Mr. Jose S. Estevez

March 24, 1997 Mr. Jose S. Estevez Mayon Telephone Corporation J.P. Bldg., A. Mabini St. Legaspi City S i r : This refers to your letter dated February 26, 1997 inquiring whether the issuance of shares of the capital stock of Mayon Telephone Corporation, as a "public utility" is considered exempt from the registration requirements of the Revised Securities Act. llcd Quoted hereunder is the pertinent provision of the Revised Securities Act: "SECTION 6. Exempt transaction . (a) The requirement of registration under subsection (a) of Section four of this Act shall not apply to the sale of any security in any of the following transactions. xxx xxx xxx (11) Any issuance of any security by a public utility or service corporation which, in compliance with or pursuant to law, regulation or decree , is intended to broaden its equity base as well as to finance a part of the capital investment thereof through the issuance and sale of stock. . . ." (Emphasis supplied) Thus, the issuance of shares of stock by a "public utility" corporation is not an exempt transaction per se . The issuance would constitute an exempt transaction within the context of the above provision only if it is made in compliance with or pursuant to law, regulation or decree ( Ltr. opinion addressed to Capitol Wireless, Inc. dtd. 10-18-91 ) However, prior exemption from the registration requirements may be secured pursuant to Sec 6(b) of the Revised Securities Act if the registration thereof is not necessary in the public interest and for the protection of the investors by reason of the small amount involved or the limited character of the public offering. Very truly yours, (SGD.) SONIA M. BALLO Director Corporate and Legal Department