Philippine Stock Exchange

March 2, 1998 PSE CIRCULAR FOR BROKERS NO. 253-98 February 27, 1998 Philippine Stock Exchange Ms. Maria Isabel T. Garcia Head, Listing Department 4/F PSE Center, Exchange Road Ortigas Center, Pasig City Gentlemen : We are pleased to report that Ayala Corporation generated a consolidated net income of P6.39 Billion for 1997 for a growth of 3% over the previous year's level of P6.23 Billion. The conglomerate's diversified lines of business continued to provide stability in earnings amid uncertainties which affected many sectors of the industry. pred Ayala's real estate subsidiary, Ayala Land, Inc., posted a consolidated net income of P4.21 Billion for a 5% growth over 1996. The main contributors to revenues were land sales, sale of office and residential condominium projects, and rental operations. As the company positions for the upturn, ALI continues to focus on maintaining a healthy financial structure, strengthening its rental portfolio, and continued project development groundwork across diverse product lines. The Bank of the Philippine Islands registered a consolidated net income of P4.56 Billion for an increase of 14% from last year's P4.0 Billion. Total assets grew by 16% to P202.7 Billion. The extensive network of 420 branches nationwide continued to provide a stable source of funding for its loan portfolio which grew by 9.5% to P115 Billion. Ayala Insurance Holdings Corporation posted a net income of P406.3 Million. Premium generation grew by at least 20%, health care policies increased by 36% and pre-need plans nearly doubled in gross profit. The sluggish performance of the capital market, however, reduced the company's gain from investment operations. Integrated Micro-Electronics, Inc. recorded a net income of P450.2 Million, surpassing its 1996 income by a hefty 57%. The company's aggressive expansion of its customer base largely accounts for its noteworthy performance. While Yamaha and Toshiba continued to be IMI's two largest customers, four new contracts with US and Japanese companies were also signed in 1997. Globe Telecom recorded a less of P870.2 Million or 16% higher than the 1996 level. The increase in net loss is due to higher operating, depreciation and interest expenses incurred in relation to the company's expansion programs. Nonetheless, the company registered a positive EBITDA (Earnings before interest, taxes, depreciation, and amortization) on the back of a growing subscriber base. Pure Foods net income amounted to P157.1 Million, a sharp rise from the 1996 level of P20.6 Million. Its meat division strengthened its leadership position even under strong competitive pressure from low-priced regional brands and imported products. Its flour division likewise retained its market dominance as a result of operational efficiencies and balanced sales mix. The Ayala Group sees 1998 as a year of challenge. The Group will remain focused on preserving flexibility to adapt to a changing environment and to be in a position of strength to quickly respond to opportunities. Conservatism in financial management remains an overarching principle so that growth is based not on short term results but on the long term financial strength of the Group. LLjur The above information is being made in compliance with the disclosure requirements of the Philippine Stock Exchange. Thank you. Very truly yours, (SGD.) RENATO O. MARZAN Managing Director