Mr. Noe S. Andaya

April 23, 1987 Mr. Noe S. Andaya AFP Savings and Loan Association, Inc. Col. Bonny S. Serrano Rd. cor. E. de los Santos Ave. Quezon City Sir : This refers to your letter dated April 3, 1987 requesting confirmation that the amendments to the by-laws of the AFP Savings and Loan Association, Inc. have been approved by the Commission contrary to the allegations of Mr. Luis P. Enriquez as manifested in his letter dated March 25, 1987. It appears that Mr. Luis P. Enriquez made the following allegations summarized hereunder: 1. That the amendments to the by-laws of the AFP Savings and Loan Association, Inc. since 1976 were never approved by the Securities and Exchange Commission; 2. That the amendment in Section 5 of the Amended By-Laws of the AFP Savings and Loan Association, Inc. quoted here under, which in effect authorizes the Chief of Staff, AFP to "cast the total number of votes remaining after deducting the total votes of the members and the proxies present from the registered number of votes of qualified members" is unconstitutional, unwarranted and immoral. "SECTION 5. Voting. At all meetings, a member shall be entitled to one (1) vote for every P100.00 capital contribution or a maximum of one thousand (1,000) votes irrespective of the amount of his capital contribution as of December 1st immediately preceding the annual meeting which shall be the basis for computing the number of votes each member shall be entitled to: Provided, further, that during the period from December 1st to the date of the annual meeting, said contribution shall not be reduced below the amount of contribution as of December 1st: Otherwise, he shall be entitled only to the number of votes corresponding to the remaining balance as of February 1st: Provided, finally that the Chief of Staff, AFP shall be entitled to cast the total number of votes remaining after deducting the total votes of the members and the proxies present from the total registered number of votes of qualified members .(As amended on July 12, 1986) A verification of the corporate records of the AFP Savings and Loan Association, Inc. on file with this office disclosed that the Commission approved the following amendments to the by-laws of the corporation: 1. Amended by-laws filed on November 10, 1972 (approved by the Commission on November 10, 1972) 2. Amended by-laws filed on August 26, 1977 (approved by the Commission on November 8, 1977) 3. Amended by-laws filed on February 27, 1987 (approved by the Commission on February 27, 1987) A copy of the latest approved amended by-laws is attached here with for your information and guidance. As to the second allegation, the Corporation Code provides, thus: "SECTION 89. Right to Vote . The right of the members of any class or classes to vote may be limited , broadened or denied to the extent specified in the articles of incorporation or the by-laws .Unless so limited, broadened or denied, each member, regardless of class, shall be entitled to one vote." (emphasis supplied) xxx xxx xxx From the above-quoted provision, it is clear that the articles of incorporation or by-laws of a non-stock corporation may limit , broaden or even deny a member's right to vote. In your case, the right to vote of each member was limited to a maximum of one thousand (1,000) votes irrespective of the amount of his capital contribution. It likewise broadened the right to vote of the Chief of Staff of the AFP by allowing him to vote the remaining balance after deducting the total votes of the members/proxies. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman