PSE Circular for Brokers No. 1613-99

July 5, 1999 PSE CIRCULAR FOR BROKERS NO. 1613-99 July 2, 1999 PRESS RELEASE PDCP BOARD APPROVES CAPITAL INCREASE PDCP Development Bank (PDCP Bank) announced today that its Board of Directors has approved Management's proposal for a capital increase aimed at expanding the bank's balance sheet and reinforcing its foothold in retail banking. The plan includes an increase in capital by Pesos 2.5 billion; new product launches such as Savings Supreme and Privilege Check; and, the enhancement of its technology-driven products and services such as Cashnet, and the Pre-paid Cellphone PINS thru PDCP's ATM network. The management plan has the full support of its major shareholders, particularly Metro Pacific Corporation, which owns 33% of the Bank's common shares and 49% of its preferred shares. The plan will be presented for approval at the annual general meeting of shareholders scheduled tentatively for late September and subject to approval by the Bangko Sentral ng Pilipinas and other regulatory bodies. As of December 1998, PDCP Bank ranked fourth among the 116 thrift banks and second among the development banks in the country in terms of total assets. It has a total of 60 branches of which 37 are in Luzon, 11 in the Visayas, and 12 in Mindanao. Of the branches in Luzon, 24 are in Metro Manila. Meanwhile, the Bank reported a loss of Pesos 143.6 million for the three months ended March 1999, compared with Pesos 30.3 million in earnings for the same period in 1998, as interest earnings dropped year-on-year by 34 per cent to Pesos 343 million. This resulted from a 24-per cent decline in total loans to Pesos 6.8 billion during the period on account of stricter lending policies, and a significant drop in average lending rates. On the other hand, deposits grew by 14 per cent to Pesos 9.4 billion due to increased confidence among depositors, a more aggressive marketing effort, and the introduction of new products and services. This improved the bank's liquidity ratio (liquid assets to deposit liabilities) to 24 per cent as of end-March 1999 from 17.9 per cent as of end December 1998. Operating expenses declined by 10 per cent as the bank initiated cost cutting measures during the period, which included a 20 per cent cut in manpower, the consolidation of branches, and a re-organization that resulted in the integration of service areas in the bank. PDCP Bank's CEO Vicente C. Tinsay III said: "The support from our major shareholders by way of fresh capital will allow us to intensify our efforts toward achieving our goals for new deposit products and selective entry into the consumer loan markets." For further information, please contact: Vicente C. Tinsay Chief Executive Officer PDCP Development Bank Tel. No.: 814-0418 Michael P. Goco President PDCP Development Bank Tel. No.: 841-0631 Corazon P. Guidote Group Vice President Corporate Communication & Investor Rels. Metro Pacific Corporation Tel. No.: 811-0367