PSE Circular for Brokers No. 265-99

February 12, 1999 PSE CIRCULAR FOR BROKERS NO. 265-99 Philippine Stock Exchange, Inc . Disclosure Department Listings and Disclosure Group 4/F PSE Centre, Exchange Rd. Ortigas Commercial Complex, Pasig City Gentlemen : We write in response to the requirements of the Exchange for a corporate disclosure on how the Company intends to implement its Undertaking dated February 12, 1999 to have the Company's stockholders ratify in its regular meeting in June 1999 the 0.974225531% stock dividend needed to bring up to 6% the 5.025447769% stock dividend to stockholders of record as of December 11, 1998 (the "Record Date") which has already been approved for listing by the Exchange. LLjur The disclosure is being made in support of the application by the Company to list the 5.025447769% stock dividend equivalent to 305,808,913 Common Shares (after dropping the fractional shares equivalent to 1,087 Shares) ahead of the 0.974225531% stock dividend. The Company represents that it has sufficient surplus as well as authorized but unissued Common Shares to cover the necessary amounts and number of shares for the said stock dividend declaration. We wish to clarify that during the stockholders' meeting of the Company on June 24, 1998 the stockholders representing 2/3 of the outstanding capital stock ratified the stock dividend declaration of 6% of outstanding capital stock as of Record Date. At the time of the stockholders' meeting, the amount of 6% was equivalent to 305,810,000 Common Shares based on the 5,095,833,330 outstanding capital stock of the Company on the said date. By the Record Date, however the outstanding capital stock of the Company was already 6,084,833,330. Notwithstanding this increase in the Company's outstanding capital stock the Securities and Exchange Commission limited the stock dividend to a fixed number of 305,810,000 shares or only 5.025774469 of the Company's 6,084,833,330 outstanding capital stock as of Record Date. On advise of the Philippine Stock Exchange, in view of queries it received from certain stockholders of the Company regarding the reduced stock dividend percentage, the Company agreed and undertook to work out the declaration of the 0.977225531% stock dividend to bring up to 6% the total stock dividend to stockholders of record as of Record Date. The Company will take the following steps to assure that the above objectives are attained: 1. It shall call for a meeting of the Board of Directors (pursuant to the By-Laws provisions) to consider and vote on the proposal to declare to stockholders as of December 11, 1998 record date a stock dividend of 0.974225531% equivalent to approximately 59,280,000 shares in order to bring up to 6% the 5.025774469% stock dividend to the said stockholders as of December 11, 1998 record date. 2. After approval by the Board (and the necessary disclosures to the regulatory authorities made), the Company will include the above matter in the agenda for the regular annual stockholders' meeting in June 1999. 3. Once this has been ratified by 2/3 of the outstanding capital stock of the Company during the stockholders' meeting (and the necessary disclosures to the regulatory authorities made), the Company will notify the Commission and the Exchange of such declaration of stock dividends. 4. It will then file with the Money Market Operations Department of the Commission a request (or such other application necessary) for exemption from the registration requirements of the Revised Securities Act under the pertinent provisions of the said law: 5. Simultaneously with the filing of the request for exemption with the Commission, the Company will then apply with the Exchange for the listing of the additional shares approved for distribution as stock dividends. Thank you. Truly yours, (SGD.) YUN WOO CHOO SVP & Chief Financial Officer