Mr. Lope A. Derro

July 3, 1998 Mr. Lope A. Derro Bahbah, Prosperadad Agusan del Sur S i r : This refers to your letter dated June 16, 1998 inquiring whether or not the management of Cruz Telephone Company, Incorporated, can bill its Statement of Account to its telephone subscribers-customers even if the billing period is no longer covered by a contract of telephone service. Please be advised that the jurisdiction of the Securities and Exchange Commission (SEC) over corporations emanates from its authority to enforce the Corporation Code. In cases where a government agency regulates the business operation of a certain type of corporation by virtue of a special law, that agency has the primary jurisdiction to regulate the same with the SEC exercising jurisdiction only on intra-corporate relationship matters. Under Republic Act No. 7925, the National Telecommunications Commission (NTC) is vested with the power to regulate and supervise entities engaged in the business of telecommunication services so as to protect the interest of the consumers and to see to it that violations of the provisions of the Act are properly dealt with or punished. Thus, inasmuch as the subject matter treated in your letter pertains to business operation of a telecommunication company, the same should be addressed to that Office. Very truly yours, (SGD.) PERFECTO R. YASAY, JR. Chairman