PLDT’s longtime auditor SGV resigns, withdraws opinion amid accounting issues

SGV resigned from its role as PLDT’s independent registered public accounting firm. That role involved examining PLDT’s financial statements and issuing opinions about whether they fairly presented the company’s finances. SGV said its independence was impaired under US SEC and auditing oversight rules.

SGV had initially issued clean opinions on PLDT’s 2024 and 2025 international financial statements. After accounting problems emerged, it withdrew the 2025 opinions because they could no longer be relied upon. It also withdrew the 2024 opinion because it could not finish assessing additional accounting information before resigning.

The withdrawal leaves PLDT needing reliable replacement audits for its international reporting. PLDT appointed Isla Lipana & Co., the Philippine member firm of PwC, for its Philippine financial statements. However, it was still seeking another auditor for international statements and internal-control reporting required by US regulators.

An external auditor is an outside professional firm that examines a company’s financial statements. It checks whether the reported figures fairly present the company’s finances. Its opinion gives investors information they can use when assessing the company. The auditor is not supposed to prepare or defend the company’s accounts.

Independence means the auditor can inspect records, question management, and report problems without conflicts affecting its judgment. In PLDT’s case, SGV concluded that its independence was impaired under US SEC and auditing oversight rules. The disclosure did not explain what caused that impairment. SGV therefore resigned rather than continue as PLDT’s independent auditor.

This safeguard matters because investors rely on audited statements when making decisions. If an auditor’s independence is impaired, its conclusions may be questioned even if no fraud is found. SGV withdrew its 2025 opinions because they could no longer be relied upon, and withdrew its 2024 opinion after an unfinished assessment.

SGV served as PLDT’s auditor for nearly 24 years. That is significant because an auditor-client relationship lasting so long can create familiarity. The auditor may become deeply accustomed to management, systems, and explanations. Independence rules exist to ensure professional judgment remains objective throughout the relationship.

The article does not say that the long relationship caused SGV’s independence impairment. It states only that SGV concluded its independence was impaired as of the issuance of its 2025 audit opinions. SGV also said the impairment continued through the date of its resignation. The disclosure did not identify the cause.

The long tenure makes the resignation especially important for investors watching PLDT’s reporting. SGV had issued clean opinions for 2024 and 2025 before withdrawing them. PLDT appointed PwC Philippines for its Philippine financial statements, but still needed an auditor for international statements and US-required internal-control reporting.

Structured hedge arrangements are contracts companies often use to protect against financial risks, including currency fluctuations. PLDT said its errors arose from deficiencies in controls over accounting for certain arrangements. The problem involved how gains and losses from those contracts were recorded in the financial statements.

Internal controls are the procedures and checks used to produce accurate financial reports. A material weakness is a serious control deficiency that creates a reasonable possibility that a material misstatement will not be prevented or detected promptly. SGV concluded that such a weakness existed at PLDT as of December 31, 2025.

The issue mattered even though PLDT said identified revisions were not expected to materially affect net income, EBITDA, earnings per share, cash flows, or key operating metrics. SGV withdrew its 2025 opinions and later its 2024 opinion. PLDT must now address its controls while completing replacement audit work for international reporting.

When PLDT disclosed the accounting problems in August, investors reacted quickly. The Philippine Stock Exchange halted trading in PLDT shares for one hour on August 14. The pause gave investors time to absorb the company’s disclosure about accounting errors and weaknesses in financial controls.

Trading resumed, but the shares ended that day down 4.49%, at P1,170. The movement showed that investors treated the control and reporting issues as significant, even though PLDT said the identified revisions were not expected to materially affect several key financial and operating measures.

The market response added pressure for clearer reporting and corrective action. SGV later withdrew its 2025 audit opinions and its 2024 opinion, then resigned. PLDT appointed PwC Philippines for its Philippine statements, while it continued searching for an auditor covering international statements and US-required internal-control reporting.

PLDT has different financial-reporting obligations. It appointed Isla Lipana & Co., the Philippine member firm of PwC, as its new external auditor for Philippine financial statements. That appointment covers the company’s local reporting work, effective Monday, November 2.

International statements require separate coverage because PLDT also has US reporting obligations. Its American depositary shares trade on the New York Stock Exchange. The company therefore needs an auditor for international financial statements and internal-control reporting required by US regulators. The article does not say that PwC is barred from doing this work.

Instead, PLDT was still searching for an auditor to handle those international responsibilities. This split means PwC can begin the Philippine audit while the broader replacement process continues. Investors will still need the international audit and control reporting to address the opinions SGV withdrew and support PLDT’s US regulatory obligations.

Reliable financial statements give investors a consistent picture of a company’s finances and performance. Internal controls support that reliability by setting procedures for recording transactions, checking information, and identifying errors. Independent audits provide an outside examination rather than relying only on management’s explanations.

PLDT’s hedge-accounting problem shows how these safeguards work together. Deficiencies in controls affected how gains and losses were recorded. SGV then identified a material weakness in internal control over financial reporting. After reassessing the information, it withdrew its audit opinions and said its 2025 opinions could no longer be relied upon.

These steps protect accountability by bringing problems into the open. Investors can see that reported figures and controls require correction, while regulators can require appropriate reporting. PLDT said revisions were not expected to materially affect several key measures, but it still needs replacement audit work and an auditor for US-required internal-control reporting.