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ResponseLetter_Blye

                                                                                                January
29, 2007

Via EDGAR

Ms. Cecilia
D. Blye, Chief

Office of Global Security Risk

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

United States of America

Re:       Philippine Long Distance
Telephone Company

            Annual Report on Form
20-F for the Fiscal Year ended December 31, 2005

Filed June 29, 2006

File No. 1-03006

Dear Ms. Blye:

This is in response to the Staff’s comment letter dated
December 21, 2006, relating to the annual report on Form 20-F of Philippine
Long Distance Telephone Company (the “Company”) for the fiscal year ended
December 31, 2005 (the “2005 Form 20-F”), which was filed with the Securities
and Exchange Commission on June 29, 2006.

We wish to thank you and the other members of the Staff
for taking the time to review the Form 20-F and for providing us with your helpful
comments.

For your convenience, we have included your comments in
this response letter in italicized form and keyed our responses accordingly.
Our responses to the comments are as follows.

General

1.
The disclosure in the Form 20-F under “Business” – “Cellular Service” –
“Rates and Discounts” identifies Cuba as one of the destinations all Smart
subscribers may dial directly.  The “Products and Services” section of your
website provides, under “Customer Service,” international direct distance
dialing country codes for countries including Cuba, Iran, North Korea, Sudan and Syria.  Each of these five countries is identified as a state sponsor of
terrorism by the U.S. State Department, and is subject to U.S. economic sanctions and export controls.  Your Form 20-F includes no other information regarding
contacts with Cuba, and no information regarding contacts with any other of
these countries.

Please clarify for us whether you and/or your
subsidiaries provide subscribers with direct dial or other access to Iran, North Korea, Sudan and Syria, as well as Cuba.  Describe to us the nature and extent of your
past, current, and anticipated contacts with each of these countries, whether
through subsidiaries or other direct or indirect arrangements.  Your response
should describe any agreements, commercial arrangements or other contacts with
the governments of these countries or entities controlled by their governments.

During their ordinary course of business, the Company and
its subsidiaries have entered into numerous bilateral interconnection
agreements with foreign telecommunication operators providing for settlement mechanisms
in respect of telecommunications traffic terminated on the respective operators’ networks, including an
interconnection arrangement between the Company and the Telecommunications
Company of Iran (“TCI”) (the “Iran Interconnection Arrangement”).

Under the Iran Interconnection Arrangement, total incoming
long distance call minutes in 2005 totaled 2,538,247 minutes, which accounted
for approximately 0.0698% of the Company’s total incoming international long
distance call minutes in 2005.  The Company believes that substantially all of
this call traffic is between Filipinos working in Iran and their friends and families
in the Philippines. In each of the past three fiscal years the settlements
under the Iran Interconnection Arrangement resulted in net payments being due from
TCI to PLDT because of the greater volume of incoming long distance call
minutes from Iran compared to outgoing call minutes to Iran in each of these
fiscal years.

Other than the Iran Interconnection Arrangement, the
Company and its affiliates have no agreements or commercial arrangements,
direct or indirect, with any telecommunications operators in or the governments
of any of Iran, North Korea, Sudan, Syria and Cuba (the “Specified Countries”)
or entities controlled by these governments.  The Company also confirms that
none of its subsidiaries in the United States has been or is involved in
providing any telecommunication services to any of the Specified Countries. In
addition, the Company has no prior or existing operations within any of the Specified
Countries and it does not anticipate any future operations within any of the Specified
Countries.

Although subscribers of PLDT and its subsidiaries, subject
to their respective calling plans, are provided with direct dialing services to
more than 200 foreign destinations, including the Specified Countries, neither
the Company nor any of its subsidiaries maintains direct interconnection
arrangements in respect of calls to and from the Specified Countries, except
for the Iran Interconnection Arrangement.   Instead, such calls are routed through
one of the Company’s three international gateway switching exchanges to and
from submarine and satellite systems and other network and interconnection
facilities maintained by third party operators.

