-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
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<SEC-DOCUMENT>0000078150-04-000034.txt : 20040624
<SEC-HEADER>0000078150-04-000034.hdr.sgml : 20040624
<ACCEPTANCE-DATETIME>20040624100802
ACCESSION NUMBER:		0000078150-04-000034
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20031231
FILED AS OF DATE:		20040624

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PHILIPPINE LONG DISTANCE TELEPHONE CO
		CENTRAL INDEX KEY:			0000078150
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		20-F
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-03006
		FILM NUMBER:		04878493

	BUSINESS ADDRESS:	
		STREET 1:		RAMON CONJUANGCO BLDG
		STREET 2:		MAKATI AVE
		CITY:			MAKATI METRO MANILA
		STATE:			R6
		ZIP:			0721
		BUSINESS PHONE:		0116328143552

	MAIL ADDRESS:	
		STREET 1:		RAMON CONJUANGCO BLDG
		STREET 2:		MAKATI AVE
		CITY:			MAKATI METRO MANILA
		STATE:			R6
		ZIP:			0721
</SEC-HEADER>
<DOCUMENT>
<TYPE>20-F
<SEQUENCE>1
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<DESCRIPTION>2003 PLDT FORM 20F
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	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";
	font-style:italic;}
p.MsoBodyTextIndent2, li.MsoBodyTextIndent2, div.MsoBodyTextIndent2
	{margin:0in;
	margin-bottom:.0001pt;
	text-indent:.6in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.MsoBodyTextIndent3, li.MsoBodyTextIndent3, div.MsoBodyTextIndent3
	{margin:0in;
	margin-bottom:.0001pt;
	text-indent:.3in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.MsoBlockText, li.MsoBlockText, div.MsoBlockText
	{margin-top:0in;
	margin-right:6.5pt;
	margin-bottom:0in;
	margin-left:22.5pt;
	margin-bottom:.0001pt;
	text-indent:-22.5pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:9.0pt;
	font-family:"Times New Roman";
	font-style:italic;}
a:link, span.MsoHyperlink
	{color:blue;
	text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
	{color:purple;
	text-decoration:underline;}
p.MsoDocumentMap, li.MsoDocumentMap, div.MsoDocumentMap
	{margin:0in;
	margin-bottom:.0001pt;
	background:navy;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:Tahoma;}
p.MsoAutoSig, li.MsoAutoSig, div.MsoAutoSig
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:12.0pt;
	font-family:"Times New Roman";}
p
	{margin-top:5.0pt;
	margin-right:0in;
	margin-bottom:5.0pt;
	margin-left:0in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:12.0pt;
	font-family:"Arial Unicode MS";}
span.DeltaViewChangeNumber
	{color:black;
	letter-spacing:0pt;
	vertical-align:super;}
span.DeltaViewDelimiter
	{letter-spacing:0pt;}
p.alpha2, li.alpha2, div.alpha2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:62.35pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Body, li.Body, div.Body
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:21.25pt;
	text-align:justify;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Bullet1, li.Bullet1, div.Bullet1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:0in;
	text-align:justify;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Head, li.Head, div.Head
	{margin-top:14.75pt;
	margin-right:0in;
	margin-bottom:8.75pt;
	margin-left:21.25pt;
	text-align:justify;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.TableText, li.TableText, div.TableText
	{margin-top:1.0pt;
	margin-right:0in;
	margin-bottom:1.0pt;
	margin-left:0in;
	text-align:justify;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Alpha3-a, li.Alpha3-a, div.Alpha3-a
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:92.15pt;
	text-align:justify;
	text-indent:-42.55pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Alpha4-a, li.Alpha4-a, div.Alpha4-a
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:113.4pt;
	text-align:justify;
	text-indent:-21.25pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Level4, li.Level4, div.Level4
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:3.0pt;
	margin-left:113.4pt;
	text-align:justify;
	text-indent:-21.25pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Level5, li.Level5, div.Level5
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:134.65pt;
	text-align:justify;
	text-indent:-21.25pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Head1, li.Head1, div.Head1
	{margin:0in;
	margin-bottom:.0001pt;
	text-align:center;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.Body1, li.Body1, div.Body1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:21.25pt;
	text-align:justify;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Body2, li.Body2, div.Body2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Head3, li.Head3, div.Head3
	{margin:0in;
	margin-bottom:.0001pt;
	text-align:justify;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman Bold";
	font-weight:bold;}
p.Body3, li.Body3, div.Body3
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:92.15pt;
	text-align:justify;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Level1, li.Level1, div.Level1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:21.25pt;
	text-align:justify;
	text-indent:-21.25pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Level2, li.Level2, div.Level2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Level3, li.Level3, div.Level3
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:92.15pt;
	text-align:justify;
	text-indent:-42.55pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Level6, li.Level6, div.Level6
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:4.0pt;
	margin-left:155.95pt;
	text-align:justify;
	text-indent:-21.3pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Roman2-i, li.Roman2-i, div.Roman2-i
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Roman3-i, li.Roman3-i, div.Roman3-i
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:92.15pt;
	text-align:justify;
	text-indent:-42.55pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Roman4-i, li.Roman4-i, div.Roman4-i
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:113.4pt;
	text-align:justify;
	text-indent:-21.25pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Alpha3-A0, li.Alpha3-A0, div.Alpha3-A0
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:92.15pt;
	text-align:justify;
	text-indent:-42.55pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Alpha5-a, li.Alpha5-a, div.Alpha5-a
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:134.65pt;
	text-align:justify;
	text-indent:-21.25pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Alpha2-a, li.Alpha2-a, div.Alpha2-a
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Alpha2-A0, li.Alpha2-A0, div.Alpha2-A0
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Alpha2-abolditalic, li.Alpha2-abolditalic, div.Alpha2-abolditalic
	{margin-top:6.0pt;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-indent:-28.35pt;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.5pt;
	font-family:"Times New Roman";
	font-weight:bold;
	font-style:italic;}
p.Alpha2-aitalic, li.Alpha2-aitalic, div.Alpha2-aitalic
	{margin-top:6.0pt;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";
	font-style:italic;}
p.Alpha2-Abolditalic0, li.Alpha2-Abolditalic0, div.Alpha2-Abolditalic0
	{margin-top:6.0pt;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-indent:-28.35pt;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.5pt;
	font-family:"Times New Roman";
	font-weight:bold;
	font-style:italic;}
p.Alpha2-Abold, li.Alpha2-Abold, div.Alpha2-Abold
	{margin-top:6.0pt;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-indent:-28.35pt;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.5pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.Alpha2-Aitalic0, li.Alpha2-Aitalic0, div.Alpha2-Aitalic0
	{margin-top:6.0pt;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";
	font-style:italic;}
p.Arabic2-1, li.Arabic2-1, div.Arabic2-1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Arabic3-1, li.Arabic3-1, div.Arabic3-1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:92.15pt;
	text-align:justify;
	text-indent:-42.55pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Arabic2-10, li.Arabic2-10, div.Arabic2-10
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Arabic3-10, li.Arabic3-10, div.Arabic3-10
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:92.15pt;
	text-align:justify;
	text-indent:-42.55pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Roman2-I0, li.Roman2-I0, div.Roman2-I0
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Roman2-I1, li.Roman2-I1, div.Roman2-I1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Alpha2-abold0, li.Alpha2-abold0, div.Alpha2-abold0
	{margin-top:6.0pt;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:49.6pt;
	text-indent:-28.35pt;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.5pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.Alpha1G-Aitalic, li.Alpha1G-Aitalic, div.Alpha1G-Aitalic
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:42.55pt;
	text-align:justify;
	text-indent:-42.55pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";
	font-style:italic;}
p.Head2, li.Head2, div.Head2
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman Bold";
	font-weight:bold;}
p.Arabic4-1, li.Arabic4-1, div.Arabic4-1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:113.4pt;
	text-align:justify;
	text-indent:-21.25pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Arabic4-10, li.Arabic4-10, div.Arabic4-10
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:113.4pt;
	text-align:justify;
	text-indent:-21.25pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.alpha3, li.alpha3, div.alpha3
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:96.4pt;
	text-align:justify;
	text-indent:-34.05pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Bullet2, li.Bullet2, div.Bullet2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:62.35pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Bullet3, li.Bullet3, div.Bullet3
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:102.05pt;
	text-align:justify;
	text-indent:-39.7pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.CellBody, li.CellBody, div.CellBody
	{margin-top:2.0pt;
	margin-right:0in;
	margin-bottom:2.0pt;
	margin-left:0in;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.Title10C, li.Title10C, div.Title10C
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:0in;
	text-align:center;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.CellHead, li.CellHead, div.CellHead
	{margin-top:2.0pt;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:0in;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";
	font-weight:bold;}
span.DeltaViewInsertion
	{font-weight:bold;
	text-decoration:underline;}
p.DoubleSpace, li.DoubleSpace, div.DoubleSpace
	{margin:0in;
	margin-bottom:.0001pt;
	line-height:200%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:12.0pt;
	font-family:"Times New Roman";}
span.DeltaViewDeletion
	{color:red;
	text-decoration:line-through;}
p.WGLAddressHeading, li.WGLAddressHeading, div.WGLAddressHeading
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.ListBullet2, li.ListBullet2, div.ListBullet2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:.25in;
	text-align:justify;
	text-indent:-.25in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.table, li.table, div.table
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:4.0pt;
	margin-left:0in;
	line-height:14.0pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:8.0pt;
	font-family:Arial;}
p.Style1, li.Style1, div.Style1
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";
	text-transform:uppercase;}
p.DoubleScore, li.DoubleScore, div.DoubleScore
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	border:none;
	padding:0in;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.BodytextBold, li.BodytextBold, div.BodytextBold
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.TableHeading1, li.TableHeading1, div.TableHeading1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:0in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:9.0pt;
	font-family:Arial;
	font-weight:bold;}
p.Address, li.Address, div.Address
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:1.0in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.BodyTextFirstInd2, li.BodyTextFirstInd2, div.BodyTextFirstInd2
	{margin:0in;
	margin-bottom:.0001pt;
	text-indent:1.0in;
	line-height:200%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.BodyTextHang, li.BodyTextHang, div.BodyTextHang
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:.5in;
	text-indent:-.5in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.BodyTextHang2, li.BodyTextHang2, div.BodyTextHang2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:0in;
	margin-left:.5in;
	margin-bottom:.0001pt;
	text-indent:-.5in;
	line-height:200%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.Bullet, li.Bullet, div.Bullet
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:.25in;
	text-indent:-.25in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.CenterBold, li.CenterBold, div.CenterBold
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:0in;
	text-align:center;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman Bold";
	font-weight:bold;}
p.CenterBoldScore, li.CenterBoldScore, div.CenterBoldScore
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:0in;
	text-align:center;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman Bold";
	font-weight:bold;
	text-decoration:underline;}
p.CenterScore, li.CenterScore, div.CenterScore
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:0in;
	text-align:center;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";
	text-decoration:underline;}
p.Heading, li.Heading, div.Heading
	{margin-top:6.0pt;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:0in;
	text-align:center;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.LeftBold, li.LeftBold, div.LeftBold
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:0in;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman Bold";}
p.LeftItalic, li.LeftItalic, div.LeftItalic
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:.25in;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";
	font-style:italic;}
p.LeftBoldItalic, li.LeftBoldItalic, div.LeftBoldItalic
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:0in;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";
	font-style:italic;}
p.NotesSeparator, li.NotesSeparator, div.NotesSeparator
	{margin-top:0in;
	margin-right:5.5in;
	margin-bottom:0in;
	margin-left:0in;
	margin-bottom:.0001pt;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	border:none;
	padding:0in;
	font-size:6.0pt;
	font-family:"Times New Roman";}
p.Quote, li.Quote, div.Quote
	{margin-top:0in;
	margin-right:1.0in;
	margin-bottom:12.0pt;
	margin-left:1.0in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.Separator, li.Separator, div.Separator
	{margin-top:0in;
	margin-right:207.35pt;
	margin-bottom:3.0pt;
	margin-left:207.35pt;
	punctuation-wrap:simple;
	text-autospace:none;
	border:none;
	padding:0in;
	font-size:1.5pt;
	font-family:"Times New Roman";}
p.SingleScore, li.SingleScore, div.SingleScore
	{margin:0in;
	margin-bottom:.0001pt;
	punctuation-wrap:simple;
	text-autospace:none;
	border:none;
	padding:0in;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.TableHead, li.TableHead, div.TableHead
	{margin:0in;
	margin-bottom:.0001pt;
	text-align:center;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:8.0pt;
	font-family:"Times New Roman Bold";
	font-weight:bold;}
p.TableNotes, li.TableNotes, div.TableNotes
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:6.0pt;
	margin-left:.25in;
	text-indent:-.25in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:8.0pt;
	font-family:"Times New Roman";}
p.PageNum, li.PageNum, div.PageNum
	{margin:0in;
	margin-bottom:.0001pt;
	text-align:center;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.LeftScore, li.LeftScore, div.LeftScore
	{margin:0in;
	margin-bottom:.0001pt;
	line-height:200%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";
	text-decoration:underline;}
p.text2, li.text2, div.text2
	{margin:0in;
	margin-bottom:.0001pt;
	text-indent:.5in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.Head10, li.Head10, div.Head10
	{margin:0in;
	margin-bottom:.0001pt;
	text-align:center;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman Bold";
	font-weight:bold;}
p.Head5, li.Head5, div.Head5
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:0in;
	text-align:justify;
	line-height:13.0pt;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";
	font-style:italic;}
p.Bodytext, li.Bodytext, div.Bodytext
	{margin:0in;
	margin-bottom:.0001pt;
	text-indent:.25in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.alpha1, li.alpha1, div.alpha1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:28.35pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Lista, li.Lista, div.Lista
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:.25in;
	text-indent:-.25in;
	punctuation-wrap:hanging;
	text-autospace:ideograph-numeric ideograph-other;
	font-size:12.0pt;
	font-family:"Times New Roman";}
p.Head4, li.Head4, div.Head4
	{margin:0in;
	margin-bottom:.0001pt;
	text-align:justify;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.Note-Head, li.Note-Head, div.Note-Head
	{margin-top:24.0pt;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:.25in;
	text-indent:-.25in;
	punctuation-wrap:hanging;
	text-autospace:ideograph-numeric ideograph-other;
	border:none;
	padding:0in;
	font-size:11.0pt;
	font-family:"Times New Roman";
	font-weight:bold;}
p.Note-BodyNo, li.Note-BodyNo, div.Note-BodyNo
	{margin-top:6.0pt;
	margin-right:0in;
	margin-bottom:3.0pt;
	margin-left:0in;
	text-align:justify;
	punctuation-wrap:hanging;
	text-autospace:ideograph-numeric ideograph-other;
	font-size:10.0pt;
	font-family:"Times New Roman";}
p.CaptionText, li.CaptionText, div.CaptionText
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:12.0pt;
	margin-left:0in;
	punctuation-wrap:hanging;
	text-autospace:ideograph-numeric ideograph-other;
	font-size:12.0pt;
	font-family:"Times New Roman";}
p.n, li.n, div.n
	{margin:0in;
	margin-bottom:.0001pt;
	text-indent:.5in;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:"Times New Roman";}
p.SchedHead1, li.SchedHead1, div.SchedHead1
	{margin-top:7.0pt;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:28.35pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:11.0pt;
	font-family:Arial;
	font-weight:bold;}
p.23BodyText, li.23BodyText, div.23BodyText
	{margin-top:5.0pt;
	margin-right:0in;
	margin-bottom:0in;
	margin-left:0in;
	margin-bottom:.0001pt;
	text-align:justify;
	line-height:110%;
	punctuation-wrap:hanging;
	text-autospace:ideograph-numeric ideograph-other;
	font-size:10.0pt;
	font-family:Arial;
	color:black;}
p.alpha4, li.alpha4, div.alpha4
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:136.1pt;
	text-align:justify;
	text-indent:-34.05pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.alpha5, li.alpha5, div.alpha5
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:164.45pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.alpha6, li.alpha6, div.alpha6
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:198.45pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Bullet4, li.Bullet4, div.Bullet4
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:136.05pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Bullet5, li.Bullet5, div.Bullet5
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:164.45pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Bullet6, li.Bullet6, div.Bullet6
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:198.45pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Parties, li.Parties, div.Parties
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:28.35pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Recitals, li.Recitals, div.Recitals
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:28.35pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.roman1, li.roman1, div.roman1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:28.35pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.roman2, li.roman2, div.roman2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:62.35pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.roman3, li.roman3, div.roman3
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:102.05pt;
	text-align:justify;
	text-indent:-39.7pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.roman4, li.roman4, div.roman4
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:136.05pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.roman5, li.roman5, div.roman5
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:164.45pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.roman6, li.roman6, div.roman6
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:198.45pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Schedule1, li.Schedule1, div.Schedule1
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:28.35pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Schedule2, li.Schedule2, div.Schedule2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:62.35pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Schedule3, li.Schedule3, div.Schedule3
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:102.05pt;
	text-align:justify;
	text-indent:-39.7pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Schedule4, li.Schedule4, div.Schedule4
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:136.1pt;
	text-align:justify;
	text-indent:-34.05pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Body4, li.Body4, div.Body4
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:136.1pt;
	text-align:justify;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Schedule5, li.Schedule5, div.Schedule5
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:164.45pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Body5, li.Body5, div.Body5
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:164.45pt;
	text-align:justify;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Schedule6, li.Schedule6, div.Schedule6
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:198.45pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Body6, li.Body6, div.Body6
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:198.45pt;
	text-align:justify;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.TCLevel1, li.TCLevel1, div.TCLevel1
	{margin-top:7.0pt;
	margin-right:0in;
	margin-bottom:0in;
	margin-left:28.35pt;
	margin-bottom:.0001pt;
	text-align:justify;
	text-indent:-28.35pt;
	line-height:120%;
	page-break-after:avoid;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;
	font-weight:bold;}
p.TCLevel2, li.TCLevel2, div.TCLevel2
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:62.35pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.TCLevel3, li.TCLevel3, div.TCLevel3
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:102.05pt;
	text-align:justify;
	text-indent:-39.7pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.TCLevel4, li.TCLevel4, div.TCLevel4
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:7.0pt;
	margin-left:136.05pt;
	text-align:justify;
	text-indent:-34.0pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.BulletF, li.BulletF, div.BulletF
	{margin-top:0in;
	margin-right:0in;
	margin-bottom:0in;
	margin-left:70.9pt;
	margin-bottom:.0001pt;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Table1, li.Table1, div.Table1
	{margin-top:3.0pt;
	margin-right:0in;
	margin-bottom:3.0pt;
	margin-left:28.35pt;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
	font-family:Arial;}
p.Table2, li.Table2, div.Table2
	{margin-top:3.0pt;
	margin-right:0in;
	margin-bottom:3.0pt;
	margin-left:28.35pt;
	text-indent:-28.35pt;
	line-height:120%;
	punctuation-wrap:simple;
	text-autospace:none;
	font-size:10.0pt;
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</head>

<body style='font-family:arial,helvetica,sans-serif;font-size:9pt'  lang=EN-US link=blue vlink=purple>

<div>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Washington, DC 20549</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">FORM 20-F</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.5in' style="margin-top:0;margin-bottom:0"><b>[  ]           </b><b>REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OF THE SECURITIES
EXCHANGE ACT OF 1934</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>OR</b></p>

<p align=center style='text-align:center;line-height:50%' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-left:.5in;text-indent:-.5in' style="margin-top:0;margin-bottom:0"><b>[X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 &#150; For the fiscal year ended
December 31, 2003</b></p>

<p style='margin-left:.5in;text-indent:-.5in;line-height:50%' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>OR</b></p>

<p style='margin-left:.5in;text-indent:-.5in;line-height:50%' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-left:.5in;text-indent:-.5in' style="margin-top:0;margin-bottom:0"><b>[  ]           TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 &#150; For the transition period
from _________ to _________</b></p>

<p align=center style='margin-left:.5in;text-align:center;
text-indent:-.5in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='margin-left:.5in;text-align:center;
text-indent:-.5in' style="margin-top:0;margin-bottom:0"><b>Commission file number
1-03006</b></p>

<p style='margin-left:.5in;text-indent:-.5in;line-height:50%' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Philippine Long Distance Telephone Company</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(Exact name of Registrant as specified in its charter)</p>

<p style='margin-left:.5in;text-indent:-.5in;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Republic of the </b><b>Philippines</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(Jurisdiction of incorporation or organization)</p>

<p style='margin-left:.5in;text-indent:-.5in;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Ramon</b><b> </b><b>Cojuangco</b><b>
 </b><b>Building</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Makati Avenue</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Makati City</b><b>,
 </b><b>Philippines</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(Address of principal executive or organization)</p>

<p style='margin-left:.5in;text-indent:-.5in;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Securities registered or to be registered pursuant to
Section 12(b) of the Act.</p>

<p style='margin-left:.5in;text-indent:-.5in;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-bottom:3.0pt' style="margin-top:0;margin-bottom:0"><u>Title of each class</u></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Name of each exchange</p>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">on which registered</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
 margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Common
 Capital Stock, Par Value Five Philippine Pesos Per Share</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">New York Stock
 Exchange*</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
 margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">American
 Depositary Shares, evidenced by American Depositary Receipts, each
 representing one share of Common Capital Stock</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='margin-bottom:3.0pt;text-align:center;
 line-height:9.0pt' style="margin-top:0;margin-bottom:0">New York Stock Exchange</p>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">Pacific Exchange</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
 margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Series
 III Convertible Preferred Stock, Par Value Ten Philippine Pesos Per Share</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">New York Stock
 Exchange*</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
 margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Global
 Depositary Shares, evidenced by Global Depositary Receipts, each representing
 one share of Series III Convertible Preferred Stock</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">New York Stock
 Exchange</p>
 </td>
 </tr>
</table></center></div>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>*    Registered on the New
York Stock Exchange not for trading but only in connection with the
registration of American Depositary Shares or Global Depositary Shares, as the
case may be, pursuant to the requirements of such stock exchange</i>.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Securities registered or to be registered pursuant to
Section 12(g) of the Act.</p>

<p align=center style='text-align:center;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">None</p>

<p align=center style='text-align:center;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act.</p>

<p style='margin-left:.5in;text-indent:-.5in;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align=center>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">10.625% Notes due 2004</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">10.625% Notes due 2007</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">9.875% Notes due 2005</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">10.500% Notes due 2009</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">9.250% Notes due 2006</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">11.375% Notes due 2012</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">7.850% Notes due 2007</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">8.350% Notes due 2017</p>
 </td>
 </tr>
</table></center></div>

</div>

<p style='text-indent:.5in;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Indicate the number of
outstanding shares of each of the issuer&#146;s classes of capital or common stock
as of the close of the period covered by the annual report.</p>

<p style='margin-left:.5in;text-indent:-.5in;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align=center>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">As of December 31, 2003:</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">169,476,120 shares of Common
 Capital Stock, Par Value Five Philippine Pesos Per Share</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">458,434,729 shares of Serial
 Preferred Stock, Par Value Ten Philippine Pesos Per Share</p>
 </td>
 </tr>
</table></center></div>

</div>

<p style='margin-left:.25in;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:  Yes [X]   No</p>

<p style='margin-left:.25in;line-height:50%' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Indicate
by check mark which financial statement item the registrant has elected to
follow:  Item 17    Item 18 [X]</p>

</div>

<br clear=all
style='page-break-before:always'>

<div>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">TABLE OF CONTENTS</h1>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><u>Page</u></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">CERTAIN CONVENTIONS AND
 TERMS USED IN THIS REPORT</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 </tr>
 <tr>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">FORWARD-LOOKING STATEMENTS</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 </tr>
 <tr>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">PART I</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 1.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Identity of Directors,
 Senior Management and Advisors</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 2.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Offer Statistics and
 Expected Timetable</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 3.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Key Information</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Selected Financial Data</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Capital Stock</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Dividends Declared</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Dividends Paid</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Exchange Rates</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Risk Factors</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 4.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Information on the Company</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Overview</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Historical Background and
 Development</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Organization</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Strengths</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">26</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Strategy</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">27</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Wireless</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">28</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Fixed Line</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">35</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Information and
 Communications Technology</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">42</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Wireless Network
 Infrastructure</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">44</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Fixed Line Network
 Infrastructure</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Interconnection Agreements</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Licenses and Regulation</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Competition</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Environmental Matters</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Intellectual Property Rights</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Properties</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 5.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Operating and Financial
 Review and Prospects</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Overview</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Critical Accounting Policies</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Results of Operations</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">60</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Liquidity and Capital
 Resources</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">88</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Effect of Peso Depreciation</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">102</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Impact of Inflation and
 Changing Prices</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">103</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Other Information</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">103</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Certain Indebtedness</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">105</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 6.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Directors, Senior Management
 and Employees</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">116</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Directors, Key Officers and
 Advisors</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">116</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Terms of Office</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">121</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Family Relationships</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">121</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Compensation</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">122</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Executive Stock Option Plan</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">122</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Share Ownership</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">122</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Audit, Nomination, Executive
 Compensation and Finance Committees</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">124</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Employees and Labor
 Relations</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">126</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Pension and Retirement
 Benefits</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">127</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Employees&#146; Stock Plan</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">128</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Legal Proceedings</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">128</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 7.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Major Shareholders and
 Related Party Transactions</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">129</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Related Party Transactions</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">130</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 8.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Financial Information</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">137</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Consolidated Statements and
 Other Financial Information</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">137</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Legal Proceedings</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">137</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Dividend Distribution Policy</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">142</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 9.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">The Offer and Listing</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">142</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Common Capital Stock and
 Amercian Depositary Receipts (&#147;ADRs&#148;)</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">142</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Series III Convertible
 Preferred Stock and Global Depositary Receipts (&#147;GDRs&#148;)</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">143</p>
 </td>
 </tr>
 <tr style='height:.5in'>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:.5in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:.5in'>
 <p style="margin-top:0;margin-bottom:0">Item 10.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:.5in'>
 <p style="margin-top:0;margin-bottom:0">Additional Information</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:.5in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">144</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Articles of Incorporation
 and By-Laws</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">144</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Material Contracts</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">151</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Exchange Controls and Other
 Limitations Affecting Securities Holders</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">151</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Taxation</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">152</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Documents on Display</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">157</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 11.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Quantitative and Qualitative
 Disclosures About Market Risks</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">158</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Liquidity Risk Management</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">158</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Foreign Exchange Risk
 Management</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">158</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Interest Rate Risk
 Management</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">159</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 12.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Description of Securities
 Other than Equity Securities</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">160</p>
 </td>
 </tr>
 <tr>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">PART II</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">161</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 13.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Defaults, Dividend
 Arrearages and Delinquencies</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">161</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 14.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Material Modifications to
 the Rights of Security Holders and Use of Proceeds</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">161</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 15.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Controls and Procedures</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">161</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 16A.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Audit Committee Financial
 Expert</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">161</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 16B.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Code of Business Conduct and
 Ethics</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 16.C.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Principal Accountant Fees
 and Services</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">165</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 16D.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Exemption from the listing
 Standards for Audit Committees</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">166</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 16E.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Purchases of Equity
 Securities by the Issuer and Affiliated Purchaser</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">166</p>
 </td>
 </tr>
 <tr>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">PART III</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">166</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 17.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Financial Statements</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">166</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 18.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Financial Statements</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">166</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Item 19.</p>
 </td>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Exhibits</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">167</p>
 </td>
 </tr>
 <tr>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">EXHIBIT INDEX</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">169</p>
 </td>
 </tr>
 <tr>
 <td  colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">CERTIFICATION</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">174</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<br clear=all
style='page-break-before:always'>

<div>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779184"></a><a name="_Toc46082243">CERTAIN CONVENTIONS AND TERMS USED IN THIS REPORT</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Unless the context indicates or
otherwise requires, references to &#147;we,&#148; &#147;us,&#148; &#147;our&#148; or &#147;PLDT Group&#148; mean
Philippine Long Distance Telephone Company and its consolidated subsidiaries,
and references to &#147;PLDT&#148; mean Philippine Long Distance Telephone Company, not
including its consolidated subsidiaries (see <i>Note 2 &#150;Basis of Consolidated
Financial Statement Preparation </i>to the accompanying consolidated financial
statements in Item 18 for a list of these subsidiaries, including a description
of their respective principal business activities).</p>

<p style='line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Any discrepancies in any table
between totals and the sums of the amounts listed are due to rounding.</p>

<p style='text-indent:.5in;line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">All references to the &#147;Philippines&#148;
contained in this report mean the Republic of the Philippines and all
references to the &#147;U.S.&#148; or the &#147;United States&#148; are to the United States of
 America.</p>

<p style='text-indent:.5in;line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In this report, unless otherwise
specified or the context otherwise requires, all references to &#147;pesos,&#148;
&#147;Philippine pesos&#148; or &#147;Php&#148; are to the lawful currency of the Philippines, all
references to &#147;dollars,&#148; &#147;U.S. dollars&#148; or &#147;US$&#148; are to the lawful currency of
the United States, all references to &#147;Japanese yen,&#148; &#147;JP&yen;&#148; or &#147;&yen;&#148; are to the
lawful currency of Japan, and all references to &#147;Euro&#148; or &#147;&#128;&#148; are to the lawful
currency of the European Union.  Unless otherwise indicated, translations of
peso amounts into U.S. dollars in this report were made based on the volume
weighted average exchange rate quoted through the Philippine Dealing System,
which was Php55.586 to US$1.00 on December 31, 2003.  On June 23, 2004, the volume weighted average exchange rate quoted was Php56.261 to US$1.00.</p>

<p style='text-indent:.5in;line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In this report, each reference to:</p>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ACeS Philippines means ACeS Philippines Cellular Satellite
Corporation, a 93.7%-owned subsidiary of PLDT;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AIL means ACeS International Limited;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AMPS means advanced mobile phone system;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
94%' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
BCC or Bonifacio Communications Corporation, our 75%-owned
subsidiary;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
BSP means Bangko Sentral ng Pilipinas;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CDMA means code division multiple access;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Clark Telecom means PLDT Clark Telecom, Inc., our wholly-owned
subsidiary;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ePLDT means ePLDT, Inc., our wholly-owned subsidiary;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ETACS means enhanced total access communications system;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
First Pacific means First Pacific Company Limited;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
GAAP means generally accepted accounting principles;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
GSM means global system for mobile communications;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ISP means internet service provider;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Infocom means Infocom Technologies, Inc., a 99.6%-owned
subsidiary of ePLDT;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mabuhay Satellite means Mabuhay Satellite Corporation (formerly
Mabuhay Philippines Satellite Corporation), our 67%-owned subsidiary;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Maratel means PLDT-Maratel (formerly Maranao Telephone Company,
Inc.), our 97.5%-owned subsidiary;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NTC means the National Telecommunications Commission of the Philippines;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NTT Communications means NTT Communications Corporation, a
wholly-owned subsidiary of Nippon Telegraph and Telephone Corporation of Japan;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NTTC-UK means NTT Communications Capital (UK) Ltd., a
wholly-owned subsidiary of NTT Communications;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PAPTELCO means Philippine Association of Private Telephone
Companies;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Parlance means Parlance Systems, Inc., a wholly-owned subsidiary
of ePLDT;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Piltel means Pilipino Telephone Corporation, an associate in
which we have a 45.3% ownership interest and which is treated as a consolidated
subsidiary under U.S. GAAP; </p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PLDT Beneficial Trust Fund means the beneficial trust fund
created by PLDT to pay the benefits under the PLDT Employees&#146; Benefit Plan;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PLDT Global means PLDT Global Corporation, our wholly-owned subsidiary;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
94%' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SEC means the Philippine Securities and Exchange Commission;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
94%' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SMS means short message service;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Smart means Smart Communications, Inc., our wholly-owned
subsidiary;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subic Telecom means Subic Telecommunications Company, Inc., our
wholly-owned subsidiary;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telesat means Telesat, Inc., our 94.4%-owned subsidiary;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Vocativ means Vocativ Systems, Inc., a wholly-owned subsidiary of
ePLDT; and</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
VSAT means very small aperture terminal.</p>

<p style='text-indent:.5in;line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779185"></a><a name="_Toc46082244">FORWARD-LOOKING STATEMENTS</a></p>

<p style='text-indent:.5in;line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Some
information in this report may contain forward-looking statements within the
meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of
the U.S. Securities Exchange Act of 1934.  We have based these forward-looking
statements on our current beliefs, expectations and intentions as to facts,
actions and events that will or may occur in the future.  Such statements
generally are identified by forward-looking words such as &#147;believe,&#148; &#147;plan,&#148;
&#147;anticipate,&#148; &#147;continue,&#148; &#147;estimate,&#148; &#147;expect,&#148; &#147;may,&#148; &#147;will&#148; or other similar
words.</p>

<p style='text-indent:.5in;line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">A forward-looking statement may
include a statement of the assumptions or bases underlying the forward-looking
statement.  We have chosen these assumptions or bases in good faith, and we
believe that they are reasonable in all material respects.  However, we caution
you that assumed facts or bases almost always vary from actual results, and the
differences between results implied by the forward-looking statements, assumed
facts or bases and actual results can be material, depending on the
circumstances.  When considering forward-looking statements, you should keep in
mind the description of risks and other cautionary statements in this report.
You should also keep in mind that any forward-looking statement made by us in
this report or elsewhere speaks only as of the date on which we made it.  New
risks and uncertainties come up from time to time, and it is impossible for us
to predict these events or how they may affect us.  We have no duty to, and do
not intend to, update or revise the statements in this report after the date
hereof.  In light of these risks and uncertainties, you should keep in mind
that actual results may differ materially from any forward-looking statement
made in this report or elsewhere.</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779186"></a><a name="_Toc46082245">PART I</a></p>

<p style='text-indent:.5in;line-height:9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779187"></a><a name="_Toc46082246">Item 1.   Identity
of Directors, Senior Management and Advisors</a></p>

<p style='text-indent:.5in;line-height:9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Not applicable.</p>

<p style='text-indent:.5in;line-height:9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779188"></a><a name="_Toc46082247">Item 2.   Offer
Statistics and Expected Timetable</a></p>

