PSE Circular for Brokers No. 962-99

May 3, 1999 PSE CIRCULAR FOR BROKERS NO. 962-99 May 3, 1999 Securities & Exchange Commission Director Linda A. Daoang Money Market Department S.E.C. Building, EDSA Mandaluyong City Philippine Stock Exchange Disclosure Department Listing and Disclosure Group 4/F PSE Center, Exchange Road Ortigas Center, Pasig City Gentlemen : Please be informed that Ayala Corporation has agreed over the weekend to explore a potential combination of its local telecommunications Company, Globe Telecom, Inc. ("Globe") with Isla Communications Co., Inc. ("Islacom") an affiliate of Deutsche Telekom AG, towards; establishing a leading provider of mobile and fixed line telecommunications services in the Philippines. The exploratory discussions will be in two phases, with the first step involving an Ayala Corporation subsidiary to be the local partner of Deutsche Telekom AG in Islacom, Filnet Holdings. Inc., a 100%-owned subsidiary of Ayala has purchased a 75% ownership in Visay-Ted, Inc. from Citadel Holdings, Inc. for $14 Million Visay-Tech, in turn, has controlling interest in Islacom through its holdings in AsiaCom, Philippines, Inc. In the second phase of the process, the parties agreed that a full due diligence and valuation exercise would be undertaken of both companies prior to the potential merger or combination. before finalizing the ultimate ownership structure of the combined operations. llcd A potential Globe-Islacom combination would result in an even stronger and dominant digital wireless service provider using the GSM technology. The opportunity for the Globe-Islacom combination is supported by Singapore Telecom International, a major shareholder of globe. With the combined strengths of the major shareholders, the combination would be well positioned to pursue aggressive expansion plans in strengthening its cellular and fixed line networks. With Globe's 500,000 customers, the combined subscribers would surpass 750,000, consisting of 450,000 cellular subscribers and more than 300,000 fixed line customers. The new combination would also have more than 600 GSM cell sites nationwide Ayala and the other major shareholders believe that stronger players in the telecommunications industry are necessary to foster effective competition and improve the quality of services to all customers at affordable costs. The information is being submitted in compliance with the disclosure rules of the SEC and the PSE. Very truly yours, (SGD.) RENATO O. MARZAN Managing Director