associated with these events could exceed the insurance coverage we maintain. Our system redundancy may be ineffective or inadequate, and our disaster recovery planning may be insufficient for all eventualities. These events could also damage the infrastructure of the suppliers that provide us with the equipment and services that we need to operate our business and provide products to our customers. A natural disaster or other event causing significant physical damage 19 Table of Contents could cause us to experience substantial losses resulting in significant recovery time and additional expenditures to resume operations. In addition, these occurrences could result in lost revenues from business interruption as well as damage to our reputation. The Philippines has been subject to a number of terrorist attacks over the past decade. The Philippine army has been in conflict with the Abu Sayyaf organization which has been identified as being responsible for kidnapping and terrorist activities in the Philippines, and is also alleged to have ties to the Al-Qaeda terrorist network and, along with certain other organizations, has been identified as being responsible for certain kidnapping incidents and other terrorist activities particularly in the southern part of the Philippines. Furthermore, the Government and the Armed Forces of the Philippines (AFP) have been in conflict with members of several separatist groups seeking greater autonomy, including the Moro Islamic Liberation Front (MILF), the Moro National Liberation Front (MNLF) and the New People’s Army (NPA). There have been numerous bombing incidents in Mindanao and elsewhere in the Philippines, which have resulted in death and injury to the civilian population as well as military and security personnel. An increase in the frequency, severity or geographic reach of these terrorist acts, violent crimes, bombings and similar events could have a material adverse effect on investment and confidence in, and the performance of, the Philippine economy. Any such destabilization could cause interruption to our business and materially and adversely affect our business, financial condition, and results of operations. These continued conflicts between the Government and separatist groups could lead to further injuries or deaths by civilians and members of the AFP, which could destabilize parts of the Philippines and adversely affect the Philippine economy. There can be no assurance that the Philippines will not be subject to further acts of terrorism or violent crimes in the future, which could have a material adverse effect on our business, financial condition, and results of operations. Territorial disputes with China and a number of Southeast Asian countries may disrupt the Philippine economy and business environment. The Philippines, China and several Southeast Asian nations have been engaged in a series of longstanding territorial disputes over certain areas in the West Philippine Sea, also known as the South China Sea. The Philippines maintains that its claim over the disputed territories is supported by recognized principles of international law consistent with the United Nations Convention on the Law of the Sea (UNCLOS). Over the years, tensions have periodically risen in disputed features such as the Scarborough Shoal and other areas within the Philippine exclusive economic zone, with maritime incidents, diplomatic protests, and overlapping patrols contributing to regional uncertainty. These developments have the potential to affect trade flows, investment sentiment, and bilateral relations. In addition, heightened tensions in the Taiwan Strait have emerged as a broader regional geopolitical risk. Given the Philippines’ geographic proximity to Taiwan and its strategic role in regional security dynamics, any escalation of cross-strait tensions – whether involving military activity, blockades, or disruptions to shipping lanes – could affect regional stability, trade routes, labor mobility, supply chains, and investor confidence. Such developments could indirectly impact the Philippine economy and may also disrupt the business environment in ways that affect our operations. Should territorial disputes between the Philippines and other countries in the region continue or escalate further, the Philippines may experience disruptions across key sectors. These include potential impacts on the supply and prices of energy, food and other critical commodities; delays in the delivery of equipment and materials sourced from the affected routes; and volatility in capital markets, foreign-exchange conditions, and investment activity. Heightened geopolitical tensions could also give rise to more restrictive regulatory or governmental actions or reciprocal trade measures, particularly in the context of disputes involving China. Any such escalation may materially and adversely affect the Philippine economy and, in turn, our business, financial condition, and results of operations. There can be no assurance that these regional disputes or tensions will not intensify in the future. If foreign exchange controls were to be imposed, our ability to meet our foreign currency payment obligations could be adversely affected. In general, Philippine residents may freely dispose of their foreign exchange receipts and foreign exchange may be freely sold and purchased outside the Philippine banking system. However, the Monetary Board of the BSP has statutory authority, with the approval of the President of the Philippines, during a foreign exchange crisis or in times of national emergency, to: 1.suspend temporarily or restrict sales of foreign exchange; 2.require licensing of foreign exchange transactions; or 3.require the delivery of foreign exchange to the BSP or its designee banks for the issuance and guarantee of foreign currency-denominated borrowings. 20 Table of Contents The Philippine Government has, in the past, instituted restrictions on the conversion of the Philippine peso into foreign currencies and the use of foreign exchange received by Philippine companies to pay foreign currency-denominated obligations. We cannot assure you that foreign exchange controls will not be imposed in the future. If imposed, these restrictions could materially and adversely affect our ability to obtain foreign currency to service our foreign currency obligations. The credit ratings of the Philippines may restrict the access to capital of Philippine companies, including PLDT. Historically, the Philippines’ sovereign debt has been rated non-investment grade by international credit rating agencies. The Philippines has the following investment grade ratings of Moody’s (Baa2, stable) and S&P Global (BBB, stable). The Philippine Government’s credit ratings directly affect companies domiciled in the Philippines as international credit rating agencies issue credit ratings by reference to that of the sovereign. No assurance can be given that Moody’s, S&P Global, or any other international credit rating agency will not downgrade the credit ratings of the Philippine Government in the future and, therefore, Philippine companies, including PLDT. Any such downgrade could have a material adverse impact on the liquidity in the Philippine financial markets, on the ability of the Philippine Government and Philippine companies, including PLDT, to raise additional financing, and on the interest rates and other commercial terms at which such additional financing is available. Developments outside of the Philippines, including U.S. policies related to global trade and tariffs could adversely affect our business, financial condition and results of operations. The current international political environment, including existing and potential changes to U.S. policies related to global trade and tariffs, have resulted in some uncertainty surrounding the future state of the global economy. Since 2018, the U.S. began to increase or impose tariffs on many products, particularly from China, among other jurisdictions, including, but not limited to, solar panels, steel and aluminum products, consumer electronics, and industrial chemicals. In 2025, President Donald Trump imposed tariffs of at least 10% on goods from a number of countries. In response, the European Union, China and other affected jurisdictions have introduced tariffs on U.S. goods. An escalating trade war may have material adverse effects on the power industry and our business may be impacted by these tariffs. Any further expansion in the types or levels of tariffs implemented has the potential to negatively impact our business, financial condition and results of operations. Additionally, there is a risk that the U.S. tariffs on imports are met with tariffs on U.S. produced exports and that a broader trade conflict could ensue, which has the potential to significantly impact global trade and economic conditions. Potential costs and any attendant impact on pricing arising from these tariffs and any further expansion in the types or levels of tariffs implemented could adversely affect our business, financial condition and results of operations. While there are ongoing discussions between the U.S. and China regarding tariffs, there is no certainty as to the timing and scale of reduction in tariffs, if any, and the overall impact on global markets. Thus, economic disruption in other countries, even in countries in which we do not currently conduct business or have operations, could also adversely affect our businesses and results.