<p style='text-indent:.5in;line-height:9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Not applicable.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779189"></a><a name="_Toc46082248">Item 3.   Key
Information</a></p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779190"></a><a name="_Toc46082249">Selected Financial Data</a></p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The selected consolidated financial information below should be
read in conjunction with, and is qualified in its entirety by reference to, our
audited consolidated financial statements, including the notes, included
elsewhere in this report.  The consolidated financial statements have been
prepared and presented in conformity with U.S. GAAP.  Due to our decision to
commence using U.S. GAAP for our Annual Report on Form 20-F in respect of the
year ended December 31, 2002, we are unable to provide without unreasonable
effort and expense U.S. GAAP consolidated financial information with respect to
the fiscal year ended December 31, 1999.  As a result, we have omitted such
information in the table below.  In our Annual Reports on Form 20-F for years
prior to 2002, we disclosed consolidated financial statements, including the
financial information with respect to the year ended December 31, 1999,
prepared in conformity with Philippine GAAP, along with a reconciliation to
U.S. GAAP.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Prior to the filing of our Annual Report on Form 20-F in respect
of the year ended December 31, 2002, the consolidated financial statements
included in our Annual Reports on Form 20-F filed with the U.S. Securities and
Exchange Commission, or U.S. SEC, were prepared in conformity with Philippine
GAAP.  Philippine GAAP varies in certain significant respects from U.S. GAAP.
A description of the significant differences between U.S. GAAP and Philippine
GAAP and a quantitative reconciliation of such differences in the net loss and
stockholders&#146; equity to U.S. GAAP was disclosed in a note to our previously
filed consolidated financial statements.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>

 <tr style='height:1.0pt'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p style='' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=6 valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Consolidated
 Financial Data</b></p>
 </div>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p style='' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=6 valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Years Ended
 December 31,</b></p>
 </div>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p style='margin-left:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b>(1)</p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2000</b></p>
 </div>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p style='margin-left:8.0pt;text-indent:-8.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=center style='margin-left:8.0pt;text-align:center;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0"><b>(in millions, except net operating income (loss) per share,
 earnings per common share, ratio of earnings to fixed charges and dividends
 declared per common share)</b></p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0"><i>Amounts in conformity with </i><i>U.S.</i><i> GAAP:</i></p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>

 <tr style='height:1.0pt'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0"><b>Statements of Operating Data:</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Operating revenues</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php112,036</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">US$2,016</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php92,800</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php80,294</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php60,348</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Operating expenses</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">78,563</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">1,413</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">80,771</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">86,236</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">49,824</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Net operating income (loss)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">33,473</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">602</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">12,029</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(5,942)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">10,524</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Net operating income (loss) per share</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt;text-indent:1.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">179.59</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">3.23</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">55.47</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(47.36)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">58.82</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt;text-indent:1.0pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">165.85</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">2.98</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">52.23</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(47.36)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">58.82</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Net income (loss)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">11,045</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">199</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(6,158)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(27,782)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(29,258)</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Earnings per common share(2)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt;text-indent:5.6pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">47.20</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">0.85</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(193.48)</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt;text-indent:5.6pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">45.72</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">0.82</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(193.48)</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0"><b>Balance Sheets Data:</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Cash and cash equivalents</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">19,372</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">349</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">10,974</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">4,276</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Total assets</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">276,628</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">4,977</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">269,387</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">284,877</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Total long-term debt - net of current portion</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">160,459</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">2,887</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">171,283</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">169,870</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Long-term debt</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">184,275</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">3,315</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">190,908</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">190,099</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Total debt(3)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">186,408</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">3,353</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">191,668</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">196,561</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Total liabilities(4)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">236,897</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">4,262</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">240,622</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">249,563</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Total stockholders&#146; equity</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">24,745</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">445</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">16,413</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">24,472</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0"><b>Other Data:</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">EBITDA(5)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">44,055</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">793</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">26,281</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">6,475</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(4,972)</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Depreciation </p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">21,882</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">393</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">17,566</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">16,218</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">12,756</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Ratio of earnings to fixed charges(6)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">1.8x</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">1.8x</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Net cash provided by operating activities</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php40,920</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">US$736</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php39,722</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php20,113</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php20,727</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Net cash used in investing activities</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">18,359</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">330</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">17,167</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">29,376</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">25,183</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Net cash provided by (used in) financing activities</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(14,135)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(254)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(15,954)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">3,841</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">5,511</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Dividends declared to common shareholders</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">202</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">752</p>
 </td>
 </tr>
 <tr style='height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p style='margin-left:7.9pt !msorm;margin-left:8.0pt;
 text-indent:-8.0pt;line-height:97%' style="margin-top:0;margin-bottom:0">Dividends declared per common share(7)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">4.80</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">_____________</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>We maintain our accounts in
Philippine pesos. For convenience, the peso financial information as of and for
the year ended December 31, 2003, has been translated into U.S. dollars at the
exchange rate of Php55.586 to US$1.00, the rate quoted through the Philippine
Dealing System as of December 31, 2003.  This translation should not be
construed as a representation that the Philippine peso amounts represent, or
have been or could be converted into, U.S. dollars at that rate or any other
rate.</i></p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(2)   Prior to 2003, our convertible preferred shares
were deemed anti-dilutive based on a calculation of the required dividends on
preferred shares for each series of convertible preferred shares divided by the
number of equivalent common shares assuming such preferred shares were converted
into common shares and compared against the basic earnings per share.  Since
the amount of dividends on preferred shares over the equivalent number of
common shares were greater than the basic earnings per share, the amounts for
basic and diluted earnings per share are the same.</i></p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.55in;text-indent:-.55in' style="margin-top:0;margin-bottom:0"><i>(3)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Total debt represents
current portion of long-term debt, long-term debt&#151;net of current portion and
notes payable.</i></p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(4)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Total liabilities on a
consolidated basis represent the difference between total assets and minority
interest in consolidated subsidiaries, preferred stock subject to mandatory
redemption and stockholders&#146; equity.</i></p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(5)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>On a consolidated basis,
EBITDA is defined as income (loss) before minority interest in net income of
consolidated subsidiaries and adding back interest expense and related items
(net of capitalized interest), taxes, depreciation, and amortization and
deducting interest income and is presented because it is generally accepted as
providing useful information regarding a company&#146;s ability to service and/or
incur debt.  In light of our substantial indebtedness, we believe that the
presentation of EBITDA measures is useful information regarding our ability to
service our debt and to incur any additional debt. In addition, many of our
loan agreements incorporate various covenants or limitations based on EBITDA
(calculated on the basis of Philippine GAAP).  EBITDA should not be considered
in isolation or as a substitute for operating income, net income, cash flows
from operating activities and other income or cash flow statement data prepared
in accordance with applicable generally accepted accounting principles, or as a
measure of PLDT&#146;s profitability or liquidity.  A quantitative reconciliation of
EBITDA from income (loss) before minority interest in net income of
consolidated subsidiaries is provided in the following table: </i></p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:97.16%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style=';text-align:
 center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=5 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style=';text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Consolidated
 Financial Data</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=5 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:7.9pt;text-indent:-7.9pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b>(1)</p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.35pt'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2000</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:7.9pt;text-indent:-7.9pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:auto' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:7.9pt;text-indent:-7.9pt;line-height:
 97%' style="margin-top:0;margin-bottom:0"><i>Amounts in conformity
 with </i><i>U.S.</i><i> GAAP:</i></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.35pt;text-indent:-9.35pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Income (loss) before
 minority interest in net income of consolidated subsidiaries </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php11,159</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$201</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php6,032)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php27,674)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php29,117)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:22.3pt;text-indent:-22.3pt;line-height:
 97%' style="margin-top:0;margin-bottom:0">Add/(deduct):</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:26.0pt;text-indent:-8.0pt' style="margin-top:0;margin-bottom:0">Interest expenses and related items, net of
 capitalized interest</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">12,161</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">219</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">12,780</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">14,697</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">13,541</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.25pt' style='page-break-inside:
 avoid !msorm;height:11.25pt !msorm'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:11.25pt'>
 <p style='margin-left:7.9pt;text-indent:.15in;line-height:
 97%' style="margin-top:0;margin-bottom:0">Interest income</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:11.25pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(513)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:11.25pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(9)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:11.25pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(237)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:11.25pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(373)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:11.25pt'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,016)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:26.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Provision for (benefit from) income tax</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,400)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(25)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,438</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,570)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(5,613)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:26.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Depreciation</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">21,882</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">393</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">17,566</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">16,218</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">12,756</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:.3in' style='page-break-inside:avoid !msorm;
 height:.3in !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:.3in'>
 <p style='margin-left:26.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Amortization of goodwill and other </p>
 <p style='margin-left:26.0pt;text-indent:2.0pt' style="margin-top:0;margin-bottom:0">intangible assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:.3in'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">766</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:.3in'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">14</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:.3in'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">766</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:.3in'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">6,177</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:.3in'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:6.5pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">4,477</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:14.85pt' style='page-break-inside:
 avoid !msorm;height:14.85pt !msorm'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:14.85pt'>
 <p style='line-height:12.0pt' style="margin-top:0;margin-bottom:0">EBITDA</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:14.85pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Php44,055</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:14.85pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">US$793</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:14.85pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Php26,281</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:14.85pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Php6,475</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt 0in 4.5pt 0in 4.5pt !msorm;height:14.85pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:4.3pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">(Php4,972)</p>
 </div>
 </td>
 </tr>
 <tr style='height:1.0pt' style='height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:1.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
</table></center></div>

<p style='line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>(6)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>For purposes of this ratio,
&#147;Earnings&#148; consist of income before provision for income tax (excluding PLDT&#146;s
share in undistributed income of less than 50% owned affiliates) and fixed
charges (excluding capitalized interest).  &#147;Fixed charges&#148; consist of interest
(including capitalized interest, discounts and other financing costs) on all
indebtedness, amortization of deferred financing costs and the estimated
financing component of rent expense (i.e., one-third of rent expense).</i></p>

<p style='line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Due to PLDT&#146;s net losses in 2002, 2001 and 2000, the
coverage ratio on a consolidated basis was less than 1.0x in these three
years.  In order to achieve a coverage ratio of 1.0x, we would have had to
generate additional consolidated earnings of Php2,464 million, Php30,126 million
and Php35,509 million for each of the three years ended </i><i>December 31, 2002</i><i>, 2001 and 2000, respectively.</i></p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(7)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>The most recent cash
dividend declaration made by PLDT on its common stock was in March 2001, which
was paid in April 2001.</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779191"></a><a name="_Toc46082250">Capital Stock</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table summarizes
PLDT&#146;s capital stock outstanding as of December 31, 2003, 2002 and 2001.</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:11.25pt'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.25pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.5pt'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:10.5pt'>
 <p style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;height:10.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;height:10.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;height:10.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;height:10.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.15pt'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.15pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:9.15pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.55pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Serial Preferred Stock</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.55pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.55pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.55pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.55pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:8.55pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.65pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:7.65pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cumulative Convertible</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:7.65pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:7.65pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:7.65pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:7.65pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:7.65pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.25pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10% Convertible</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:.15in'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:.15in'>
 <p style='margin-left:27.0pt' style="margin-top:0;margin-bottom:0">A
 to DD</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='margin-right:9.5pt;text-align:right' style="margin-top:0;margin-bottom:0">Php4,099</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">Php4,068</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">Php3,723</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.9pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.9pt'>
 <p style='margin-left:27.0pt' style="margin-top:0;margin-bottom:0">Series
 III</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.9pt'>
 <p align=right style='margin-right:8.55pt;text-align:right' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.9pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.9pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.9pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.9pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p style='margin-left:27.0pt' style="margin-top:0;margin-bottom:0">Series
 V(1)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='margin-right:8.55pt;text-align:right' style="margin-top:0;margin-bottom:0">26</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">25</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">26</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p style='margin-left:27.0pt' style="margin-top:0;margin-bottom:0">Series VI(1)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='margin-right:9.5pt;text-align:right' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:9.0pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p style='margin-left:27.0pt' style="margin-top:0;margin-bottom:0">Series VII(1)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p align=right style='margin-right:9.5pt;text-align:right' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">36</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:8.55pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.15pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:12.15pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Cumulative Nonconvertible</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:12.15pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:12.15pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:12.15pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:12.15pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:12.15pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.25pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p style='margin-left:27.0pt' style="margin-top:0;margin-bottom:0">Series
 IV</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:11.25pt'>
 <p align=right style='margin-right:9.5pt;text-align:right' style="margin-top:0;margin-bottom:0">360</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:11.25pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">360</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:11.25pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:11.25pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">360</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.05pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:10.05pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:10.05pt'>
 <p align=right style='margin-right:9.5pt;text-align:right' style="margin-top:0;margin-bottom:0">Php4,616</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.05pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:10.05pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">Php4,584</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;height:10.05pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:10.05pt'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">Php4,242</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:.15in'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Common Stock</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <p align=right style='margin-right:9.5pt;text-align:right' style="margin-top:0;margin-bottom:0">Php847</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">Php847</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 height:.15in'>
 <p align=right style='margin-right:.15in;text-align:right' style="margin-top:0;margin-bottom:0">Php845</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779192"></a><a name="_Toc46082251">Dividends Declared</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cash dividends declared per share of
 PLDT&#146;s common stock, in pesos (2)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:21.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php&#151;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:25.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php&#151;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1.20</p>
 </td>
 </tr>
</table></center></div>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">_____________</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:2.0pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>(1)   Preferred stock subject to
mandatory redemption (see Note 16 &#150; Preferred Stock Subject to Mandatory
Redemption to the accompanying consolidated financial statements in Item 18 for
further discussion) in 2008 and 2009.</i></p>

<p style='line-height:2.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>(2)   The most recent cash dividend
declaration made by PLDT on its shares of common stock was in March 2001, which
was paid in April 2001.  PLDT does not expect to declare cash dividends on
these shares in 2004.</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779193"></a><a name="_Toc46082252">Dividends Paid</a></p>

<p style='text-indent:.5in;line-height:8.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">A summary of dividends paid per
share of PLDT's common stock stated in both Philippine pesos and U.S. dollars
follows:</p>

<p style='text-indent:.5in;line-height:8.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;width:100.0% !msorm;border-collapse:
 collapse !msorm'>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'><br
 clear=all style='page-break-before:always'>

 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In Philippine Pesos</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>In U.S. Dollars</b></p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1999</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">January 15</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.031</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">April 15</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.031</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">July 15</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.031</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">October 15</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.030</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">January 14</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.030</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">April 14</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.029</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">July 15</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.027</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">October 15</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.025</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">January 15</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">0.023</p>
 </td>
 </tr>
 <tr style='height:12.0pt' style='height:12.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">April
 16</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style=';;text-align:center' style="margin-top:0;margin-bottom:0">1.20</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:12.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">0.024</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.5in' style="margin-top:0;margin-bottom:0">(<i>Note</i>:      <i>Dividends on PLDT's common stock
were declared and paid in Philippine pesos.  For the convenience of the reader,
the peso dividends are translated into U.S. dollars based on exchange rates on
the respective dates of dividend payments.  Dividends paid in January of each
of the calendar years 1999-2001 were declared in the preceding December.
Accordingly, total amounts shown for cash dividends declared under &#147;Dividends
Declared&#148; above may differ from the amounts shown for cash dividends paid under
&#147;Dividends Paid.&#148;)</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779194"></a><a name="_Toc46082253">Exchange Rates</a></p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Philippine government does not
administratively fix the exchange rate between the Philippine peso and the U.S.
dollar.  Since August 1, 1992, a market average rate has been determined daily
in inter-bank trading using the Philippine Dealing System, known as the
&#147;Philippine Dealing System Reference Rate.&#148;  The Philippine Dealing System is a
specialized off-floor direct dealing service for the trading of Philippine
pesos-U.S. dollars by member banks of the Bankers Association of the Philippines
and BSP, the central bank of the Philippines.  All members of the Bankers
Association of the Philippines are required to make their Philippine peso-U.S.
dollar trades through this system, which was established by Telerate Financial
Information Network of Hong Kong.</p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following shows the exchange
rates between the Philippine peso and the U.S. dollar, expressed in pesos per
U.S. dollar, for the periods indicated, based on the volume-weighted average
exchange rate for each business day in each of the periods presented:</p>

<p style='line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Year Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Period End</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Average(1)</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Low(2)</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>High(3)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1999</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php40.298</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php39.090</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php37.566</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php41.112</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">49.986</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">44.179</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">39.830</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">51.680</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">51.690</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">51.009</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">47.550</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">55.013</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">53.254</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">51.583</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">49.336</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">53.841</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">55.586</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">54.215</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">52.021</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">55.767</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">2004 (through June 23, 2004)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">56.261</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">55.945</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">55.142</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">56.429</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Source:  Philippine Dealing
System Reference Rate</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(1)   Simple average of exchange rates for the period.</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(2)   Lowest exchange rate for the period.</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(3)   Highest exchange rate for the period.</i></p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Month</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Period End</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Average(1)</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Low(2)</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>High(3)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">December</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php55.586</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php55.438</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php55.288</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php55.586</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">January</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.964</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.545</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.142</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.085</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">February</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.332</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.089</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.872</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.332</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">March</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.216</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.298</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.151</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.429</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">April
 </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.034</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.894</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.577</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.346</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">May</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.807</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.835</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.490</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.973</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">June
 (through June 23, 2004)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.261</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.965</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">55.669</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">56.393</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Source:  Philippine Dealing
System Reference Rate</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(1)   Simple average of exchange rates for the month.</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(2)   Lowest exchange rate for the month.</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(3)   Highest exchange rate for the month.</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">This report contains conversions of peso amounts into U.S.
dollars for your convenience.  Unless otherwise specified, these conversions
were made at the exchange rate as of December 31, 2003 of Php55.586 to
US$1.00.  You should not assume that such peso amounts represent such U.S.
dollar amounts or could have been or could be converted into U.S. dollars at
the rate indicated, or at any particular rate.  As of June 23, 2004, the exchange rate quoted through the Philippine Dealing System was Php56.261 to
US$1.00.</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0"><a
name="_Toc43040184">&nbsp;</a></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779195"></a><a name="_Toc46082254"></a><a
name="_Toc42934525">Risk Factors</a></p>

