PSE Circular for Brokers No. 132-99

January 26, 1999 PSE CIRCULAR FOR BROKERS NO. 132-99 January 26, 1998 Philippine Stock Exchange PSE Center, Exchange Road Ortigas Center, Pasig City Attention: Ms . Grace B . de Guia/Ms . Raquel R . Angeles Disclosure Department Ladies and Gentlemen : This is to acknowledge with thanks your two letters requesting us to comment, on newspaper articles discussing the following matters: 1. The Philippines might suffer a downgrade once creditor banks of Piltel calls on the credit line of its majority shareholder, PLDT (Manila Standard: "Piltel Mess May Lower RP Credit Rating"); 2. Piltel's possible closure is one of the options being studied as part of its PhP21 Billion debt restructuring program (Philippine Star: "Piltel Seen to Grow Under New Management"). Addressing the first matter, we trust that you appreciate that we are not in a position to comment on or influence how credit rating agencies could assess or re-assess the creditworthiness of the Philippines on account of Piltel's debt problems. This is a matter beyond the control of Piltel. On the second point, we would like to underscore the fact that the new management, having been in Piltel for less than two months, is in the midst of conducting a thorough operational, financial and legal review of Piltel's business and prospects. It is management's view that a few more weeks are required to complete this review process, the results of which are intended to develop a range of possible options that will be presented to the Board of Piltel and its creditors. The results will then be presented to the shareholders of Piltel for their consideration, including PLDT. LLpr In the meantime, negotiations are ongoing between management and Piltel's creditors to work out an acceptable debt repayment plan. This is deemed necessary to protect Piltel's value as an on-going enterprise, conserve to the extent possible its cash position, and ensure that its operational competitiveness is not compromised. We strongly believe that it is in the interest of all creditors and shareholders for management to conduct a thorough and comprehensive review of Piltel's current position, as a basis for formulating its plans moving forward, rather than to draw hasty conclusions now that may end up being detrimental to all parties concerned. In this regard, we appeal to your patience and understanding as we go through this painful but necessary exercise. We assure you that a full, fair and complete disclosure will be made to shareholders of the outcome of the ongoing review once it is completed. Thank you for allowing us to clarify these matters with you. Very truly yours, (SGD.) MA. LOURDES C. RAUSA-CHAN Corporate Secretary