PSE Circular for Brokers No. 1760-99

July 16, 1999 PSE CIRCULAR FOR BROKERS NO. 1760-99 PRESS STATEMENT RE : Newspaper Articles Citing Senator Juan Ponce Enrile's Allegation that Petron, Along With Shell and Caltex, are Involved in a Tax Credit Scam Petron would like to stress that it is not and has never been involved in any scam. The use by Petron of tax credit certificates, duly issued to BOI-registered export producers under the Omnibus Investments Code, started way back in 1993 notably even when Petron was still a government-owned and controlled corporation. This particular use of tax credit certificates (TCCs) issued to certain export producers is being legally contested because of interpretations of certain rules. Petron however, received these tax credit certificates as payment made by these export producers for the full value for petroleum products supplied. Petron did not accept the TCCs at a discount; it delivered the exact volume of petroleum products as paid for. Petron as a qualified transferee of the TCCs in turn used the same to pay excise taxes on petroleum products it manufactured or imported. Such payments by Petron through TCCs were approved by the government agencies concerned everytime a payment is made. prcd Petron has not been involved in the processing or issuance of the TCCs. It is not aware of any illegality or impropriety in the issuance of the said tax credit certificates. The issuance of the TCCs to the exporting entities is intended to assist them in competing internationally. Such tax incentives in favor of international or ocean-going vessels greatly contribute to the promotion of the Philippines as a bunkering port.