PSE Circular for Brokers No. 2080-99

August 20, 1999 PSE CIRCULAR FOR BROKERS NO. 2080-99 August 19, 1999 Philippine Stock Exchange 4th Floor, PSE Centre Exchange Road, Ortigas Center Pasig City Attention: Ms . Grace B . de Guia Assistant Manager, Disclosure Department Gentlemen : We refer to your letter requesting for a clarification on the news article entitled "2 firms blamed for gas lacked permits" which came out in the 18 August 1999 issue of the Philippine Daily Inquirer. 1. First Philippine Industrial Corporation (FPIC) is a subsidiary of First Philippine Holdings Corporation. While FPIC is the owner of the pipeline that was punctured, it had absolutely nothing to do with the excavation activities which resulted in the unfortunate accident. As such, there was no obligation on its part to secure the permit adverted to in the news report. cdta It bears mentioning that FPIC has been operating the pipeline for over thirty years, during which time no significant untoward incident has occurred. The key factor has been the due diligence observed by FPIC in closely coordinating with entities undertaking works in the vicinity of the pipeline. For instance, during the construction of the Skyway at the South Expressway, FPIC, together with the contractor, took all the necessary precautions with respect to areas where the pipeline lies underneath. For that matter, there was always at least one FPIC representative present, particularly at the start of any excavation. 2. In the case of the Muntinlupa fire, the excavation was done without the presence of any FPIC representative. The gas leak from the aforesaid pipeline occurred during a drilling for soil testing operations by Geotechnics Philippines, Inc. Based on declarations made by Maynilad Water Services, Inc., and investigations conducted by FPIC, Geotechnics appears to have been engaged by DCCD Engineering Corporation which was in turn contracted by Montgomery Watson New Zealand Ltd. and Safege Consulting Engineers. These two latter entities are independent contractors and consultants of Maynilad Water Services, Inc. 3. FPIC had no relationship, contractual or otherwise, with the abovementioned entities and, therefore, had no hand in the drilling operation that triggered the gas leak. 4. In the light of the above stated circumstances, there is absolutely no ground to hold FPIC liable for the fire, or the consequences thereof, either criminally or civilly. No such cases have been filed to date. In any event, FPIC has been fully cooperating with the Muntinlupa City Government in formulating plans of action to prevent a similar occurrence. We trust that the foregoing clarifies the matter. If you have any further queries or need further clarification, please communicate with the undersigned. Thank you. Very truly yours, (SGD.) ERNESTO B. RUFINO, JR. Vice President, Treasurer & Chief Finance Officer