PSE Circular for Brokers No. 2779-98

December 17, 1998 PSE CIRCULAR FOR BROKERS NO. 2779-98 December 15, 1998 Disclosure Department Listing and Disclosure Group Philippine Stock Exchange, Inc. (PSE) Philippine Stock Exchange Center Exchange Road, Ortigas Center Pasig city, Metro Manila Attention: Ms . Grace B . De Guia Assistant Manager Gentlemen/Mesdames : We respond to your fax message dated December 14, 1998 asking this office for a written clarification/confirmation of a news article captioned "Technical glitch sours Petron's fuel supply bid" published in the December 14, 1998 issue of the Business World. cdlex We hereby confirm the rejection of Petron's bid by the National Power Corporation (NPC) Bidding Committee for the power firm's January March 1999 fuel supply requirements last December 11, 1998. Despite Petron's request for suspension of the award of contract and for reconsideration of the rejection of its bid on a purely procedural and non-substantial ground that its qualification documents were in the same envelope as the bid prices, Petron has been informed that the NPC nevertheless has proceeded with awarding of the fuel supply contract(s) to some of its competitors. Petron has also been informed that it will be allowed to participate in a new bidding for certain NPC power plants where there were failed bids because only one bid was submitted. Reports also indicate that NPC is also considering the option of extending existing fuel contracts for these power plants. To replace this temporary loss of NPC volumes, Petron is looking at other markets, including the export market. It will also exert efforts to get the NPC Fuel Supply Contracts for the long term period, from April 1999 to 2000. Very truly yours, (SGD.) LIBERADOR V. VILLEGAS General Counsel