Philippine Long Distance Telephone Company

March 24, 1998 PSE CIRCULAR FOR BROKERS NO. 451-98 SUBJECT : Philippine Long Distance Telephone Company Philippine Long Distance Telephone Company ("TEL") confirmed to the Exchange, in a letter dated March 18, 1998, its claim for tax refund with the BIR. TEL in said letter explained that: "The BIR under date of December 13, 1995 rendered a ruling exempting from income tax, and consequently withholding tax, the separation pay of employees of a company whose services shall be terminated under the Company's Redundancy Program. At the end of 1995, about 980 employees of TEL were separated from service under the said program. TEL erroneously deducted from the separation pay of said employees withholding taxes in the total amount of P23,706,908.20 and remitted the same to the BIR on January 25, 1996. On November 20, 1997, TEL filed a claim for tax credit or refund with the BIR for the said erroneously collected taxes. To avoid prescription of the claim for tax refund TEL filed a petition for tax refund or credit with the Court of Tax Appeals on January 6, 1998." The said confirmation was done in view of the article appearing in the March 13, 1998 issue of the Business World. For your information. (SGD.) MA. ISABEL T. GARCIA Head, Listing and Disclosures Group