<p style='line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Risks Relating to Us</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Our substantial
indebtedness could impair our ability to fulfill our financial obligations,
service our other debt and carry out new financings</i></p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">We have substantial indebtedness.  As of December 31, 2003, we had consolidated total indebtedness of approximately Php186,408 million
(US$3,353 million), including short-term debt of approximately Php2,133 million
(US$38 million) and a consolidated ratio of debt to equity (total debt on a
consolidated basis divided by stockholders' equity) of 7.53x.  Our consolidated
ratio of earnings to fixed charges was less than the minimum required ratio of 1.0x
for the years ended December 31, 2002 and 2001.  For an explanation on how we
calculate our consolidated ratio of earnings to fixed charges, see footnote 6
to our consolidated financial data table under &#147;Selected Financial Data&#148; and
Exhibit 7 in &#147;Item 19.&#148;  Our existing debt contains covenants, which, among
other things, require PLDT to maintain certain financial ratios calculated on
the basis of Philippine GAAP on a consolidated and non-consolidated basis,
limit our ability to incur indebtedness, make investments, incur expenditures
and pay dividends.  Financial statements prepared in conformity with Philippine
GAAP differ in some material respects from financial statements prepared in
conformity with U.S. GAAP.  For a description of some of these covenants, see
&#147;Item 5. Operating and Financial Review and Prospects &#151; Liquidity and Capital
Resources &#151; Financing Activities &#151; Debt Financing &#151; Covenants.&#148;</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our substantial indebtedness and
the requirements and limitations imposed by our debt covenants could have
important consequences.  For example, they could:</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
make it more difficult for us to satisfy our debt obligations;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
require us to dedicate a substantial portion of our cash flow to
payments on our indebtedness, thereby reducing the availability of our cash
flow to fund working capital, capital expenditures and other general corporate
requirements;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
limit our ability to refinance our debt obligations or incur new
debt needed to finance our working capital, capital expenditure or other
requirements;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
limit our flexibility in planning for, or reacting to, changes in
our business and the industry in which we operate; and</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
place us at a competitive disadvantage compared to our
competitors.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">If we are unable to meet our debt service obligations or comply
with our debt covenants, we could be forced to restructure or refinance our
indebtedness, seek additional equity capital or sell assets.  An inability to
effect these measures successfully could result in a declaration of default and
an acceleration of some or all of our indebtedness.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Under the indenture for our 10.625% Notes due 2007 and 11.375%
Notes due 2012, we may only incur additional debt, subject to certain
exceptions, if, after incurrence of such debt, our consolidated leverage ratio
under Philippine GAAP, (the ratio of debt to EBITDA calculated on a non-consolidated
basis based on definitions provided in the same indenture and except under
certain circumstances) would be less than 5.5:1 on or prior to December 31,
2003, 5.0:1 from January 1, 2004 to December 31, 2004 and 4.5:1 thereafter.
Because our consolidated leverage ratio at December 31, 2003 is in excess of 5.0:1, we are currently restricted from incurring any additional debt,
subject to certain exceptions, including exceptions for refinancing transactions.
In addition, we expect that we will have difficulty meeting our debt payment
obligations if we do not continue to receive cash dividends from Smart.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>We may not be able to
maintain compliance with restrictive covenants and ratios imposed by our
indebtedness</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our debt instruments contain
restrictive covenants and require us to comply with specified financial ratios
and other financial tests calculated on the basis of Philippine GAAP at
relevant measurement dates, principally at the end of each quarterly period.
Financial statements prepared in conformity with Philippine GAAP differ in some
material respects from financial statements prepared in conformity with U.S.
GAAP.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The principal factors that can
negatively affect our ability to comply with these financial ratios and other
financial tests are depreciation of the peso relative to the U.S. dollar, poor
operating performance of PLDT and its consolidated subsidiaries, impairment or
similar charges in respect of investments or other long-lived assets that may
be recognized by PLDT and its consolidated subsidiaries, and increases in our
interest expenses.  Since approximately 96% of PLDT's total debt is denominated
in foreign currencies, principally in U.S. dollars, many of these financial
ratios and other tests are negatively affected by any weakening of the peso,
which declined by approximately 5% against the U.S. dollar to an average of
Php54.215 to US$1.00 in 2003 from an average of Php51.583 to US$1.00 in 2002.
As of December 31, 2003, the exchange rate was Php55.586 to US$1.00, equivalent
to a 4% depreciation of the peso relative to the rate at the end of 2002.  In
addition, certain of our financial ratios are adversely affected by increases
in interest expense, which may result from factors including issuance of new
debt, the refinancing of lower cost indebtedness by higher cost indebtedness,
depreciation of the peso, the lowering of PLDT's credit ratings or the credit
ratings of the Philippines, an increase in reference interest rates, and general
market conditions.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT&#146;s ability to maintain
compliance with financial covenant requirements measured on a non-consolidated
basis is principally affected by the performance of our fixed line business,
which is predominantly conducted by PLDT.  PLDT cannot be assured of the
benefit of results generated by Smart and PLDT&#146;s other investees in assisting
in complying with non-consolidated covenants or covenants that are calculated
without giving effect to the results of PLDT&#146;s investees.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We have maintained compliance with
all of our financial ratios and covenants as measured under Philippine GAAP
under our loan agreements and other debt instruments.  However, if negative
factors adversely affect our financial ratios, we may be unable to maintain
compliance with these ratios and covenants or be unable to incur new debt.
Under some of our loan agreements, certain of our financial ratios have become
more restrictive at the end of the second and fourth quarters of 2003 and the
first quarter of 2004, and will continue to become more restrictive in
increments thereafter, which will make it more difficult for PLDT to maintain
compliance with this ratio in the future.  Inability to comply with our
financial ratios and covenants or raise new financing could result in a
declaration of default and acceleration of some or all of our indebtedness.
The terms of some of our debt instruments have no minimum amount for
cross-default.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">For more information on the
requirements of our loan agreements and other debt instruments and our
compliance with them, see &#147;Item 5. Operating and Financial Review and Prospects
&#151; Liquidity and Capital Resources &#151; Financing Activities &#151; Debt Financing &#151;
Covenants.&#148;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Creditors of our
subsidiaries will have superior claims to our subsidiaries&#146; cash flow and
assets</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">A growing portion of our consolidated revenues and cash flow
from operations is derived from our subsidiaries, particularly Smart.  Smart
and some of our other subsidiaries have significant internal cash requirements
for debt service, capital expenditures and operating expenses and so may be
financially unable to pay any dividends to PLDT.  In addition, some of our
subsidiaries are subject to covenants that restrict them from distributing cash
to PLDT except under certain circumstances.  In particular, Smart is subject to
loan covenants that restrict its ability to distribute cash to PLDT.  Although
Smart received consents under its relevant loans that permitted it to make
dividend payments to PLDT in December 2002, June 2003, November 2003 and May
2004, we cannot assure you that PLDT will continue to receive dividends or
other distributions, or otherwise be able to derive liquidity from Smart or any
other subsidiary or investee in the future.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Creditors of our subsidiaries will
have prior claims to our subsidiaries&#146; assets and cash flows.  We and our
creditors will effectively be subordinated to the existing and future
indebtedness and other liabilities, including trade payables, of our
subsidiaries, except that we may be recognized as a creditor on loans we have
made to subsidiaries.  If we are recognized as a creditor of a subsidiary, our
claim will still be subordinated to any indebtedness secured by assets of the
subsidiary and any indebtedness of the subsidiary otherwise deemed senior to
indebtedness we hold.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><i>Our businesses require substantial capital investment,
which we may not be able to finance</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our projects under development and
the continued maintenance and improvement of our networks and services,
including Smart&#146;s projects, networks and services, require substantial ongoing
capital investment.  Our consolidated capital expenditures in 2003 and 2002
totaled Php17,943 million and Php17,239 million, respectively.  Our 2004 budget
for consolidated capital expenditures is approximately Php22,000 million, of
which approximately Php7,000 million is budgeted to be spent by PLDT and
approximately Php15,000 million is budgeted to be spent by Smart.  PLDT&#146;s
capital spending is intended principally to finance the continued build-out of its
data and internet protocol infrastructures and for its data services and the
maintenance of its network.  Smart&#146;s capital spending is focused on expanding
and upgrading its GSM network to meet increased demand for cellular services.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Future strategic initiatives could
require us to incur significant additional capital expenditures.  We may be
required to finance a portion of our future capital expenditures from external
financing sources, which have not yet been fully arranged.  We cannot assure
you that financing for new projects will be available on terms acceptable to us
or at all.  If we cannot complete our development programs and other capital
projects, our growth, results of operations and financial condition could be
materially and adversely affected.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Our ability to refinance
our debt and raise new financing to fund our working capital, capital
expenditures and other needs depends on many factors beyond our control</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In addition
to our existing available credit facilities, we may require new external
financing in order to fund all of our operating, investment, capital
expenditures and debt service requirements and to refinance and extend the
maturities of our short and medium-term indebtedness.  Our ability to arrange
for this and other financing and the cost of such financing will be dependent
on numerous factors outside of our control, including:</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
general economic and capital market conditions, including the
peso-to-U.S. dollar exchange rate;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the availability of credit from banks or other lenders;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
investor confidence in us;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
investor views about the Philippines;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the continued success of our business;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
our credit ratings and the sovereign credit ratings of the Philippines;
and</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
provisions of tax and securities laws that may be applicable to
our efforts to raise capital.</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Any credit rating downgrades may
significantly affect the availability and the terms of our prospective
financing, including financing costs.  In addition, restrictions under our
current indebtedness subject us to various financial tests, which could prevent
us from incurring additional debt.  Inability to arrange such debt could
materially and adversely affect our ability to fund our anticipated operating,
investment and capital expenditures as well as our anticipated debt service
requirements, and could result in defaults and cross-defaults under our
existing debt, thereby adversely affecting our results of operations and
financial condition.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>If the peso depreciates
against the U.S. dollar, our financial position could be materially and
adversely affected</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Substantially
all of our indebtedness and related interest expense, a substantial portion of
our capital expenditures and a portion of our operating expenses are
denominated in U.S. dollars and other foreign currencies, but a significant
portion of our revenues is denominated in pesos.  As of December 31, 2003, approximately 94% of our consolidated indebtedness was denominated in U.S. dollars
and other foreign currencies.  A depreciation of the peso against the U.S.
dollar increases the amount of our debt obligations and operating and interest
expenses in peso terms.  In the event that the peso depreciates against the
U.S. dollar, we may be unable to generate enough funds through operations (such
as by raising our service rates, including through adjustments to rates for
local exchange service based on movements in the peso-to-dollar exchange rate)
and other means to offset the resulting increase in our obligations in peso
terms.  Further, these changes could cause us not to be in compliance with the
financial covenants imposed by our lenders under certain loan agreements and
other indebtedness.</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">During the last decade, the peso
has generally depreciated against most foreign currencies.  In addition, during
this period, the Philippine economy has also, from time to time, experienced
periods of concentrated peso devaluation and limited availability of foreign
currency.  Since June 30, 1997, when the<i> </i>BSP announced that it would let
market forces determine the value of the peso, the peso has experienced a
significant decline against the U.S. dollar.  It depreciated from Php26.376 to
US$1.00 on June 30, 1997, to Php55.586 to US$1.00 as of December 31, 2003 and further decreased to Php56.216 to US$1.00 as of March 31, 2004.  The peso declined by approximately 4% against the U.S. dollar to Php55.586 to US$1.00 as of
December 31, 2003 from Php53.254 to US$1.00 as of December 31, 2002 and by
approximately 1% against the U.S. dollar to Php56.216 to US$1.00 as of March
31, 2004 from Php55.586 to US$1.00 as of December 31, 2003.  The peso has also
been subject to significant fluctuations.  For example, during the first nine
months of 2003, the peso depreciated to a low of Php55.532 to US$1.00 on August 26, 2003, recovered to a high of Php52.021 to US$1.00 on May 8, 2003 and again depreciated to a low of Php55.767 to US$1.00 on November 27, 2003.  The peso may again be subject to significant fluctuations and may depreciate due to a range
of factors, including:</p>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
political and economic developments affecting the Philippines;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the volatility of regional currencies, particularly the Japanese
yen;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any interest rate increases by Federal Reserve Bank of the United
 States;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
higher demand for U.S. dollars by both banks and domestic
businesses to service their maturing U.S. dollar obligations; and</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
some banks covering their short U.S. dollar positions.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Our results of operations
have been, and may continue to be, adversely affected by competition in
international long distance service</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The international long distance
business was historically one of our major sources of revenue.  However, due to
competition and the steep decline in international settlement rates that are
paid to us by foreign telecommunications carriers for termination of
international calls on our network, revenues generated from our international
long distance business have overall declined in recent years.  </p>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Although revenue generated from our
international long distance business increased primarily due to increased
termination rates in 2003, we anticipate that revenues from international
communications and information services, including our services, will continue
to decline in the future, primarily due to:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
installed and expanding fiber networks and satellite capacities
that provide substantially more transmission capacity than may be needed in the
short or medium term;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
substantial increases in the transmission capacity of new and
existing networks, including those operated by our competitors, due to recent
technological advances;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
increased competition from other domestic and international
telecommunications providers;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
alternative providers offering internet telephony and broadband
capacity; and</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
advances in technology.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We cannot assure you that these
declines will not materially and adversely affect our financial performance.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Net settlement payments between
PLDT and other foreign telecommunications carriers for origination and
termination of international call traffic between the Philippines and other
countries have been our predominant source of foreign currency revenues.
However, in U.S. dollar terms, these payments have been declining in recent
years.  Continued decline in our foreign currency revenues could increase our
exposure to risks from declines in the value of the Philippine peso against the
U.S. dollar.  We cannot assure you that we will be able to achieve adequate
increases in our other revenues to make up for any adverse impact of a further
decline in our net settlement payments.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>We face strong competition
and may need to increase our marketing expenditures or reduce our rates in
order to compete effectively</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">We cannot assure you that the
number of providers of cellular telecommunication services will not increase or
that competition for telecommunications customers will not lead our cellular
and fixed line subscribers to switch to other operators or lead us to increase
our marketing expenditures or reduce our rates, resulting in a reduction in our
profitability.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The Philippine government has liberalized the Philippine telecommunications
industry and opened up the Philippine telecommunications market to new
entrants.  Including us, there are nine major local exchange carriers, 11
international gateway facility providers and six cellular mobile telephone
system providers in the Philippines, including one which has not yet commenced
operations.  Many new entrants into the Philippine telecommunications market
have entered into strategic alliances with foreign telecommunications
companies, which provide them access to technological and funding support as
well as service innovations and marketing strategies.  Consequently, we are
facing increasing competition in major segments of the telecommunications
industry, particularly cellular, fixed line and data and other network services
segments.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The cellular telecommunications
industry in the Philippines has been particularly competitive, as operators
have sought to develop and maintain market shares and to attract new
subscribers.  Our principal cellular competitor, Globe Telecom, Inc., or Globe,
acquired another telecommunications provider, Isla Communications Company,
Inc., or Islacom, on June 27, 2001, thereby strengthening Globe as a
competitor.  Further consolidation in the industry could result in more
vigorous competition.  Digital Telecommunications Philippines, Inc., or
Digitel, which was awarded a license to operate cellular telecommunications
services in 2000, launched its cellular service, <i>Sun Cellular</i>, on March 29, 2003.  In addition, the NTC has awarded a license to Bayan Telecommunications
Philippines, Inc., or BayanTel, to operate cellular telecommunications
services, but as of the filing of this annual report has not yet commenced
cellular operations.  The recent entry of Digitel and the grant of a license to
Bayantel are expected to create additional competition in the industry.  In the
future, the government may allocate further frequencies and award additional
cellular telecommunications licenses, which would further increase competition.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Competitive pressures on our cellular rates may affect our
cellular revenues and revenue growth.  For example, we have not increased our
cellular rates to reflect fluctuations in the peso-to-U.S. dollar exchange rate
since November 1998 as a result of such competitive pressures.  In addition,
our prepaid GSM subscribers can, using their existing handsets, switch to one
of our competitors by having their handsets &#147;unlocked&#148; from our service for a
fee and purchasing a new SIM card from the desired operator.  We cannot assure
you that these marketing expense and rate pressures and loss of customers will
not have a material adverse effect on our financial performance.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>If we are unable to
install and maintain telecommunications facilities and equipment in a timely
manner, we may not be able to keep up with our principal competitors, which may
have negative implications for our revenue and profitability</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our business requires the regular installation of new, and the
maintenance of existing, telecommunications transmission and other facilities and
equipment.  The installation and maintenance of these facilities and equipment
are subject to risks and uncertainties relating to:</p>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
shortages of equipment, materials and labor;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
work stoppages and labor disputes;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
interruptions resulting from inclement weather and other natural
disasters;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
unforeseen engineering, environmental and geological problems;
and</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
unanticipated cost increases.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Any of these factors could give rise to delays or cost overruns
in the installation of new facilities or equipment or could prevent us from
properly maintaining the equipment used in our networks, and could have a
material adverse effect on our results of operations and financial condition.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Rapid changes in
telecommunications technology may adversely affect the economics of our
existing businesses and the value of our assets, increase our required capital
expenditures and create new competition</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The telecommunications sector has been characterized recently by
rapid technological changes.  We cannot assure you that these developments will
not result in competition from providers of new services or the need to make
substantial capital expenditures to upgrade our facilities.  For example, if
third-generation, or 3G, cellular services were introduced in the Philippines,
we would likely incur significant expenses if we were to roll out those
services.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our future success will depend, in
part, on our ability to anticipate or adapt to such changes and to offer
services that meet customer demands on a competitive and timely basis.  We
cannot assure you that we will be able to obtain new technologies on a timely
basis or on satisfactory terms or implement them in an appropriate or effective
manner.  The development and introduction of new technologies by us or our
competitors may cause significant portions of our existing assets to become
obsolete and suffer an impairment in value earlier than their anticipated
useful lives and require us to accelerate their depreciation.  In 2001, we
recognized impairment charges in respect of Smart&#146;s analog assets and Smart&#146;s
unamortized intangible asset relating to analog customer lists.  Piltel
recognized impairment losses in respect of its AMPS/CDMA and Executive Order
No. 109, or E.O. 109 assets in 2001 and 2002, respectively.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>The cellular telecommunications
industry may not continue to grow or may grow at a slower rate</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The majority
of our consolidated revenues is currently derived from our cellular services.
As a result, we depend on the continued development and growth of the cellular
telecommunications industry.  Growth of the cellular communications market
depends on many factors beyond our control, including the continued
introduction of new and enhanced cellular devices and consumer preferences.
Any economic, technological or other developments resulting in a reduction in
demand for cellular services may harm our business.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Our businesses depend on
the reliability of our network infrastructure, which is subject to physical,
technological and other risks</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
development and operation of telecommunications networks are subject to
physical, technological and other risks, which may cause interruptions in
service or reduced capacity for customers.  These risks include:</p>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
physical damage;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
power loss;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
capacity limitation;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
software defects; and</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
breaches of security by computer viruses, break-ins or otherwise.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The occurrence of any of these
risks could have a material adverse effect on our ability to provide services
to customers, and could have a material adverse effect on our business.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Piltel has experienced
financial difficulties and we cannot assure you that it will be able to
discharge any of its debts or other obligations, including its debts or other
obligations owed to us and our affiliates</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">Piltel has
experienced significant financial difficulties in recent years.  It has
restructured substantially all of its debts in accordance with its debt
restructuring plan, which was signed on June 4, 2001.  Under the terms of such
debt restructuring plan, PLDT issued a Letter of Support for the benefit of
Piltel and its creditors under which PLDT has agreed to cover any funding
shortfalls of Piltel up to a maximum amount of US$150 million, of which
approximately US$50 million remained undrawn as of December 31, 2003.  In June and October 2002, more creditors of Piltel agreed to participate in its
restructuring plan on the same terms.  As of December 31, 2003, total restructured long-term debt of Piltel amounted to Php23,382 million, with maturities
of up to June 14, 2016.  Piltel is currently in the process of restructuring
certain other debts.  However, we cannot assure you that Piltel will be able to
restructure or otherwise pay the claims relating to its unrestructured debt or
that Piltel will have sufficient cash flow to meet its debt service and other
payment obligations, including its payment obligations to us.  As of December
31, 2003, Piltel owed PLDT Php985 million, while Smart owed Piltel Php2,199
million in respect of their respective facilities sharing and other agreements
with Piltel.  Until all amounts owed to creditors participating in the debt
restructuring plan have been paid or discharged, PLDT will not be permitted to
demand or receive any payment, redemption, or distribution in respect of any
present and future liability owed by Piltel to PLDT or any affiliate of PLDT,
subject to specified exceptions.  These liabilities include amounts owed on
Piltel preferred shares owned by PLDT and other financial indebtedness owed by
Piltel to PLDT or any affiliate of PLDT, but exclude payments due in respect of
transactions having arm&#146;s-length terms or in which the pricing is based on
market terms.  These severe long-term restrictions significantly impair
Piltel&#146;s ability to transfer funds to PLDT.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Moreover, Piltel may not be able to
restructure or otherwise pay the claims relating to its unrestructured debt.
As of December 31, 2003, Piltel had an aggregate principal amount of Php51
million of unrestructured debt.  Piltel does not intend to make any payments in
respect of this debt unless and until it reaches a restructuring agreement with
the creditors holding the obligations.  If Piltel&#146;s non-participating creditors
take forceful measures to enforce their claims, it is possible that Piltel
would be required to submit itself to a court-supervised rehabilitation
proceeding or an involuntary insolvency proceeding seeking liquidation.  All of
Piltel&#146;s creditors that participated in the debt restructuring agreed in
connection with the debt restructuring that they would submit Piltel to a
rehabilitation proceeding in those circumstances and petition for the adoption
of a plan of rehabilitation that includes the financial terms of the debt
restructuring plan.  However, the laws and procedures governing a
rehabilitation proceeding in the Philippine courts remain untested in
significant respects.  We cannot assure you that a rehabilitation plan, which
incorporates the financial terms of the debt restructuring, would be adopted
promptly or at all.  Even if such a rehabilitation plan was adopted, we cannot assure
you that Piltel will prove to be viable thereafter and that it will be able to
meet its obligations, including its obligations owed to us or our affiliates.
On March 23, 2004, Smart sent out invitations to the creditors of Piltel to
offer to sell their indebtedness to Smart, see &#147;Item 5. Operating and Financial
Review and Prospects &#150;&#150; Other Information &#150;&#150; Smart&#146;s Proposed Exchange Offer to
Piltel Creditors&#148; and <i>Note 28 &#150; Other Matters(g) </i>to the accompanying
consolidated financial statements in Item 18 for further discussion.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>The franchise of Smart may
be revoked if it cannot make a public offering of its shares in August 2004 </i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart believes that it has ten years from the commencement
of its operations, or until August 2004, to conduct a public offering of its
shares required under the Public Telecommunications Policy Act (Republic Act
No. 7925, or R.A. 7925).  If Smart will not conduct a public offering of its
shares by August 2004, the Philippine Congress may revoke the franchise of
Smart if it fails to comply with the requirement under R.A. 7925 on the public
offering of its shares.  A <i>quo warranto</i> case may also be filed against
Smart by the Office of the Solicitor General of the Philippines for the
revocation of the franchise of Smart on the ground of violation of R.A. 7925 if
Smart will fail to conduct the public offering of its shares by August 2004.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>A significant number of
PLDT&#146;s shares are held by two separate shareholders, which may not act in the
interests of other shareholders or stakeholders in PLDT</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">Affiliates of First Pacific directly or indirectly own
approximately 31.4% of PLDT&#146;s common stock as of December 31, 2003.  This is the largest block of PLDT&#146;s common stock that is directly or indirectly under
common ownership.  NTT Communications owns 14.9% of PLDT&#146;s common stock as of December 31, 2003 and has contractual veto rights over a number of major decisions and
transactions that PLDT could make or enter into, including:</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
capital expenditures in excess of US$50 million;</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any investments, if the aggregate amount of new investments for
the previous 12 months is greater than US$100 million, determined on a rolling
monthly basis;</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any investments in a specific investee, if the cumulative value
of all investments made by PLDT in that investee is greater than US$10 million
in the case of an existing investee and US$50 million in the case of a new
investee;</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
issuance of common stock or stock that is convertible into common
stock;</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
new business activities other than those we currently engage in;</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:0in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
merger or consolidation; and</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;the provision of financial support to Piltel
in excess of that remaining available under the PLDT Letter of Support.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">First Pacific and NTT Communications have also entered into a
shareholders&#146; agreement relating to PLDT.  As a result of this agreement and
their respective stockholdings, First Pacific and its affiliates and/or NTT
Communications are able to influence our actions and corporate governance,
including:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;elections of PLDT&#146;s directors; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;approval of major corporate actions, which
require the vote of common stockholders.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">First Pacific and its affiliates and/or NTT Communications may
exercise control over these decisions and transactions in a manner that could
be contrary to your interests.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>If a major shareholder sells
its interest in PLDT, the transaction may result in an event of default</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">If First Pacific or NTT Communications sells all or a portion of
its equity interest in PLDT, in certain circumstances, such sale may give rise
to an obligation for us to make an offer to purchase or prepay our outstanding
debt under our 10.625% Notes due 2007 and our 11.375% Notes due 2012, our
US$145 million multicurrency term loan facility agreement, our JP&yen;9,760 million
loan agreement with Japan Bank for International Cooperation, or JBIC,
(formerly known as the Export-Import Bank of Japan) and our JP&yen;5,615 million
syndicated term loan facility, and may result in a default under all of Smart&#146;s
loan agreements.  As of December 31, 2003, Php33,152 million in principal
amount of PLDT&#146;s indebtedness is directly subject to a change in control offer
to purchase or prepay requirement and Php19,733 million in principal amount of
Smart&#146;s indebtedness is subject to an event of default in the event of a change
in control of PLDT.  If we fail to complete a required change in control offer
to purchase or prepay the affected debts, all of our debt could become
immediately due and payable as a result of various cross-default provisions.
See &#147;Item 5. Operating and Financial Review and Prospects &#151; Liquidity and
Capital Resources &#151; Financing Activities &#151; Debt Financing &#151; Covenants.&#148;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>The outcome of a pending investigation by the </i><i>U.S.</i><i>
Department of Justice is uncertain</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">In January 2004, PLDT, a PLDT employee and an employee of Smart
received grand jury subpoenas seeking documents and testimony in connection
with a criminal investigation being conducted by the U.S. Department of Justice
with respect to alleged antitrust violations relating to the provision of
international termination services in the Philippines.  The U.S. Department of
Justice has also requested testimony and documents from Smart in connection
with this investigation.  Moreover, in March 2004, PLDT (U.S.) Ltd., a
subsidiary of PLDT Global, also received a grand jury subpoena seeking
documents in connection with this investigation.  At this time, PLDT cannot
predict the outcome of this investigation.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>PLDT&#146;s franchise may be revoked if we are unsuccessful in
legal proceedings, which are pending</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The Constitution of the Philippines requires that at least 60%
of the capital of a corporation operating a public utility in the Philippines
be owned by Philippine citizens.  In 1990, the then-Solicitor General of the Philippines
instituted legal proceedings seeking to revoke PLDT&#146;s franchise on various
grounds, including violation of this requirement.  We believe that these
proceedings are without merit.  In 1991, the Philippine Congress extended the
term of PLDT&#146;s franchise until 2028 and broadened PLDT&#146;s franchise authority.
The Congress granted this amended franchise to PLDT despite these pending legal
proceedings and despite the opposition of the Solicitor General.  The Solicitor
General has not taken any further action to pursue or continue the proceedings
on this case.  The parties filed their last pleadings in 1992 and since then
the case has remained inactive.  Consequently, under a court order dated January 20, 1999, the case has been archived, though the case can potentially be revived
by action of either PLDT or the Solicitor General&#146;s office.  It is a normal
practice for Philippine courts to archive cases that remain inactive for a long
period of time.  We are not aware of any court notice for the resumption of the
proceedings in this case.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Our business is
significantly affected by governmental laws and regulations, including
regulations in respect of our franchises and rates</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">We operate our business under franchises, each of which is
subject to amendment, termination or repeal by the Philippine Congress.
Additionally, PLDT operates pursuant to various provisional authorities and
certificates of public convenience and necessity, or CPCNs, which are granted
by the NTC and expire between now and 2028.  Some of PLDT&#146;s CPCNs and
provisional authorities have already expired.  However, PLDT filed applications
for extension of these CPCNs and provisional authorities prior to their
respective expiration dates and is therefore entitled to continue to conduct
its business under its existing CPCNs and provisional authorities pending the
NTC&#146;s decisions on these extensions.  Smart also operates its cellular,
international long distance, national long distance and global mobile personal
communications via satellite services pursuant to CPCNs, which will expire upon
the expiration of its franchise.  Smart&#146;s franchise is due to expire on March 27, 2017, 25 years after the date on which its current franchise was granted.  Smart
operates international private leased circuits under a provisional authority,
which expired on May 6, 2003.  Smart applied for an extension of this
provisional authority prior to its expiration.  Because PLDT and Smart filed
the applications for extension on a timely basis, we expect that these
extensions will be granted.  However, we cannot assure you that the NTC will
grant these extensions.  If a CPCN has not been issued, the NTC may permit an
operator to provide services pursuant to a provisional authority.  Provisional
authorities are typically granted for a period of 18 months.  The Philippine
Revised Administrative Code of 1987 provides that if the grantee of a license
or permit, such as a CPCN or provisional authority, has made timely and
sufficient application for the extension thereof, the existing CPCN or
provisional authority will not expire until the application is finally decided
upon by the administrative agency concerned.  However, we cannot assure you
that our franchises, CPCNs and provisional authorities will be renewed.  For a
description of our licenses, see &#147;Item 4. Information on the Company &#151; Licenses
and Regulation.&#148;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The NTC also regulates the rates we
are permitted to charge for services that have not yet been deregulated, such
as local exchange services.  We cannot assure you that the NTC will not impose
additional obligations on us that could lead to the revocation of our licenses
if not adhered to and/or reduction in our operating revenues or profitability.
In addition, the NTC could adopt changes to the regulations governing our
interconnection with other telecommunications companies or the rates and terms
upon which we provide services to our customers that could have a material and
adverse effect on our results of operations.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">The NTC may implement proposed changes in billing
requirements for cellular operators, which may have negative implications for
our revenues and profitability</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On June 16, 2000, the NTC issued Memorandum Circular No. 13-6-2000 proposing that Philippine cellular operators,
including Smart and Piltel, be required, among other things:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to bill their subscribers for cellular calls on a six-second
pulse basis instead of the current per minute basis;</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
not to bill calls directed to recorded voice messages; and</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to extend the expiration date of prepaid cards from the current
two months to two years.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Along with the other Philippine cellular operators,
Smart sought and obtained from a Quezon
 City trial court a preliminary
injunction restraining the implementation of the memorandum circular.  The NTC
appealed the issuance of the injunction to the Court of Appeals which, on October 9, 2001, annulled
the preliminary injunction, ruling that the NTC had jurisdiction over the
matter.  On January 10, 2002, the Court of Appeals denied the cellular operators&#146;
motion to annul and reverse the decision of the Court of Appeals.  On February 22, 2002,
Smart filed an appeal with the Supreme Court arguing that the appellate court
had erred in ruling that the NTC, and not the trial court, had jurisdiction
over its case.  On September 2, 2003, the Supreme Court upheld Smart&#146;s appeal, reversing
and setting aside the decision of the Court of Appeals and affirming that the Quezon City
trial court could hear and decide the case.  The case was remanded to the Quezon City
trial court for continuation of the proceedings. The NTC filed a motion for
reconsideration on September 29, 2003 which was denied with finality by the Supreme Court
on November 13, 2003.  The Supreme Court stated that &#147;considering that the
basic issues have already been passed upon and there is no substantial argument
to warrant a modification of this court&#146;s decision, the court resolves to deny
consideration with finality.&#148;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">The Philippine Congress is considering five bills,
each of which, if passed by Congress and enacted into law, would impose a 7% or
10% tax on the gross receipts of cellular operators.  The proposed taxes would
apply to both cellular calls and cellular data revenues and prohibit cellular
operators from imposing additional charges or fees to compensate for the
imposition of the proposed taxes.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>We may be subject to
significant local business and franchise taxes if we are unsuccessful in legal
proceedings, which are pending</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">We are currently facing
various lawsuits for local business and franchise taxes assessed by different
local government units, or LGUs as described under &#147;Item 8. Financial
Information &#151; Legal Proceedings &#151; Taxation &#151; Local Business and Franchise
Taxes.&#148;  Generally, each province may impose local franchise tax at a rate of
up to 0.5% of the gross annual receipts received or realized within that
province.  Cities within each province may also impose annual franchise taxes
on gross annual receipts received or realized in those cities, at a rate that
may not exceed the provincial franchise tax rate by more than 50%.  In one
case, involving the City of Davao, the Supreme Court has ruled that we are not exempt
from payment of local business and franchise taxes.  On March 25, 2003, the
Supreme Court denied our motion for reconsideration and affirmed the local
franchise tax assessment of Davao City in the amount of approximately Php4
million.  Subsequently, PLDT paid the Davao City government franchise taxes
covering the period 1999 to 2003, including the Php4 million, but we are
seeking reconsideration of the surcharges and interests of about Php10 million
imposed by the Davao City government.  Although the Supreme Court decision
would constitute a precedent, this will not automatically result in the
termination of the other pending local franchise tax cases, with the courts
rendering decisions adverse to us.  While the courts in these cases are
expected to adhere to this Supreme Court decision, each court would have to
make its own determination based on the evidence introduced by the parties and
the factual circumstances of each case.  We cannot assure you that other LGUs will
not file lawsuits against us or otherwise claim amounts owed in respect of
business and franchise taxes.  If the courts rule against us, we would be
liable for these taxes, including interest and penalties, for past periods to
the extent these taxes are assessed within five years from the date they were
due and for future periods.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">As of December 31, 2003, the aggregate amount claimed by the
plaintiffs in these lawsuits was Php5,142 million with respect to PLDT, Php313
million with respect to Smart and Php45 million with respect to Piltel.  We
believe that in the event these lawsuits and protests were decided against us,
in many cases, we would not be liable for the full amounts claimed by the local
governments because these amounts (1) were computed based on the gross annual
receipts received or realized not only from within the related province or city
for the related period but also from gross annual receipts received or realized
from other provinces or cities and (2) include assessments for periods occurring
more than five years before the respective lawsuits were filed.  Accordingly,
in the event these lawsuits are decided against us, we believe that our
potential liability is likely to be significantly lower than the amounts
claimed by the plaintiffs.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Risks Relating to the </i></b><b><i>Philippines</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Our business may be
affected by political or social instability in the </i><i>Philippines</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">In the past three years, an increasing number of kidnapping,
criminal and terrorist activities have occurred in Mindanao, principally led by
the extremist &quot;Abu Sayyaf&quot; group, which reportedly has ties to the
Al-Qaeda terrorist network.  There have been a series of bombing incidents in
key cities in Mindanao, including Davao City.  The armed conflict between the
Philippine military and the communist Moro Islamic Liberation Front also
continues in Mindanao.  This social unrest negatively impacted the operations
of Piltel&#146;s fixed line business in Mindanao. </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">In November 2001, members of the rebel groups damaged three of
our cell sites located in Central Luzon and one of our relay stations,
including some radio facilities, in Southern Mindanao in response to our
failure to pay &#147;revolutionary taxes&#148; demanded by these groups.  On July 27, 2003, approximately 300 Philippine soldiers took control of a shopping center and
apartment complex in Makati City in an effort to express their dissatisfaction
with the Philippine government.  The mutineers surrendered within 20 hours.
The government has reported that the actions taken by the approximately 300 Philippine
soldiers were part of a coup attempt.  In October 2003, a group of unidentified
armed men inflicted minor damage to Smart&#146;s cell site in Bicol.  </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On May 10, 2004, the Philippines held a presidential elections, as well as elections for members of the Senate and
the Congress.  The canvassing of votes has just been concluded and resulted in
a victory by the incumber President Gloria Macapagal-Arroyo who successfully
retained her post.  The opposition has alleged irregularities in the
presidential elections, such as stolen ballots and vote buying, and has
threatened street protests.  We cannot assure you that political events or
terrorists&#146; activities will not result in major public protest or the
involvement of the military in politics.  Any political instability in the
future may have a negative effect on our results of operations and financial
condition.  We cannot assure you that the political environment in the Philippines
will be stable or that the current or any future government will adopt economic
policies conducive to sustained economic growth or which do not impact
adversely on the current regulatory environment for telecommunications or other
companies.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Our results of operations
may be negatively affected by slow growth rates and economic instability in the
</i><i>Philippines</i><i> and in </i><i>Asia</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">In the past, the Philippines has experienced periods of slow
growth, high inflation, significant devaluation of the peso, imposition of
exchange controls, debt restructuring and electricity shortages and blackouts,
and has been significantly affected by economic volatilities in the Asian
Region.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2003, the Philippine government
incurred a fiscal deficit of Php199,900 million which was lower by
approximately 6% from the Php212,000 million incurred in 2002.  The fiscal
deficit incurred for 2003 represents 4.7% of the nominal gross domestic
product, or GDP.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On January 27, 2004, Moody&#146;s downgraded the Philippine
Government&#146;s long-term foreign currency bond rating to &#147;Ba2&#148; with a negative
outlook citing concerns over the government&#146;s fiscal deficit and unsettled
political dynamics.  While Moody&#146;s upgraded PLDT&#146;s foreign currency senior
unsecured debt rating to &#147;Ba2&#148; on the same day, PLDT outlook was constrained to
negative by Moody&#146;s reflecting the outlook on the Philippine Government&#146;s
rating.  In case the Philippine sovereign rating is downgraded by Moody&#146;s, it
is highly likely that PLDT&#146;s credit rating would be downgraded as well.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The growing government fiscal
deficit and a global increase in oil prices, have resulted in increased
concerns about the political and economic stability in the Philippines.  This,
in turn, has resulted in the depreciation of the peso against the U.S. dollar
and the volatility of the prices of shares traded on the domestic stock market.
We cannot assure you that these factors will not affect our results of
operations in a materially adverse manner.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><i>If foreign exchange controls were to be imposed, our
ability to meet our foreign currency payment obligations could be adversely
affected</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Approval from or registration with
the BSP for the issuance and guarantee of foreign currency denominated
borrowings is not required in order to make our foreign currency payment
obligations legally valid and binding.  However, receiving this approval and registration
will enable a borrower to access the banking system to obtain foreign currency
to service its debt obligations rather than using other sources of foreign
currency, for example, foreign currency revenue streams.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Philippine government has, in
the past, instituted restrictions on the conversion of the peso into foreign
currency and the use of foreign exchange received by Philippine companies to
pay foreign currency-denominated obligations.  The Monetary Board of the BSP has
statutory authority, with the approval of the President of the Philippines,
during a foreign exchange crisis or in times of national emergency, to:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
suspend temporarily or restrict sales of foreign exchange;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
require licensing of foreign exchange transactions; or</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
require the delivery of foreign exchange to the BSP or its
designee banks.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We cannot assure you that foreign
exchange controls will not be imposed in the future.  If imposed, these
restrictions could materially adversely affect our ability to obtain foreign
currency to service our foreign currency obligations.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>The occurrence of natural
catastrophes may materially disrupt our operations</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Philippines has experienced a
number of major natural catastrophes over the years including typhoons,
volcanic eruptions and earthquakes that may materially disrupt and adversely
affect our business operations.  We cannot assure you that the insurance
coverage we maintain for these risks will adequately compensate us for all
damage and economic losses resulting from natural catastrophes.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779196"></a><a name="_Toc46082255">Item 4.   Information
on the Company</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779197"></a><a
name="_Toc46082256">Overview</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">We are the leading national telecommunications service provider
in the Philippines.  Through our three principal business groups &#151; wireless,
fixed line, and information and communications technology &#151; we offer a wide
range of telecommunications services to over 15 million wireless and fixed line
subscribers in the Philippines across the nation's most extensive fiber optic
backbone and fixed line, cellular and satellite networks.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We are the leading fixed line
provider in the Philippines with approximately 65% of the total reported fixed
lines in service nationwide as of December 31, 2003.  Smart, our wholly-owned
subsidiary, is the leading cellular service provider in the country, with
approximately 46% of total reported cellular subscribers as of December 31, 2003.  Piltel, our 45.3%-owned subsidiary, had approximately 13% of total
reported cellular subscribers as of December 31, 2003.  We have interests in
the information and communications technology sectors, including Infocom, one
of the leading ISPs in the Philippines.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our common shares are listed on the Philippine Stock Exchange,
or PSE, and our American Depositary Shares are listed on the New York Stock
Exchange and the Pacific Exchange.  We had a market capitalization of
approximately Php181,178 million (US$3,259 million) as of May 31, 2004, representing one of the largest market capitalizations among Philippine-listed
companies.  For the year ended December 31, 2003, we had consolidated revenues
and EBITDA of Php112,036 million (US$2,016 million) and Php44,055 million
(US$793 million), respectively.  See footnote 5 to the selected financial data
table in &#147;Item 3. Key Information &#151; Selected Financial Data&#148; for a quantitative
reconciliation of EBITDA on a consolidated basis to income (loss) before
minority interest in net income of consolidated subsidiaries.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our principal executive offices are
located at the Ramon Cojuangco Building, Makati Avenue, Makati City, Philippines
and our telephone number is (632) 816-8024.  Our website address is <i>www.pldt.com.ph</i>.
The contents of our website are not a part of this annual report.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779198"></a><a name="_Toc46082257">Historical Background and Development</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style="margin-top:0;margin-bottom:0">PLDT was incorporated under the old Corporation Law of the Philippines
(Act 1459, as amended) on November 28, 1928, following the merger of four
telephone companies under common U.S. ownership.  Under its amended Articles of
Incorporation, PLDT&#146;s corporate term is limited through 2028.  In 1967,
effective control of PLDT was sold by General Telephone and Electronics
Corporation (a major shareholder since PLDT&#146;s incorporation) to a group of
Filipino businessmen.  In 1981, in furtherance of the then existing policy of
the Philippine government to integrate the Philippine telecommunications industry,
PLDT purchased substantially all of the assets and liabilities of the Republic
Telephone Company which at that time was the second largest telephone company
in the Philippines.  During 1998, First Pacific, through its Philippine and
other affiliates, acquired a significant interest in PLDT.  On March 24, 2000, NTT Communications, through NTTC-UK, became PLDT&#146;s strategic partner with
approximately 15% economic and voting interest in the issued common capital
stock of PLDT.  Simultaneous with NTT Communications&#146; investment in PLDT, we
acquired 100% of Smart.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">PLDT&#146;s original franchise, which was granted in 1928, was last
amended in 1991 to be extended until 2028.  The amended franchise (R.A. 7082),
which became effective on August 24, 1991, also broadened PLDT&#146;s franchise to
permit PLDT to provide virtually every type of telecommunications service.
PLDT&#146;s franchise covers the business of providing basic and enhanced
telecommunications services in and between the provinces, cities and
municipalities in the Philippines and between the Philippines and other
countries and territories including mobile, cellular, wired or wireless
telecommunications system, fiber optics, multi-channel transmission
distribution systems and their value-added services such as but not limited to
transmission of voice, data, facsimile, control signals, audio and video,
information services bureau and all other telecommunications systems
technologies, as are at present available or can be made available through
technical advances or innovations in the future.  See &#147;Item 8. Financial
Information &#151; Legal Proceedings &#151; Quo Warranto Action&#148; for information
regarding legal proceedings initiated by the Solicitor General with respect to
PLDT&#146;s franchise.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Since the implementation of its Subscriber Investment Plan, or
SIP, in 1973 pursuant to Presidential Decree No. 217, which, until April 21, 2003, required telephone subscribers to purchase shares of PLDT's preferred
stock, PLDT has developed a broad base of public ownership with approximately 2,207,008
common and preferred shareholders of record as of December 31, 2003.  Approximately 2,190,318 of these shareholders are Philippine persons representing
approximately 88% of PLDT's outstanding common and preferred shares.  For
purposes of the percentages described in this paragraph, all the ADSs evidenced
by American Depositary Receipts, or ADRs, are considered to be held of record
in the United States.  As approved by the NTC, the purchase of PLDT preferred
shares by PLDT subscribers pursuant to the SIP became optional starting April 22, 2003.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On a consolidated basis, capital expenditures amounted to
Php17,943 million, Php17,239 million and Php28,201 million in 2003, 2002 and
2001, respectively.  Of these amounts, Php6,100 million, Php8,194 million and
Php9,252 million were attributable to PLDT for 2003, 2002 and 2001,
respectively, while Php11,305 million, Php7,564 million and Php17,961 million
were spent by Smart for 2003, 2002 and 2001, respectively.  The remaining
balances were spent by our other subsidiaries, principally ePLDT and its
subsidiaries.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779199"></a><a name="_Toc46082258">Organization</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our two largest shareholders are First Pacific,
a Hong Kong-based investment and management company engaged in consumer,
telecommunications and property businesses, which, through its Philippine and
other affiliates, beneficially owns 31.4% of our common shares, and NTT
Communications, a wholly-owned subsidiary of Nippon Telegraph and Telephone
Corporation of Japan, which
beneficially owns 14.9% of our common shares.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT and the
following subsidiaries were all incorporated in the Philippines, except for PLDT Global, which was incorporated in the British Virgin Islands:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   rowspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Name of
 Subsidiary/Investee</b></p>
 </td>
 <td   rowspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Principal
 Activity</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Percentage
 of Ownership</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-top:0in;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Wireless</b></p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Smart and subsidiaries</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cellular mobile services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Telesat</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Satellite communications services</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">94.4</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">94.4</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">94.4</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">ACeS Philippines </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Satellite phone services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">93.7</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">93.7</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">93.7</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Mabuhay Satellite</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Satellite communications services</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">67.0</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">67.0</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">67.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Piltel and subsidiaries</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:12.6pt;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cellular
 mobile and telecommunications services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">45.3</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">45.3</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">45.3</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Fixed Line</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Clark Telecom</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Telecommunications
 services</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Subic Telecom</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Smart-NTT Multimedia, Inc.</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Data and network services</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT Global and subsidiaries</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT-Maratel</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">97.5</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">97.5</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">92.3</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">BCC</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:1.45pt;text-indent:-1.45pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Telecommunications,
 infrastructure and related value-added services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">75.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">37.5</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0"><b>Information and Communications Technology</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">ePLDT and subsidiaries</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:12.6pt;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Information and
 communications infrastructure for internet-based services, e-commerce, call
 centers and IT-related services</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Wireless</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We provide
cellular, satellite, VSAT and other services through our wireless business
segment.  Revenues from our wireless services accounted for 58% of our
consolidated operating revenues for the year ended December 31, 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Our cellular service (including handset sales), which accounted
for about 99% of our wireless business revenues for the year ended December 31,
2003, is provided through Smart and Piltel.  Smart is the leading cellular
service provider in the Philippines, with approximately 10.1 million subscribers as of December 31, 2003,
representing an estimated market share of approximately 46%.  Piltel, a
reseller of Smart's digital GSM capacity under its own branding and pricing
strategy for voice and text messaging services, had approximately 2.9 million
subscribers as of December 31, 2003, representing an estimated market share of
13%.  In 2003, the combined number of Smart's and Piltel's subscribers (being
served using Smart&#146;s GSM network) increased by 51%, representing the largest
increase in the number of cellular subscribers in absolute terms in that period
among Philippine cellular providers.  As of December 31, 2003, cellular
penetration in the Philippines was approximately 27%, which was nearly seven times
the country's fixed line penetration.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Smart's and Piltel's cellular subscriber gains were
predominantly attributable to their respective prepaid GSM services, which were
introduced in September 1999 and April 2000, respectively.  Approximately 98%
of Smart's cellular GSM subscribers were prepaid as of December 31, 2003.
The predominance of prepaid service reflects one of the distinguishing
characteristics of the Philippine cellular market.  The growth in our prepaid
service has enabled us to increase and broaden our subscriber base rapidly
while controlling credit risk and reducing billing and administrative costs on
a per-subscriber basis.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Our cellular subscriber growth has also been driven by
text messaging service.  Text messaging service is extremely popular in the Philippines,
particularly on the prepaid platform, as it provides a convenient and
inexpensive alternative to voice and e-mail based communications.  During 2003,
our text messaging service system handled 28,825 million outbound messages, an
increase of 47% compared to 19,558 million outbound messages handled during
2002. </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, Smart's digital GSM network included 32 switching centers with a capacity of 14.3 million
subscribers and 3,904 base stations covering 1,039 cities and municipalities.
Piltel&#146;s prepaid GSM service, <i>Talk &#145;N Text</i>, is also supported on this
network.  In addition, Piltel had six active cell sites as of December 31, 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Fixed Line</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">We are the leading fixed line operator in the Philippines and
the only company providing fixed line telecommunications service throughout the
country.  Our fixed line business group offers local exchange, international
long distance, national long distance, data and other network and miscellaneous
services.  As of December 31, 2003, we had approximately 2.1 million fixed
lines in service.  Revenues from our fixed line services accounted for 41% of
our consolidated operating revenues for the year ended December 31, 2003.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We have a 5,400-kilometer long
digital fiber optic backbone, which is supported by an extensive digital microwave
backbone.  Our fixed line network reaches all of the major cities and
municipalities in the Philippines, with a concentration in the Metropolitan
Manila area.  Our network offers the country&#146;s most extensive connections to
international networks through three international gateway switching exchanges,
satellite systems and various regional submarine cable systems in which we have
interests.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Information and
Communications Technology</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Through our wholly-owned
subsidiary, ePLDT, we provide broad-based integrated information and
communications, or ICT, services focusing on infrastructure and solutions for
internet applications, internet protocol-based solutions and multimedia content
delivery.  Incorporated in August 2000, ePLDT started commercial operations in
February 2001.  ePLDT's principal activities are the operation of an internet
data center under the brand name <i>Vitro&#153;</i>, call center businesses and
Infocom, an ISP.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">ePLDT has also invested in a number of other e-commerce and
internet-related businesses, as described in &#147;&#151; Business &#151; Information and
Communications Technology &#151; Infrastructure and Services &#151; Other Investments&#148;
below.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As a new business, revenues from
our information and communications technology services accounted for 1% of our
consolidated operating revenues in 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779200"></a><a name="_Toc46082259">Strengths</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">We believe our business is characterized by the following
competitive strengths:</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Recognized Brands</i>.  PLDT and Smart are strong and widely
recognized brand names in the Philippines.  We have built the PLDT brand name
for 75 years as the leading telecommunications provider in the Philippines.
Smart is recognized in the Philippines as an innovative provider of
high-quality cellular services.  Piltel&#146;s <i>Talk 'N Text</i> brand, which is
provided using Smart&#146;s GSM network, has also gained significant recognition.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Leading Market Shares</i>.  With over 15 million wireless and
fixed line subscribers as of December 31, 2003, we have the leading market
position in both the fixed line and cellular markets in the Philippines.
ePLDT&#146;s subsidiary, Infocom, is one of the leading ISPs in the Philippines.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Diversified Revenue Sources</i>.  As a result of the continued
growth of wireless service in the country, approximately 58% of our
consolidated operating revenues in 2003 are now derived from our wireless
business segment.  Fixed line revenues, which represent 41% of our consolidated
revenues in 2003 compared to 49% in 2002, have remained stable over the past
three years despite pressures on traditional fixed line voice revenues,
resulting from increases in our international long distance, fixed line data
and other network services.  We continue to identify and develop new revenue
sources from our wireless, fixed line and ICT businesses.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Advanced Integrated Network</i>.  With one of the most
advanced and extensive telecommunications networks in the Philippines, we are
able to offer a wide array of communications services.  We are enhancing the
capabilities of our fixed line and wireless networks to allow us to better
exploit this competitive strength and achieve higher levels of network
efficiency in providing voice and data services.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Innovative Products and Services</i>.  We have successfully
introduced a number of innovative and award-winning cellular products and
services, including <i>Smart Load, Talk &#145;N Text Load </i>and<i> Pasa Load.</i>
<i>Smart </i>and <i>Talk &#145;N Text Loads</i> are &#147;over-the-air&#148; electronic
loading facilities designed to make reloading of air time credits more
convenient for, and accessible to consumers.  <i>Pasa Load </i>(literally means
&#147;transfer load&#148;), a derivative service of <i>Smart and </i><i>Talk &#145;N Text
Loads,</i> allows load transfers to other <i>Smart Buddy</i> and <i>Talk &#145;N
Text </i>subscribers.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Strong Strategic Relationship</i>.  We have an important
strategic relationship with NTT Communications and First Pacific.  The
technological support, international experience and management expertise made
available to us through these strategic relationships enhance our market
leadership and ability to provide and cross-sell a more complete range of
products and services.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779201"></a><a name="_Toc46082260">Strategy</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The key elements of our business
strategy are:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Build on our leading positions in the wireless and fixed line
businesses</i>.  We plan to build on our position as the leading wireless
service provider in the Philippines by continuing to introduce new products and
services to increase our subscribers&#146; use of our network for both voice and
data, as well as their reliance on our services.  We also plan to further
increase the capacity and expand the geographic reach of our cellular network,
as well as to improve our service quality and indoor coverage.  Our operating
target is to continue growth in profitability by increasing our revenues while
controlling costs.  We plan to build on our position as the leading provider of
fixed line service in the Philippines by continuing to launch new products and
services to increase subscriber value and utilization of our existing
facilities and equipment at reduced cost.  </p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Capitalize on our strength as an integrated provider of
telecommunications services</i>.  We offer the broadest range of
telecommunications services among all operators in the Philippines.  We plan to
capitalize on this position to maximize revenue opportunities by bundling and
cross-selling our products and services between voice and data and fixed line
and cellular.  We are also lowering our costs by integrating the operations of
our different businesses.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Strengthen our leading position in the data market</i>.
Recognizing the significant growth potential of data and other network
services, including internet-based services, and their increasing importance to
PLDT's overall business strategy, we are emphasizing the development of our
data and network business segment to address the needs of large corporations,
small and medium-sized enterprises and retail customers.  We have launched a
variety of products and services, including data network services like digital
leased lines, frame relay, asynchronous transfer mode, or ATM, internet
Protocol Virtual Private Network, or IP-VPN.  We are progressively introducing
internet-based services such as digital subscriber line, or DSL to our
corporate and residential clients, International internet Gateway or I-Gate for
ISPs and large corporations.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Strengthen our financial position</i>.  We are engaged in a
number of initiatives to strengthen our financial position.  We are working to
increase our cash flow available for debt reduction by containing our operating
costs, reducing capital expenditures and generating cash returns from our
investments in subsidiaries.  In December 2002, Smart made its first dividend
payment of Php1,540 million (not to exceed 40% of its net income in 2001) to
PLDT to supplement PLDT&#146;s cash flows available for debt reduction, followed by
Php4,300 million in June 2003 and Php1,866 million in November 2003
(representing dividends equivalent to 70% and 30%, respectively, of its 2002
net income) and Php11,280 million in May 2004 (representing 70% of Smart&#146;s 2003
net income under Philippine GAAP.)</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Business</b></p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779202"></a><a name="_Toc46082262">Wireless</a></p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">We provide cellular and
satellite, VSAT and other services through our wireless business segment.</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Cellular Service</i></p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Overview</i></p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our cellular business, which we
provide through Smart and Piltel to approximately 13 million GSM subscribers,
more than 98% of whom are prepaid subscribers, is focused on providing wireless
voice communications, wireless data communications (primarily through text
messaging) and a variety of other value-added services, which include (a) <i>Mobile
Banking</i> (banking services delivered over the mobile phone); (b) <i>Smart
zedTM</i>; (c) <i>Smart Money</i>; and (d) international roaming, as
well as other value-added services developed on Smart&#146;s and Piltel&#146;s own platform.
Smart services the almost three million subscribers of Piltel on its GSM
network through a facilities service agreement with Piltel, under the brand
name <i>Talk &#145;N Text</i>.</p>

