PSE Circular for Brokers No. 164-00

January 26, 2000 PSE CIRCULAR FOR BROKERS NO. 164-00 PETRON'S BOARD APPROVES LOWEST CAPEX BUDGET IN FIVE YEARS Petron Corporation has set aside P854 million for its capital expenditures program for the year 2000. cdll Historical data would show that this is the lowest amount of capex to be spent by the oil firm in the last five years. In its regular quarterly meeting today, the Petron Board of Directors has approved the P854 capex budget, originally allotted at P2.3 billion, primarily for the improvement of refinery facilities in order to comply with the Clean Air Act and the upgrade of other bulk plant facilities. In approving this year's capex, Petron has decided to put on hold its expansion program to put up additional service stations amounting to P1.5 billion. The downsizing of the company's capex program comes in view of its financial difficulties being unable to increase its petroleum product prices despite rising crude costs. Since last year, Petron has not been able to recover the additional production costs it has incurred from increased world crude prices. At this time, the company has estimated under recoveries of P1.40 per liter. In the same Board meeting, Ms. Wilma G. Rodriguez and Mr. Mario S. Lucas were elected as Treasurer and Controller, respectively. Both positions were previously occupied by Mr. Fredesuendo G. Ong, presently the incumbent Vice President for Marketing.