PSE Circular for Brokers No. 1477-98

July 1, 1998 PSE CIRCULAR FOR BROKERS NO. 1477-98 June 29, 1998 Petron Corporation's Disclosure Disclosure Department Listing and Disclosure Group Philippine Stock Exchange, Inc. (PSE) Philippine Stock Exchange Center Exchange Road, Ortigas Center Pasig, Metro Manila Gentlemen/Mesdames : This is in connection with your fax message dated June 26, 1998 regarding a June 23, 1998 Manila Bulletin news item on "Petron eyes power generations business." We would like to advise that said news item may have been developed from the Message to Stockholders given by the President and Chief Executive Officer and the Chairman as printed in the Annual Report, copies of which had been sent earlier to the SEC and the PSE. In reporting on "New Directions" the report on page 4 states: "For instance, we are assessing the possibility of investing in power generation via a project that would involve converting low-priced black residue products in the Bataan refinery to high-value light products, through the use of hydrocracking and delayed coking processes a possible first in the Philippines. Called petroleum coke, product is a cheap source of fuel for a commercial power plant." cdlex We would like to add that only a Memorandum of Understanding to study the project have been signed and the parties involve have agreed to keep the project confidential. In the meantime, there are many financial, technical, legal other issues still to be resolved. We shall render a full report at the proper time. We hope that the foregoing satisfies your request. Very truly yours, (SGD.) LIBERADOR V. VILLEGAS Corporate Secretary