Mr. Zoilo M. Cortes

November 4, 2003 SEC OPINION NO. 58-03 Mr. Zoilo M. Cortes Corporate Secretary Visayan Electric Co.,Inc. P.O. Box 134 Cebu City, Philippines Dear Mr. Cortes : This refers to your letter dated 21 October 2003 seeking confirmation on the exemption of Visayan Electric Co., Inc., being a public utility with an electric franchise and under the direct supervision of the Energy Regulatory Commission, from the reportorial requirements provided by the Securities Regulation Code. The corporation made reference to Item 3, SEC Memorandum Circular No. 11, Series of 2003, to justify exemption from reportorial requirements, to wit: The business operations of corporations which are grantees of secondary licenses or franchises of other government agencies such as but not limited to banking and quasi-banking institutions, building and loan associations, trust companies and other financial intermediaries, insurance companies, public utilities, educational institutions, and other corporations governed by special laws, shall not be under the direct supervision of this Commission, but under the direct supervision of the concerned government agency granting such secondary license or franchise. The extent of the Commission's supervisory powers over such corporations shall be limited to those mentioned in item No. 2 hereof. All complaints regarding their operations shall be directed to their primary regulator. cTCADI Based on the above-said provision, the Commission's supervisory powers over the covered corporations shall be limited to those mentioned in item 2 of the Circular, specifically on the following matters: a. submission of financial statements; b. submission of General Information Sheets (GIS); c. compliance with provisions in their by-laws on: i. number of directors ii. qualifications, compensation of directors iii. holding of meetings, etc. d. declaration of dividends; e. inspection of books; and, f. other provisions of the Code requiring submission of documents to effect compliance. From all the foregoing, it is therefore very clear that Visayan Electric Co., Inc. is not exempted from filing the necessary reports required under the Corporation Code. cEHSTC Please be guided accordingly. Very truly yours, (SGD.) VERNETTE UMALI-PACO General Counsel