For outgoing direct dialed calls, the Company is able to
identify the call destination by tracking the respective country codes as
dialed.  However, for incoming calls, the Company is not provided with and is
unable to obtain origination country data – the Company tracks numbers of
incoming calls and incoming minutes for purposes of charging call termination
fees for incoming traffic through the gateways, but these are not segregated by
origination country.  Nevertheless, based on both the overall ratio of incoming
to outgoing international call minutes for the Company and its subsidiaries
taken as a whole, as well as data compiled from bilateral interconnection
arrangements relating to countries other than the Specified Countries (as well
as data compiled in respect of the Iran Interconnection Arrangement), the
Company considers it to be likely that (i) incoming minutes exceed outgoing
minutes for each of the Specified Countries and (ii) if the Company had
bilateral interconnection arrangements with each of the Specified Countries,
the Company would be a net recipient of payments under all of such
arrangements.

The Company supplementally advises the Staff that total
outgoing long distance call minutes for the Company and its subsidiaries in
2005 totaled 200,262 minutes, 4,130 minutes, 163,459 minutes, 240,873 minutes,
and 8,186 minutes, for Iran, North Korea, Sudan, Syria and Cuba, respectively,
which accounted for approximately 0.0633%, 0.0013%, 0.0516%, 0.0761% and 0.0026%
of the Company’s total outgoing international long distance call minutes in
2005, respectively.  For the first eleven months of 2006, similar data were
observed.

Moreover, the Company respectfully notes that U.S. telecommunications
carriers, which, unlike the Company, are U.S. persons subject to U.S. economic
sanctions administered by the Office of Foreign Assets Control under the U.S.
Department of the Treasury (“OFAC”), are generally permitted to engage in
transactions that are incident to the receipt or transmission of
telecommunications involving the Specified Countries (see 31 C.F.R.
§500.571; 31 C.F.R §538.512 and 31 C.F.R §515.418).  All of the Company’s (and
its subsidiaries’) outgoing or incoming call minutes to and from these
countries are incident to the Company’s regular telecommunication services.  In
addition, the Company notes that TCI is not among the Iranian entities that
have been included in the specially designated nationals list published and
maintained by OFAC, including those Iranian entities that were designated under
the program of non-proliferation of weapons of mass destruction.  Moreover, the
Company has no knowledge or reasonable cause to believe that any of the
payments in connection with such telecommunications traffic involve
any fund transfers
that would pose a risk of furthering terrorist acts in or against the United
States (as noted above, the Company is a net payee under the Iran
Interconnection Arrangement and it believes it would likely be a net payee if
it had direct bilateral interconnection agreements in respect of the other
Specified Countries).  Therefore, the Company believes that its business
activities in connection with the telecommunications traffic with such
countries would generally be in compliance with OFAC regulations, if such
regulations were applicable to the Company (although the Company
recognizes that all such activities may not be expressly permitted under the
OFAC regulations in respect of all of the Specified Countries).

2.
Please discuss the materiality of the business activities or other
contacts described in response to the foregoing comment, and whether they
constitute a material investment risk for your security holders.  You should
address materiality in quantitative terms, including the dollar amounts of any
associated revenues, assets, and liabilities for the last three complete fiscal
years and any fractional period thereafter.  Please also address materiality in
terms of qualitative factors that a reasonable investor would deem important in
making an investment decision, including the potential impact of corporate
activities upon a company’s reputation and share value.

We note, for example, that Arizona and Louisiana have adopted legislation requiring their state retirement systems to prepare
reports regarding state pension fund assets invested in, and/or permitting
divestment of state pension fund assets from, companies that do business with
countries identified as state sponsors of terrorism. The Missouri Investment
Trust has established an equity fund for the investment of certain state-held
monies that screens out stocks of companies that do business with
U.S.-designated state sponsors of terrorism.  The Pennsylvania legislature has
adopted a resolution directing its Legislative Budget and Finance Committee to
report annually to the General Assembly regarding state funds invested in
companies that have ties to terrorist-sponsoring countries.  California,
Connecticut, Illinois, Maine, Oregon and New Jersey have adopted, and other
states are considering, legislation prohibiting the investment of certain
assets in, and/or requiring the divestment of certain state assets from,
companies that do business with Sudan.  Harvard University, Stanford
University, Yale University, the University of California and other academic
institution have adopted policies prohibiting investment in, and/or requiring
divestment from, companies that do business with Sudan.  Florida requires
issuers to disclose in their prospectuses any business contacts with Cuba or persons located in Cuba.  Your materiality analysis should address the potential impact of
the investor sentiment evidenced by such actions directed toward companies that
have operations associated with Cuba, Iran, North Korea, Sudan and Syria.

