Philippine Telegraph & Telephone Corporation

February 15, 1999 PSE CIRCULAR FOR BROKERS NO. 277-99 SUBJECT : Philippine Telegraph & Telephone Corporation Philippine Telegraph, & Telephone Corporation ("PTT") clarified to the Exchange a news article published in the February 11, 1999 issue of the Philippine Star, which reported that Pocketbell, PTT's 20% owned affiliate, has suspended payments on its P2 billion loan after its debt restructuring program, and that despite the temporary debt moratorium Asian Bank still decided to sue the company for default of payment. In its letter, PTT advised that: ". . . 1. On July 31, 1998, Pocketbell wrote its creditors requesting for a debt standstill until such time that the company would be able to provide an acceptable workout plan With the creditors. The reasons cited for the request was force majeure caused by the non-entry of new capital on account of an intra-stockholder dispute among the stockholders of its parent company, Republic Telecommunications Holdings, Inc. 2. On September 30, 1998, a Memorandum of Agreement was signed between Pocketbell and a majority of its creditors. 3. Pocketbell has retained the services of Bear, Steams Ltd. and Buenaventura Filamor Echauz (BFE) as its Financial Advisors in developing the workout plan for presentation and approval by the creditors. 4. Pocketbell and its creditors have and continued to be in contact with its creditors. 5. On January 11, 1999, BFE presented a Debt Restructuring Plan for discussion and approval by the creditors. 6. At the present time, Pocketbell, the advisors and the creditors are jointly reviewing and discussing the above plan. 7. It would be inappropriate for us to comment on the Asian Bank case as it is presently sub-judice. LLpr 8. Pocketbell has not filed for debt suspension/relief with the Securities and Exchange Commission. . . ." For your information. (SGD.) JOSE LUIS U. YULO, JR. President and CEO