PSE Circular for Brokers No. 359-99

February 26, 1999 PSE CIRCULAR FOR BROKERS NO. 359-99 PRESS STATEMENT The Bank of the Philippine Islands ended 1998 with P219 billion in total resources 7% higher than December 1997. Total deposits stood at P176 billion, 12% higher compared with P1.57 billion a year ago. Loans however, contracted by 8% to P106 billion owing to the overall business slowdown, and consequent week demand for both corporate and consumer loans. cdll Notwithstanding the loan contraction, BPI posted an annual net income P4.60 billion (unaudited), slightly better than P4.56 billion of 1997. Total income grew by 18% while operating expenses increased by 8%, well within the 1998 inflation rate. A major cost component for the year was the loss provisions of P2.0 billion that the Bank set up in line with the higher requirements of the Bangko Sentral on reserves. Total loss reserves thus stood at P4.6 billion or 4.4% of total loan portfolio. Reserve cover on non-performing loans was at 70%. The Bank's return on equity was at 17% while return on assets was at 2.2%. For 1999, BPI will support the Philippine economy toward its recovery phase by keeping its lending window open as always. The Bank will maintain its superior pricing policy for its corporate clients as well as offer the most affordable rates to its retail clients. Recently, the Bank introduced a 5 year fixed rate mortgage loan package, at 18% p.a. in addition to its 2 year fixed rate package of 17.5% and its 1 year fixed one at, 16.5%. A consumer thus has the option to choose the package that he is comfortable with. The Bank has continuously put the customer first not only in terms of its lending activities but also in terms of banking convenience. LLjur