PSE Circular for Brokers No. 1483-98

July 1, 1998 PSE CIRCULAR FOR BROKERS NO. 1483-98 June 29, 1998 Philippine Stock Exchange, Inc. PSE Center, Exchange Road Ortigas Center, Pasig City Gentlemen : Reference is made of your fax messages both dated 26 June 1998 requiring us to submit a written clarification/confirmation on the following news articles namely: (i) "Philcom, Piltel still on talks over P500-M payment" (Manila Times, June 25, 1998 issue); and (ii) "Piltel 20,000 lines short of 400,000 rollout commitment" (Business World: June 26, 1998 issue). Relative thereto, please find below Piltel's comments on the said news articles to wit: I. PHILCOM's P500M SUBSCRIPTION ISSUE A cursory reading of the said news article reveals that the statements therein indicated were attributed to Mr. Jaime C. Gonzales, Chairman of the APC Group Inc. Thus the news article necessarily pertains to the Philcom's view on the matter and it does not necessarily reflect Piltel's position on the same issue. Nevertheless, we would like to apprise the PSE that the lawyers of Piltel have already initiated discussion with the lawyers of Philcom on the proper disposition/treatment of the said non-payment by Philcom of the balance due on the subscription to Piltel's common shares. Up to this date, the Company has yet to decide on what course of action it will take pending the results of the said discussions and the final recommendation of our lawyers. prcd II. 400,000 LOCAL EXCHANGE LINES UNDER E . O . 109 . In our report to the NTC, the Company cited that the failure to complete the 400,000 lines requirement by some 21,000 lines is solely attributed to the prevailing peace and order problem in specific municipalities in Piltel's assigned service area i.e. Southern Mindanao. In view of the said problem, the Company feels that the delay is excusable considering that the failure to install the balance of 21,000 lines is due to a factor which is beyond the Company's control. We trust that you will find the foregoing clarification in order. Thank you. Very yours truly, PILIPINO TELEPHONE CORP. By: (SGD.) JUAN G. VELASQUEZ Chief Financial Officer