<p style='margin-left:.75in;text-indent:-.25in;line-height:
10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table summarizes
key measures of our cellular business as of and for the years ended December 31, 2003, 2002 and 2001:</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>

 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Years Ended
 December 31,</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </div>
 </td>
 </tr>

 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Systemwide cellular subscriber base</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,947,197</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,599,306</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,368,850</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,080,112</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,825,686</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,893,844</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">GSM</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,080,112</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,825,686</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,641,666</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Prepaid</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,831,135</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,649,038</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,569,616</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Postpaid</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">248,977</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">176,648</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">72,050</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Analog/ETACS (1)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">252,178</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Prepaid</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">87,429</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Postpaid</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">164,749</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Piltel</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,867,085</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,773,620</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,475,006</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">GSM&#151;Prepaid(2)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,867,085</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,773,620</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,329,326</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Analog/CDMA(1)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">145,680</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Prepaid</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">76,473</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Postpaid</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">69,207</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Growth rate of cellular subscribers</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">51%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">35%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">81%</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">39%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">71%</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">GSM</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">47%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">99%</p>
 </td>
 </tr>
 <tr style='height:8.1pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Analog/ETACS</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(100%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:8.1pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52%)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Piltel</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">62%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">20%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">125%</p>
 </td>
 </tr>
 <tr style='height:11.7pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">GSM&#151;Prepaid(2)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">62%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">33%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:11.7pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">261%</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Analog/CDMA</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(100%)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(49%)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Cellular revenues (in
 millions)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php63,434</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php45,565</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php32,835</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Service
 (3)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">51,001</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,583</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,820</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Handset
 sales</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,433</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,982</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,015</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Percentage of cellular revenues to total operating
 revenues</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">57%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">49%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:7.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">41%</p>
 </td>
 </tr>
</table></center></div>

<p style='line-height:7.0pt;page-break-after:auto' style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>

<p style='margin-left:20.25pt;text-indent:-20.25pt' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>In December 2002, Smart
closed down its analog/ETACS network.  In 2001, Piltel recognized impairment
losses in respect of its AMPS/CDMA network.</i></p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:
0in;margin-left:20.25pt;margin-bottom:.0001pt;text-indent:-20.25pt' style="margin-top:0;margin-bottom:0"><i>(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </i><i>Represents
Talk &#145;N Text, a prepaid GSM service provided by Piltel using Smart&#146;s GSM
network. Piltel&#146;s GSM revenue is net of service fees payable to Smart for using
Smart&#146;s GSM network.  Piltel does not offer postpaid GSM service.</i></p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>

<p style='margin-left:20.25pt;text-indent:-20.25pt' style="margin-top:0;margin-bottom:0"><i>(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Refers to GSM and analog
voice and data revenues.</i></p>

<p style='line-height:3.0pt' style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Service Plans</i>.  Smart
markets nationwide cellular communications services under the brand names <i>Smart
Buddy, Smart Gold,</i> <i>addict mobile</i> and <i>Smart Infinity.  Smart Buddy</i>
is a prepaid service while <i>Smart Gold, addict mobile</i> and <i>Smart
Infinity</i> are postpaid services, all of which are provided through Smart's
digital GSM network.  </p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Of Smart&#146;s total cellular subscribers as of December
31, 2003, 98% were <i>Smart Buddy</i> prepaid subscribers and 2% were <i>Smart
Gold,</i> <i>addict mobile </i>and<i> Smart Infinity </i>postpaid<i> </i>subscribers.
Introduced in April 2003, <i>addict mobile </i>offers exclusive multimedia
content to subscribers and features personalized means for internet surfing and
allows subscribers to apply their allocated free credits towards their choice
of data and value-added services.  <i>Smart Infinity</i> is a premium postpaid
plan launched in January 2004 for the affluent and highly mobile market,
offering first class quality services, including a round-the-clock dedicated
personal concierge service, international assistance services, premium handset
packages and exclusive lifestyle content.  Before Smart decommissioned its
analog/ETACS network in December 2002, it had also offered analog prepaid and
postpaid services under the brand names <i>BillCrusher</i> and <i>PriceBuster</i>,
respectively.  </p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Piltel markets its cellular
services under the brand name <i>Talk 'N Text</i>, a prepaid service provided
using Smart&#146;s GSM network pursuant to a facilities service agreement between
Smart and Piltel.  As of December 31, 2003, Piltel&#146;s <i>Talk 'N Text</i>
subscribers reached 2,867,085.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Text Messaging Service and Other
Value-added Services</i>.  Our cellular subscriber growth has been driven by
text messaging service on GSM networks.  Text messaging is extremely popular in
the Philippines, particularly on the prepaid platform, as it provides a
convenient and cost-efficient alternative to voice and e-mail based
communications.  Text messaging also utilizes less network capacity than voice,
thereby increasing network efficiency.  Strong volume growth in text messaging
contributed significantly to our cellular revenue growth in 2003.  The total
volume of messages handled by our text messaging service system during 2003
increased by 47% to 28,825 million outbound messages from 19,558 million
outbound messages handled during 2002.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our value-added services are
primarily based on text messaging service technology.  Since 2000, Smart
launched the following value-added cellular services:</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Smart zed</i>&#153;, a partnership with international cellular
operator Sonera zed Ltd., or Sonera zed, of Finland, enables subscribers to
personalize their information requirements not only as to the types of
information required but also when the information is required.  Sonera zed has
introduced a single platform that provides access to local and global
information through text messaging or wireless application protocol;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Mobile Banking</i>, launched in collaboration with various
banks, allows subscribers to execute banking transactions, such as balance
inquiries and transfers, over their mobile telephones; and</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Smart Money</i>, launched in conjunction with MasterCard,
enables subscribers to pay for their purchases by transferring money from their
bank accounts to their Smart Money cards as well as reload their prepaid cards
electronically.</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">We also offer value-added services such as voice mail,
information-on-demand, which is a service that allows subscribers to order
information from our content providers whenever desired, mobile banking and <i>TextMail</i>,
which is a service that allows subscribers to send and receive text messages
through their personal computers and location-based services.  In addition, we
have a number of interactive activities, such as text games and chat services,
developed on our own platforms.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>Smart Money</i>
was cited as the &quot;Best Product Innovation&quot; by MasterCard
International and the &quot;Most Innovative GSM Wireless Service for
Customers&quot; at the 3rd GSM World Congress held in Cannes, France, in
March 2001.  In February 2004, at the sixth GSM World Congress, <i>Smart Load, </i>an
over-the-air electronic loading facility designed to make reloading of air time
credits more convenient for and accessible to subscribers was cited as the
&#147;Best Mobile Application or Service for the Consumer Market.&#148;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Due to the high level of text
messaging service usage, we believe that the Philippine market is well suited
for text-based informational and e-commerce services.  Our current approach is
to continue maximizing our GSM, or 2G, services and also offer General Packet
Radio Service, or GPRS or 2.5G, to service increased demand for
bandwidth-intensive applications.  GPRS allows data transfer at an average
speed of up to 115 kilobits per second.  In addition, we continue to upgrade
our network to Enhanced Data for GSM Evolution, or EDGE.  EDGE is a technology
that would further increase the speed and data capability of our GSM network.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Rates and
Discounts</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">A prepaid cellular subscriber is
recognized as an active subscriber when that subscriber activates and uses the
SIM card in the handset, which already contains Php100 worth of pre-stored air
time.  Subscribers can then reload by purchasing prepaid call-and-text cards
that are sold in denominations of Php300, Php500 and Php1,000 or, by purchasing
additional air time &#147;over the air&#148; via <i>Smart Load</i> and<i> Talk &#145;N Text
Load </i>in smaller denominations of Php30, Php60, Php115 and Php200, by
receiving loads of Php2, Php5, Php10 and Php15 via <i>Pasa Load</i> (for
prepaid subscribers only) or through their handsets using <i>Smart Money</i>.
Reloads have validity periods ranging from one day to two months, depending on
the amount reloaded.  A prepaid GSM account is disconnected if the subscriber
does not reload within four months after the full usage or expiry of the last
reload.  As a result, a subscriber would not be included in our churn rate
calculation for up to 121 days to six months after the subscriber may have
stopped using the service to make calls or send messages (although the
subscriber may continue to receive calls and messages).  These effects may cause our calculated churn rate
for a period to be lower than the actual rate at which subscribers are ceasing
to use Smart's and Piltel&#146;s services, and may contribute to more rapid growth
in calculated churn following periods of rapid subscriber growth. </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Smart
Buddy</i> and Piltel&#146;s <i>Talk &#145;N Text</i> prepaid cards are sold in
denominations of Php300, Php500 and Php1,000, which include 33, 83 and 250 free
text messages, respectively.  The stored value of a prepaid card remains valid
for a period of two months from the time a subscriber activates the card.  On
May 11, 2003, we introduced <i>Smart Load </i>and<i> Talk &#145;N Text Load</i>, an
&#147;over-the-air&#148; electronic loading facility designed to make reloading of air
time credits more convenient for, and accessible to consumers.  These
over-the-air reloads come in the following denominations and corresponding
expiration periods:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:80.82%;margin-left:63.9pt;border-collapse:collapse'>
 <tr style='height:10.35pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:10.35pt'>
 <p align=center style=';text-align:center;
 line-height:normal' style="margin-top:0;margin-bottom:0"><b>Denomination</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.35pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid;border:none' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:10.35pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid;border:none' style="margin-top:0;margin-bottom:0"><b>Load
 Expiry</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:10.35pt'>
 <p style='margin-right:53.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:10.35pt'>
 <p style='margin-right:53.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Equivalent Values</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:43.7pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php30</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">3 days</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:43.7pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">30 text messages or 4 local call minutes</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php60</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">6 days</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:43.7pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">60 text messages or 8 to 9 local call minutes</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Php115</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12 days</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:43.7pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">115 text messages or 15 to 17 local call minutes</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Php200</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">30 days</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:43.7pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">200
 text messages or 26 to 30 local call minutes</p>
 </td>
 </tr>
</table></center></div>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Smart </i>and <i>Talk &#145;N Text
Loads</i> were followed in January 2004 with <i>Pasa Load</i>, a derivative
service allowing prepaid subscribers to transfer even smaller denominations to
other prepaid subscribers for a charge of Php1.00 per transfer.  <i>Pasa Load</i>
comes in denominations of Php2, Php5, Php10 and Php15, all carrying a one-day
load expiry.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Beginning January 2004, <i>Smart Buddy</i> subscribers
pay the following air time rates per minute: (a) Php6.50 for Smart-to-Smart and
Smart-to-<i>Talk &#145;N Text</i> subscribers; and (b) Php7.50 for Smart-to-other
mobile operators, fixed lines and national long distance calls.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Prior to January 2004, <i>Smart
Buddy</i> subscribers paid a rate of Php8.00 per minute for calls made during
peak hours and Php4.00 per minute for calls made during off-peak hours,
regardless of whether the calls were made within the Smart network or to other
mobile operators&#146; networks.  From October 25 to December 31, 2003, national long distance calls were charged at Php11.00 per minute for peak hours and Php7.00
per minute for off-peak hours.  Previous to that date, <i>Smart Buddy</i>
subscribers paid varying national long distance rates depending on the
destination of the call.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Beginning January 25, 2004,<i> Smart Gold </i>launched its flat rate and consumable plans as
follows:</p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Flat Rate (regular plans) Plans are available with monthly
service fees ranging from Php500 to Php8,000 with varying amounts of free air
time and text messages and different rates beyond the free minutes and text
messages, depending on the monthly service fee.  Monthly service fees for these
plans are applicable only to local calls and text messages.  All other services
are billed on top of the monthly service fee; and</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">_</p>

<p style='margin-left:.75in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consumable plans are available with monthly service fees ranging
from Php800 to Php8,000 with different amounts of free air time and text
messages and different rates beyond the free minutes and text messages.
Subscribers to these plans may apply their monthly service fees to all voice
calls, text messages (both local and international) and value-added services.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Under both types of plans, the rates for calls to other mobile
operators, landlines and NDD calls are Php1.00 higher than calls within the
Smart network.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">From January 1, 2002 to January 24, 2004, <i>Smart Gold</i> subscribers could choose from seven different
subscription plans with monthly services fees ranging from Php500 to Php3,500
with different amounts of free air time and text messages and different rates
beyond the free minutes and text messages.  Under each of these plans, calls
during peak hours and to other mobile operators, landlines and NDD calls were
charged at higher rates per minute than calls within the Smart network.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Prior to January 1, 2002, <i>Smart Gold</i> offered the following monthly air time plans: Php600,
Php1,200, Php1,800, Php3,000 and Php4,000.  Subscribers who enrolled in these
plans prior to January 1, 2002 remained on these plans following introduction
of the plans described above.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">From April 12, 2003 to January 24, 2004, <i>addict mobile</i> offered seven different
subscription plans with monthly services fees ranging from Php500 to Php3,500
with different amounts of free air time and text messages and different rates
beyond the free minutes and text messages.  Under each of these plans, calls
during peak hours to other mobile operators, landlines and NDD calls were
charged at higher rates per minute than calls within the Smart network.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On January 25, 2004, <i>addict mobile</i> began offering flat rate plans similar to the ones launched for <i>Smart
Gold</i> on the same day with monthly service fees ranging from Php500 to
Php3,500 with different amounts of free air time and text messages and
different rates beyond the free minutes and text messages.  Under each of these
plans, calls to other mobile operators and landlines are charged at higher
rates per minute than calls within the Smart network.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">Smart is permitted to adjust its cellular air time and
national direct dial rates according to changes in the peso-to-U.S. dollar
exchange rate.  Under the authorization granted to Smart by the NTC, Smart is
permitted to increase and is required to decrease its air time and national
direct dial rates by 1% for every Php0.25 change in the exchange rate relative
to a base rate of Php24.726 to US$1.00.  However, Smart has not implemented any
foreign currency adjustments to its rates since November 4, 1998 because of the
concern that increased rates may result in decreased usage by its subscribers.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">All Smart subscribers pay an
international direct dialing rate of US$0.40 per minute.  This rate applies to
200 destinations, including the United States, Hong Kong, Japan, Singapore, the
 United Kingdom and the United Arab Emirates.  Smart charges US$0.98 per
minute for 27 other destinations such as Afghanistan and Cuba and US$2.18 per
minute for another ten destinations such as East Timor and the Falkland Islands.
</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Charges for
point-to-point text messages beyond the allotted free text messages are as
follows:</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
for <i>Smart Buddy</i> and <i>addict mobile</i> subscribers,
Php1.00 per message; and</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
for <i>Smart Gold</i> and <i>Smart Infinity</i> subscribers,
Php0.50 or Php1.00 per message, depending on air time plan.</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Smart
Buddy,</i> <i>Smart Gold</i> and <i>addict mobile</i><i> </i>subscribers pay
the same charges for SMS-based value-added services, as follows:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php15.00 per message for international text for <i>Smart Buddy</i>
subscribers and Php10.00 per message for international text under the new <i>Smart
Gold</i> plans and for <i>addict mobile</i> and <i>Smart Infinity</i>
subscribers;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php2.50 per message for e-text and information-on-demand
services, such as news, stock and entertainment updates;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php15.00 per download of ring tones and logos;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php2.50 per Mobile Banking and <i>Smart Money</i> transaction,
such as balance inquiry and fund transfer; and</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php10.00 per subscription download.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">For multimedia messaging service, or MMS, and wireless
application protocol, or WAP, services, the charges are as follows:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:0in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php5.00 per person-to-person MMS still and animated images;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:0in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php15.00 per download of pictures, greeting cards, polyphonic
ring tones and traffic shots;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php2.50 per MMS for e-text and information-on-demand services
(such as news, stock and entertainment updates);</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:0in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php2.00 per transaction when surfing on the Smart WAP portal; and</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:0in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Php0.25 per kilobyte when surfing outside the Smart WAP portal.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">For voice mail retrieval, all Smart subscribers are charged
Php6.50 per minute.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In addition to enjoying the same
tariffs as <i>Smart Gold</i> subscribers, <i>addict mobile</i> subscribers are
allowed to apply their allocated free credits on their choice of data and
value-added services.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We sell our cellular services
primarily through a network of independent dealers that generally have their
own retail networks, direct sales forces and sub-dealers.  These dealers
include major distributors of cellular handsets.  We currently have six dealers
that carry out distribution throughout the Philippines.  On December 1, 2002, Smart purchased the assets of Telecommunications Specialists, Inc., or
TSI, a major dealer that used to account for more than half of our sales of
prepaid air time cards, and integrated TSI&#146;s employees following the
acquisition.  Account managers from our dealer sales force manage our dealer
network and regularly update these dealers on our upcoming marketing
strategies, promotional campaigns and product development.  With the
introduction of <i>Smart Load</i> and <i>Talk &#145;N Text Load</i> in May 2003,
Smart and Piltel moved into a new mode of distribution.  These over-the-air
reloads, which were based on the &#147;sachet&#148; marketing concept of consumer goods
such as shampoo and ketchup, required a distribution network more comparable to
those of soft drink and beer distributors.  Starting with just 50,000 outlets
when it was launched, <i>Smart Load</i>&#146;s distribution network now encompasses
over 400,000 retail agents, 80% of which are micro businesses (e.g.
neighborhood stores, individuals acting as roving agents).</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">For prepaid services, we provided discounts to dealers
for prepaid phone kits, air time cards and over-the-air reloads sold.
Beginning August 1, 2002, Smart and Piltel reduced the maximum discount to
dealers for prepaid phone kit sales from a range of Php1,000 to Php1,300 per
unit sold in the form of prepaid &#147;call and text&#148; cards (depending on the volume
purchased) to Php800 in cash per prepaid phone kit sold.  An additional 1%
rebate was given on cash purchases.  Air time cards and over-the-air reloads
are sold to dealers at volume discounts determined by the value of the cards
purchased by the dealers.  Discounts for air time cards sold range from 8% to
10% while discounts on over-the-air reloads range from 4% to 5%.  Air time
cards cannot be returned or refunded and normally expire within six to 12
months after release from the Smart warehouse.  For postpaid services, we pay
dealer discounts based on the air time plan sold.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Piltel's <i>Talk 'N Text</i>
prepaid cards are sold in the same denominations and offer the same international
direct dialing rates as <i>Smart Buddy </i>prepaid cards at US$0.40 per minute
to all destinations.  In October 2003, Piltel implemented an all-day/all-night
flat rate of Php9.50 per minute for local calls, calls to other network and
national long distance calls replacing the Php12.00 per minute during peak
hours and Php8.00 per minute during off-peak hours.  In January 2004, this rate
was further reduced to Php6.50 per minute while the rate for <i>Talk &#145;N Text</i>
to <i>Talk &#145;N Text</i> calls was reduced to a flat rate of Php5.50 per minute
from Php6.50 per minute.  The same rate of Php5.50 per minute is charged for
voice mail retrieval.  <i>Talk &#145;N Text </i>subscribers are charged Php1.00 for
a regular text message in excess of free text allocations while for value added
services, such as text games, logo and ring tone downloads are charged within a
range of Php2.50 to Php15.00 per message.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Satellite and VSAT</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Overview</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">We currently provide satellite and VSAT services through Mabuhay
Satellite and Telesat.  ACeS Philippines, our satellite phone service provider,
started to roll out fixed satellite terminals in the last quarter of 2001.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Mabuhay
Satellite</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">We currently own 67% of Mabuhay
Satellite, which is engaged in the control and operation of the Agila II
satellite.  Commencing commercial operations in January 1998, Agila II is the Philippines'
first communications satellite.  Mabuhay Satellite leases satellite space
segments in both the C and Ku bands on the Agila II.  Through Agila II, Mabuhay
Satellite also offers internet backbone access, video and data broadcasting,
and bandwidth-on-demand, facilitating communication links between
telecommunications, broadcast and other public utility companies operating in
the Asia-Pacific region.  See &#147;Item 5. Operating and Financial Review and
Prospects &#150;&#150; Critical Accounting Policies &#150;&#150; Investments&#148; and <i>Note 8 &#150;
Investments</i> to the accompanying consolidated financial statements in Item
18 for a discussion of our investment account in Mabuhay Satellite.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Telesat</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We currently
own 94.4% of Telesat which operates a nationwide communications satellite
network using VSAT technology.  Telesat offers voice, facsimile and data
transmission services throughout the Philippines, including areas that are
underserved or unserved by local fixed line operators. </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Using VSAT
technology, we also provide the following services:</p>

<p style='text-indent:.5in;line-height:7.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
point-to-multipoint data transmission services, usually for
intercompany communication for corporate customers;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
private point-to-point service; and</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
connectivity for the cell sites of our wireless network in
outlying locations.</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We lease transponder capacity on
the Agila II to provide VSAT services.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>ACeS </i><i>Philippines</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We currently own 93.7% of ACeS
Philippines, which owns approximately 20.23% of AIL, and the remaining 6.3% of ACeS
Philippines is owned by other shareholders of Piltel.  AIL aims to develop and
implement a satellite-based communications system to provide services to users
in the Asia-Pacific region through the Garuda I satellite, or ACeS System and
ACeS Service.  AIL has entered into interconnection agreements and roaming
service agreements with PLDT and other major telecommunications operators that
will allow ACeS subscribers to access GSM terrestrial cellular systems in
addition to the ACeS system.  Further, AIL has an Air Time Purchase Agreement,
or ATPA, with National Service Providers, or NSPs, in Asia, including PLDT.
For further discussion of this ATPA, please see <i>Note 18 &#150; Related Party
Transactions</i> and <i>Note 23 &#150; Contractual Obligations and Commercial Commitments</i>
to the accompanying consolidated financial statements in Item 18.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Revenues</i></p>

<p style='text-indent:.5in;line-height:8.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our
satellite and VSAT service revenues consist of:</p>

<p style='text-indent:.5in;line-height:8.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
lease payments from the rental of Mabuhay Satellite&#146;s C-band and
Ku-band transponders; </p>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
revenues generated from Telesat&#146;s nationwide satellite network;
and</p>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
revenues generated from ACeS Philippines&#146; satellite phone
service.</p>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Rates</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Mabuhay Satellite leases its transponders to third parties at
annual rates of approximately US$1.5 million and US$1.0 million for its C-band
and Ku-band transponders, respectively.  Telesat provides its VSAT services on
a cost plus mark-up basis.  ACeS Service mobile subscribers are charged
Php13.84 per minute for local and cell-to-cell calls and for national direct
dial services while residential subscribers are charged a peak-hour rate of
Php13.00 per minute and an off-peak hour rate of Php8.00 per minute for
domestic calls regardless of destination.  For ACeS System public calling
offices, callers are charged Php4.50 and Php7.00 per minute for calls
terminating to fixed line and cellular networks, respectively.  Rates for
international long distance calls, depending on the country of termination,
ranging from US$0.35 per minute for frequently called countries to US$0.85 per
minute for less frequently called countries.</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779203">Fixed Line</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We provide local exchange,
international long distance, national long distance, data and other network and
miscellaneous services under our fixed line business segment.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Local Exchange Service</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Overview</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our local exchange service, which
consists of our basic voice telephony business, is provided primarily through
PLDT.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table summarizes key measures of our local exchange service segment
as of and for the years ended December 31, 2003, 2002 and 2001:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Number of PLDT local
 exchange lines in service (at period-end)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,115,671</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,092,539</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,075,109</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net additions</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">23,132</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,430</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">159,124</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Growth rate </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8%</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Number of PLDT employees (at period-end)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,230</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,131</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,915</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Number of local exchange
 lines in service per employee</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">207</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">172</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">161</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Consolidated local exchange
 revenues (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">Php20,728</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">Php21,345</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">Php21,356</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Growth rate</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">(3%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:0in;margin-right:5.95pt;
 margin-bottom:0in;margin-left:2.9pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:0in;margin-right:5.95pt;
 margin-bottom:0in;margin-left:2.9pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:0in;margin-right:5.95pt;
 margin-bottom:0in;margin-left:2.9pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:0in;margin-right:5.95pt;
 margin-bottom:0in;margin-left:2.9pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0">14%</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Local exchange revenues as a
 percentage of total operating revenues</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">19%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">23%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.95pt;text-align:right' style="margin-top:0;margin-bottom:0">27%</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We also provide local exchange
services through our subsidiaries Clark Telecom, Subic Telecom, Maratel and
Piltel.  Together, these subsidiaries account for approximately 1% of our total
fixed lines in service.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">We regularly adjust our rates and introduce new
products and services in an effort to increase our number of subscribers,
improve our churn management efforts and minimize our credit risk exposure.
Since 1999, we have launched a prepaid fixed line service, introduced additional
value-added services, introduced initiatives aimed at increasing subscription
in areas where we have excess capacity and reduced our installation fees, as
described below under &quot;&#151; Rates.&quot;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Initially intended as an alternative affordable
telephone service for consumers under difficult economic conditions, our
prepaid fixed line services now form an important part of PLDT&#146;s overall churn
and credit risk exposure management and subscriber retention strategy.  For
more information on prepaid fixed line services, see &#147;&#150;&#150; Rates&#148; below.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">To attract new fixed line subscribers and retain
existing ones, PLDT has introduced various value-added services such as <i>Hype</i>
in April 2003.  <i>Hype</i> is a full two-way fixed line text messaging service<i>,</i>
which allows subscribers to send and receive text messages to and from landline
and mobile phones, and is capable of international text messaging.  <i>Hype</i>
also allows subscribers to join TV network-based and new PLDT-initiated texting
services.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Rates</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">As of December 31, 2003, basic monthly charges for our local
exchange service in the Metropolitan Manila area were Php653.88 for a
single-party residential line and Php1,362.66 for a single business line.
Monthly charges vary according to the type of customer (business or residential)
and location, with charges for urban customers generally being higher than
those for rural/provincial customers.  In July 2003, we launched the Telegusto
promotion waiving installation charges up to December 31, 2003 to encourage subscriber growth.  Installation charges amount to Php1,200 for residential
customers and Php1,500 for business customers.  Other than basic monthly
charges, we do not charge our postpaid subscribers for local calls.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Pursuant to a currency exchange rate adjustment
mechanism authorized by the NTC, we adjust our monthly local exchange service
rates according to changes in the peso-to-U.S. dollar exchange rate.  Under the
authorization granted to us by the NTC, we are permitted to increase and are
required to decrease these rates by 1% for every Php0.10 change in the exchange
rate relative to a base exchange rate of Php11 to US$1.00.  During 2003, we
implemented 11 upward and three downward adjustments in our monthly local
exchange service rates.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Effective January 1, 2003, local access charges for cellular subscribers&#146; calls that terminate to our fixed
line subscribers increased from Php2.00 per minute to Php2.50 per minute, and
was further increased to Php3.00 per minute effective January 1, 2004.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">A prepaid fixed line subscriber is recognized as an
active subscriber when that subscriber activates and uses a prepaid call card.
Prepaid fixed line subscribers can reload their accounts by purchasing call
cards that are sold in denominations of Php500, Php300 and Php150.  Reloads are
valid for two months for the Php500 and Php300 card.  The lower denomination of
Php150 card, launched in September 2003, has an account life of 15 days.  A
prepaid fixed line subscriber is disconnected if that subscriber does not
reload within one month for the Php500 card, four months for the Php300 card,
and 15 days for the Php150 card after the expiry of the last reload.  All sales
of prepaid cards, whether through dealers or through PLDT's business offices,
are non-refundable.  Our prepaid fixed line customers do not pay a basic
monthly charge and are charged based on usage.  For local calls, prepaid fixed
line customers are charged based on usage at a rate of Php1.00 per minute.  The
international and national long distance rates we charge to our prepaid fixed
line customers are similar to the rates we charge our postpaid customers.  For
a description of these rates, see &quot;&#151; International Long Distance Service &#151;
Rates&quot; and &quot;&#151; National Long Distance Service &#151; Rates.&quot;  Prepaid
phone kits, each containing Php500 worth of pre-stored call credits, are sold
for Php1,900 per unit.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>International Long
Distance Service</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Overview</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our international long distance service consists of voice and
packet-based voice services that go through our international gateway facilities.
We also generate international long distance revenues through access charges
paid to us by other Philippine telecommunications carriers for incoming
international voice calls that terminate to our local exchange network.  Our
packet-based voice services are transmitted over our existing traditional
circuits: voice over internet protocol, or VOIP; network of a consortium of
dominant carriers in Asia; ATM; and internet protocol global backbone of PLDT
Global.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table shows certain
information about our international long distance business as of and for the
years ended December 31, 2003, 2002 and 2001:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>

 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Years Ended
 December 31,</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>

