PSE Circular for Brokers No. 2637-99

October 15, 1999 PSE CIRCULAR FOR BROKERS NO. 2637-99 Press Release METRO PACIFIC CONFIRMS CREDIT RATINGS Metro Pacific Corporation (MPC) announced today that Phil. Ratings Services Corporation (formerly CIBI Ratings, Inc.) has maintained the credit rating for its commercial papers as PRS-A rating on outstanding long-term commercial paper (LTCP) and PRS 2 on short term commercial papers (STCP). The ratings were sought in relation to a proposed license to issue Pesos 2 billion in short-term commercial papers for working capital, the development of Pacific Plaza, and to re-finance other more expensive lines. The STCP issue, which is being arranged by All Asia Capital and Trust Corporation, is awaiting approval by the Securities and Exchange Commission. BASIS FOR CREDIT RATING According to Philratings, both the short and long-term credit ratings consider MPC's more than adequate alternative funding sources, notably its ability to raise funds through the sale of, or borrow against, its eventual 8 per cent holding in Philippine Long Distance Telephone Corporation. The latter is an offshoot of the ongoing merger proceedings between MPC's cellular telephone subsidiary Smart Communications, Inc. with the giant fixed-lined telephone operator, a strategic action taken by the MPC in its efforts to focus on property development. prcd CAPITAL STRUCTURE MPC has successfully issued approximately Pesos 4.2 billion of new equity in the first seven months of 1999, which was used primarily to reduce debt. In addition, over Pesos 2 billion of funds were generated from the disposal of two companies in the consumer products division during the year. With the proposed license to sell up to Pesos 2 billion of STCP's and other credit lines presently available to MPC, there are no plans to issue additional common shares within 1999 or the first half of next year. In particular, MPC's consolidated total debt-to-equity ratio has been reduced to just 0.57 as of end June 1999, a level considered by management to be very conservative in the light of the present Group structure. FINANCIAL POSITION Metro Pacific has focused this year on further strengthening its balance sheet and has reduced its consolidated debts by 21 per cent to Pesos 17.3 billion as of end June this year from yearend 1998 levels. Net interest-bearing debts at the head office also dropped 34 per cent to Pesos 8.5 billion during the same period. As a result, the debt-reduction program improved MPC's consolidated debt-to-equity ratio of just 0.57 as of end June 1999 from 0.71 as of end December 1998.