PLDT Chooses REIT Path for Vitro Data Centers

PLDT Inc., the Philippines’ largest telecommunications company, has chosen a new path to unlock value from its fast-growing data center arm, rejecting a majority stake sale and instead pressing ahead with plans to list Vitro Inc. as a real estate investment trust (REIT) on the Philippine Stock Exchange.

The decision, confirmed by executives this week, comes as the company manages P284.7 billion in consolidated net debt and prepares for P16.6 billion in maturing obligations in 2026 and another P27.9 billion in 2027. A REIT listing, executives say, offers a way to raise capital without surrendering control over what they consider a cornerstone of PLDT’s future growth.

Control Over Capital

PLDT had previously explored selling a minority interest in Vitro, its data center subsidiary. Talks with potential investors, including foreign firms, stalled after buyers sought majority control — a concession PLDT refused to grant.

“Ceding majority shareholdings in Vitro is ‘non-negotiable right now,’” said Danny Yu, PLDT’s chief financial officer.

Vitro President and Chief Executive Victor Genuino underscored that position. “It’s clear for us that if we want to take this route of monetizing our asset, selling it to an interested third party for a majority is not going to happen. We want to keep control of our assets because we think this is going to be a catalyst for growth,” he said.

Yu was more direct about the company’s narrowing options: “Our only option at this moment is the REIT.”

A Rule Change Opens the Door

The strategy gained momentum after the Securities and Exchange Commission in January 2026 issued a memorandum circular allowing REITs to hold income-generating real estate in telecommunications, including data centers that have been operational for at least three years.

The regulatory shift effectively turned server farms — once seen purely as technical infrastructure — into yield-generating property assets eligible for public listing. For companies like PLDT, it created a mechanism to monetize mature facilities while retaining strategic oversight.

Under the rules, only mature Vitro sites qualify for inclusion in a REIT. Of its 11 data centers nationwide, as many as nine may meet the three-year operating requirement. Its newest facility, the 50-megawatt Vitro Sta. Rosa campus in Laguna, inaugurated in 2025 on a five-hectare site, will likely remain outside the initial listing until it reaches maturity.

Debt Pressures and Financial Performance

The planned REIT listing is unfolding against a backdrop of elevated debt and modest earnings pressure.

As of December 2025, PLDT reported:

• P296.9 billion in gross debt
• P284.7 billion in net debt
• A net debt-to-EBITDA ratio of 2.56x

While PLDT remains profitable, earnings dipped slightly. Consolidated net income stood at P30.01 billion in 2025, down 3 percent from a year earlier. Core income declined by the same margin to P33.9 billion.

Chairman Manuel V. Pangilinan acknowledged the headwinds. “The first half of the year was tough, but we regained momentum in the second half,” he said. “Our core business has remained stable.”

Within that core, data centers stand out as a rare growth engine. PLDT Enterprise and Vitro generated P6.5 billion in revenue in 2025, reflecting 22 percent year-on-year growth.

Inside Vitro’s Expansion

Vitro has operated for 25 years and is considered the Philippines’ largest data center provider. It now runs facilities across multiple regions, supplying nearly 100 megawatts of combined capacity.

The crown jewel is the Sta. Rosa campus, one of the largest data center facilities in the country. Designed to serve hyperscalers, enterprises and government clients, the site represents PLDT’s bet that demand for cloud services, artificial intelligence processing and digital storage will continue to surge.

In strategic terms, data centers function like digital toll roads — charging rent to companies that need secure, climate-controlled environments to house their servers. By placing mature assets into a REIT, PLDT can convert these long-term rental streams into upfront capital while maintaining operational control.

Limited Immediate Impact on Consumers

The planned listing is unlikely to affect consumer mobile or broadband prices in the near term. For most Filipinos, the move will register primarily as a balance sheet adjustment rather than a change in daily life.

Indirectly, however, a stronger capital position could help PLDT sustain investment in digital infrastructure, particularly outside Metro Manila where connectivity gaps remain a challenge for remote work and online education.

With roughly 30,000 employees across its operations, the company’s financial stability also carries implications for workforce continuity and supplier relationships.

A Model Other Telcos May Watch

PLDT’s pivot to a data center REIT could signal a broader shift in how telecommunications firms fund capital-intensive infrastructure. As profit margins tighten and borrowing costs fluctuate, monetizing real estate-linked assets without relinquishing strategic control offers an alternative to outright divestment.

For now, PLDT’s course is set. The company will pursue a REIT listing for Vitro’s mature facilities, leveraging new regulatory rules to shore up its finances while preserving what executives describe as a critical engine for growth.

The balancing act is delicate: pay down debt without surrendering the future. In choosing the REIT route, PLDT is betting it can do both.