 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Total PLDT call volumes (million
 minutes)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,183</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,576</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,814</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;margin-right:0in;
 margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-indent:-.25in;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Growth rate</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18%</p>
 </td>
 </tr>
 <tr style='height:6.3pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:6.3pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound call volumes (million minutes)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:6.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,028</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:6.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,409</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt;height:6.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,648</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Growth rate</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(16%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18%</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outbound call volumes (million minutes)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">155</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">167</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">166</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Growth rate</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(7%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18%</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound-outbound call ratio</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13.1:1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14.4:1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16:1</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Consolidated international long distance
 revenues (in millions)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php12,634</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php10,636</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php11,701</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Growth rate</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9%)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(12%)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">International long distance revenues as
 a percentage of total operating revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11%</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11%</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15%</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">International long distance service historically has
been a major source of revenue.  However, due to the steep decline in inbound
termination and collection rates and intense competition, revenues derived from
our international long distance service had been declining through the end of
2002.  We adopted a two-pronged initiative in early 2000 with respect to
inbound international service to try to address this issue.  First, we lowered
our inbound termination rates at that time.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">By reducing our rates, we reduced the incentive for
unauthorized traffic termination and bypass routings by international simple
resale operators, and therefore were able to recover some lost traffic.
Secondly, we intensified our efforts to identify and contain unauthorized
traffic termination and bypass through more effective monitoring of our
international trunks, leased lines or local network.  International simple
resale operation occurs when a company rents an international leased line from
a Philippine international gateway operator, aggregates traffic outside the Philippines
and carries and terminates this traffic at the public switch telephone network
in the Philippines.  International simple resale can be used to bypass
the local access charge system, which is illegal in the Philippines.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Since 2001, we have become more selective in accepting
incoming traffic from some carriers, particularly second and third tier
international carriers.  In addition, we adopted a policy requiring prepayment
from certain second and third tier international carriers as a prerequisite for
accepting their incoming traffic.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">We are also pursuing a number of other initiatives to
further strengthen our inbound business.  Through PLDT Global, we aggregate
inbound call traffic to the Philippines at our points of presence and, using our capacity in
submarine cable systems connected to each point of presence, transmit calls to
our network.  PLDT Global is also enhancing the presence of PLDT in other
international markets by offering new products and services such as
international prepaid cards, SMS transit and other global bandwidth services.
We believe this strategy will help us maximize the use of our existing
international facilities, and develop alternative sources of revenue.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">To stimulate call volume growth and
prevent further erosion in our share of outbound international call traffic, we
have introduced a number of marketing initiatives, including substantial cuts
in international direct dialing rates, innovative pricing packages for large
accounts and loyalty programs for some customers.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The table below sets forth the
net settlement amounts for international calls handled by PLDT, by country, for
the years ended December 31, 2003, 2002 and 2001:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Net Settlement</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in
 millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:1.3pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:1.3pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:1.3pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">United States</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$52</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$68</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$82</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Saudi Arabia</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Canada</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Italy</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Japan</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Australia</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">United Arab Emirates</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Hong Kong</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Taiwan</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">77</p>
 </div>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">63</p>
 </div>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">41</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">US$219</p>
 </div>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">US$186</p>
 </div>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:5.75pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">US$200</p>
 </div>
 </td>
 </tr>
</table></center></div>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Rates</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We adopted the U.S. FCC accounting
rate benchmark of US$0.38 per minute for inbound international calls on January 1, 2000, which represented a settlement rate of US$0.19 per minute, for
international long distance traffic between the Philippines and the United
 States.  Adopting the U.S. FCC benchmark accounting rate one year ahead of
the target date of January 1, 2001 allowed us pricing flexibility for inbound
call traffic.  Termination rates for inbound calls from the United States
continued to decline through the end of 2002 to levels below the U.S. FCC
benchmark accounting rate under pressure from unauthorized terminations and
bypass operations.  Termination rates for inbound calls from other countries
have also been declining generally.  As of December 31, 2002, a substantial portion of PLDT&#146;s international inbound traffic terminating on its fixed line
network was charged an average termination rate of approximately US$0.08 per
minute.  PLDT increased termination rates with carriers accounting for a
substantial portion of its international inbound traffic terminating on its
fixed line network to an average of approximately US$0.12 per minute effective February 1, 2003.  See &#147;Item 8. Financial Information &#150;&#150; Legal Proceedings &#150;&#150; U.S. Federal
Communications Commission, or FCC, Ruling versus Philippine Telecommunications
Companies&#148;, &#147;&#150;&#150; Investigation by U.S. Department of Justice&#148; and <i>Note 28 &#150;
Other Matters</i> to the accompanying consolidated financial statements in Item
18 for further discussion.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Rates for outbound international long distance calls
are based on the length of the call, country of destination, and type of
service such as operator-assisted and direct-dialed calls.  Our rates are
quoted in U.S. dollars and billed in pesos.  The peso amounts are determined at
the time of billing.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Effective February 1, 2001, PLDT
reduced its international direct dialing, or IDD, rates for retail customers
from US$0.49 per minute for off-peak hours and US$0.69 per minute for peak
hours to a flat rate for retail customers of US$0.40 per minute, applicable to
all call destinations at any time on any day of the week.  Additionally, in
November 2001, PLDT introduced <i>Budget Card</i>, a prepaid call card offering
a reduced IDD rate of US$0.24 per minute for calls to 20 overseas destinations
including the United States, Canada, Japan and China<i>.</i>  <i>Budget Cards</i>
are sold in a denomination of Php200, which must be consumed within 30 days
from first use.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>National Long Distance
Service</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Overview</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our national
long distance services are provided primarily through PLDT.  This service
consists of voice services for calls made by our fixed line customers outside
of their local service areas within the Philippines and access charges paid to
us by other telecommunications carriers for calls carried through our backbone
network and/or terminating to our fixed line customers.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table shows our national long distance call volumes and revenues as
of and for the years ended December 31, 2003, 2002 and 2001:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Years Ended
 December 31,</p>
 </div>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Total PLDT call volumes (million minutes)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,017</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,145</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,756</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Growth rate</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(22%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15%)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Consolidated national long distance revenues (in
 millions)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php6,694</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php7,818</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php8,500</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Growth rate</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(14%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8%)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(19%)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">National long distance revenue as a percentage of
 total operating revenues</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:9.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11%</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Cellular substitution and the widespread availability
and growing popularity of alternative, more economical, non-voice means of
communications, particularly e-mailing and cellular text messaging, have
negatively affected our national long distance call volumes.  The integration
of some of our local exchanges into a single local calling area effective
August 2000, as approved by the NTC, has also negatively affected our national
long distance call volumes, and consequently, our revenues.  Because of this
integration, calls between two exchanges located within the same province are
no longer considered national long distance calls but are treated as local
calls.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">A substantial portion of our national long distance
calls were direct-dialed calls.  Operator-assisted calls are charged based on a
minimum of three minutes plus operator charges, while direct-dialed calls are
charged on a less costly per minute basis.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We offer various <i>PLDT Premium
Phone Services</i>, which allows customers to choose from a range of service
applications, such as appointment-booking services for select embassies in the
Philippines (including, among others, the U.S. and Australian embassies),
spiritual and love counseling, joining television-based game shows, celebrity
chatting, downloading and sending of ring tones and logos, televoting, job
postings, and <i>myMusic</i>, a music entertainment line to various popular
artists.  PLDT charges a minimum of Php10.00 per minute for these premium phone
services.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Rates</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Rates for national long distance
calls are based on type of service, such as whether the call is
operator-assisted or direct-dialed.  In the latter part of 2001, PLDT
simplified its rates for calls to fixed line subscribers and for those
terminating to cellular subscribers resulting in an overall rate increase.  For
calls terminating to fixed line subscribers, the applicable rates from January
to November 1, 2001 ranged from Php3.00 per minute to Php5.00 per minute,
depending on distance and time of call.  In line with its move towards rate
simplification, PLDT simplified these rates to a flat rate of Php4.50 per
minute effective November 2, 2001.  At the same time, PLDT simplified its rates
for calls terminating to cellular subscribers from a range of Php10.00 per
minute to Php16.00 per minute to a uniform rate of Php13.75 per minute.  Effective March 1, 2003, PLDT increased the rate for calls terminating to other
local exchange carriers from a flat rate of Php4.50
per minute to Php5.00 per minute.  In addition,
NDD calls originating from and terminating to PLDT
was also adjusted to Php5.00 per minute from a
flat rate of Php4.50 per minute effective June 8, 2003.  Through
rate simplification, we aim to simplify our tariff structure in order to
enhance the competitiveness of our products and services and increase our
operating efficiencies. We adopted these simplified pricing plans with a view
to maximizing our national long distance revenues going forward.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT entered into new
interconnection agreements with local exchange carriers and cellular
operators.  In particular, in May 2001, PLDT entered into an interconnection
arrangement with the majority of other local exchange carriers, pursuant to
which the originating carrier pays (1) a hauling charge of Php0.50 per minute
for short-haul traffic or Php1.25 per minute for long-haul traffic to the
carrier owning the backbone network and (2) an access charge of Php1.00 per
minute to the terminating carrier.  In addition, effective January 2002, access
charges being paid by PLDT to cellular operators were reduced to Php4.50 per
minute from Php6.50 per minute it paid for the period from July to December
2001.  Prior to July 2001, PLDT was paying access
charges ranging from a low of Php7.69 to a
high of Php10.94 per minute for calls
terminating to cellular subscribers, depending on whether the calls were local
or long distance.  PLDT still maintains revenue-sharing arrangements
with a few other local exchange carriers, whereby charges are generally
apportioned 30% for the originating entity, 40% for the backbone owner and the
remaining 30% for the terminating entity.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Data and Other Network Services</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">Recognizing the growth
potential of data and other network services, including internet-based
services, and in light of their importance to our business strategy, we have
been putting considerable emphasis on this service segment.  In 2002, this
segment registered the highest percentage growth in revenues among our fixed
line services and it continued to grow in 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The upgrading of our network in recent years through the
completion of our domestic fiber optic backbone has enabled us to offer a
growing range of value-added and broadband services.  With this and other
technological upgrades, our infrastructure is being developed from a
traditional voice facility to a new packet-switched and internet-based network
that allows faster transmission of voice, video and data.  Data services we
currently provide include:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
traditional bandwidth service &#151; high-speed point-to-point
domestic and international digital leased line services;</p>

<p style='margin-left:.25in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
broadband/packet-based/internet protocol-based services &#151; frame
relay, ATM, internet protocol virtual private network, or IP-VPN, DSL, internet
gateway and wholesale digital signal level 3, or DS3; and</p>

<p style='margin-left:.25in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
other packet-based switching services &#151; Datapac and integrated
services digital network, or ISDN.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
foregoing services are used for the following:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
domestic and international communications;</p>

<p style='margin-left:.25in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
broadband data transmission services that transmit data over a
range of frequencies and/or bandwidth into several narrower bands;</p>

<p style='margin-left:.25in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
internet exchange services that provide ISPs with a primary
connection to the global internet to exchange local traffic generated within
the Philippines;</p>

<p style='margin-left:.25in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
private networking services that use the public internet as a
backbone for private interconnection between different locations;</p>

<p style='margin-left:.25in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
switch-based services, provided through a fixed bandwidth
transmission facility, that allow establishment of a dedicated connection for
the duration of the call; and</p>

<p style='margin-left:.25in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
international packet-based services, provided through bilateral
arrangements and global alliances that integrate voice, video and data.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2003 and 2002, we continued to
broaden our service offerings with the launch of new services and expansion or
enhancement of some of the existing ones.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In May 2002, PLDT launched a
pay-per-use dial-up internet service under the brand name <i>PLDT Vibe</i>,
which is available on a postpaid or prepaid basis to PLDT&#146;s fixed line
subscribers.  Charges for this service are Php0.25 per minute for off-peak
hours, which are from 10:01 p.m. to 6:00 a.m., and Php0.50
per minute for peak hours, which are from 6:01 a.m. to 10:00 p.m.  With
the launch of <i>PLDT Vibe</i>, PLDT now offers two residential internet
service packages targeting separate markets:  <i>PLDT Vibe </i>for light to
medium internet users and <i>DSL </i>broadband for heavy internet users.  As of
December 31, 2003, the number of PLDT&#146;s fixed line subscribers that signed up
for <i>PLDT Vibe </i>was<i> </i>206,979, of which 129,447 were postpaid and
77,532 were prepaid subscribers, compared to 76,014 as of December 31, 2002, of
which 60,878 were postpaid and 15,136 were prepaid subscribers, while the
number of <i>DSL</i> subscribers reached 23,884 and 10,896 as of December 31,
2003 and 2002, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In March 2003, PLDT launched a
number of data services, namely: <i>Continuum, iView </i>and <i>Encompass</i>,
all under the <i>Brains</i> umbrella.  <i>Brains Continuum</i> provides
customers the ability to recover from service interruptions and offers network
diversity, facility and hosting services in partnership with ePLDT.  <i>Brains
iView</i> enables customers to monitor the performance of their network, track
bandwidth utilization patterns and identify the source of network problems.  <i>Brains</i>
<i>Encompass</i> provides a broad range of services for the customers&#146; managed
networking needs, be it a wide area network or local area network.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:40.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In April
2003, PLDT introduced <i>Resort Solutions,</i> a network service that provides
communication links between the head office and the remote offices of vacation
resorts.  It enables resort offices to access the information vital to the
business and to do transactions such as real-time updating of room bookings,
real-time checking of room inventory or even real-time audit of resort
profitability via IP-VPN or internet access.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In May 2003, <i>Shops.work</i> was
fully launched<i>, </i>a network service that allows the electronic linking of
retail stores providing, among other features, sales and inventory reports,
up-to-date and real-time monitoring of sales and inventory, and on-line access
to head offices.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:40.5pt' style="margin-top:0;margin-bottom:0">In June 2003, <i>Embed </i>was
introduced to the market through a soft launch.  The service is a wholesale
banking solution that enables a bank partner to build a community among its
clients in a business to business or business to consumer arrangement through
the use of IP-VPN network solution.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In September 2003, <i>High
Bandwidth Optical Service</i>, or <i>HBOS</i> was launched, a dedicated
high-speed point-to-point optical access solution that enables data mirroring,
storage area network, or SAN, and local area network, or LAN, interconnectivity
within Metro Manila.  <i>HBOS</i> offers an option for a virtually ready
alternative data center.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779204"></a><a name="_Toc46082263">Information and Communications Technology</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We conduct
our information and communications technology businesses through our
wholly-owned subsidiary ePLDT, which was incorporated in August 2000 and
started commercial operations in February 2001.  ePLDT is a broad-based
integrated information and communications technology company, focusing on
infrastructure and solutions for internet applications, internet protocol-based
solutions and multimedia content delivery.  ePLDT's principal businesses are
the operation of: (a) an internet data center under the brand name <i>Vitro</i>&#153;;
(b) call centers through Vocativ and Parlance, which commenced commercial
operations in April 2002 and June 2002, respectively, and (c) an ISP through
Infocom.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Infrastructures and Services</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Data</i><i> </i><i>Center</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">ePLDT operates <i>VitroTM</i>,
one of the Philippines' first internet data centers.  The Philippine Board of
Investments granted <i>Vitro</i>&#153; pioneer status, which entitles it to tax and
other governmental incentives.  <i>Vitro</i>&#153; is a CISCO-certified co-location
service provider.  <i>Vitro</i>&#153; provides co-location, web and server hosting,
hardware and software maintenance services, website development and maintenance
services, webcasting and webhosting, shared applications, data disaster
recovery and business continuity services, intrusion detection and internet
protocol security services, as well as firewall and managed firewall services.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Call Centers</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">ePLDT is focusing on developing its
call center services business, which capitalizes on the availability of
English-speaking labor in the Philippines.  The call center service business is
being undertaken through the following wholly-owned subsidiaries of ePLDT:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Vocativ which owns and operates a 722-seat call center facility
with 883 customer service representatives, or CSRs, exclusively for clients of
a global provider of customer relationship management services.  Vocativ
commenced commercial operations in April 2002; and</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Parlance which owns and operates a 522-seat call center facility
with 619 CSRs, exclusively for one of the largest direct-to-home satellite
service providers in the United States for customer support and billing
requirements.  Parlance commenced commercial operations in June 2002.</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0">ePLDT sold its entire 51% interest
in Contact World, Inc., another call center facility, on June 30, 2003 and assigned its receivables from the same to Service Zone Inc., a U.S.-based call
center operator, for a total consideration of US$700,000.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Internet Service</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">ePLDT owns 99.6% interest in
Infocom, one of the country's leading ISPs.  Infocom offers consumer prepaid
internet access under the name <i>Warpspeed</i> and postpaid internet access;
dedicated dial-up and multi-user business dial-up access; broadband internet
access through corporate leased lines and <i>NOW</i> cable internet; and
consulting, web development and hosting.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Other
Investments</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">ePLDT also
has investments in several other internet-related businesses, including:</p>

<p style='text-indent:.5in;line-height:7.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
100% interest in mySecureSign, Inc., which issues VeriSign
digital certificates in the Philippines for e-commerce transactions;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
100%-owned subsidiary, iPlus Intelligent Network, Inc., which
provides IT helpdesk/contact center solutions;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
20.5% interest in BayanTrade Dotcom, Inc., a business-to-business
exchange established together with six of the Philippines&#146; leading
conglomerates;</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
debt securities convertible into a 40% interest in Netopia, a
leading branded chain of internet cafes in the Philippines; and</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
22.5% interest in convertible securities of Stradcom
International Holdings, the parent company of Stradcom Corporation, which has
an existing concession agreement with the Philippine government for the
modernization of the Philippine Land Transportation Office, including the
computerization of driver&#146;s license issuance, vehicle registration and traffic
adjudication systems.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In addition, we held convertible
notes issued by Unilink Communications Corporation, or Unilink, which owns 100%
of the shares of the Philippine Home Cable Holdings, Inc., or Home Cable, the Philippines&#146;
second largest cable television operator by subscriber numbers.  PLDT&#146;s total
investments in convertible notes of Unilink amounted to Php2,052 million as of December 31, 2002.  Mediaquest Holdings,
Inc., a company wholly-owned by the PLDT Beneficial Trust Fund, or BTF, owns
all of the shares of Unilink. In June 2003, PLDT assigned and ceded unto the
PLDT BTF all of its rights, interest and participation in respect of its
investment in convertible notes of Unilink with a fair value of zero and
effectively for zero consideration under U.S. GAAP.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">These notes are convertible into shares of common stock of
Unilink or exchangeable into common stock of Home Cable at the option of the
holder, if and when the law limiting the ownership of cable television systems
to Philippine citizens or corporations, which are 100% owned by Philippine
citizens, is eventually changed.  Unilink is a Philippine corporation owning
all the outstanding common shares of Home Cable, which is also a Philippine
corporation licensed to own, maintain and operate a cable television system in
the Philippines.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">All of Unilink&#146;s shares in Home
Cable have been pledged to a group of lenders as security for a loan of Home
Cable.  On December 6, 2001, Home Cable defaulted on the principal and interest
payments in respect of certain of its loan obligations.  On April 10, 2002, the loan agent, at the request of the lenders, delivered a notice to Home
Cable declaring an event of default and accelerating the loan repayment.
Consequently, the lenders are entitled to foreclose on or sell the collateral
granted as security for the loan, including Unilink&#146;s share in Home Cable.  In
the event that Home Cable&#146;s lenders were to foreclose on Unilink&#146;s Home Cable
shares, the lenders would be entitled to the proceeds from the sale thereof or,
if such shares were not sold, to the shares, and Unilink would be subrogated to
the lenders&#146; claims against Home Cable.  On October 17, 2003, Home Cable signed a Memorandum of Agreement with its key creditors providing the framework
and indicative terms and conditions for the restructuring of its debt
obligations.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On July 18, 2001, we entered into a master consolidation agreement pursuant to which a newly incorporated company,
Beyond Cable, Inc., would hold all interests in Sky Cable and Home Cable.
Completion of the trasaction is subject to certain conditions, including
obtaining consents of lenders of Sky Cable and Home Cable.  Upon completion of
the transaction, the Benpress Group, which currently holds the interests in Sky
Cable, would hold a 66.5% interest in Beyond Cable and Mediaquest would hold
remainder.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779205"></a><a name="_Toc46082265">Wireless Network Infrastructure</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Cellular</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">Through Smart, we
operate a digital GSM network.  To meet the growing demand for cellular
services, Smart has implemented an extensive deployment program for its GSM
network covering substantially all of Metro Manila and most of the other
population centers in the Philippines.  In 2003, Smart added 1,127 base stations to its
nationwide cellular network, bringing to 3,904 Smart's total GSM base stations
in operation.  Smart has 32 mobile switching centers and 37 text messaging
service centers, which have raised significantly Smart's GSM network capacity
to cover approximately 14.3 million subscribers as of December 31, 2003.
As of December 31, 2003, Piltel had six active cell sites.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='margin-top:0in;text-align:left;
text-indent:.5in;line-height:normal' style="margin-top:0;margin-bottom:0">Smart has an operating spectrum of 7.5 MHz
in the 900 MHz band supporting both its GSM and previously its ETACS network
and 17.5 MHz in the1800 MHz band for GSM.  Its dual-band GSM network allows it
to efficiently deploy high capacity 1800 MHz base transceiver stations in dense
urban areas while its 900 MHz base transceiver stations can be much more
economically deployed in potentially high growth, but less densely populated
provincial areas.  Spectrum constraints will not affect the Smart&#146;s expansion
plans for GSM in the foreseeable future.  Piltel, on the other hand, has an
operating spectrum of 11.5MHz out of the 12.5MHz allocated in the 800 MHz band.
</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='margin-top:0in;text-align:left;
text-indent:.5in;line-height:normal' style="margin-top:0;margin-bottom:0">Due to its access to PLDT&#146;s network assets,
Smart has been able to achieve significant capital expenditure savings, which
are understood to be significantly less, on a per net addition basis, than its
current competitors.  This translates into an improved ability to price
competitively and target the mass market subscriber base in the Philippines, while
retaining profitability.  Based on existing equipment purchase contracts, Smart
expects incremental capital expenditure per net additional subscriber to amount
to less than US$50. </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">The coming years will see continued increases in
coverage (particularly indoor), as well as new types of BTS for outdoor, street
level and commercial office coverage.  Smart has recently started to introduce
the Nokia <i>ConnectSite </i>GSM system for wider coverage and increased
efficiencies in underserved areas of the Philippines. The new base station equipment called <i>ConnectSite</i>
can be up to 25% more efficient than traditional outdoor cell sites.  Smart is
one of the very first operators in the world to adopt this system.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart and
Piltel have been co-locating their cell sites where their base stations are
installed.  As of December 31, 2003, 20 of Smart's mobile switching centers and
75 of Smart's cell sites are housed in PLDT&#146;s fixed line complexes while 233 of
Smart&#146;s cell sites are co-located with Piltel.  These operational synergies
have allowed Smart to reduce switch installation time from three months to five
weeks.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Satellite and VSAT</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Mabuhay Satellite controls and
operates the Agila II satellite, which has 30 C-band transponders and 24
Ku-band transponders covering the Asia-Pacific region, the Indian subcontinent
and Hawaii.  Of the 54 transponders, six have restricted usage due to satellite
interference.  Through Agila II, Mabuhay Satellite offers internet service,
video and data broadcasting, and bandwidth-on-demand, facilitating
communication links between telecommunications, broadcast and other public
utility companies operating in the Asia-Pacific region.  In December 2000,
Agila II joined the U.S. FCC's &quot;Permitted Space Station&quot; list, which
permits U.S. owned and operated earth stations in Hawaii to access Agila II for
transpacific telecommunications, data, video and internet-over-satellite
traffic and vice versa.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Telesat operates a national
communications satellite network using VSAT technology to provide voice,
facsimile, video and data transmission services to areas in the country that
are still underserved or unserved by local telephone operators.  Telesat leases
transponder capacity from Agila II to provide VSAT services such as
multipoint-to-multipoint and point-to-multipoint data transmission services,
private point-to-point service, and connectivity for the cell sites of our cellular
network in outlying locations.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">ACeS Philippines manages, controls
and operates its own satellite gateway and other ground infrastructure,
including a 13-meter feeder-link C-band earth station, beam congruency antenna
and equipment that serve as the primary interface between the ACeS system and
other telecommunications networks.  It uses the Garuda I satellite to provide
digital voice services to ACeS Philippines&#146; mobile and fixed terminal users
within the Asian service area.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779206">Fixed Line Network Infrastructure</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Domestic</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our domestic telephone network
includes installed telephones and other equipment on customers&#146; premises, local
access lines connecting customers to exchanges, referred to as &#147;outside plant,&#148;
inter-office lines connecting exchanges, and long distance transmission
equipment.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table gives some basic measures of the development of our domestic
telephone network as of December 31, 2003, 2002 and 2001:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>As of
 December 31,</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Number of central office exchanges</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">183</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">183</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">187</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT fixed lines in service</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,115,671</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,092,539</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,075,109</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT employees per 10,000 local
 exchanges in service</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">58</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">62</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We have our own 5,400 kilometer
domestic fiber optic backbone, the country's first telecommunications network
using fiber optics in delivering voice, video, data, and other broadband and
multimedia services nationwide.  Constructed at a total cost of US$188 million,
our fiber optic network employs synchronous digital hierarchy technology to
improve network performance and reduce operating costs.  Our network is
composed of in-land and submarine cable installations and is configured in six
self-healing rings and an extension link, allowing route delivery even in the
event of link failures.  It has an initial transmission speed of 2.5 gigabits
per second and is connected directly to five existing international submarine
cable systems.  We use <i>CS PLDT</i>, a cable ship which we lease from NTT
World Engineering Marine Corporation pursuant to a five year Chartered
Arrangement Maintenance Contract to maintain the 2,400 kilometers of submarine
cable comprising the submerged portion of our domestic fiber optic network, or
DFON.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">In 2001, we activated a second fiber pair on our
existing fiber cable and installed dense wavelength division multiplexing
technology in certain portions of the network.  The new system serves the areas
of Luzon, Visayas and Mindanao and also serves the international node connecting the
Philippines to the Asia-Pacific Cable Network 2.  The second pair provides an
extra 10 gigabits per second of capacity, or the equivalent of 120,000 voice
circuits.  Nortel Networks supplied us with a suite of optical internet
solutions, including a 10-gigabit per second dense wavelength division
multiplexing solution based on Nortel Networks OPTera&#153; Long Haul 1600 Optical
Line System.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2002, we increased our
transmission and data network capacities and sold to Smart certain assets
comprising a portion of our digital fiber optic cable loops from Luzon to Mindanao
and certain related equipment.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>International</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We provide international network
services using our three international gateway switching exchanges.  As of December 31, 2003, our international long distance facilities allow direct correspondence
with 50 countries/territories (representing 76 correspondents) and can reach
229 foreign destinations worldwide.  We also own interests in submarine and
satellite systems, through which we route most of our international traffic.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The table below shows the
submarine cable systems in which we have interests and the countries or
territories they link:</p>

<p style='text-indent:.5in;line-height:7.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0  style='width:473.4pt;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:8.1pt'>
 <p style='page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Cable System</b></p>
 </div>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p style='page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Countries Being Linked</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">B-M-P</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Brunei, Malaysia and Philippines</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">G-P</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Guam and the Philippines</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Asia-Pacific Cable Network</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Korea, Japan, Hong Kong, Taiwan, Australia, Philippines, Singapore, Malaysia, Indonesia and Thailand</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Asia-Pacific Cable Network 2</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Philippines, Hong Kong, Japan, Korea, Malaysia, Singapore,
 Mainland China and Taiwan</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Transpacific Cable No. 4</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japan, Canada and the
 U.S.
 Mainland</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Transpacific Cable No. 5</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Guam, Japan, Hawaii and the
 U.S.
 Mainland</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">KN-KK</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Kuantan and Kota Kinabalu in Malaysia</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">SEA-ME-WE-3</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japan, Korea, China, Taiwan, Hong Kong, Macau, Philippines, Vietnam,
 Cambodia, Brunei, Malaysia, Singapore, Indonesia, Australia, Thailand,
 Myanmar, Sri Lanka, India, Pakistan, United Arab Emirates, Oman, Djibouti,
 Saudi Arabia, Egypt, Cyprus, Turkey, Greece, Italy, Morocco, Portugal,
 France, UK, Belgium and Germany</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">SEA-ME-WE-2</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">13 countries in South East Asia, the Middle East and Western Europe,
 including Singapore, Indonesia, India, Saudi Arabia, Egypt, Italy, Turkey and
 France</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Asia Pacific</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Hong Kong, Japan, Singapore, Malaysia and Taiwan</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">PacRim West</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Guam and Australia</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">PacRim East</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Hawaii and New Zealand</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">M-T</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Malaysia and Thailand</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Hawaii-5</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Hawaii and the U.S. Mainland</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">C-J</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Mainland China and Japan</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">North Pacific</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japan, Alaska and the
 U.S.
 Mainland</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">H-J-K</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Hong Kong, Japan and Korea</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Americas Cable 1</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S. Mainland, U.S. Virgin Islands,
 Brazil, Trinidad and Venezuela</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">China-U.S. Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japan, China, Taiwan, Korea, Guam and U.S. Mainland</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Columbus II Cable</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S. Mainland, Italy, U.S. Virgin Islands,
 Mexico, Portugal and Spain</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">FLAG Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japan, Korea, Mainland China, Hong Kong, Malaysia, Thailand, India,
 United Arab Emirates, Saudi Arabia, Egypt, Italy, Spain and UK</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">MAT 2 Cable</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Italy and Spain</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">RIOJA Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Spain, UK, Belgium and Netherlands</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">RJK Cable</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Russia, Japan and Korea</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Southern Cross Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S. Mainland, Hawaii, Fiji, Australia and New Zealand</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">TASMAN2 Cable</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Australia and New Zealand</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">TAT 10 Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Germany and the Netherlands</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">TAT 12/13 Cable</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S. Mainland, UK and France</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">TVH Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Thailand, Vietnam and Hong Kong</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">EAC Cable</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Japan, Hong Kong, Korea, Taiwan, Singapore and the Philippines</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">PC-1 and Japan-U.S. Cable</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Japan and the U.S.</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779207"></a><a name="_Toc46082266">Interconnection Agreements</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Since the
issuance of Executive Order No. 59 in 1993, which requires non-discriminatory
interconnection of Philippine carriers' networks, we have entered into
bilateral interconnection arrangements with other Philippine fixed line and
cellular carriers.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Prior to July 1,
 2001, PLDT retained an origination
charge of Php2.00 per minute on every call terminating to the network of Smart
or Globe.  From July 1, 2001 to December 31,
 2001, Smart and Globe charged PLDT
Php6.50 per minute pursuant to an amended interconnection agreement.  The new
arrangement also applied to national long distance calls originating from PLDT
and terminating on the cellular network of either Smart or Globe removing any
distinction between access charges for local calls and national long distance
calls.  For local calls originating from PLDT and terminating to the cellular
networks of Smart and Globe, Smart and Globe charged PLDT a rate of Php4.50 per
minute effective January 1, 2002.  Effective January 1, 2004,
calls terminating to cellular subscribers originating from fixed line
subscribers will be charged a termination rate of Php4.00 per minute, a
decrease from the previous Php4.50 per minute.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Effective January 1, 2003,
local access for cellular operators, including Smart and Piltel, which
terminate calls on PLDT&#146;s fixed line network increased from Php2.00 per minute
to Php2.50 per minute, which further increased to Php3.00 per minute effective January 1, 2004.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under a separate agreement between
PLDT and PAPTELCO, PLDT is the transit facility provider between Smart, Globe
and PAPTELCO.  Transit traffic is an accommodation by PLDT to Smart, Globe and
PAPTELCO members where PAPTELCO members have no direct interconnection with
either Smart or Globe.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Effective February 1, 2003,
international calls terminating on PLDT&#146;s fixed line network were charged a
termination rate of an average of approximately US$0.12 per minute from the
previous rate of an average of approximately US$0.08 per minute.  Also,
international calls terminating on Smart&#146;s and Piltel&#146;s cellular network were
charged a termination rate of an average of approximately US$0.16 per minute,
an increase from the previous termination rate of an average of approximately
US$0.12 per minute.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Effective January 1, 2002, Smart charged a termination rate of Php4.00 per minute for calls originating
from/terminating on another cellular operator&#146;s network.  For SMS originating
from Smart and Piltel and terminating on other operators&#146; cellular network and
for SMS originating from other operators and terminating on Smart&#146;s and
Piltel&#146;s cellular network, the charge is Php0.35 per message.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779208"></a><a name="_Toc46082267">Licenses and Regulation</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT, Smart and Piltel
provide telecommunications services pursuant to legislative franchises, which
expire, in the case of PLDT, November 28,
 2028, in the case of Smart, March 27, 2017 and,
in the case of Piltel, May 14, 2019.  A franchise holder is required to obtain operating
authority from the NTC to provide specific telecommunications services.  These
approvals may take the form of a CPCN or, while an application for a CPCN is
pending, a provisional authority to operate.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">PLDT operates its business pursuant to a number of
provisional authorities and CPCNs, the terms of which expire at various times
between now and 2028.  PLDT's CPCNs to provide services to most of the
Metropolitan Manila area, Davao and other Philippine cities expired in 2003.
Although some of PLDT's CPCNs and provisional authorities have already expired,
PLDT filed timely applications for extension of these CPCNs and provisional
authorities prior to their respective expiration dates and is therefore
entitled to continue to conduct its business under its existing CPCNs and
provisional authorities pending the NTC&#146;s decision on these extensions.  PLDT
expects that the NTC will grant these extensions; however, there is no
assurance that this will occur.  The period of validity of some of PLDT&#146;s CPCNs
expired on November 28, 2003, coterminous with the term of its previous franchise
under R.A. 6146, which has been extended further by the NTC to November 28, 2028,
coterminous with PLDT&#146;s current franchise under R.A. 7082.  Motions to extend
the period of validity of the other CPCNs to November 28, 2028 are now pending
with the NTC.  See &#147;Item 3. Key Information &#151; Risks Factors &#151; Risks Relating to
Us &#151; Our business is significantly affected by governmental laws and
regulations, including regulations in respect of our franchises and
rates.&quot;  Piltel holds a CPCN to provide a nationwide cellular telephone
service which expires in August 2019.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart operates its cellular,
international long distance and national long distance services pursuant to
CPCNs, the terms of which will expire upon the expiration of its franchise.  On
 August 26, 2002, Smart was granted a CPCN to install, operate and maintain
nationwide global mobile personal communications via satellite which shall also
expire upon expiration of its franchise.  Smart&#146;s provisional authority to
establish, install, maintain, lease and operate an international private leased
circuit expired on May 6, 2003.  Prior to its expiration, Smart filed for an
extension of this provisional authority.  On July 22, 2002, Smart was granted separate CPCNs to operate a cellular mobile telephone system and an
international gateway facility.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Piltel is authorized to provide virtually every type of
telecommunications service, including the transmission of voice, data
facsimile, audio and video and information services, in and between provinces,
cities and municipalities throughout the Philippines. The franchise, which was
last amended on May 14, 1992, expires on May 14, 2019 and may be extended by a legislative act of the Philippine Congress.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table sets forth
the spectrum system, licensed frequency and bandwidth allocated to Smart and
Piltel:</p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='margin-left:5.4pt;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:.9pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Carrier</b></p>
 </div>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Spectrum
 System</b></p>
 </div>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Frequency
 Assignment</b></p>
 </div>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Bandwidth</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">ETACS/GSM 900</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">897.5-905/942.5-950 Mhz</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">7.5 Mhz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">GSM 1800</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1725-1730/1820-1825 Mhz</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">5.0 Mhz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1730-1732.5/1825-1827.5 Mhz</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2.5 Mhz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1735-1740/1830-1835 Mhz</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">5.0 Mhz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1745-1750/1840-1845 Mhz</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">5.0 Mhz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Piltel</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:48.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">AMPS/CDMA</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">824-835/869-880 Mhz</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">11.0 Mhz</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">845-846.5/890-891.5 Mhz</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.5 Mhz</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Operators of international gateway facilities and
cellular telephone operators, pursuant to E. O. 109, are required to install a
minimum number of local exchange lines.  Of these new lines, operators are
required to install one rural exchange line for every ten urban exchange lines
installed.  Smart and Piltel were required to install 700,000 and 400,000
lines, respectively, and each has received a certificate of compliance from the
NTC.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">We are required to pay various permit, regulation and
supervision fees to the NTC and are currently engaged in disputes with the NTC
over some of the assessed fees.  For more information on these disputes, see
&#147;Item 8. Financial Information &#150;&#150; Legal Proceedings &#151; NTC Fees.&#148;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">On May 27, 1998, Smart filed an Urgent Ex Parte Motion
and Manifestation regarding the permit fee in the amount of approximately
Php113 million assessed by the NTC for CPCN 93-482, pertaining to Smart&#146;s
Integrated Local Exchange Telephone Service, Domestic Toll Service and Private
Line Service.  Smart contended that the fee should have been calculated on the
basis of the actual local exchange carrier project cost, and that therefore the
fee should be Php70 million.  Although the NTC has not yet resolved this issue,
Smart has already paid Php50 million in respect of this assessment as of the
date of filing of this annual report.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:11.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In a letter dated January 17, 2002, the NTC requested that Smart pay the following fees in respect of its
CPCNs and provisional authorities:</p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align=center>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:96.52%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=left style='margin-bottom:0in;margin-bottom:.0001pt;
 text-align:left;line-height:94%;page-break-after:auto;border:none;padding:
 0in' style="margin-top:0;margin-bottom:0">Case No.</p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Fee</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">92-303</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php3,750,000</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">93-482</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:12.25pt;text-align:right' style="margin-top:0;margin-bottom:0">62,510,950</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">94-220</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:24.5pt;text-align:right' style="margin-top:0;margin-bottom:0">878,830</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">96-248</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:17.3pt;text-align:right' style="margin-top:0;margin-bottom:0">6,815,500</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#D9D9D9;padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php73,955,280</p>
 </td>
 </tr>
</table></center></div>

