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PHILIPPINE Long Distance Telephone Co. (PLDT)
landline subscribers will be shielded from frequent foreign-exchange
rate increases as the National Telecommunications Commission (NTC)
approved the company’s proposed changes in its currency exchange
rate adjustments (CERA).
Edgardo Cabarrios, NTC common
carrier and authorization director, told The Manila Times that the
regulator has approved PLDT’s request to revise its CERA
computation using yearly average exchange rates instead of monthly
averages.
Fernando M. Sobierra 3rd, PLDT
lead counsel, said in a letter to the NTC that the simplified scheme
will serve the best interest of PLDT’s customers as this would
result in a predictable monthly charge.
“The new format will be used to
cover [foreign-currency adjustments] to be implemented for the
balance of 2007 using the average exchange rate for the period July
2006 to June 2007,” Sobierra said.
Telecom companies impose CERA to
enable them to recover foreign-exchange losses. As a rule of thumb,
every 10-centavo adjustment in the exchange rate will translate to a
percent increase or decrease in the company’s rate base.
This is computed according to a
formula provided by the NTC, and changes depending on the
peso-dollar exchange rate.
Telcos are allowed to charge
automatic CERA to their subscribers every month.
Last month, PLDT, which has more
than 2 million landline subscribers, informed the NTC that it would
cut CERA by 11 percent brought about by a stronger peso, which
averaged 46.70 to the dollar.
Last May, PLDT implemented a
6-percent decline in its local service rates when the peso stood at
an average 47.80 to a dollar.
PLDT is charging residential
subscribers about P600 a month, inclusive of taxes and adjustments.
PLDT business subscribers, meanwhile, are billed about P1,200 a
month.
PLDT’s present base of
reference for currency adjustment is P11 to $1 as of August 12,
1983, when its local service rates were provisionally approved.
--Darwin G. Amojelar
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