Planned Privatization and Restructuring of PNB; and * Resignation of Executives in Protest of Revamp Plans

July 8, 1998 PSE CIRCULAR FOR BROKERS NO. 1560-98 July 7, 1998 MS. LUISA BUENAVENTURA Analyst Disclosure Department Philippine Stock Exchange PSE Center, Exchange Road Ortigas Center, Pasig City SUBJECT : * Planned Privatization and Restructuring of PNB; and * Resignation of Executives in Protest of Revamp Plans Dear Ms. Buenaventura : In response to your two letter-queries both dated July 6, 1998 which we received on July 7, 1998 on certain news articles, the following is our response: 1. The source of the news articles on the interested buyers did not come from us but reportedly emanated from the Secretary of Finance. We have not received any written indication of interest from these parties. 2. The Bank has not yet received any advice on the new government nominees to the PNB Board. 3. On the resignations of PNB executives, Senior Executive Vice Pres. Valentin A. Araneta and Executive Vice Presidents Inocencio B. Deza, Jr. and Francisco S. Magsajo, Jr. have tendered their resignations to the Board through PNB President Peter B. Favila, in order not to stand in the way of whatever plans the controlling minority shareholder may have for PNB. Mr. Favila has not endorsed the resignations to the Board and the executives concerned continue to discharge their respective functions 4. We have not issued any announcements on the sale of Century Bank and the PNB International Finance Ltd., Hong Kong.