PSE Circular for Brokers No. 1586-98

July 10, 1998 PSE CIRCULAR FOR BROKERS NO. 1586-98 July 9, 1998 Disclosure Department Listing and Disclosure Group Philippine Stock Exchange, Inc. (PSE) Philippine Stock Exchange Center Exchange Road, Ortigas Center Pasig, Metro Manila Gentlemen/Mesdames : In compliance with disclosure requirements, please be informed that Petron has filed a Petition for Review with the Court of Tax Appeals (CTA Case No. 5657), questioning the position taken by the BIR Regional Director of Revenue Region No. 8, Makati City regarding the validity of the transfers of tax credit certificates (TCCs). BOI-registered firms which are customers of Petron pay their fuel requirements in TCCs assigning the same to Petron. As a qualified transferee, Petron in turn uses the TCCs to party pay its excise tax liabilities to the BIR. The BIR Regional Director maintains that the transfer of TCCs worth P658,971,982.97 is invalid and consequently requires that the said amount plus interest and penalties, be paid. However, the assignment of TCCs and the application to excise tax payment, including the cancellation of the TCCs after the same have been applied in payment, were all approved by the DOF One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (DOF Center) and by the BIR. Very truly yours, (SGD.) LIBERADOR V. VILLEGAS Corporate Secretary