</div>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Piltel has also been assessed by
the NTC for deficiency supervision and regulation fees.  Based on the latest
computation of deficiency supervision and regulation fees received from the
NTC, which is dated as of September 30, 2002, the total amount assessed on
Piltel stands at Php640 million, including penalty fees amounting to Php275
million.  Piltel has protested the assessments in good faith.  Piltel continues
to make payments for which it believes are properly due to the NTC.  On September 30, 2002, Piltel made a payment to the NTC under protest in the amount of Php9.1
million.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In order to diversify the ownership
base of public utilities, the Public Telecommunications Policy Act (R.A. 7925)
requires a telecommunications entity with regulated types of services, such as
Smart and Piltel, to make a public offering through the stock exchanges
representing at least 30% of its aggregate common shares by the later of the
following:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the fifth anniversary of the date the law became effective; and</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the fifth anniversary of the date of the entity&#146;s commencement of
commercial operations.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT and Piltel have complied with
this requirement.  Smart believes that it has ten years from the commencement
of its operations, or until August 2004, to conduct a public offering because
the Philippine government has granted franchises to other telecommunications
companies requiring a public offering within ten years from the later of their
commencement of operations or the date on which the franchise was granted.
Because R.A. 7925 provides that any advantage granted under existing franchises
automatically becomes part of previously granted telecommunications franchises,
Smart believes that it is also entitled to this ten-year period.  PLDT
currently contemplates to cause Smart to conduct a public offering based on
market conditions and in accordance with applicable rules and regulations of
the PSE.  The Philippine Congress may revoke the franchise of Smart if it fails to comply with the requirement under R.A. 7925
on the public offering of its shares by August 2004.  A <i>quo warranto</i>
case may also be filed against Smart by the Office of the Solicitor General of
the Philippines on the ground of violation of R.A. 7925 if Smart will fail to
conduct public offering of its shares by August 2004.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In addition, the Philippine
Congress is considering five bills, each of which, if passed by Congress and
enacted into law, would impose a 7% or 10% tax on the gross receipts of
cellular operators.  The proposed taxes would apply to both cellular calls and
cellular data revenues and prohibit cellular operators from imposing additional
charges or fees to compensate for the imposition of the proposed taxes.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779209"></a><a
name="_Toc46082268">Competition</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The enactment of the Public Telecommunications Policy Act (R.A.
7925) of the Philippines in March 1995 consolidated the government's various
policy issuances governing the telecommunications industry and reaffirmed,
among other things, the policy of liberalizing the industry and opening up the
telecommunications market to new entrants.  Including us, there are nine major
local exchange carriers, 11 international gateway facility providers, and six
cellular service providers in the country, including one which has not yet
commenced operations.  Many new entrants into the Philippine telecommunications
market have entered into strategic alliances with foreign telecommunications
companies, which provide them access to technological and funding support as
well as service innovations and marketing strategies.  Consequently, we are
facing increasing competition in major segments of the telecommunications
industry, particularly cellular, fixed line and data and other network services
segments.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Cellular
Service</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Competition
in the cellular business has intensified with the introduction by competitors
of affordably priced handsets offering a range of new functions and features,
new and improved plans for postpaid subscribers, reduced rates per minute and
aggressive marketing and promotional strategies.  Our principal competitor in
the cellular business is Globe, which acquired Islacom in 2001. The principal
bases of competition are price, including handset cost, quality of service,
network reliability, geographic coverage and attractiveness of packaged
services.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Cellular operators are also
competing actively against each other in launching innovative products and
value-added services.  The growing range of cellular products and services now
include text messaging, multimedia messaging, voice mail, text mail,
international roaming, information-on-demand, mobile banking, e-commerce,
mobile data and cellular internet access.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Consistent with industry practice
and Smart&#146;s churn management efforts, Smart &quot;locks&quot; the handsets it
sells to its subscribers, rendering them incompatible with SIM cards issued by
competitors.  However, subscribers may have their handsets &#147;unlocked&#148; by
unauthorized parties, for a nominal fee, and purchase new SIM cards from
competing operators.  &#147;Unlocking&#148; does not involve significant cost.  In
addition, switching to another cellular operator would result in a change of
the subscriber&#146;s cellular telephone number.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">There are six operating cellular
service providers, namely Smart, Piltel, Globe, Islacom, Digitel and Express
Telecom.  Globe acquired Islacom (now known as <i>Innove</i>) to form into one
operating group while Smart and Piltel, both being part of the PLDT Group, form
another operating group.  There are therefore effectively only two key
competitors in the Philipppine cellular market.  Digitel commenced its cellular
service, <i>Sun Cellular</i>, on March 29, 2003 and is estimated to have less
than 1% of the market.  Extelcom operates on an analog platform and is
estimated to have less than 50,000 subscribers.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Local Exchange Service</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">The concerted nationwide
local exchange line build-out by various players, as mandated by the Philippine
government, significantly increased the number of fixed lines in service in the
country and resulted in wider access to basic telephone service.  The growth of
the fixed line market has considerably weakened due to the surge in demand for
cellular services and the general sluggishness of the national economy.
Nevertheless, we have sustained our leading position in the fixed line market
on account of PLDT's extensive network in key cities nationwide.  In most
areas, we face one or two competitors.  Our principal competitors in the local
exchange market are Digitel, BayanTel and Globe.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Over the past couple of years,
however, competition among local exchange operators has reduced as certain
operators have faced financial difficulties or have shifted strategic focus
away from the fixed line business to cellular services.  On the other hand, we
are facing increasing competition from cellular operators mainly due to
substitution of cellular services for fixed line services.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>International Long
Distance Service</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Including us, there are 11 international gateway
facility operators in the country.  While we have so far been able to maintain
a leadership position in this highly competitive segment of the industry, in
recent years, our market share has reduced largely as a result of (1)
competition from other international gateway facility operators and
international simple resale operators, (2) an increase in inbound and outbound
international long distance calls terminating to and originating from the
growing number of cellular subscribers, and (3) the popularity of alternative
and cheaper means of long distance communications, such as text messaging,
e-mailing and internet telephony, further heightening the competition.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">With respect to inbound calls into the Philippines,
we adopted the U.S. FCC benchmark accounting rate of US$0.38 per minute for
inbound international calls which represented a settlement rate of US$0.19 per
minute, one year ahead of the target date of January 1, 2001.  This provided
us with increased flexibility to terminate more U.S. traffic into the Philippines,
minimize unauthorized traffic termination through international simple resale
operations and recover traffic lost due to bypass routings.  We have also
established presence in key cities overseas to identify traffic at its source,
maximize the use of our international facilities and develop alternative
sources of revenue.  Effective February 1, 2003, after lengthy negotiations
with approximately 100 telecommunications operators around the world, we
increased the termination rate with carriers accounting for a substantial
portion of our international inbound traffic terminating on our fixed line
network to an average of approximately US$0.12 per minute.  Prior to the
increase in termination rates, a substantial portion of PLDT&#146;s international
inbound traffic terminating on its fixed line network was charged an average
termination rate of approximately US$0.08 per minute.  See &#147;Item 8. Financial
Information &#150;&#150; Legal Proceedings &#150;&#150; U.S. Federal Communications Commission, or FCC, Ruling
versus Philippine Telecommunications Companies&#148;,  &#147;Item 5. Operating and
Financial Review and Prospects &#150;&#150; Results of Operations &#150;&#150; 2003 Compared to
2002 &#150;&#150; Consolidated Operating Revenue &#150;&#150; Fixed Line &#150;&#150; International Long
Distance&#148;, &#147;Item 3. Key Information &#150;&#150; Risks Factors&#150;&#150; Risks Relating to Us &#150;&#150;
Our results of operations have been, and may continue to be, adversely affected
by competition in international long distance service&#148; and <i>Note 28 &#150; Other
Matters </i>to the accompanying consolidated financial statements in Item 18
for further discussion.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">With respect to outbound calls from the Philippines, we compete
for market share through our local exchange and cellular businesses, which are
the origination points of outbound international calls.  We have also
introduced a number of marketing initiatives to stimulate growth of outbound
call volumes, including tariff reductions and volume discounts for large
corporate subscribers.</p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>National Long Distance Service</i></p>

<p style='text-indent:.5in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Since 2000, our national long distance service business has been
negatively impacted by the growing number of cellular subscribers in the Philippines and the widespread availability and growing
popularity of alternative economical non-voice methods of communication,
particularly text messaging and e-mailing.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">While national long distance call
volumes have been declining, we have remained a leading provider of national
long distance service in the Philippines due to our significant subscriber base
and ownership of the Philippines&#146; most extensive DFON.  In order to mitigate
the decline of our national long distance revenues, we have renegotiated the
interconnection agreements with the cellular operators to provide the fixed
line business a more equitable access charge arrangement for calls between
fixed line and cellular subscribers.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Data and Other Network
Services</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Another rapidly growing segment
of the industry is the market for data and other network services. The growth
is spurred by the significant growth in consumer/retail narrowband and
broadband internet access, enterprise resource planning applications, call
centers, business process outsourcing, on-line gaming and other e-services that
drive the need for broadband and internet-protocol based solutions both here
and abroad.  Our principal competitors in this area are Globe/Innove, BayanTel,
Eastern Telecommunications and Digitel.  The principal bases of competition in
the data services market are price, customer service and quality of service.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779210"></a><a name="_Toc46082269">Environmental Matters</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have not
been subject to any material fines or legal or regulatory action involving
non-compliance with environmental regulations of the Philippines.  We are not
aware that we are not in compliance in any material respect with relevant
environmental protection regulations.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779211"></a><a name="_Toc46082270">Intellectual Property Rights</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We do not
own any material intellectual property rights apart from our brand names and
logos.  We are not dependent on patents, licenses or other intellectual
property which are material to our business or results of operations, other
than licenses to use the software that accompany most of our equipment
purchases.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779212"></a><a name="_Toc46082271">Properties</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">PLDT owns four office buildings located in Makati City and owns
and operates 183 exchanges nationwide, of which 61 are located in the
Metropolitan Manila area.  The remaining 122 exchanges are located in small
cities and municipalities outside Metropolitan Manila area.  We also own radio
transmitting and receiving equipment used for international and domestic
communications.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart&#146;s digital GSM network
includes 32 switching centers with a capacity of over 14 million subscribers
and 3,904 base stations covering 1,039 cities and municipalities nationwide.
Piltel also has six active cell sites at the end of 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">As of December 31, 2003, our principal properties, excluding property under construction, consisted of the
following, based on book value:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
53% consisted of cable and cellular facilities, including our
DFON, subscriber cable facilities, inter-office trunking and toll cable
facilities and cellular facilities;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
30% consisted of central office equipment, including three
international gateway facilities, six pure national toll exchanges and 15
combined local and toll exchanges, and communications satellite;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8% consisted of land and improvements and buildings, which we
acquired to house our telecommunications equipment;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1% consisted of information origination and termination
equipment, including, pay telephones and radio equipment installed for
customers use, as well as cables and wires installed within customers'
premises; and</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8% consisted of other work equipment.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">For more information on these properties, see <i>Note
7 &#150; Property, Plant and Equipment</i> to the accompanying consolidated
financial statements in Item 18.  These properties are located in areas being
served by our exchanges.  In our opinion, these properties are in good
condition, except for ordinary wear and tear, and are adequately insured.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">The majority of our
connecting lines are above or under public streets and properties owned by
others.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT's and Smart&#146;s
properties are free from any mortgage, charge, pledge, lien or encumbrance.
However, substantial properties of Piltel and Mabuhay Satellite are subject to
liens.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT Group has various long-term
lease contracts for periods ranging from two to ten years covering certain
offices, warehouses, telecommunications equipment locations and various office
equipment.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779213"></a><a name="_Toc46082272">Item 5.   Operating
and Financial Review and Prospects</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>The following discussion and
analysis of our financial condition and results of operations should be read in
conjunction with our audited consolidated financial statements (and the related
notes) as of December 31, 2003 and 2002 and for the years ended December 31,
2003, 2002 and 2001 included elsewhere in this report.  This discussion
contains forward-looking statements that reflect our current views with respect
to future events and our future financial performance.  These statements
involve risks and uncertainties, and our actual results may differ materially
from those anticipated in these forward-looking statements as a result of
particular factors such as those set forth under &quot;Forward-Looking
Statements&quot; and &#147;Item 3. Key Information &#151; Risk Factors&quot; and
elsewhere in this report.  Our audited consolidated financial statements, and
the financial information discussed below, have been prepared in accordance
with </i><i>U.S.</i><i> GAAP.  For convenience, certain peso financial
information in the following discussions has been translated to U.S. dollars at
the exchange rate at </i><i>December 31, 2003</i><i> of Php55.586 to US$1.00,
as quoted through the Philippine Dealing System.</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779214"></a><a name="_Toc46082273">Overview</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We are the
largest and most diversified telecommunications company in the Philippines.  We
have organized our business into three main segments:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Wireless</i> &#151; wireless telecommunications services provided
by PLDT&#146;s subsidiaries, Smart and Piltel, our cellular service providers, and
Mabuhay Satellite, ACeS Philippines, and Telesat, our satellite and VSAT
operators;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Fixed Line</i> &#151; fixed line telecommunications services
primarily provided through PLDT.  We also provide fixed line services through
PLDT&#146;s subsidiaries Clark Telecom, Subic Telecom, SNMI and Maratel, which
together account for approximately 1% of our consolidated fixed lines in
service, BCC (in 2003) and PLDT Global; and</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Information and Communications Technology</i> &#151; information
and communications infrastructure and services for internet applications,
internet protocol-based solutions and multimedia content delivery provided by
PLDT&#146;s subsidiary, ePLDT, internet access services provided by ePLDT&#146;s
subsidiary Infocom, and e-commerce, call centers and IT-related services
provided by ePLDT&#146;s other subsidiaries and associates.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Key performance indicators and
drivers that our management uses for the management of our business include,
among others, the general economic conditions in the Philippines, our
subscriber base, traffic volumes, and interconnection arrangements.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.5in;
margin-bottom:.0001pt;text-indent:0in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><b>Wireless</b></h4>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our wireless business provides cellular and satellite, VSAT and
other services, contributing about 99% and 1% of our wireless revenues,
respectively, as of December 31, 2003.  Rapid growth in the cellular market has
resulted in a change in our revenue composition and sources of our revenue
growth.  For 2003, cellular service was our major revenue source surpassing
fixed line revenues by four percentage points.  As of December 31, 2003, Smart and Piltel, which offers GSM service using Smart&#146;s GSM network, had the
largest and third largest cellular subscriber bases, respectively, in the Philippines.
In addition, Smart&#146;s and Piltel&#146;s subscribers increased by 51% in 2003,
resulting in our aggregate system-wide cellular subscribers outnumbering our
fixed line in service by more than 6 to 1 at the end of 2003.  Cellular data services,
which include all text messaging and text-related services ranging from
ordinary text to value-added services, contributed significantly to our revenue
increase.  Wireless business revenues accounted for 58%, 50% and 42% of our
consolidated revenues for 2003, 2002 and 2001, respectively.</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.5in;
margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></h4>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.5in;
margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><b>Fixed Line</b></h4>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Our fixed line business provides local exchange
service, international and national long distance services, data and other
network services and miscellaneous services.  Until 2003, fixed line services have
been our major revenue source contributing 49% and 58% of total operating
revenues in 2002 and 2001, respectively.  Although relatively stable in
absolute terms, our fixed line revenues&#146;contribution to consolidated operating
revenues have declined to 41% in 2003, largely due to the substantial growth in
our wireless business.  Local exchange revenues have declined slightly owing to
shift in subscriber preference from postpaid to prepaid service.  National long
distance revenues have also been declining largely due a drop in call volumes,
and an increase in the proportion of calls subject to revenue sharing with
other carriers.  Mitigating these declines was the steady growth of our data
and other network services over the recent years.  Recognizing the growth
potential of the data and other network services segment, we have put
considerable emphasis on the development of new packet-switched, data-capable
and internet-based networks.  International long distance revenues have
declined until 2002 due to lower inbound call volumes, lower termination rates
and increased competition and substitution, but has increased its contribution
to the overall fixed line revenues in 2003 on account of an increase in our
average termination rates.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:.5in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><b>Information
and Communications Technology</b></h4>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our
information and communications technology business is conducted through our
wholly- owned subsidiary, ePLDT, which was incorporated in August 2000 and
started commercial operations in February 2001.  ePLDT&#146;s principal businesses
are the operation of an internet data center under the brand name <i>Vitro</i>TM;
two wholly-owned call centers, Vocativ and Parlance; and Infocom, an ISP.  The
revenue contribution of our information and communications technology segment
accounted for 1% of our total consolidated operating revenues for the years
2003 and 2002, and less than 1% in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779215"></a><a
name="_Toc46082274">Critical Accounting Policies</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated financial
statements are prepared in accordance with U.S. GAAP, which requires management
to make estimates and assumptions that affect amounts reported in our
consolidated financial statements and related notes.  In preparing these
consolidated financial statements, we have made our best estimates and
judgments of certain amounts, giving due consideration to materiality.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We believe the following represent
our critical accounting policies under U.S. GAAP.  The impact and any
associated risks relating to these policies in our business operations are
discussed elsewhere in this section.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Revenue Recognition</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Revenue for
services is stated at amounts invoiced to customers and excludes value-added
tax.  We provide wireless communication services, fixed line communication
services, and information and communications technology services.  We provide
such services to business, residential, payphone and mobile customers.  Revenue
represents the value of fixed consideration that has been received or is
receivable.  Revenue is recognized when there is evidence of an arrangement,
collectibility is reasonably assured, and the delivery of the product or
service has occurred.  In certain circumstances, revenue is split into
separately identifiable components and recognized when the related components
are delivered in order to reflect the substance of the transaction.  The value
of components is determined using verifiable objective evidence.  We do not
provide our customers with the right to a refund.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Products and services</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Subscriptions.  </i>We provide
telephone and data communication services under postpaid and prepaid payment
arrangements.  Revenue includes fees for installation and activation.
Installation and activation-related fees and the corresponding costs, not
exceeding the activation revenue, are deferred and recognized over the expected
average period of the customer relationship of seven years and three years for
fixed line and cellular service, respectively.  Postpaid service arrangements
include subscription fees, typically fixed monthly fees, which are recognized
over the subscription period on a pro rata basis.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Air time, traffic and
value-added services.  </i>Prepaid service revenue collected in advance is
deferred and recognized based on the earlier of actual usage or upon expiration
of the usage period.  Payphone service revenue is recognized when the service
is provided.  Interconnection revenue for call termination, call transit, and
network usage are recognized in the period the traffic occurs.  Revenues
related to local, long distance, network-to-network, roaming and international
call connection services are recognized when the call is placed or the
connection is provided, net of amounts payable to other telecommunication
carriers for terminating calls in their territories. Revenue related to
products and value-added services is recognized upon delivery of the product or
service.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Equipment sales.  </i>Sales of
communication equipment are recognized upon delivery to the customer.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Directory services.  </i>Revenue
related to published directory services is recognized on a pro rata basis over
the period in which the publication expires, which is generally 12 months.
Telephone-based directory service revenue is recognized when the service is
provided.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Incentives.  </i>We record
commission expense based on the number of new subscriber connections initiated
by certain dealers.  All other cash incentives provided to dealers and
customers are recorded as a reduction from revenue.  Product-based incentives
provided to dealers and customers as part of a transaction are accounted for as
multiple element arrangements and recognized when earned.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Others.  </i>Interest income
from cash deposits is recognized on a time proportion basis taking into account
the principal amount outstanding and the effective interest rate.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Impairment of Long-Lived
Assets</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S. GAAP requires that an
impairment review be performed when certain impairment indicators are present.
The impairment review first compares the future undiscounted cash flows
expected to be generated from the continued use and ultimate disposition of the
assets with the book value of the assets.  If these cash flows are not
sufficient to recover the book value of the assets, an impairment charge is
recognized based on the comparison between the discounted value of these cash
flows and the book value of the assets.  In addition, our projections for
future cash flows are generally less during periods of reduced cash flow.  As a
result, an impairment charge is more likely to occur during a period when our
operating results are already otherwise depressed.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Purchase accounting requires
extensive use of accounting estimates and judgments to allocate the purchase
price to the fair market values of the assets and liabilities purchased.  Our
business acquisitions typically result in goodwill, which affected our results
of operations for the amount of future period amortization expense.  However,
we no longer amortize goodwill under U.S. GAAP effective January 1, 2002.  Instead, goodwill is subject to a periodic impairment test.  Determining the value
of goodwill and future undiscounted cash flows expected to be generated from
the continued use and ultimate disposition of such assets require us to make
estimates and assumptions that can materially affect our consolidated financial
statements.  Future events could cause us to conclude that goodwill associated
with an acquired business is impaired.  Any resulting impairment loss could
have a material adverse impact on our financial condition and results of
operations.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Piltel recognized an asset
impairment charge of Php12,938 million in 2001 and Php13,204 million in 2002 relating
to its AMPS/CDMA and E.O. 109 assets, respectively.  The revenues generated
from these services could no longer support the cost of operating the network.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Also, Smart carried out an
impairment review of its analog assets in 2001 as a result of declining
subscriber numbers, decreasing average revenue per user and the general
migration of analog subscribers to Smart&#146;s GSM services.  This resulted in an
asset impairment charge of Php3,783 million in 2001 based on the estimated
discounted future cash flows from continued use and eventual disposition of
these assets.  In 2001, Smart wrote-off the unamortized intangible assets
(customer lists) amounting to Php2,077 million relating to analog customers.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, ACeS Philippines has a 20% investment in AIL, a company incorporated under the laws of the island
 of Bermuda.  AIL owns the Garuda I satellite and the related system control
equipment in Batam, Indonesia.  In December 1998, AIL and its 95% owned
subsidiary, PT Asia Cellular Satellite, entered into an Amended and Restated
Credit Agreement, or Amended Agreement, to amend the original Credit Agreement
entered into by PT Asia Cellular Satellite and its bank creditors in 1997.
Under the Amended Agreement, AIL has, among others, assigned to the banks as
collateral all of its intangible properties, including the Garuda Satellite,
the system control facilities and system control equipment.  On September 30,
2002, PT Asia Cellular Satellite, AIL, as guarantor, P.T. Bank International
Indonesia, as security agent, and various banks signed the Rescheduling
Agreement, which amended the terms of the Amended and Restated Credit Agreement
dated December 29, 1998, moving the principal repayment dates to agreed periods
with the final maturity date on January 31, 2012.  As of December 2001, AIL has
incurred recurring significant losses, negative operating cash flows, and
significant levels of debt.  The financial condition of AIL was partly due to
the NSP&#146;s inability to generate the amount of revenues originally expected as
the growth in subscriber numbers have been significantly lower than budgeted.
These factors raised substantial doubt about AIL&#146;s ability to continue as a
going concern.  On this basis, we recognized an impairment provision in respect
of our investment in AIL of Php3,314 million and ground station equipment of
ACeS Philippines in relation to the business of AIL in 2001 of Php673 million.
</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT&#146;s total investments in
convertible notes of Unilink amounted to Php2,052 million.  These notes are
convertible into shares of common stock of Unilink or exchangeable into common
stock of Home Cable at the option of the holder, if and when the law limiting
the ownership of cable television systems to Philippine citizens or
corporations, which are 100% owned by Philippine citizens, is eventually
changed.  Unilink is a Philippine corporation owning all the outstanding common
stocks of Home Cable, which is also a Philippine corporation licensed to own,
maintain and operate a cable television system in the Philippines.  All of
Unilink&#146;s shares in Home Cable have been pledged to a group of lenders as
security for a loan to Home Cable.  On December 6, 2001, Home Cable defaulted
on the principal and interest payments in respect of certain of its loan obligations.
On April 10, 2002, the loan agent, at the request of the lenders, delivered a
notice to Home Cable declaring an event of default and accelerating the loan
repayment.  Consequently, the lenders are entitled to foreclose on or sell the
collateral granted as security for the loan, including Unilink&#146;s share in Home
Cable.  In the event that Home Cable&#146;s lenders were to foreclose on Unilink&#146;s
Home Cable shares, the lenders would be entitled to the proceeds from the sale
thereof or, if such shares were not sold, to the shares, and Unilink would be
subrogated to the lenders&#146; claims against Home Cable.  Home Cable is currently
engaged in negotiations with the lenders to restructure its debt.  On the basis
of Home Cable&#146;s default on certain of its obligations, the uncertainty
surrounding the negotiations with its creditors and equity holders, and its
financial condition, we provided for a full permanent decline in value of our
investment totaling Php2,052 million in 2001.  In June 2003, PLDT assigned and
ceded unto the PLDT Beneficial Trust Fund, or BTF, all of its rights, interest
and participation in respect of its investment in convertible notes of Unilink
with a fair value of zero and effectively for zero consideration under U.S.
GAAP.  In addition, PLDT also ceded its rights, interest and participation to
certain other assets unrelated to Unilink for and in consideration of partial
payment of the contributions which PLDT is required to make to the BTF under
PLDT&#146;s employee benefit plan.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The preparation of the estimated future cash flows involves
significant judgment and estimations. While we believe that our assumptions are
appropriate and reasonable, significant changes in our assumptions may
materially affect our assessment of recoverable values and may lead to future
additional impairment changes under U.S. GAAP.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><i>Estimating Allowances for Doubtful Accounts</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We estimate the allowance for
doubtful accounts related to our trade receivables based on two methods.  The
amounts calculated using each of these methods are combined to determine the
total amount we reserve.  First, we evaluate specific accounts, mostly of
foreign administrators and fixed line subscribers, or, where we have
information that certain customers may be unable to meet their financial obligations.
In these cases, we use judgment, based on the best available facts and
circumstances, including but not limited to, the length of our relationship
with the customer and the customer&#146;s current credit status based on third party
credit reports and known market factors, to record specific reserves for
customers against amounts due to reduce our receivables to amounts that we
expect to collect.  These specific reserves are re-evaluated and adjusted as
additional information received impacts the amounts estimated.  Second, a
general provision is established as a certain percentage of operating
revenues.  This percentage is based on historical collection, write-off
experience, current economic trends and changes in our customer payment terms.
The amount and timing of recorded expenses for any period would differ if we
made different judgments or utilized different estimates.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Full allowance is provided for receivables from permanently
disconnected subscribers.  Permanent disconnections are made after a series of
collection steps following non-payment by subscribers.  Such permanent
disconnections generally occur within 105 days from due date.  Partial
allowance is provided for active subscribers based on the age status of the
receivable.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Full
allowance is provided for carrier accounts which have been past due for over
360 days from transaction date and after a review of the status of settlement
with other carriers.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">An increase
in our allowance for doubtful accounts would increase our recorded operating
expenses and decrease our current assets.  Provision for doubtful accounts
amounted to Php4,092 million in 2003, Php4,160 million in 2002 and Php3,221
million in 2001.  The provision for doubtful accounts represented approximately
4% of our consolidated operating revenues for each of the years ended December 31, 2003, 2002 and 2001.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Acquisitions and
Intangible Assets</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Acquisitions have generally been
accounted for as purchases.  Accordingly, the acquisition of Smart was
accounted for using the purchase method of accounting.  The excess of the total
acquisition cost over the fair value of the net assets acquired was Php23,096
million.  Based on management's review and estimate, Php5,900 million was
recorded as the value of customers acquired.  Prior to 2002, the excess of the
total acquisition cost over the fair value of the net assets acquired was
amortized on a straight-line basis over five years.  Starting 2002, the
unamortized balance is reviewed annually for impairment using the fair value
approach.  On the other hand, prior to 2001, customers list for both GSM and
analog subscribers were amortized over five years which at that time was the
expected average period of the customer relationship.  Beginning 2001, we
revised our estimated useful life of the acquired GSM customer lists based on
our analysis of customer churn rates over three years.  The unamortized balance
of the analog customer lists was fully impaired in 2001.  Purchase accounting
requires extensive use of accounting estimates and judgments to allocate the
purchase price to the fair market values of the assets and liabilities
purchased.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Foreign Exchange Revaluation Losses</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">When we incur unhedged foreign currency-denominated liabilities
arising directly from the acquisition of property, plant and equipment invoiced
in a foreign currency, such as U.S. dollar-denominated loans to finance
equipment purchases, foreign exchange losses on those liabilities are charged
or credited to operations in the current period.  In recent years, the Philippine
peso has depreciated significantly against the U.S. dollar, resulting in
substantial foreign exchange losses, and has resulted in our incurring net
losses for certain periods.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><i>Investments</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The various interests that we hold
in companies are accounted for under three methods:  consolidation, the equity
method and the cost method.  The applicable accounting method is generally
determined based on our voting interest in a company.  Majority-owned companies
are consolidated, 20% to 50% owned companies are accounted for using the equity
method and our investments in companies over which no significant influence is
exercised or in cases where our investments are temporary, the investments are
stated at cost.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Pension Cost</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The determination of our obligation
and cost for pension and other retirement benefits is dependent on our
selection of certain assumptions used by actuaries in calculating such
amounts.  Those assumptions are described in <i>Note 19 &#150; Employee&#146;s Benefit
Plan</i> to the accompanying consolidated financial statements in Item 18, and
include among others, discount rates, expected returns on plan assets and rates
of compensation increase.  In accordance with U.S. GAAP, actual results that
differ from our assumptions are accumulated and amortized over future periods
and therefore, generally affect our recognized expense and recorded obligation
in such future periods.  While we believe that our assumptions are reasonable
and appropriate, significant differences in our actual experience or
significant changes in our assumptions may materially affect our pension and
other retirement obligations.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Legal Contingencies</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We are currently involved in
various legal proceedings.  Our estimate of the probable costs for the
resolution of these claims has been developed in consultation with outside
counsel handling our defense in these matters and is based upon an analysis of
potential results.  We currently do not believe these proceedings will have a
material adverse effect on our consolidated financial position.  It is
possible, however, that future results of operations could be materially
affected by changes in our estimates or in the effectiveness of our strategies
relating to these proceedings.  See &#147;Item 8. Financial Information &#151; Legal
Proceedings.&#148;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><a name="_Toc46082275"><i>&nbsp;</i></a></p>

<p style='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b><i>Impact
of Recently Issued Accounting Pronouncements</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">In June 2002, the Financial
Accounting Standard Board, or FASB, issued SFAS 146, &#147;Accounting for Costs
Associated with Exit or Disposal Activities.&#148;  SFAS 146 provides guidance
related to accounting for costs associated with disposal activities covered by
SFAS 144 or with exit or restructuring activities previously covered by
Emerging Issues Task Force, or EITF, Issue No. 94-3, &#147;Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring).&#148;  SFAS 146 supersedes
EITF Issue No. 94-3 in its entirety.  SFAS 146 requires that costs related to
exiting an activity or to a restructuring should not be recognized until the
liability is incurred. SFAS 146 will be applied prospectively to exit or
disposal activities that are initiated after December 31, 2002.</p>

