PSE Circular for Brokers No. 184-99

February 1, 1999 PSE CIRCULAR FOR BROKERS NO. 184-99 PLDT signs $46M loan deal with KfW PLDT reported today that it has signed five new loan agreements worth US$46.3 million with the financing institution Kreditanstalt fur Wiederaufbau (KfW) of Germany, January 21. KfW's loan commitments to PLDT have exceeded the US$1 billion mark, making PLDT KfW's largest telecommunications client in the world. PLDT said proceeds of these loans will be used to finance the supplies and related services provided by Siemens AG for the establishment of a new local exchange in Makati, expansion of nine digital exchanges which will replace existing analog exchanges and establishment of a new engineering records management system. One of the loans is a US$25 million credit facility which will finance capital goods and related services of German exporters or their affiliates. The agreement was signed in Frankfurt, Germany by PLDT president Manuel V. Pangilinan and KfW's Hans Reich and Heinrich Heims. In a related development, the Export-Import Bank of Japan (JEXIM) recently granted PLDT a US$28.8 million loan to support its network expansion. Of the total, US$17.3 million will be provided by JEXIM while the remaining portion of US$11.5 million will be co-financed by the Sakura Bank. Proceeds of these loans will be used to finance the cost of Japanese goods and services to be provided for PLDT's advanced X-7 program and five telephone exchange projects under phase II of its Zero Backlog program. This is the sixth loan extended by JEXIM to PLDT since 1994. It has already extended a total of US$190 million for five export credits to finance the purchase of switching devices, telecommunications cables and other equipment and services from Japan. These loans, which made an appropriate use of funds from the fiscal investment and loan program, have contributed to the development of the country's telecommunications industry.