Philippine Long Distance Telephone Co., the nation’s biggest company by value, said its profit will rise this year, largely because of lower taxes.

“It’s going to be a tough year but we’re determined to improve, so I think core profit will still be higher” than 2008, chairman Manuel Pangilinan told reporters yesterday. The Makati-based company is scheduled to report fourth-quarter results on March 3 and has forecast profit, before one-time gains or losses, of P37 billion ($782 million) for the 12 months ended Dec. 31.

The Philippine government cut taxes for companies to encourage investment amid simultaneous recessions in Europe, Japan and the US. PLDT, may add about four million mobile-phone users this year, slowing from the five million it gained in 2008 for a total of 35 million, he said.

“The reduction in income tax rates will be beneficial to PLDT and other corporates,” he said. “There will be some growth in organic income.” The income tax rate for companies will drop to 30 percent this year from 35 percent.

PLDT, partly owned by Nippon Telegraph & Telephone Corp. and First Pacific Ltd., will spend about P27 billion this year to expand mobile phone and broadband networks, Pangilinan said. The company may raise P5 billion by selling five- and seven-year debt in the first half to fund expansion and refinance foreign currency loans, he said.

The phone company has about $316 million of debt maturing in 2009.

Mediaquest Holdings Inc., which is owned by PLDT’s trust fund and has investments in media, is in talks to buy more than 50 percent of Philippine Star, one of the nation’s three biggest newspapers, for about P4 billion, Pangilinan said. Bloomberg