<p style='text-indent:35.3pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.3pt' style="margin-top:0;margin-bottom:0">In January 2003, the FASB issued
FASB Interpretation No., or FIN, 46, &#147;Consolidation of Variable Interest
Entities.&#148;  The primary objective of FIN 46 is to provide guidance on the
identification of, and financial reporting for, entities over which control is
achieved through means other than voting rights; such entities are known as
variable interest entities.  FIN 46 requires variable interest entities to be
consolidated by the primary beneficiary of the variable interest entities and
expands disclosure requirements for variable interest entities that are
consolidated as well as those within which an enterprise holds a significant variable
interest.  For variable interests in entities commonly referred to as &#147;special
purpose entities&#148;, implementation of this statement is required by January 1, 2004.  And for all other variable interest entities, implementation is required
by December 31, 2004.</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">In April 2003, the FASB issued
SFAS 149, Amendment of SFAS 133 on Derivative Instruments and Hedging
Activities.  This Statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under SFAS 133.  This Statement is effective for contracts
entered into or modified after June 30, 2003 and for hedging relationships
designated after June 30, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In May 2003, the FASB issued SFAS
150 &#147;Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity&#148;.  SFAS 150 establishes standards on how companies
classify and measure certain financial instruments with characteristics of both
liabilities and equity.  The Statement requires that the Company classify as
liabilities the fair value of all mandatorily redeemable financial instruments
that had previously been recorded as equity or elsewhere in the consolidated
financial statements.  This Statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise effective for all
existing financial instruments, except for minority interests in limited-life
entities, beginning of the first interim period beginning after June 15, 2003.  Certain provisions of this Statement relating to noncontrolling interests
in limited-life subsidiaries were deferred indefinitely.  We continue to
monitor the deferral status of SFAS 150.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The adoption of FIN 46, SFAS 146,
SFAS 149 and SFAS 150 did not have a material impact on PLDT Group&#146;s
consolidated financial statements.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In May 2003, EITF Issue No. 00-21,
&#147;Accounting for Revenue Arrangements with Multiple Deliverables,&#148; was
finalized. EITF No. 00-21 provides guidance on how to account for arrangements
that involve the delivery or performance of multiple products, services and/or
rights to use assets.  The provisions of EITF No. 00-21 apply to revenue
arrangements entered into in fiscal periods beginning after June 15, 2003.  In December 2003, the U.S. SEC issued Staff Accounting Bulletin, or SAB,
No. 104, &#147;Revenue Recognition,&#148; which codifies and rescinds certain sections of
SAB No. 101, &#147;Revenue Recognition&#148;, in order to make this interpretive guidance
consistent with EITF No. 00-21.  We are currently in the process of evaluating
any effect the adoption of EITF No. 00-21 will have on our consolidated
financial statements.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In December 2003, the FASB revised
SFAS 132, &#147;Employers&#146; Disclosures about Pensions and Other Postretirement
Benefits.&#148;  It requires additional disclosures to those in the original SFAS
132 about the plan assets, benefit obligations, cash flows and net periodic
benefit cost of defined benefit plans and other postretirement benefit plans.
The new disclosures are generally effective for 2003 calendar yearend financial
statements of public companies, with a delayed effective date for certain
disclosures and for foreign plans.  The requirements of this Statement are
included in <i>Note 19 &#150; Employees&#146; Benefit Plans </i>to the accompanying
consolidated financial statements in Item 18.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779216">Results of Operations</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table shows the
contribution by each of our business segments to our consolidated operating
revenues, operating expenses and net operating income (loss) for each of the
years ended December 31, 2003, 2002 and 2001.  Most of our revenues are derived
from our operations within the Philippines.  Our revenues derived from outside
the Philippines consist primarily of revenues from incoming international calls
to the Philippines.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.1in;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Years Ended
 December 31,</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.1in;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>%(1)</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>%(1)</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>%(1)</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.1in;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=6 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.1in;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Operating Revenues</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Wireless</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php64,332</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">58</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php46,298</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php33,597</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">42</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,195</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">41</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45,851</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,323</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">58</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Information and communications
 technology</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">1,509</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">1</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">651</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">1</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">374</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">&#150;</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.1in;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">112,036</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">100</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">92,800</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">100</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">80,294</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">100</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.1in;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Operating Expenses</b></p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Wireless</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45,649</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">41</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">37,282</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">40</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">57,537</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">72</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,878</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">42,032</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27,495</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">34</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-.1in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Information and communications
 technology</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">2,036</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">2</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">1,457</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">2</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">1,204</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">1</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.1in;text-indent:-.1in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">78,563</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">70</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">80,771</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">87</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">86,236</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">107</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.1in;text-indent:-.1in' style="margin-top:0;margin-bottom:0"><b>Net Operating Income (Loss)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-.1in' style="margin-top:0;margin-bottom:0">Wireless</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">18,683</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">17</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">9,016</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(23,940)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style=';text-align:right' style="margin-top:0;margin-bottom:0">(30)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-.1in' style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">15,317</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,819</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">18,828</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-.1in' style="margin-top:0;margin-bottom:0">Information and communications technology</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">(527)</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">(1)</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">(806)</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">(1)</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">(830)</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">(1)</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.1in;text-indent:-.1in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Php33,473</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">30</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">Php12,029</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">13</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">(Php5,942)</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;'>
 <p align=right style='text-align:right;border:none;
 padding:0in' style="margin-top:0;margin-bottom:0">(7)</p>
 </div>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">_____________</p>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:
0in;line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp; </i><i>Operating
expenses and net operating income (loss) as a percentage of operating revenues.</i></p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a name="_Toc69572324"><b>2003
Compared to 2002</b></a></p>

<p style='text-indent:.5in;line-height:9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Consolidated Operating Revenues</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Largely driven by the continued strong growth of our
wireless business, particularly Smart&#146;s cellular business, our consolidated
operating revenues for 2003 increased by Php19,236 million, or 21%, to Php112,036 million from Php92,800
million in 2002.  The revenue contribution of our wireless business accounted
for 58% of our consolidated operating revenues for 2003, compared to 50% in
2002.  Smart contributed Php58,740 million in
revenues in 2003, an increase of 33% over its revenue contribution of Php44,316
million in 2002.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table shows the
breakdown of our total consolidated operating revenues for the years ended December 31, 2003 and 2002 by business segment:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=12 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Increase </b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=12 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Wireless </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php64,332</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">58</p>
 </td>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php46,298</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">Php18,034</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">39</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">46,195</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">41</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">45,851</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">344</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Information and communications technology </p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,509</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">651</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">858</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">132</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php112,036</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php92,800</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php19,236</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">21</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Wireless</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table summarizes our consolidated operating revenues from our
wireless business for the years ended December 31, 2003 and 2002 by service
segment:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=11 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Wireless services:</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cellular services</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php51,001</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">79</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php30,583</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">66</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php20,418</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">67</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Cellular handset sales</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">12,433</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">20</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">14,982</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-right:5.75pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,549)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(17)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Satellite, VSAT and others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">898</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">733</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-right:5.75pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">165</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php64,332</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php46,298</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-right:5.75pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php18,034</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">39</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our wireless
service revenues increased significantly by Php18,034 million, or 39%, to
Php64,332 million in 2003 from Php46,298 million in 2002 mainly as a result of
the continued strong growth in revenues generated from Smart&#146;s and Piltel&#146;s
cellular services.  Accordingly, as a percentage of our consolidated operating
revenues, wireless service revenues increased to 58% in 2003 from 50% in 2002. </p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Cellular Service</i></p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Our cellular service revenues consist of: </p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
revenues derived from actual usage of the network by prepaid
subscribers and any unused peso value of expired prepaid cards or electronic
air time loads, net of discounts given to dealers; </p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
monthly service fees from postpaid subscribers, including (1)
charges for calls in excess of allocated free local calls, (2) toll charges for
national and international long distance calls, (3) charges for text messages
of our GSM service customers in excess of allotted free text messages and (4)
charges for value-added services, net of related content provider costs;</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
revenues generated from incoming calls and messages to our
subscribers, net of interconnection expenses; fees from reciprocal traffic from
international correspondents; and revenues from inbound international roaming
calls for the GSM service; and</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
other charges, including those for reconnection and migration. </p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our cellular service revenues in
2003 amounted to Php51,001 million, an increase of Php20,418 million, or 67%,
from Php30,583 million in 2002.  Cellular service revenues accounted for 46% of
our consolidated operating revenues in 2003, compared to 33% in 2002.  This
increase was primarily due to increased traffic volumes and the 51% growth in
our wireless subscriber base, which increased by 4,347,891 from 8,599,306 as of
 December 31, 2002 to 12,947,197 as of December 31, 2003.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The following table shows our
cellular subscriber base as of December 31, 2003 and 2002:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.96%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:5.75pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:5.75pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Increase</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:5.75pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:5.75pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">GSM Cellular Subscribers</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">12,947,197</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">8,599,306</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">4,347,891</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">51</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:justify' style="margin-top:0;margin-bottom:0">Smart</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">10,080,112</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,825,686</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">3,254,426</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:justify;text-indent:
 13.5pt' style="margin-top:0;margin-bottom:0">Prepaid </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">9,831,135</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">6,649,038</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">3,182,097</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:justify;text-indent:
 13.5pt' style="margin-top:0;margin-bottom:0">Postpaid </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">248,977</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">176,648</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">72,329</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">41</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:justify;text-indent:
 9.0pt' style="margin-top:0;margin-bottom:0">Piltel &#150; Prepaid</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,867,085</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,773,620</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,093,465</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">62</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Of our 12,947,197 GSM subscribers
as of December 31, 2003, prepaid subscribers accounted for approximately 98%
while postpaid subscribers accounted for the remaining 2%.  Smart's prepaid GSM
subscriber base grew by 48% to 9,831,135 as of December 31, 2003 from 6,649,038
as of December 31, 2002, whereas Smart's postpaid GSM subscriber base increased
by 41% to 248,977 as of December 31, 2003 from 176,648 as of December 31,
2002.  Smart&#146;s prepaid and postpaid net subscriber activations totaled
3,182,097 and 72,329, respectively, in 2003, or a monthly average addition of
265,175 prepaid and 6,027 postpaid subscribers.  On the other hand, Piltel&#146;s
prepaid subscribers increased by 62% to 2,867,085 as of December 31, 2003 from
1,773,620 as of December 31, 2002 or a monthly average addition of 91,122
subscribers.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Churn, or the rate at which
existing subscribers have their services cancelled in a given period, is
computed based on total disconnections in the period, net of reconnections in
the case of postpaid subscribers, divided by the average of the number of
subscribers at the beginning and the end of a month, all divided by the number
of months in the same period.</p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Cellular Handset Sales</i></p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our cellular revenues include
revenues from the sale of handsets amounting to Php12,433 million, a decrease
of Php2,549 million, or 17%, over the Php14,982 million in 2002.  The decrease
was attributable to lower sale of handsets in 2003 as compared to 2002.</p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Satellite, VSAT and Other
Services</i></p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our revenues from satellite, VSAT
and other services consist mainly of rentals received for the lease of Mabuhay
Satellite's transponders and Telesat's VSAT facilities to other companies and
charges for ACeS Philippines&#146; satellite phone service.  Total revenues from
these services for 2003 amounted to Php898 million, an increase of Php165
million, or 23%, from Php733 million for 2002.</p>

<p style='line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Fixed Line</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Revenues
generated from our fixed line business in 2003 totaled Php46,195 million, an
increase of Php344 million, or 1%, from Php45,851 million in 2002.  This
increase was due to higher revenues generated from international long distance
service and data and other network services, partially offset by decreased
revenues from local exchange service, national long distance service, and
miscellaneous services.  As a percentage of our consolidated operating
revenues, however, fixed line revenues decreased to 41% in 2003 from 49% in 2002 principally due to the continued
strong growth of our wireless business.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table summarizes our consolidated operating revenues from our fixed
line business for the years ended December 31, 2003 and 2002 by service
segment:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fixed line services:</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Local exchange</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php20,728</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php21,345</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php617)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">International long distance</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">12,634</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">27</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">10,636</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">1,998</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.2pt;text-align:right' style="margin-top:0;margin-bottom:0">19</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">National long distance</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">6,694</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">7,818</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">17</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,124)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(14)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Data and other network</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">5,802</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">13</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">5,561</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:5.75pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">12</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">241</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.2pt;text-align:right' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Miscellaneous</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">337</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:5.75pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">491</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(154)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(31)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php46,195</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php45,851</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php344</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.2pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 </tr>
</table></center></div>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Local
Exchange Service</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our local
exchange service revenues consist of: </p>

<p style='line-height:9.0pt;punctuation-wrap:hanging;
text-autospace:ideograph-numeric ideograph-other;border:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
flat monthly fees for our postpaid service; </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;;margin-bottom:
0in;margin-left:.75in;margin-bottom:.0001pt;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
installation charges and other one-time fees associated with the
establishment of customer service;</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
fixed charges paid by other telephone companies, charges retained
by PLDT for calls terminating to cellular subscribers within the local area,
and local access charges paid by cellular operators for calls by cellular
subscribers that terminate to our local exchange network;</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
revenues from usage of prepaid cards for calls within the local
area and any unused peso value of expired prepaid cards;</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
call revenues generated from payphones and coin-operated phones;
and</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
charges for special features, including bundled value-added
services such as call waiting, call forwarding, multi-party conference calling,
speed calling and Caller ID. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table summarizes key measures of our local exchange service business
segment as of and for the years ended December 31, 2003 and 2002:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December
 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:4.5pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Consolidated local exchange revenues (in millions) </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php20,728</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php21,345</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php617)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Number of fixed lines in service</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT Group</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,185,951</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,188,612</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,661)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">PLDT(1)
 </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2,115,671</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2,092,539</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">23,132</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0">Number
 of PLDT employees</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">10,230</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">12,131</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,901)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(16)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0">Number
 of PLDT fixed lines in service per PLDT employee</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">207</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">172</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">35</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">20</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">________________</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">(1) Approximately 83% and 88% were postpaid fixed line
subscribers as of December 31, 2003 and 2002, respectively.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Revenues from our local exchange service for 2003 decreased by
Php617 million, or 3%, to Php20,728 million from Php21,345 million in 2002.
The decrease was primarily due to the (1) shifting subscriber preference from
postpaid to prepaid services, which generate lower average revenue per
subscriber, and (2) decline in installation revenues due to a promotion in 2003
which waived installation cost of subscribers in an effort to stimulate
subscriber growth, partially offset by adjustments in our monthly local service
rates.  The percentage contribution of local exchange revenues to our total
fixed line revenues also decreased in 2003 to 45% from 47% in 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Gross additions to PLDT's fixed
lines in service in 2003 totaled 577,530, an increase of 54,516 from the gross
additions of 523,014 in 2002.  On a net basis, PLDT&#146;s fixed line additions in
2003 totaled 23,132, which was 33% higher compared to the net additions of
17,430 in 2002.  While fixed line additions totaled 114,277 for PLDT&#146;s prepaid
fixed line services, PLDT&#146;s postpaid fixed lines in service declined by 91,145
in 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, PLDT&#146;s active prepaid fixed line subscribers totaled 357,304 which accounted for
approximately 17% of PLDT&#146;s total fixed lines in service<b> </b>as of December 31, 2003. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Pursuant to a currency exchange rate adjustment
mechanism authorized by the NTC, we implemented 11 upward adjustments and three
downward adjustments in our monthly local service rates in 2003, compared to 13
upward adjustments and six downward adjustments in 2002.  See &#147;Item 4.
Information on the Company &#150;&#150; Fixed Line &#150;&#150; Rates&#148; for more details relating to
the exchange rate adjustment mechanism.  The average peso-to-dollar rate in
2003 was Php54.215 to US$1.00, compared to the average of Php51.583 to US$1.00
in 2002.  This change in the average peso-to-dollar rate translated to a peso
depreciation of 5%, which resulted in an average net increase of 5% in our
monthly local service rates in 2003. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">The ratio of PLDT fixed lines in service per PLDT
employee improved to 207 as of December
 31, 2003 from 172 as of December 31, 2002.
This improvement resulted primarily from the net decrease in PLDT&#146;s employee
headcount.  During the year ended December 31, 2003,
PLDT&#146;s workforce was reduced by 16% to 10,230 employees from 12,131 in 2002,
mainly on account of PLDT&#146;s manpower rightsizing program, or MRP. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><i>International Long Distance
Service</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our international long distance
revenues, which we generate through our international gateway facilities,
consist of:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
inbound call revenues representing settlements from foreign
telecommunications carriers for inbound international calls, virtual transit
and hubbing service and reverse charged calls such as received collect and home
country direct service;</p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
access charges paid to us by other Philippine telecommunications
carriers for terminating inbound international calls to our local exchange
network; and</p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
outbound call revenues representing amounts billed to our
customers (other than our cellular customers) for outbound international calls,
net of amounts payable to foreign telecommunications carriers for terminating
calls in their territories.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table shows information about our fixed line international long
distance business for the years ended December 31, 2003 and 2002:</p>

<p style='line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=7 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:4.5pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Consolidated international
 long distance revenues (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php12,634</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php10,636</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1,998</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">19</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:13.5pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,614</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,461</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,153</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">25</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:13.5pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outbound</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,020</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,175</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(155)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(7)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">International call volumes (in million minutes,
 except call ratio)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:13.5pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT Group</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,286</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,815</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(529)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(19)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:27.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,128</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,644</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(516)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(20)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:27.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outbound</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">158</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">171</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(13)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(8)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:27.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound-outbound call ratio</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">13.5:1</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">15.5:1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:13.5pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,183</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,576</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(393)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(15)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:27.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,028</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">2,409</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(381)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(16)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:27.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outbound</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">155</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">167</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(12)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(7)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:27.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound-outbound call ratio</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">13.1:1</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">14.4:1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated international long
distance revenues increased by Php1,998 million, or 19%, to Php12,634 million
in 2003 from Php10,636 million in 2002, primarily as a result of an increase in
our inbound international long distance revenues principally due to an increase
in average inbound termination rates in 2003.  Likewise, the percentage
contribution of international long distance revenues to our total fixed line
revenues increased to 27% in 2003 from 23% in 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our revenues from inbound
international long distance calls in 2003 increased by Php2,153 million, or
25%, to Php10,614 million from Php8,461 million in 2002, primarily due to an
increase in PLDT&#146;s average termination rates and the positive impact of the
depreciation of the average value of the peso relative to the U.S. dollar,
partially offset by the effect of lower inbound call volumes.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our inbound international long
distance call volumes in 2003 decreased by 20% to 2,128 million minutes from
2,644 million minutes in 2002, primarily due to increased competition from
alternative means of long distance communications, particularly e-mailing,
international text messaging and internet telephony, more inbound calls
terminating directly to cellular subscribers and continued illegal bypass
activity.  In addition, the increase in our average termination rates in 2003
also resulted in reduced inbound call volumes, principally those being routed
through direct facilities from the U.S. to the Philippines.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">After lengthy negotiations
commencing in May 2002 with carriers around the world, PLDT increased its
termination rates with carriers that account for a substantial portion of its
international inbound traffic terminating on its fixed line network to an
average of approximately US$0.12 per minute effective February 1, 2003.  Prior to the increase in termination rates, a substantial portion of PLDT&#146;s
international inbound traffic terminating on its fixed line network was charged
an average termination rate of approximately US$0.08 per minute.  See &#147;Item 8.
Financial Information &#150;&#150; Legal Proceedings &#150;&#150; U.S. Federal Communications
Commission, or FCC, Ruling versus Philippine Telecommunications Companies&#148;,
&#147;Item 8. Financial Information &#150;&#150; Legal Proceedings &#150;&#150; Investigation by U.S.
Department of Justice&#148; and <i>Note 28 &#150; Other Ma</i>tters to the accompanying
consolidated financial statements in Item 18 for further discussion.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The depreciation of the peso
contributed to the increase in our inbound international long distance revenues
in peso terms since settlement charges for inbound calls are billed in U.S.
dollars or in special drawing rights, an established method of settlement among
international telecommunications carriers using values based on a basket of
foreign currencies, that are translated into pesos at the prevailing exchange
rates at the time of billing.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our revenues from outbound
international long distance calls in 2003 decreased by Php155 million, or 7%,
to Php2,020 million from Php2,175 million in 2002.  The decline was primarily
due to lower outbound call volumes and reduced international direct dialing, or
IDD, rates attributable to our corporate customers partly offset by the positive
impact of the depreciation of the peso on outbound international long distance
service revenues.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">The depreciation of the peso contributed to the
outbound international long distance revenues in peso terms because outbound
calls are charged in U.S. dollar rates and billed to our subscribers in pesos
at the prevailing exchange rates at the time of billing.  This increase,
however, was not sufficient to compensate for the reduced IDD rates
attributable to our corporate customers and the decline in outbound call
volumes.  Our outbound international long distance call volumes declined by 8%
to 158 million minutes in 2003 from 171 million minutes in 2002, primarily due
to cellular substitution (subscribers opting to use cellular for international
outbound calls) and the popularity of alternative means of communications such
as e-mailing and text messaging.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>National
Long Distance Service</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our national
long distance revenues consist of: </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
per minute charges for calls made by our fixed line customers
outside of the local service areas but within the Philippines, net of
interconnection charges payable for calls carried through the backbone network
of, and/or terminating to the customer of, another telecommunications carrier;
and</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
access charges received from other telecommunications carriers
for calls carried through our backbone network and/or terminating to our
customers.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table shows our national long distance revenues and call volumes for
the years ended December 31, 2003 and 2002:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=7 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Decrease</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:4.5pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:4.5pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Consolidated national long distance
 revenues (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php6,694</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">Php7,818</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php1,124)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">(14)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">National long distance call volumes (in million
 minutes)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT Group</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,049</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">2,181</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">(132)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">(6)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,017</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">2,145</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">(128)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">(6)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our national long distance revenues
decreased by Php1,124 million, or 14%, to Php6,694 million in 2003 from
Php7,818 million in 2002 as a result of lower call volumes and changes in
interconnection arrangements with certain local exchange carriers.
Accordingly, the percentage contribution of national long distance revenues to
our total fixed line revenues was down to 14% in 2003 from 17% in 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our national long distance call
volumes decreased by approximately 6% to 2,049 million minutes in 2003 from
2,181 million minutes in 2002.  Cellular substitution and the widespread
availability and growing popularity of alternative non-voice means of
communications, particularly cellular text messaging and e-mailing, have negatively
affected call volumes.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The decrease
in our national long distance revenues in 2003 compared to 2002 was, however,
mitigated by the impact of the launch of various <i>PLDT Premium Phone Services
</i>and rate adjustments.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Effective
March 1, 2003,
the rate for national long distance, or NDD, calls originating from PLDT
subscribers and terminating to other local exchange carriers increased to Php5.00 per minute from a flat rate of Php4.50 per minute.  In addition, NDD calls originating from
and terminating to PLDT was also adjusted to Php5.00
per minute from a flat rate of Php4.50 per
minute effective June 8, 2003.  Prior to the implementation of a flat rate of Php5.00 per minute and Php4.50
per minute, NDD rates ranged from Php3.00 per
minute to Php5.00 per minute for calls
terminating to PLDT subscribers and from Php3.50
per minute to Php5.00 per minute on calls
terminating to other networks&#146; subscribers depending on distance. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2003,
certain local exchange carriers under revenue sharing arrangements have entered
into access charging agreements with PLDT.  Under the revenue sharing
agreements, charges are generally apportioned 30% for the originating entity,
40% for the backbone owner and another 30% for the terminating entity.  Under
these access charging agreements, the originating carrier generally pays access
charges of (1) Php0.50 per minute for short
haul traffic and Php1.25 per minute for long
haul traffic to the carrier owning the backbone network, and (2) Php1.00 per minute to the terminating carrier.  This change in
interconnection charges resulted to a 54% decrease in average revenue per
minute for calls originating from and terminating to other local exchange
carriers.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Data and Other Network Services</i></p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our data and other network services
revenues increased by Php241 million, or 4%, to Php5,802 million in 2003 from
Php5,561 million in 2002.  The revenue contribution of this service segment to
our total fixed line revenues increased to 13% in 2003 from 12% in 2002,
primarily attributed to an increased use of <i>Domestic Frame Relay</i>, <i>I-Gate</i>,
<i>DSL, Equant </i>and <i>ARCSTAR</i> bandwidth services, as well as the launch
of other new network-based services.  We currently expect that demand for, and
therefore revenues generated from, these services will continue to grow in the
foreseeable future.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Traditional bandwidth services
accounted for 50% of the total revenues from our data and other network
services in 2003, broadband/IP-based services accounted for 44%, and other
services accounted for the remaining 6%, compared to 57%, 38% and 5%,
respectively, in 2002.  These percentage changes indicate a continuing shift in
data and other network revenues from traditional bandwidth services to
broadband/IP-based services.  We expect this trend to continue given the
growing demand for broadband transmission of voice, data and video due to the
continued growth of the internet, e-commerce and other online services.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT offers two residential
internet service packages targeting separate markets:  <i>PLDT Vibe </i>for
light to medium internet users and <i>DSL </i>broadband for heavy internet
users.  </p>

<p style='text-indent:40.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Miscellaneous</i></p>

<p style='text-indent:40.5pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:left;text-indent:.5in;line-height:normal' style="margin-top:0;margin-bottom:0">Miscellaneous revenues are derived mostly from directory advertising
and facilities rental.  In 2003, these revenues decreased by Php154
million, or 31%, to Php337 million from Php491 million in 2002, and accounted for approximately
1% of our total fixed line revenues in each of these comparable periods.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Information and Communications Technology</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2003, our information and
communications technology business generated total revenues of Php1,509
million, an increase of Php858 million, or 132%, from Php651 million in 2002.
These revenues accounted for 1% of our consolidated operating revenues for 2003
and 2002.  ePLDT&#146;s call center business contributed revenues of Php927 million,
Infocom contributed revenues of Php380 million and <i>Vitro</i>TM
contributed revenues of Php202 million representing 62%, 25% and 13%,
respectively, of the total revenues from our information and communications
technology business in 2003, compared to 45%, 50% and 5% in 2002.  Going
forward, we expect revenues from our call center business to contribute
significantly to our information and communications technology revenues with
the growing demand for call center services. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Consolidated Operating
Expenses</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated operating expenses
in 2003 decreased by Php2,208 million, or 3%, to Php78,563 million from
Php80,771 million in 2002.  The decrease was primarily due to lower non-cash
expenses, particularly asset impairment charges mostly associated with our
fixed line business.  As a percentage of our consolidated operating revenues,
however, consolidated operating expenses decreased to 70% in 2003 from 87% in
2002.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table shows the breakdown of our total consolidated operating
expenses for the years ended December 31, 2003 and 2002 by business segment:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:96.42%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=11 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>Increase
 (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Wireless </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php45,649</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">58</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php37,282</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">Php8,367</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">22</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fixed line </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">30,878</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">39</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">42,032</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(11,154)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.45pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(27)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Information and communications technology </p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2,036</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,457</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">579</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">40</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php78,563</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php80,771</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(Php2,208)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">(3)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Wireless</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">Consolidated operating expenses
associated with our wireless business in 2003 amounted to Php45,649 million, an
increase of Php8,367 million, or 22%, from Php37,282 million in 2002.  A
significant portion of this increase was attributable to Smart&#146;s non-cash
charges mainly depreciation coupled with an increase in cash charges mainly
cost of satellite airtime, compensation and benefits, and selling and
promotions.  As a percentage of our wireless operating revenues, operating
expenses associated with our wireless business decreased to 71% in 2003 from
81% in 2002. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table summarizes
our consolidated wireless-related operating expenses for the years ended December 31, 2003 and 2002 and the percentage of each expense item to the total:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.18%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=13 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Wireless services</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:4.95pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost of cellular handsets sold</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php15,886</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">35</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php16,203</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">44</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:4.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:4.95pt'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php317)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:4.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:4.95pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,331</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,387</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">20</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,944</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">67</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Compensation and benefits</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,801</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,710</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,091</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">40</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Selling and promotions</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,332</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,456</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">876</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">36</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost of satellite air time</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,919</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,869</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,738</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Maintenance</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,816</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,412</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">404</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">29</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Rent</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,769</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,951</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(182)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Taxes and licenses</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,122</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">426</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">696</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">163</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Professional and other service fees</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">777</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,221</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(444)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(36)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortization of goodwill and other intangible assets</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">766</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">766</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Insurance and securities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">741</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">706</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">35</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Asset impairment charges</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">288</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">75</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">213</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">284</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for doubtful accounts</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">71</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">456</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(385)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(84)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">90</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">389</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(299)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(77)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Other operating expenses</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">940</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,074</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(134)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(12)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.5pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:3.5pt'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php45,649</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php37,282</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php8,367</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">22</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost of cellular handsets sold
decreased by Php317 million, or 2%, to Php15,886 million mainly due to lower
prices of cellular handset negotiated with suppliers.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Depreciation charges increased by
Php4,944 million, or 67%, to Php12,331 million primarily due to an increase in
Smart&#146;s depreciable asset base owing to continuing network expansion and
upgrades.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Compensation and benefits increased by Php1,091
million, or 40%, to Php3,801 million primarily due to increased salaries,
benefits and performance bonuses of Smart&#146;s employees.  In addition, Smart accrued for an additional share
under the enhanced employee retirement fund approved by Smart&#146;s Board of
Directors in October 2003.  Smart's
employee headcount increased from 5,330 as of December 31, 2002 to 5,408 as of December 31, 2003.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Selling and promotion expenses increased
by Php876 million, or 36%, to Php3,332 million mainly due to a 66% increase in
Smart&#146;s prepaid phone kit/SIM pack sales in 2003 and an increase in advertising
and promotion expense on account of the launching of new services such as <i>addict
mobile</i>, <i>Smart Load </i>and<i> Pasa Load</i>. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Cost of
satellite air time increased by Php1,869 million, to Php1,919 million mainly
due to the accrual of air time cost due to the termination of the Standstill
Agreement and the reinstatement of the terms under the ATPA following the lapse
of the deadline set in the Standstill Agreement.  See <i>Note 18 &#150; Related
Party Transaction</i> and <i>Note 23 &#150;Contractual Obligations and Commercial
Commitments </i>to the accompanying consolidated financial statements in Item
18 for further discussion.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Maintenance expenses increased by
Php404 million, or 29%, to Php1,816 million mainly due to higher site utility,
repairs and other maintenance-related expenses associated with the expansion
and upgrade of Smart&#146;s cellular network equipment; increased office and
telecenter utilities expenses; and increased computer hardware and software
license expense.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;border:none' style="margin-top:0;margin-bottom:0">Rent expenses
decreased by Php182 million, or 9%, to Php1,769 million mainly due to lower
site and circuit rental by Piltel resulting from the decommissioning efforts
done in 2002 and 2003, partially offset by higher site rental cost incurred by
Smart for its growing number of cell sites and base stations, in line with its
network expansion.  As of December 31, 2003, Smart had 2,914 GSM cell sites and
3,904 base stations, compared with 2,110 GSM cell sites and 2,777 base stations
as of December 31, 2002. </p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Taxes and
licenses increased by Php696 million, or 163%,
to Php1,122 million mainly due to an increase
in Smart&#146;s business-related taxes, NTC supervision and regulation fees and
disallowed input taxes.  </p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Professional and other service fees decreased by
Php444 million, or 36%, to Php777 million mainly as a result of a reduction in
legal and bill collection service fees.</p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Amortization of goodwill and other intangible assets
remained constant at Php766 million in 2003 and 2002.  Beginning January 1, 2002,
amortization of goodwill is no longer applicable under U.S. GAAP.  Instead, a
test of goodwill impairment should be done at least annually.</p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Insurance and securities increased
by Php35 million, or 5% to Php741 million mainly due to the growth in the
number of Smart&#146;s cell sites and the increase in the cost of equipment insured
as a result of the continued growth and expansion of its GSM network.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Provision for doubtful accounts
decreased by Php385 million, or 84%, to Php71 million mainly due to
specifically identified subscriber and carrier accounts which were
substantially provided for in 2002.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Provision for inventory
obsolescence decreased by Php299 million, or 77%, to Php90 million since the
majority of the specifically identified slow and non-moving handsets were fully
provided for in 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Other
operating expenses decreased by Php134 million, or 12%, to Php940 million mainly
due to decreases in Smart&#146;s various business and operational-related expenses
such as facility usage fees, training, travel, supplies, printing, and
communication expenses.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Fixed Line</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Consolidated
operating expenses related to our fixed line business in 2003 totaled Php30,878
million, a decrease of Php11,154 million, or 27%, compared to Php42,032 million
in 2002.  The decrease was primarily due to lower non-cash expenses, mainly
asset impairment charge and depreciation.  As a percentage of our total fixed
line operating revenues, fixed line-related operating expenses decreased to 67%
in 2003 as compared to 92% in 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">The following table shows the breakdown
of our total consolidated fixed line-related operating expenses for the years
ended December 31, 2003 and 2002 and the percentage of each expense item to
the total:</p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fixed line services:</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php9,237</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">30</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php9,824</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php587)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(6)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Compensation and benefits</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">8,971</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">29</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">7,836</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">19</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,135</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for doubtful accounts</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,951</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">13</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,659</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">292</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Maintenance</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,791</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,244</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">547</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Professional and other service fees</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,060</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">994</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">66</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Selling and promotions</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,056</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,082</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(26)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Taxes and licenses</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">986</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">548</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">438</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">80</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Rent</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">896</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">889</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Insurance and securities</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">763</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">643</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">120</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">19</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">153</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">87</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">66</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">76</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Asset impairment charges</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">13,204</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(13,204)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(100)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Other operating expenses</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,014</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,022</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(8)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(1)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.5pt'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:3.5pt'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php30,878</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:3.5pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php42,032</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php11,154)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:3.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(27)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;border:none' style="margin-top:0;margin-bottom:0">Depreciation charges
decreased by Php587 million, or 6%, to Php9,237 million mainly due to a net
decrease in our regular asset base primarily resulting from asset disposals and
impairment charges for Piltel&#146;s E.O. 109 assets recognized in 2002.</p>

<p style='line-height:10.0pt;punctuation-wrap:hanging;text-autospace:
ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Compensation and benefits increased
by Php1,135 million, or 14%, to Php8,971 million mainly due to collective
bargaining agreement-related increases in salaries and benefits of PLDT
employees coupled with an increase in MRP cost of Php1,580 million in 2003
representing payments to 1,488 affected employees, partially offset by the
effect of the reduction in headcount due to PLDT&#146;s MRP.  See <i>Note 20 &#150; Other
Expenses &#150; Net</i> to the accompanying consolidated financial statements in
Item 18 for further discussion on PLDT&#146;s MRP.</p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Provision for doubtful
accounts increased by Php292 million, or 8% to Php3,951 million on account of
higher provisions by PLDT for anticipated uncollectible accounts from various
specifically identified domestic telecommunications carriers in 2003.  PLDT&#146;s
provision for doubtful accounts in 2003 and 2002 was equivalent to 8% and 7%,
respectively, of its operating revenues. </p>

