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**SECURITIES  AND  EXCHANGECOMMISSION**

Washington, D.C.  20549

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**FORM  6 -K**

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**REPORT  OF  FOREIGN  PRIVATE  ISSUER**

**PURSUANT  TO  RULE  13a-16  or  15d-16  OF**

**THE  SECURITIES  EXCHANGE  ACT  OF  1934**

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**Report  on  Form  6-K  dated  July 16, 2003**

(Commission  File  No.  1-15024)

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**PHILIPPINE  LONG  DISTANCE  TELEPHONE  COMPANY**

(Name of Registrant)

 

Ramon Cojuangco Building
**Makati Avenue, Makati City**

**Philippines       0721**

(Address of Principal Executive Officers)

 

 

Indicate by check mark whether the registrant files or will file annual reportsunder cover of Form 20-F or Form 40-F:

 

Form 20-F:  y                        Form 40-F:  o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper aspermitted by Regulation S-T Rule 101 (b) (1):

 

Yes:  o                                    No:  y

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper aspermitted by Regulation by Regulation S-T Rule 101 (b) (7):

 

Yes:  o                                    No:  y

Indicate by check mark whether the registrant by furnishing the informationcontained in this form is also thereby furnishing the  information to theCommission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of1934:

 

                  Yes:  o                                    No:  y

 

 

 

 

 

 

 

 

 

Enclosure:

 

 

 

A copy of the disclosure letter we filed today with thePhilippine Stock Exchange and the Securities and Exchange Commission regardingthe press release in connection with PLDT’s preliminary 1st half2003 results.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SECURITY CODE CM-040
 
 

 

 

 

July 16, 2003
 

 

 

Philippine Stock Exchange

4/F Philippine Stock Exchange Center

PSE Center, Exchange Road

Ortigas Center, Pasig City

 
Attention:  Atty. Jose G. Cervantes
SeniorVice President
 

Gentlemen:

 

            In accordance with Sections 17.1 (b) and 17.3of the Securities Regulation Code, enclosed is a Current Report with a pressrelease attached thereto regarding the Company’s preliminary 1sthalf 2003 results.

 

 

                        Very trulyyours,

 

     PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
 

 

 

 

                       FLORENTINO D. MABASA, JR.
Assistant Corporate  Secretary

 

 

 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July 16, 2003
 

 

 

Securities & Exchange Commission

Money Market Operations Department

SEC Building, EDSA

Mandaluyong City

 

Attention:  Director Justina F. Callangan
Corporations Finance Department
 

Gentlemen:

 

            In accordance with Section 17.1 (b) ofSecurities Regulation Code, we are submitting herewith five (5) copies of aCurrent Report with a press release attached thereto regarding the Company’spreliminary 1st half 2003 results.

                     Very trulyyours,

 

        PHILIPPINE LONG DISTANCETELEPHONE COMPANY

 

 

 

 

FLORENTINO D. MABASA, JR.
Assistant Corporate Secretary

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

**COVERSHEET**

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**(Company’s Full Name)**

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**(Business Address: No. Street City/Town/Province)**

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**ATTY. MA. LOURDES C. RAUSA-CHAN**

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**814-3552**

                    ContactPersonCompany Telephone Number

 

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**CURRENT REPORT UNDER SECTION 17**

**OF THE SECURITIES REGULATION CODE**

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**Dept. Requiring thisDoc.Amended Articles Number/Section**

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**Total Amount of Borrowings**

**15,990**

**As of March 31, 2003**

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**Total No. of StockholdersDomestic                                         Foreign**

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To be accomplished by SECPersonnel concerned
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**File Number________________________________**

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**Document I.D.________________________________**

**Cashier**

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STAMPS
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**Remarks: Please use black ink for scanning purposes.**

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**SECURITIES AND EXCHANGE COMMISSION**

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**CURRENT REPORT UNDER SECTION 17**

**OF THE SECURITIES REGULATION CODE**

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1.   July 16, 2003___________________

****Date of Report (Date of earliest event reported)

 

2.  SEC Identification Number _____PW-55 ____   3.BIR Tax Identification No. __000-488-793  

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4.  Philippine Long Distance Telephone Company_______________________________

****Exact name of registrant as specified in its charter

 

5.  Philippines        ___________________________6.            (SEC Use Only)

     Province, country or other jurisdictionor                                 Industry Classification Code:

     Incorporation

 

7.  Makati Avenue, Makati City, Philippines           ______________________________

     Address of principal officePostal Code

 

8.  (632) 814-3664    ___________________________________________________________

     Registrant’s telephone number, including area code

 

9.  Not Applicable______________________________________________________________

     Former name or former address, if changed since lastreport

 

10.  Securities registered pursuant to Sections 8 and 12 ofthe Securities Regulation Code

 

Title of Each Class                             Numberof Shares of Common Stock

Outstanding and Amount of Debt Outstanding

 

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____________________________________________________________________________

 

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11.  Indicate the item numbers reported herein: ______________________________________

 

 
 

 
 

 
 

 

 

 

PLDT reports core earnings of P6.6 billion for the 1sthalf of 2003 driven by Smart’s strong performance; provisions of P4.8 billionbooked

