PSE Circular for Brokers No. 2540-98

November 5, 1998 PSE CIRCULAR FOR BROKERS NO. 2540-98 November 5, 1998 Philippine Stock Exchange PSE Centre, Exchange Road Ortigas Center, Pasig, Metro Manila Attention: Ms . Grace B . de Guia Supervisor, Disclosure Department Ms . Arlene S . Edades Analyst, Disclosure Department Gentlemen : This is in reply to your fax message received by the undersigned on Nov. 4, 1998 relative to the news article which appeared in the Nov. 3, 1998 issue of the Journal reporting, among others, that Air Philippines International Corporation ("APIC") is "pressing the government for authority to expand its international operations". In this connection, please be informed that it has always been part of the strategic business plan of Air Philippines Corporation (Airphil") to fly international. This is in consonance with the mandate under its franchise, Republic Act 8339, to establish, operate and maintain air transport services, both domestic and international. Thus, as part of its expansion plans, it had already filed the appropriate application to enable it to pursue international flights. This was even before, and therefore independent of, the Philippine Air Lines crisis. With the recent problems besetting PAL's international flights, Airphil (as with the other domestic airline companies) had laid preparations to be able to fill the gap and is understandably pursuing its regional/international plans with more vigor. Thus, Airphil will seek the opportunity to present to government and the riding public its ability and competence to service the void resulting from the current problems besetting the Philippine Flag carrier. Cdphil The news article therefore reflects the aspiration of Airphil to comply with its mandate to satisfy the air transportation service needs of the riding public, both domestic and international. We hope that the foregoing satisfies your requirements. Thank you. Yours very truly, AIR PHILIPPINES INTERNATIONAL CORPORATION By: (SGD.) ARTHUR R. PONSARAN Corporate Secretary