Your qualitative materiality analysis also should
address whether, and the extent to which, the governments of the referenced
countries, or entities controlled by those governments, receive cash or act as
intermediaries in connection with your operations.

The Company has carefully analyzed the materiality of the
business contacts described in its response to Comment 1 and concluded that
they do not constitute a material investment risk for its security holders.

The Iran Interconnection Arrangement is only one of many
contractual arrangements, including interconnection agreements and traffic
termination agreements that the Company has entered into in the course of its
ordinary business and in line with regular international telecommunication
industry practice.  As discussed in response to Comment 1, other than the Iran
Interconnection Arrangement, neither the Company nor any of its subsidiaries maintains
direct interconnection arrangements in respect of call minutes to and from the
Specified Countries.  Neither the Company nor any of its subsidiaries has any
manufacturing, marketing, sales or distribution facilities in any of the Specified
Countries, nor do they employ any person in these countries.  Moreover, the
Company has no direct or indirect subsidiaries, joint venture interests or
other investments in any of the Specified Countries and does not sell telecommunication
products or technology into any of the Specified Countries.  As noted
above, in recent years, the Company has received net payments from,
rather than making net payments to, TCI under the Iran Interconnection
Arrangement and, for the reasons indicated above, the Company considers it to
be likely that (i) incoming minutes exceed outgoing minutes for each of the
Specified Countries and (ii) if the Company had bilateral interconnection
arrangements with each of the Specified Countries, the Company would be a net
recipient of payments under all of such arrangements.  Nevertheless, to the
extent that any net payments made by the Company under its international
gateway arrangements happen to indirectly be paid to operators in the Specified
Countries, the Company has no knowledge or reasonable cause to believe that any
such payments involve fund transfers to the governments of the Specified
Countries, or entities controlled by the governments thereof. Neither the
Company nor any of its subsidiaries is a party to contractual or other business
arrangements with the Specified Countries nor entities controlled by the
governments thereof. In sum, the Company does not believe that the qualitative
nature of the Iran Interconnection Arrangement and the telecommunications traffic in the
ordinary course of business with the Specified Countries would be considered
significant by a reasonable investor.

On a quantitative basis, the Company does not believe its
telecommunications
traffic with telecommunications carriers in the Specified Countries, including
under the Iran Interconnection Arrangement, are material. The Company has not
undertaken a detailed quantitative analysis of call data for 2004, 2003 or
prior years in this regard, but it has no reason to believe that historic
trends are significantly different from the data observed for 2005 and the
first eleven months of 2006.

Under the Iran Interconnection Arrangement, total incoming
long distance call minutes in 2005 totaled 2,538,247 minutes, which accounted
for approximately 0.0698% of the Company’s total incoming international long
distance call minutes in 2005.  The telecommunications traffic under the Iran
Interconnection Arrangement resulted in net receivables of PLDT from TCI under
the settlement mechanism of the Iran Interconnection Arrangement of Php24,609,196
(or US$485,165) in 2005, representing 0.0199% of the Company’s consolidated
operating revenues and 0.2011% of the Company’s total international long
distance service revenues for 2005.  For the first eleven months of 2006,
similar data were observed.

 As discussed in response to Comment 1, the Company is
only able to quantify outgoing, but not incoming, telecommunications traffic
with the Specified Countries other than Iran.  However, for the reasons
indicated above, the Company considers it to be likely that (i) incoming
minutes exceed outgoing minutes for each of the Specified Countries and (ii) if
the Company had bilateral interconnection arrangements with each of the
Specified Countries, the Company would be a net recipient of payments under all
of such arrangements.  Moreover, based on the level of outgoing traffic to
these countries, the Company considers it likely that the level of incoming
traffic is immaterial on a quantitative basis compared to total incoming call
minutes and minutes.

On an aggregate basis, total outgoing long distance call
minutes in 2005 to the Specified Countries totaled 616,910 minutes, which accounted
for 0.1948% of the Company’s total outgoing international long distance call
minutes in 2005.  Total revenue related to outgoing long distance call minutes
in 2005 to the Specified Countries totaled Php6,341,983 or (US$115,131),
representing 0.0051% of the Company’s consolidat