 

 

 
- Smart posts outstanding net income of P3.4 billion in the second quarter of 2003
- Smart and Talk ‘N Text add record 995,000 subscribers during the second quarter; combined subscriber base surpasses 10 million 
- Consolidated revenues up by 17% to P46.2 billion 
- Consolidated EBITDA rises 15% to P25.2 billion. EBITDA margin remains strong at 55%.
- Consolidated net income before provisions hits P6.6 billion.  
- Provisions for manpower reduction expenses and non-cash provisions for investments and other assets totaling P4.8 billion booked in the first half of 2003 
- Smart pays cash dividends of P4.3 billion to PLDT in June 2003
- PLDT Group generates free cash flow of P10.3 billion
- PLDT Group reduces debt by a total of US$165 million in the first six months of the year

 

 

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***MANILA, Philippines, July 16, 2003***   –– Philippine Long DistanceTelephone Company (“PLDT”) (PSE: TEL) (NYSE: PHI) today announced itspreliminary and unaudited financial results for the first six months of 2003.Led by SmartCommunications Inc.’s (“SMART”)net income of P6.1 billion for the period, PLDT’s consolidated netincome before provisions for manpower reduction expenses and non-cashprovisions for investments and other assets, stood at P6.6 billioncompared to P3.4 billion in the first six months last year. Consolidated revenues in the first half of 2003increased by 17% to P46.2 billion and consolidated EBITDA improved to P25.2billion from P22.5 billion in the same period last year.  The Company’sconsolidated net income, after provisions, stood at P1.8 billion.  Giventhe non-cash nature of the provisions against investments and other assets, theCompany’s consolidated free cash flow was not affected and increased to P10.3billion in the first half of the year from P4.4 billion last year,allowing the group to reduce total debt by US$165 million during the periodwhile having a cash balance of P9.5 billion as of June 30, 2003.  TheCompany remains on track to achieve its consolidated debt reduction target ofapproximately US$280 million in 2003 versus debt reductions of US$204 millionin 2002.  

 

Smart:  Expanding reach through relentless innovation
 

Smart reinforced its position as the country’s leadingcellular provider as it added 1.3 million subscribers in the first half of theyear, ending the period with 8.1 million subscribers.  Smart, together withTalk ‘N Text, added close to a million subscribers in the second quarter alone,on top of the 770,000 net additions recorded in the first quarter. As of June30, 2003, Smart and Talk ‘N Text had over 10.3 million subscribers compared to8.6 million as of year-end 2002.  

 

 

 

 

“Over the past threeyears, Smart has consistently exceeded expectations and has underpinned thegrowth of the group’s overall results,” said Manuel V. Pangilinan, President and CEO ofPLDT.  “Smart’s relentless efforts to provideinnovative cellular products and services have been key to its impressiveperformance.  We believe that we can further increase cellular penetrationrates in the country for as long as we provide the services that customers wantat the most affordable prices,” added Pangilinan.   

 

"During thesecond quarter of 2003 alone, Smart launched *Smart Load*, *addictmobile*and *Super Sim 2*, all ground breaking offerings that makecellular services more attractive to an ever broadening range ofcustomers," commented Napoleon L. Nazareno, President and CEO of Smart.

 

Smart’s exemplary subscriber growth translated intosignificant gains in revenues, EBITDA, and net income.   In the first sixmonths of 2003, Smart increased its revenues by 53% to P22.1 billionfrom P14.5 billion in the same period last year.  EBITDA surged by 60%to P12.9 billion from P8.0 billion as revenue growth outpaced thegrowth in expenses and EBITDA margins improved significantly to 58% from 55%last year.   Net income more than doubled to P6.1 billion from P2.3billion last year while Smart’s net income of P3.4 billion in the secondquarter of 2003 increased by 21% quarter on quarter from the P2.8billion earned in the first quarter of 2003.

 

Blended ARPU of prepaid and postpaid subscribers remainedstable at P563 over the first six months of 2003.  Smart continued todrive down its subscriber acquisition costs, with blended subscriberacquisition costs for both prepaid and postpaid services declining by 27%, fromP1,464 in the first half of 2002 to P1,075 for the same period in2003. Blended churn rates improved considerably, going down from 3.8% in thefirst six months of 2002 to 3.1% in the first six months of 2003.  

 

Smart’s capital expenditures remained  within its full yearestimate of P9.0 billion as it spent P3.7 billion in the firstsix months of 2003.  Smart has extended its nationwide coverage to 880 citiesand municipalities through its network of 29 switches and 3,285 base stationsand expanded its switching capacity to 11.7 million subscribers from 9.6million subscribers at the end of 2002.  

 

 

“Our strategy at Smart has always been fairly simple – webuild a robust network with extensive coverage, provide a wide array of voiceand data services and make these services available at affordable prices whilekeeping costs down,” explained **Nazareno**.  “*Smart Load* is a primeexample of how this strategy works.  The low denomination airtime load allowsus to reach out to consumers who may not have previously been able to affordour service while the over-the-air concept, which I believe is the first of itskind, is made possible by our award-winning *Smart Money* platform.  We’dlike to think that *Smart Load* is the principal reason for the recentdecline in our churn rates, as it was envisioned to be, and we expect torealize savings as well in relation to commissions and card printing costs,”added **Nazareno**.

