PSE Circular for Brokers No. 068-98

February 5, 1998 PSE CIRCULAR FOR BROKERS NO. 068-98 PRESS RELEASE February 4, 1998 PETRON INCURS LOSSES OF P631 MILLION IN 1997 ; AFFIRMS LOWER LEVEL OF CAPITAL PROGRAM FOR 1998 Petron Corporation ended 1997 with a net loss of P631 million. This resulted from the company's inability to pass on to the pump price the higher cost of crude and product imports as the peso depreciated. Petron's net loss contrasts sharply with its recorded earnings of P4.2 billion in 1996 and mars the company's history of consistent profitability. Volume-wise, however, Petron's performance continued to be healthy. It sold 61.4 million barrels of refined products during the year, 5% higher than the 1996 level of 58.7 million barrels. Growth was posted in most product lines, including premium gasoline, diesel, IFO and jet fuel. This boosted the company's market share from 41.4% in 1996 to 42.7% in 1997. The company's consolidated asset base stood at P48.8 billion as of year-end, 2% higher than the previous year's P47.9 billion level. In its regular quarterly meeting held this morning, the Petron Board of Directors approved management's proposal to fund the company's capital projects essential only to its operations in the amount of approximately P135 million. This supports an earlier decision to rationalize the company's capital spending on a prioritized basis. The funded projects which include the installation of additional storage tanks, the upgrade of aviation facilities and the replacement of receiving line at the Rosario Terminal will continue the company's selling and distribution network and improve customer service. In the same meeting, Petron approved the amendment of the Article II, Section 2 of the company's by-laws, fixing the date of its annual Stockholders Meetings to a day in April or to another later date, at the Board's discretion, if circumstances warrant. At the same time, the Board fixed the date of the forthcoming Stockholders Meeting to July 20, 1998, subject to the approval of the Securities and Exchange Commission of the amendment to the by-laws.