Byline: James A. Loyola

Globe Telecom, the country's second-largest phone company, may borrow $ 200-$ 300 million this year to fund planned capital spending of up to $ 450 million, a company official said yesterday.

"We're looking at borrowing $ 200-$ 300 million in the course

Globe Telecom expects its revenues to grow 8 percent to 10 percent this year, in line with the industry's projected growth rate, following its announcement of a record performance in 2007.

At the sidelines of the firm's investors' briefing, Globe President Gerardo Ablaza said growth will come on the back of the expansion of wireless services as well as the increase in mobile phone penetration rate to 70 percent from 50 percent last year.

He said the firm will continue to maximize growth of its core wireless businesses, exploit new revenue sources (including broadband), and protect margins by driving improvements in the cost structure.

Globe expects the industry to continue to grow but the pace will depend on developments in the broader economy noting that the strong peso and high fuel prices will weigh on consumer spending together with uncertainty over the US economy.

Ablaza added that operating margins will continue to be under pressure from new subscribers from lower income segments while the strong peso could continue to hold back international long distance revenue growth.

He added that broadband initiatives will continue to incur costs before significantly contributing to revenues and earnings in subsequent years.

Globe reported a consolidated service revenues growth of 11 percent to reach a new peak of P63.2 billion, driven by growth of 11 percent and 7 percent from its wireless and wireline businesses, respectively.

Profitability continued to be strong with EBITDA (earnings before income tax, depreciation and amortizations) increasing 8 percent year-on-year to P40.2 billion, with margins at a robust 64 percent of service revenues.

With strong revenue growth and healthy margins, Globe's net income grew 13 percent year-on-year to reach P13.3 billion despite one-time charges related to the early payment of debt notes.

Taking out the impact of foreign exchange and mark-to-market gains and losses and the non-recurring costs related to the bond redemption, core net income posted a higher gain of 27 percent to close at a record P13.7 billion.