SGV informed PLDT on October 31 that it was resigning after concluding that its independence was impaired as of the issuance of its Fiscal 2025 Audit Opinions. The firm stated that this impairment continued through the date of its resignation, rendering it non-compliant with US Securities and Exchange Commission (SEC) and auditing oversight rules. SGV, a member of Ernst & Young, is the Philippines’ largest professional services firm.
The resignation comes after SGV identified a material weakness in PLDT’s internal control over financial reporting as of December 31, 2025. In August, PLDT acknowledged accounting errors arising from “deficiencies in controls over the accounting for certain structured hedge arrangements.” These arrangements are typically used to protect against fluctuations in currency exchange rates and interest rates, but the errors involved how gains and losses from these contracts were recorded in financial statements.
Consequently, SGV withdrew its previously issued unqualified audit opinions on PLDT’s 2024 and 2025 financial statements prepared for international reporting. The firm stated that the 2025 audit opinions “could no longer be relied upon.” SGV also withdrew its opinion on the 2024 financial statements, citing an inability to finish reviewing certain accounting adjustments before resigning. While PLDT’s disclosure detailed the accounting errors and control weaknesses, it did not specify the exact cause of SGV’s impaired independence.
PLDT stated that the errors identified so far are not expected to significantly affect its profits, cash flows, or other key financial figures. The company is currently reviewing the causes of the errors and implementing fixes to its accounting controls. PwC Philippines, which previously audited PLDT from 1999 to 2001, will handle the audit of PLDT’s Philippine financial statements. A separate search is ongoing for an auditor to handle the company’s international reporting, which is critical as PLDT shares trade on both the Philippine Stock Exchange and the New York Stock Exchange.
The transition marks the end of a 24-year audit relationship between PLDT and SGV. The company’s leadership, headed by Manuel V. Pangilinan, is now tasked with ensuring compliance with dual-listing requirements while addressing the identified internal control gaps. No specific deadline for the completion of the international auditor search was provided in the available disclosures.
