, August 4
 (STAR) (AFP) Philippine Long Distance Telephone (PLDT) on Thursday raised its net profit target for 2005 to 29 billion pesos (516 million dollars) despite stiff competition and political problems that threaten the economy.

After reporting strong growth for the six months to June, PLDT chairman Manuel Pangilinan said the country's dominant carrier had upgraded its net profit target from the original 27 billion pesos.

"Despite somewhat unsettling times, PLDT continues to show its resilience. We certainly don't expect the second half of the year to be any easier but we remain focused on the tasks at hand," Pangilinan told reporters.

The Philippines has been buffeted by political uncertainty in recent months due to the widespread clamor for the ouster of President Gloria Arroyo on opposition allegations that she cheated to win last year's presidential election and that her family was involved in illegal gambling.

PLDT saw its net profit in the first six months rise 35.48 percent from a year earlier to 16.8 billion pesos as core telecoms revenue grew 2.94 percent to 59.5 billion pesos.

For the three months to June alone, net profit rose 4.0 percent to 8.0 billion pesos, the company said.

The company reduced its debt in the first half by 312 million dollars, with the full-year total up to 600 million dollars, officials said.

Pangilinan conceded that the sharp increase in the number of mobile phone subscribers that had fuelled growth in the previous years was slowing down.

"The growth rates we've seen in the past are not going to happen" as the market matures and amid fierce competition, he said.

PLDT president Napoleon Nazareno said "we are veering away from (mobile phone) subscriber numbers and focusing on revenues."

This would mean increasing the usage rates through various promotional schemes linked to the entertainment industry, "information-on-demand" services and innovative payment schemes, Nazareno added.

"Clearly, PLDT's record performance indicates that the company is moving from strength to strength," said Lawrence de Leon, an analyst at Accord Capital Equities. "The upgrade in its profit forecast goes to show that that growth remains sustainable."

"Our forecast of 29 billion pesos in net profit for 2005 is still a likely target," said Martin Enrile of ATR Kim-Eng Securities, citing an expected strong performance in mobile phones, fixed-line and internet services.

Pangilinan however said that the second half of the year would likely see "continued unsettled conditions in the economic and political sphere" amid the continuing crisis surrounding Arroyo.

He remarked that the foreign exchange rate had been favourable in the first months of the year but that it had become unpredictable as the political uncertainty increased.

Pangilinan expressed hope that the country's economic affairs could be insulated from the political furor, remarking that "its better to have a consistent and quiet situation so people can plan properly."

PLDT's strong performance in the first half boosted the company's shares initially but they closed down five pesos at 1,625 pesos after profit-taking.

Reported by: Sol Jose Vanzi

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