UPDATE 2-Philippine telecoms firms feel consumer pinch

(Adds rival Globe results, comments)

By Rosemarie Francisco

MANILA, Aug 5 (Reuters) - Philippine Long Distance Telephone Co (PLDT) (TEL.PS) warned on Tuesday it was more cautious about hitting 2008 profit targets, while quarterly earnings at smaller rival Globe Telecoms (GLO.PS) slid on weaker consumer spending.

Revenues at telecom firms are expected to come under further pressure in the Philippines in the second half as consumers, feeling the pinch from higher fuel and food costs, cut mobile phone spending.

PLDT, the country's dominant phone company and largest listed group, retained its outlook for a 5 percent increase in core earnings, which strip out currency and derivative gains, to 37 billion pesos ($839 million) this year.

But slowing consumer demand made it less bullish.

"Already, we are seeing parts of our cash operating expenses rising and third quarter demand softening slightly -- albeit the third quarter being a seasonally low period," Manuel Pangilinan, PLDT chairman said.

"Our sense is the full impact of accelerating inflation will be felt in the third quarter."

Data on Tuesday showed annual inflation in July hit 12.2 percent, a near 17-year high, as food prices soared due to Typhoon Fengshen. For story click on [ID:nMAN190881].

PLDT -- owned by Hong Kong's First Pacific Co Ltd (0142.HK) and Japan's NTT Communications (9432.T) and NTT DoCoMo (9437.T) -- reported a 6 percent rise in second quarter core earnings to 9.36 billion pesos. PLD has a market value of $10.8 billion.

Rival Globe Telecom's (GLO.PS) net profit fell 27 percent in the same period to 2.8 billion pesos.

"The impact of strong subscriber growth was offset by reduced usage and activity levels due to intensifying competition, increasing multi-SIM usage, and weaker consumer purchasing power with inflation," Globe said in a statement.

The Philippines' No.2 telecoms group said its weak first half results were also partly due to a high base last year when election-related spending boosted revenues and profits.

DIVIDENDS

Ahead of the results, analysts had estimated PLDT's 2008 full-year profit to rise 5.3 percent to 37.9 billion pesos and Globe's profit to edge up 3 percent to 14 billion pesos, according to Reuters Estimates. Analysts do not provide quarterly forecasts.

Tuesday's results came after close of trading hours. Shares of PLDT eased 0.2 percent and Globe shed 0.4 percent in a flat broader market .PSI.