 

 

 

 

 

 

PLDT Fixed Line:  Taking tough decisions to deliver oncommitments

 

For the Fixed Line business, total revenues remained solidat P22.5 billion in the first half of the year.   EBITDA, excluding theeffects of provisions, increased to P16.5 billion on account of cashdividends received from Smart.  As a result of the increase in terminationrates implemented in February 2003, international long distance revenues grewby 14% to P5.7 billion in the first six months of 2003.  Data servicerevenues also grew by 4% year-on-year to P2.8 billion driven by theincreased demand for both corporate and retail data services.  Local exchangerevenues were steady at P10.4 billion in the first six months of theyear while national long distance continued to be under pressure, declining by16% year-on-year to P3.3 billion.  As of June 30, 2003, PLDT had 2.1million fixed lines in service, of which 12% were prepaid subscribers.

 

In response to the challenges being faced by the fixed linebusiness, PLDT Fixed Line continued to focus on cost containment. Following theimplementation of its Manpower Reduction Program (“MRP”), the Company hasreduced its headcount by 1,759 and has booked provisions of P1.3 billionfor the full amount of MRP-related expenses in the first half of 2003.  As ofJuly 15, 2003, PLDT Fixed Line had 10,372 employees compared to 12,131 as ofyear-end 2002.

 

In addition to the MRP-related expenses, the Companylikewise booked net non-cash provisions against investments and other assets,including investments in Aces Philippines and Aces International Limited,receivables due from Philcom and investments in Unilink/Home Cable convertibledebt securities, aggregating P3.5 billion.  

 

“While we have booked significant provisions in the firsthalf of 2003, I would emphasize that with the exception of the MRP provision,these are principally non-cash in nature and, as such, will not affect ourongoing debt reduction program.  Indeed, while the Manpower Reduction Programwill help strengthen our operations, the provisions will help strengthen ourbalance sheet,” shared **Pangilinan**. 

 

**PLDT Group:  Increasing cash flows and reducing debts**

 

As a result of Smart’s stellar performance, the free cashflow of Smart grew significantly to P7.5 billion in the first six monthsof 2003 from P2.8 billion in the same period last year.  Thissubstantial cash flow enabled Smart to not only reduce its debt by US$60million in the first six months of the year but also allowed it to paydividends to PLDT of P4.3 billion, representing 70% of its 2002 netincome, in June 2003.

 

In the first six months of 2003, PLDT Fixed Line reduceddebt by US$105 million.  PLDT’s free cash flow increased to P6.3billion, augmented by the dividends paid by Smart.  PLDT’s fixed line capitalexpenditures have remained low, reaching only P1.5 billion in the firsthalf of the year as against the full year target of P7.0 billion.  

 

In aggregate, the PLDT Group generated free cash flow of P10.3 billion in the first six months of 2003 comparedto P4.4 billion last year.  As of June 30, 2003, the group’s cashbalance stood at P9.5 billion after paying down a total of US$165million of consolidated debt during the period. 

 

 

 

 

"Our performance to-date demonstrates our steadfastcommitment to our stakeholders to continue to grow our cellular business,strengthen our fixed line revenues, contain our costs, improve our cash flowsand pay down our debts," concluded **Pangilinan**.

 

 

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*This press release may contain some statements whichconstitute “forward-looking statements” that are subject to a number of risksand uncertainties that could affect PLDT’s business and results of operations.Although PLDT believes that expectations reflected in any forward-lookingstatements are reasonable, it can give no guarantee of future performance,action or events.*

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**For further information, please contact:**

 

Anabelle L Chua                   AnnaV Bengzon                   Menardo Jimenez, Jr
Tel No: 816-8213                    Tel No: 816-8024                    TelNo: 816-8468

Fax No: 844-9099                   Fax No: 810-7138                   FaxNo: 893-5174

 

 

 

 

 

 

 

**About PLDT**

PLDT is the leadingtelecommunications provider in the Philippines. Through its three principalbusiness groups – fixed line, wireless and information communicationstechnology – PLDT offers a wide range of telecommunications services across thePhilippines’ most extensive fiber optic backbone and fixed line, cellular andsatellite network.

PLDT is listed on the PhilippineStock Exchange (PSE:TEL) and its American depositary shares are listed on theNew York Stock Exchange (NYSE:PHI) and the Pacific Exchange.  PLDT has one ofthe largest market capitalizations among Philippine listed companies.

Further information can be obtained by visiting theweb at www.pldt.com.ph.

 
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**SIGNATURES**

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Pursuant to the requirements of the Securities Exchange Act of 1934, theregistrant had duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 

 

 

**PHILIPPINE LONGDISTANCE TELEPHONE COMPANY**

 

 

 

 

                                                 By:  **MA. LOURDES C. RAUSA-CHAN**

                                                Corporate Secretary
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Date:  July 16,2003
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