<p style='text-indent:.5in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Maintenance expenses increased by Php547 million, or
24%, to Php2,791 million primarily due to higher maintenance costs of inside
plant facility, computer and peripherals and submarine cable in 2003 as
compared to 2002, partially offset by lower maintenance costs on outside plant
facilities.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Professional and other service fees increased by Php66
million, or 7%, to Php1,060 million as a result of higher collection agency
fees on account of higher collection of final accounts and payment of higher legal
fees in 2003 for various services, partially offset by lower advisory fees due
to a decrease in number of consultants in line with PLDT&#146;s cost management
efforts.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Selling and promotion expenses
decreased by Php26 million, or 2%, to Php1,056 million mainly as a result of
reduced corporate public relations expenses, partially offset by an increase in
PLDT&#146;s promotional activities in relation to the launch of <i>Hype, DSL</i> and
other <i>Premium Phone Service </i>variants.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Taxes and licenses increased by
Php438 million, or 80%, to Php986 million mainly on account of higher
business-related taxes paid and accrued in 2003 as compared to 2002.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Rent expenses increased by Php7 million, or 1%, to
Php896 million mainly due to higher rentals paid by PLDT to suppliers of customer
premises equipment as part of its bundled services to corporate customers
partially offset by reduced number of leased transponders.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Insurance and securities increased
by Php120 million, or 19%, to Php763 million primarily due to higher premiums
on all risks insurance for properties, and directors&#146; and officers&#146; liability
insurance for 2003 as compared to 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Provision for inventory
obsolescence increased by Php66 million, or 76%, to Php153 million due to
maintenance-related inventory items which were specifically identified as slow
and non-moving stocks in 2003.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Asset impairment charges amounted
to Php13,204 million due to Piltel&#146;s impairment recognition in 2002 relating to
its E.O. 109 assets as the revenue generated from these services could no
longer support the cost of operating the network.  No impairment charge was
recognized in 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Other operating expenses decreased by Php8 million, or
1%, to Php1,014 million mainly due to lower contracted employee cost, partially
offset by higher office supplies consumption and printing costs.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Information and Communications Technology</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Consolidated operating expenses associated with our
information and communications technology business in 2003 totaled Php2,036
million, an increase of Php579 million, or 40%, from Php1,457 million
in 2002.  The increase was principally due to the full commercial operations of
ePLDT and its newly formed subsidiaries in 2003.  As a percentage of our
information and communications technology operating revenues, operating expenses
related to our information and communications technology business decreased to
135% in 2003 from 224% in 2002.  The three largest expense items related to our
information and communications technology business in 2003 were compensation
and benefits, asset impairment charge and depreciation, representing 26%, 19%
and 15%, respectively, of our total operating expenses related to this
business.  In 2002, the three largest expense items related to our information
and communications technology business were depreciation, compensation and
benefits, and rent, representing 24%, 24% and 18%, respectively, of related
total operating expenses.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Net Operating Income</i></b></p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our consolidated net operating income in 2003 was
Php33,473 million, an increase of Php21,444 million, or 178%, from Php12,029
million in 2002.  Accordingly, our consolidated operating margin (net operating
income as a percentage of operating revenues) improved to 30% in 2003 from 13%
in 2002.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table shows the
breakdown of our consolidated net operating income (loss) for the years ended December 31, 2003 and 2002 by business segment:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Wireless </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php18,683</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:4.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">56</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php9,016</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:4.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">75</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php9,667</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">107</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Fixed line </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,317</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style=';margin-right:
 1.0pt;text-align:center;text-indent:9.6pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,819</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,498</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">301</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Information and communications
 technology </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(527)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:4.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(806)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:4.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(7)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">279</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">35</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php33,473</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php12,029</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php21,444</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">178</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Wireless</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our wireless business segment
recorded an operating income of Php18,683 million in 2003, an increase of
Php9,667 million, or 107%, over Php9,016 million registered in 2002.  This
significant improvement was due to a substantial increase of Php8,164 million
in Smart's operating income contribution in 2003 which reached Php19,802
million from Php11,638 million in 2002 primarily due to the growth in Smart&#146;s
subscriber base.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Fixed Line</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2003, our fixed line business segment contributed a
net operating income of Php15,317 million, higher by Php11,498 million, or
301%, than Php3,819 million in 2002.  This increase was primarily due to the
overall decline in fixed line-related expenses by 27% primarily owing to
Piltel&#146;s impairment of its E.O. 109 assets in 2002 amounting to Php13,204
million.</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Information and Communications
Technology</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In 2003, our
information and communications technology business segment incurred an
operating loss of Php527 million, an improvement of Php279 million, or 35%,
from the Php806 million operating loss posted in 2002.  These operating losses
reflect the start-up nature of ePLDT&#146;s businesses and those of its
subsidiaries.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Other Expenses - Net</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table shows our consolidated other expenses &#150; net for the years ended
 December 31, 2003 and 2002:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.1%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December
 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest expenses and
 related items, net of capitalized interest</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php12,161</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php12,780</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php619)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Add:  Other expenses &#150; net</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,544</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,417</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,127</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">132</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Subtotal</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24,705</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18,197</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,508</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:8.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">36</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Less:  Interest
 and other income</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">1,052</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">1,574</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:6.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.05pt;text-align:right' style="margin-top:0;margin-bottom:0">(522)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(33)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">Php23,653</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">Php16,623</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">Php7,030</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">42</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">On a consolidated basis, our
other expenses, net of other income, increased by Php7,030 million, or 42%, to
Php23,653 million in 2003 from Php16,623 million in 2002 due to the combined
effects of:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
an increase of Php7,127 million in other expenses&#150;net mainly due
to higher foreign exchange losses in 2003 of Php4,962 million and higher
derivative transaction losses of Php2,219 million; </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a decrease in interest and other income of Php522 million mainly
due to a net gain of Php633 million in 2002 resulting from PLDT&#146;s termination
of a derivative instrument; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a decrease in interest expense and related items, net of
capitalized interest, of Php619 million attributable mainly to the decrease in
PLDT&#146;s, Mabuhay Satellite&#146;s and Piltel&#146;s interest expense of Php592 million,
Php 62 million and Php6 million, respectively, due to the debt payments and
lower interest rates mainly on foreign currency-denominated loans bearing
fluctuating interest rates partially offset by a net increase in ePLDT&#146;s and
Smart&#146;s interest expenses of Php37 million Php4 million, respectively,
resulting in an increase in it&#146;s debt balances. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Income (Loss) Before
Income Tax, Cumulative Effect of Change in Accounting Principles and Minority
Interest in Net Income of Consolidated Subsidiaries</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our income before income tax, cumulative effect of change in
accounting principle and minority interest in net income of consolidated
subsidiaries in 2003 was Php9,820 million, an increase of Php14,414 million, or
314%, from a loss of Php4,594 million in 2002.</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">In 2003 and 2002, our effective corporate tax rate on a
consolidated basis was 15% and 31%, respectively.  Our effective corporate tax
rate was lower than the 32% statutory corporate tax rate due to the following:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the effect of a three-year income tax holiday granted to Smart by
the Philippine Board of Investments in connection with the pioneer status it
awarded to Smart&#146;s GSM network expansion project; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
income already subjected to a final tax or a lower tax rate. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart&#146;s three-year income tax
holiday, which will expire in May 2004, applies to the incremental income
generated from its GSM network expansion.  We expect our effective tax rate to
increase following the expiration of the tax holiday granted to Smart.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Net Income</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As a result of the foregoing
factors our consolidated net income in 2003 was Php11,045 million, an
improvement of Php17,203 million, or 279%, over our consolidated net loss of
Php6,158 million in 2002.  This improvement was largely due to the increase in
net income of Smart and the decrease in net loss of Piltel and other wireless
subsidiaries for 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Basic and diluted earnings per share, or EPS, of common share amounted
to Php47.20 and Php45.72, respectively, in 2003 from basic and diluted EPS of
Php52.08 in 2002, after giving retroactive effect to share dividend
equivalents.  See <i>Note 22 &#150;Earnings Per Common Share </i>to the accompanying
consolidated financial statements in Item 18 for further discussion.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002 Compared to 2001</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Consolidated Operating
Revenues</i></b></p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated operating revenues
increased by Php12,506 million, or 16%, to Php92,800 million in 2002 from
Php80,294 million in 2001 largely as a result of the continued strong
performance of our wireless business segment, particularly our cellular
business.  Our wireless business revenues contributed Php46,298 million in
revenues for 2002, an increase of 38% over its revenue contribution of
Php33,597 million for 2001.  Our wireless business revenues accounted for 50%
of our consolidated operating revenues in 2002, compared to 42% in 2001.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table shows the
breakdown of our total consolidated operating revenues for the years ended December 31, 2002 and 2001 by business segment:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=11 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';text-align:
 right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Wireless </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php46,298</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php33,597</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">42</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">Php12,701</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">45,851</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">46,323</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">58</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(472)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">(1)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">Information and
 communications technology </p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">651</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">374</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">277</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">74</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php92,800</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin-right:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php80,294</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php12,506</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">16</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Wireless</i></b></p>

<p style='line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table summarizes
our consolidated operating revenues from our wireless business for the years
ended December 31, 2002 and 2001 by service segment:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=11 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>Increase
 (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.35pt' style='page-break-inside:
 avoid !msorm;height:10.35pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.35pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Wireless :</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cellular services(1)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php30,583</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">66</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php19,820</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">59</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">Php10,763</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='margin-left:9.4pt;text-indent:-.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cellular handset sales</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">14,982</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">13,015</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">39</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">1,967</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Satellite, VSAT and others</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">733</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">762</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(29)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style=';margin-top:
 0in;margin-right:2.9pt;margin-bottom:0in;;margin-bottom:
 .0001pt;text-align:right;text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(4)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt' style='page-break-inside:
 avoid !msorm;height:1.0pt !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php46,298</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p style='margin-right:5.75pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php33,597</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php12,701</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Refers to GSM and analog
voice and data revenues  </i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our wireless revenues increased
considerably by Php12,701 million, or 38%, to Php46,298 million in 2002 from
Php33,597 million in 2001 mainly as a result of the continued strong growth in
revenues generated from Smart&#146;s cellular service.  Accordingly, as a percentage
of our consolidated operating revenues, wireless revenues rose to 50% in 2002
from 42% in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Cellular Service</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our cellular service revenues in 2002 increased by Php10,763
million, or 54%, to Php30,583 million from Php19,820 million in 2001 as a
result of the significant increase in our GSM subscriber base, partially offset
by declining usage per subscriber.  Cellular service revenues accounted for 33%
of our consolidated operating revenues in 2002, compared to 25% in 2001.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Revenues from our analog services have been declining as analog
subscribers have been migrating to GSM service. Smart decommissioned its analog
enhanced total access communications system, or ETACS, network in December 2002
while Piltel ceased to offer its analog/CDMA service at the end of 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The table
below shows our cellular subscriber base as of December 31, 2002 and 2001:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cellular subscribers</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,599,306</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,368,850</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,230,456</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">35</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:.15in;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Smart</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,825,686</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,893,844</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,931,842</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">39</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">GSM</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,825,686</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,641,666</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,184,020</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Prepaid</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,649,038</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,569,616</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,079,422</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Postpaid</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">176,648</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">72,050</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">104,598</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">145</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Analog(1)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#151;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">252,178</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(252,178)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(100)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Prepaid</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#151;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">87,429</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(87,429)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(100)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">Postpaid</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&#151;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">164,749</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(164,749)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(100)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.15in' style="margin-top:0;margin-bottom:0">Piltel</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">1,773,620</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,475,006</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">298,614</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">20</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">GSM
 Prepaid(2)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">1,773,620</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">1,329,326</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">444,294</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">33</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Analog(1)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&#151;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">145,680</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(145,680)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(100)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">Prepaid</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&#151;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">76,473</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(76,473)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(100)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">Postpaid</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&#151;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">69,207</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(69,207)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(100)</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Smart closed down its
analog/ETACS network in December 2002. Piltel ceased to offer its analog/CDMA
prepaid and postpaid services at the end of 2002.</i></p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(2)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Represents Talk &#145;N Text, a
prepaid GSM service provided by Piltel using Smart&#146;s GSM network. Piltel&#146;s GSM
revenue is net of service fees payable to Smart for using Smart's GSM network.
Piltel does not offer postpaid GSM service.</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2002, Smart&#146;s prepaid GSM subscriber base grew by 46% to 6,649,038 from 4,569,616 at December 31, 2001, whereas Smart&#146;s postpaid GSM subscriber base increased by 145% to
176,648 at December 31, 2002 from 72,050 at December 31, 2001.  Of Smart's 6,825,686 GSM subscribers at December 31, 2002, prepaid subscribers accounted
for 97%, while postpaid subscribers accounted for the remaining 3%.  Piltel&#146;s
prepaid GSM subscribers reached 1,773,620 as at December 31, 2002, representing a 33% increase from its 1,329,326 subscribers at December 31, 2001.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As part of our initiatives to
address the increase in churn rate, we introduced <i>PureTxt 100</i> on August 18, 2002.  The card was designed as an alternative for <i>Smart Buddy</i> and <i>Talk
&#145;N Text</i> subscribers who may temporarily be unable to afford the &#147;call and
text&#148; cards with higher denominations.  Once a <i>PureTxt 100</i> card was
loaded, the incoming and outgoing voice-call capabilities of the subscriber
were temporarily deactivated until such time that the subscriber reloaded with
a &#147;call and text&#148; card&#148; in a denomination of at least Php300.  <i>PureTxt 100</i>
cards came with a free allocation of 10 text messages and were valid for one
month.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">For Smart&#146;s postpaid service, our
policy is to redirect outgoing calls to an interactive voice response system if
the postpaid subscriber&#146;s account is either 45 days overdue or the subscriber
has exceeded the prescribed credit limit.  If the subscriber does not make a
payment within 44 days of redirection, the account is disconnected.  Within
this 44-day period, a series of collection activities are implemented,
involving the sending of a collection letter, call-out reminders and collection
messages via text messaging.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Cellular Handset Sales</i></p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;text-indent:.5in' style="margin-top:0;margin-bottom:0">Our cellular revenues include
revenues from the sale of handsets amounting to Php14,982 million, an increase
of 15% over the Php13,015 million recorded in 2001.  The increase was
attributable to higher gross activations in our GSM subscribers.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Satellite,
VSAT and Other Services</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our revenues
from satellite, VSAT and other services consist mainly of rentals received for
the lease of Mabuhay Satellite&#146;s transponders and Telesat&#146;s VSAT facilities to
other companies and charges for ACeS Philippines&#146; satellite phone service.
Total revenues from these services in 2002 amounted to Php733 million, a
decrease of Php29 million, or 4%, from Php762 million in 2001.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Fixed Line</i></b></p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Revenues generated from our fixed
line business in 2002 totaled Php45,851 million, a decrease of Php472 million,
or 1%, from Php46,323 million in 2001.  This decrease was due to lower local
exchange, international and national long distance service revenues, partially
offset by increases in data and other network and miscellaneous service
revenues.  As a percentage of our consolidated operating revenues, fixed line
revenues decreased to 49% in 2002 from 58% in 2001 principally due to the
continued strong growth of our wireless business.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table summarizes
our consolidated operating revenues from our fixed line business for the years
ended December 31, 2002 and 2001 by service segment:</p>

<p style='page-break-after:avoid;border:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions) </b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fixed line:</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Local exchange</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php21,345</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php21,356</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php11)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">International long distance</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">10,636</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">11,701</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">25</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,065)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(9)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">National long distance</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">7,818</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">17</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">8,500</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">19</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(682)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(8)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Data and other network</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">5,561</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">12</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">4,653</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">908</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">20</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Miscellaneous </p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">491</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">113</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">378</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">335</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php45,851</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php46,323</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php472)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(1)</p>
 </td>
 </tr>
</table></center></div>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><i>Local Exchange Service</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">The following table summarizes key measures of our
local exchange service business segment as of and for the years ended December 31, 2002 and
2001:</p>

<p style='line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December
 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Consolidated local
 exchange revenues (in millions)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php21,345</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php21,356</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php11)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Number of fixed lines
 in service</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT Group</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,188,612</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,174,082</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,530</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT(1)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,092,539</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,075,109</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,430</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Number of PLDT
 employees</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,131</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,915</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(784)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Number of PLDT fixed lines in service per PLDT employee</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">172</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">161</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 </tr>
</table></center></div>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(1)
Approximately 88% and 93% were postpaid fixed line subscribers as of </i><i>December 31, 2002</i><i> and 2001, respectively.</i></p>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:
0in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Revenues from our local exchange service decreased by
Php11 million to Php21,345 million in 2002 from Php21,356 million in 2001.  The
decrease was primarily due to the shift in subscriber preference from postpaid
to prepaid services, which generated lower average revenues per subscriber,
partially offset by the combined effects of (1) currency-related adjustments in
our monthly local service rates and (2) increased subscription to our bundled
value-added services.  The percentage contribution of local exchange revenues
to our total fixed line revenues was 47% and 46% in 2002 and 2001,
respectively.</p>

<p style='text-indent:.5in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Gross additions to PLDT's fixed
lines in service in 2002 totaled 523,014, a 22% increase from the gross
additions of 427,349 in 2001.  On a net basis, however, PLDT&#146;s fixed line
additions decreased by 89% to 17,430 in 2002 from 159,124 in 2001. While fixed
line additions totaled 98,525 for PLDT&#146;s prepaid fixed line services, PLDT&#146;s
postpaid fixed lines in service declined by 81,095 in 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Pursuant to a currency exchange
rate adjustment mechanism authorized by the NTC, we implemented 13 upward
adjustments and six downward adjustments in our monthly local service rates in
2002, compared to four upward adjustments and ten downward adjustments in
2001.  The average peso-to-dollar rate in 2002 was Php51.583 to US$1.00,
compared to the average of Php51.009 to US$1.00 in 2001.  This change in the
average peso-to-dollar rate translated to a peso depreciation of 1.2%, which
resulted in a 1.1% average net increase in our monthly local service rates in
2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The ratio of PLDT fixed lines in
service per PLDT employee improved to 172 as of December 31, 2002 from 161 as of December 31, 2001.  This improvement was a result of the net increase in
PLDT's fixed lines in service coupled with a reduction of PLDT&#146;s workforce.  In
2002, employee headcount was reduced by 6% mainly as a result of PLDT&#146;s ongoing
MRP, bringing its workforce down to 12,131 at year-end from 12,915 in 2001.</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>International
Long Distance Service</i></p>

<p style='line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table shows information about our fixed line international long
distance business for the years ended December 31, 2002 and 2001:</p>

<p style='line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='height:8.65pt' style='height:8.65pt !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.65pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.65pt'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.65pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.65pt'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.65pt'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.65pt'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.65pt'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.65pt'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Consolidated
 international long distance revenues (in millions)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php10,636</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php11,701</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php1,065)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:9.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,461</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,985</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(524)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:9.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outbound </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,175</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,716</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(541)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(20)</p>
 </td>
 </tr>
 <tr style='height:10.1pt' style='height:10.1pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.1pt'>
 <p style='margin-right:5.75pt;line-height:50%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">International call volumes (in million minutes, except call ratio)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:9.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT Group</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,815</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,276</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(461)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(14)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:.25in;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,644</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,108</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(464)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:.25in;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outbound</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">171</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.1in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:.25in;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound-outbound call ratio</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15.5:1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18.5:1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.1in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='height:10.1pt' style='height:10.1pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.1pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:50%;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.1pt'>
 <p style='margin-right:5.75pt;line-height:50%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.1pt'>
 <p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:10.1pt'>
 <p style='margin-right:.1in;line-height:50%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:9.0pt;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">PLDT</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,576</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,814</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(238)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:.25in;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,409</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,648</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(239)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:.25in;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outbound </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">167</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">166</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.1in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
 margin-left:.25in;margin-bottom:.0001pt;line-height:normal;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inbound-outbound call ratio</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14.4:1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16.0:1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.1in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated international long
distance revenues decreased by Php1,065 million, or 9%, to Php10,636 million in
2002 from Php11,701 million in 2001, primarily as a result of lower inbound
call volumes. Similarly, the percentage contribution of international long
distance revenues to our total fixed line revenues decreased to 23% in 2002 from
25% in 2001.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our revenues from inbound
international long distance calls decreased by Php524 million, or 6%, to
Php8,461 million in 2002 from Php8,985 million in 2001.  The decrease was
primarily due to the combined effects of lower call volumes and continued
declines in the average international termination rates, partially offset by
the positive impact of the depreciation of the average value of the peso
relative to the U.S. dollar.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our inbound
international long distance call volumes decreased by 15% to 2,644 million
minutes in 2002 from 3,108 million minutes in 2001 primarily due to the
following factors:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
increased competition from alternative means of long distance
communications, particularly  e-mailing, international text messaging and internet
telephony;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
more inbound calls terminating directly to cellular subscribers; </p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
our policy requiring certain second and third tier international
carriers to prepay in order for us to accept their incoming traffic.  (Although
this policy had a negative impact on our inbound international long distance
revenues in 2002, we expect that this will help us achieve a more stable
revenue base and control uncollectible accounts over the longer term); and</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
bankruptcy of certain foreign operators.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The depreciation of the peso increased our inbound international
long distance revenues in peso terms because settlement charges for inbound
calls are billed in U.S. dollars or in special drawing rights, an established
method of settlement among international telecommunications carriers using
values based on a basket of foreign currencies and translated into pesos at the
prevailing exchange rates at the time of billing.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our revenues from outbound
international long distance calls declined by Php541 million, or 20%, to Php2,175
million in 2002 from Php2,716 million in 2001.  The decline was primarily due
to reductions in our average international direct dialing, or IDD, rates
brought about by discounts granted to corporate customers and other large
accounts and operator-assisted call charges, partially offset by higher
outbound call volumes and the positive effect of the depreciation of the
average value of the peso against the U.S. dollar.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Effective February 2001, PLDT reduced its IDD rates for retail
customers from US$0.49 per minute for off-peak hours and US$0.69 per minute for
peak hours to a flat rate for retail customers of US$0.40 per minute applicable
to all call destinations at any time and any day of the week.  Additionally, in
November 2001, PLDT introduced <i>Budget Card, </i>a prepaid call card offering
a reduced IDD rate of US$0.24 per minute for calls to 20 overseas destinations
including the United States, Canada, Japan and China.  <i>Budget Cards</i> are
sold in a denomination of Php200, which must be consumed within 30 days from
first use.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our outbound international long
distance call volumes grew by 2% to 171 million minutes in 2002 from 168
million minutes in 2001 on account of:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
reduced average IDD rates; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
various marketing initiatives, including automatic activation of
the IDD service for qualified subscribers, innovative pricing packages for
corporate accounts and loyalty programs for high-valued customers.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The depreciation of the peso
increased our outbound international long distance revenues in peso terms because
outbound calls are charged at U.S. dollar rates that are billed to our
subscribers in pesos at the prevailing exchange rates at the time of billing.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>National
Long Distance Service</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table shows our
national long distance revenues and call volumes for the years ended December
31, 2002 and 2001:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.3%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Decrease</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Consolidated national long distance revenues (in
 millions)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">Php7,818</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php8,500</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php682)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(8)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">National long distance call
 volumes (in million minutes)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt' style="margin-top:0;margin-bottom:0">PLDT
 Group</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">2,181</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,780</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(599)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(22)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt' style="margin-top:0;margin-bottom:0">PLDT</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.55pt;text-align:right' style="margin-top:0;margin-bottom:0">2,145</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2,756</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(611)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">(22)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our national long distance revenues decreased by Php682 million,
or 8%, to Php7,818 million in 2002 from Php8,500 million in 2001 due to the
combined effects of the (1) decrease in call volumes resulting mainly from
cellular substitution and (2) changes in PLDT&#146;s interconnection arrangements
with the majority of other local exchange carriers.  Accordingly, the
percentage contribution of national long distance revenues to our fixed line
revenues was down to 17% in 2002 from 19% in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our national long distance call
volumes decreased by 22% to 2,181 million minutes in 2002 from 2,780 million
minutes in 2001.  Cellular substitution and the widespread availability and
growing popularity of alternative non-voice means of communications,
particularly cellular text messaging and <br>
e-mailing, have negatively affected call volumes.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The decrease in our national long
distance revenues in 2002 compared to 2001 was, however, mitigated by the
impact of the changes in interconnection arrangements with cellular operators;
the increase in national direct dialing rates; and the launch of <i>PLDT
Premium Phone Services</i>.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Effective January 2002, the access
charges paid by PLDT were reduced to Php4.50 per minute, down from the Php6.50
per minute it paid for the period from July to December 2001.  Prior to July
2001, PLDT was paying access charges ranging from a low of Php7.69 per minute
to a high of Php10.94 per minute for calls terminating to cellular subscribers,
depending on whether the calls were local or long distance.</p>

<p style='text-indent:.25in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Data and
Other Network Services</i></p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">While the
other major segments of our fixed line business posted lower revenues in 2002
compared to 2001, our data and other network services consistently registered
increasing revenue growth. Revenues from these services grew by Php908 million,
or 20%, to Php5,561 million in 2002 from Php4,653 million in 2001.  The
percentage revenue contribution of these services to our fixed line revenues
increased to 12% in 2002 from 10% in 2001.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Traditional bandwidth services
accounted for 57% of the total revenues from our data and other network
services for 2002, broadband/IP-based services accounted for 38%, and other
services accounted for the remaining 5%, compared to 67%, 29% and 4%,
respectively, for 2001.  These percentage changes indicate a shift in data and
other network revenues from traditional bandwidth services to
broadband/IP-based services.  We expect this trend to continue given the
growing demand for broadband transmission of voice, data and video due to the
continued growth of the internet, e-commerce and other on-line services.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Miscellaneous</i></p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Miscellaneous revenues are derived mostly from directory
advertising and facilities rental.  In 2002, these revenues increased by Php378
million, or 335%, to Php491 million from Php113 million in 2001, and accounted
for approximately 1% of our fixed line revenues in 2002.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Information and Communications Technology</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2002, our information and
communications technology business generated total revenues of Php651 million,
an increase of Php277 million, or 74%, over the Php374 million in 2001.  These
revenues accounted for 1% of our consolidated operating revenues in 2002 and
less than 1% in 2001.  Infocom contributed revenues of Php325 million; ePLDT&#146;s
call center business contributed revenues of Php290 million and <i>Vitro</i>&#228; contributed revenues of Php36 million,
representing 50%, 45% and 5%, respectively, of the total revenues from our
information and communications technology business in 2002.  Infocom&#146;s revenue
in 2002 increased by 2% over 2001. </p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Consolidated Operating Expenses</i></b></p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Our consolidated operating expenses in 2002 decreased
by Php5,465 million, or 6%, to Php80,771 million from Php86,236 million in
2001.  The decrease was primarily due to lower amortization expenses of
goodwill and a lower amount of impairment charges recognized in 2002.  As a
percentage of our consolidated operating revenues, consolidated operating
expenses decreased to 87% in 2002 from 107% in 2001 primarily as a result of an
increase in wireless revenues.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The following table shows the
breakdown of our total consolidated operating expenses for the years ended December 31, 2002 and 2001 by business segment:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=12 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>Years Ended
 December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>Increase
 (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=12 valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style=';text-align:
 center;text-indent:1.55pt' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style=';text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Wireless </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php37,282</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php57,537</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">67</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(Php20,255)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(35)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fixed line </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">42,032</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">27,495</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">14,537</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Information and communications technology </p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">1,457</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">1,204</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">253</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style=';margin-right:
 2.9pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style=';margin-right:
 5.75pt;text-align:right;text-indent:1.55pt' style="margin-top:0;margin-bottom:0">21</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php80,771</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php86,236</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(Php5,465)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:1.45pt' style="margin-top:0;margin-bottom:0">(6)</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Wireless</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Consolidated operating expenses associated with our wireless
business in 2002 totaled Php37,282 million, a decrease of Php20,255 million, or
35%, from Php57,537 million in 2001.  The decrease was primarily due to the
declines in asset impairment charge and amortization of goodwill and other
intangible assets, partially offset mainly by the increases in the costs of
cellular handsets sold, compensation and benefits, and selling and promotions.
As a percentage of our total wireless operating revenues, wireless operating
expenses decreased to 81% in 2002 from 171% in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table summarizes
our consolidated wireless-related operating expenses for the years ended December 31, 2002 and 2001 and the percentage of each expense item to the total:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Wireless </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost of cellular handsets sold</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php16,203</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">44</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php15,179</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">26</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1,024</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,387</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='margin-right:4.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">20</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,251</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">136</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Compensation and benefits </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,710</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,798</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">912</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">51</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Selling and promotions</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,456</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,598</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">858</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Rent</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,951</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,537</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">414</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Maintenance</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,412</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='margin-right:4.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,137</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">275</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Professional and other service fees</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,221</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,242</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(21)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortization of goodwill and other intangible assets</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">766</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,021</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5,255)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(87)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Insurance and securities</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">706</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">513</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">193</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for doubtful accounts </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">456</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">310</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">146</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">47</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Taxes and licenses</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">426</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">499</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(73)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">389</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">211</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">178</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">84</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Asset impairment charges</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">75</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,470</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">34</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(19,395)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(100)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost of satellite airtime</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Other operating expenses</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,074</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">771</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">303</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">39</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php37,282</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php57,537</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php20,255)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(35)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Cost of cellular handsets sold
increased by Php1,024 million, or 7%, to Php16,203 million mainly due to an
increase in GSM cellular subscribers both for Smart and Piltel.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Depreciation charges increased by Php136 million, or 2%, to
Php7,387 million in 2002 mainly due to an increase in Smart&#146;s depreciable asset
base owing to the continuing GSM network expansion and upgrade, which was
partially offset by a reduction in the depreciable value of Smart&#146;s and
Piltel&#146;s assets as a result of  asset impairment charges in 2001 for Smart&#146;s
analog/ETACS and Piltel&#146;s analog/CDMA assets.  Having complied with the
requirements set out by the NTC, Smart closed down the operation of its
analog/ETACS network in December 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Compensation and benefits increased
by Php912 million, or 51%, to Php2,710 million primarily due to increased
salaries and benefits of Smart&#146;s employees coupled with accrued long-term
incentive plan benefits for managers and executives of Smart.  Smart&#146;s employee
headcount increased from 5,035 as of December 31, 2001 to 5,330 as of December 31, 2002 mainly due to the integration of TSI into Smart on December 1, 2002.  TSI was the largest dealer of Smart.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Selling and promotion expenses
increased by Php858 million, or 54%, to Php2,456 million, mainly due to
increased gross activations of our cellular subscribers in 2002.  Effective
August 1, 2002, we reduced the maximum discounts given to dealers for prepaid
phone kit sales from a range of Php1,000 to Php1,300 per unit sold (depending
on the volume purchased) in the form of prepaid &#147;call and text&#148; cards to Php800
in cash per prepaid phone kit.  An additional 1% rebate was given on cash
purchases.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Rental expense increased by Php414 million, or 27%, to Php1,951
million on account of higher site rentals incurred by Smart for its growing
number of cell sites and base stations in line with its network expansion;
increased operational requirements for satellite, microwave link and circuit
facilities; and higher office space rentals due to increased wireless business
centers.  As of December 31, 2002, Smart had 2,110 GSM cell sites and 2,777
base stations, compared with 1,570 GSM cell sites and 2,091 base stations as of
 December 31, 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Maintenance expense increased by
Php275 million, or 24%, to Php1,412 million due to higher maintenance costs
incurred by Smart relating to additional network equipment for its growing
number of cell sites.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Professional and other service fees
decreased by Php21 million, or 2%, to Php1,221 million mainly as a result of
lower technical service fees incurred by Smart.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Amortization of goodwill and other intangible assets decreased
by Php5,255 million, or 87%, in 2002 from Php6,021 million in 2001 as
amortization of goodwill is no longer applicable under U.S. GAAP beginning January 1, 2002.  Instead, a test of goodwill impairment should be done at least annually.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Insurance and securities increased
by Php193 million, or 38%, to Php706 million which pertained to the growth in
the number of Smart&#146;s cell sites and the increase in the cost of equipment
insured as a result of the continued growth and expansion of its GSM network
facilities.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Provision for doubtful accounts
increased by Php146 million, or 47%, to Php456 million due to an increase in
Smart&#146;s provision for doubtful carrier accounts, an increase in Smart&#146;s
postpaid subscriber base, and Smart&#146;s adoption of a more stringent provisioning
policy.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Taxes and licenses decreased by
Php73 million, or 15%, to Php426 million due mainly to the decrease in Piltel&#146;s
real property tax, municipal licenses and taxes, and NTC supervision and
license fees.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Provision for inventory
obsolescence increased by Php178 million, or 84%, to Php389 million which pertained
to the majority of the specifically identified slow and non-moving handsets
fully provided for in 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Asset impairment charges decreased
by Php19,395 million, or 100%, to Php75 million in 2002.  In 2001, Smart and
Piltel recognized impairment charges of the values relating to their analog
assets.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Cost of satellite airtime amounting
to Php50 million in 2002 pertained to air time cost incurred by ACeS
Philippines; none in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Other operating expenses increased
by Php303 million, or 39%, to Php1,074 million primarily due to increases in
Smart&#146;s various other operating expenses, such as facility usage fees, travel
and transportation, and communications expenses.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Fixed Line</i></p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Consolidated operating expenses
related to our fixed line business in 2002 totaled Php42,032 million, an
increase of Php14,537 million, or 53%, compared to Php27,495 million in 2001.
The increase was primarily due to the recognition of higher asset impairment
charges in 2002 compared in 2001.  As a percentage of our total fixed-line
operating revenues, fixed-line related operating expenses increased to 92% in
2002 from 59% in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table shows the breakdown of our total consolidated fixed
line-related operating expenses for the years ended December 31, 2002 and 2001 and the percentage of each expense item to the total:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fixed line :</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:2.25pt;text-indent:-2.25pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Asset impairment charges</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php13,204</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php265</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php12,939</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='margin-right:5.75pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,883</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,824</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,849</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">975</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Compensation and benefits</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,836</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='margin-right:2.9pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,717</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">28</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">119</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for doubtful accounts</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,659</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,880</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-right:2.9pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">779</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Maintenance</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,244</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,878</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(634)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(22)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Selling and promotions</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,082</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,050</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Professional and other service fees</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">994</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,008</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(14)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Rent</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">889</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">815</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">74</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Insurance and securities</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">643</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">570</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">73</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Taxes and licenses</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">548</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">420</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">128</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">87</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p style='margin-right:2.9pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">87</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortization of goodwill and other intangible assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">69</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(69)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(100)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Other operating expenses</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,022</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">974</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php42,032</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php27,495</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php14,537</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">53</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Asset impairment charges increased
by Php12,939 million to Php13,204 million due to Piltel&#146;s impairment
recognition in 2002 relating to its E.O. 109 assets as the revenues generated
from these services could no longer support the cost of operating the network.</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Depreciation charges increased by
Php975 million, or 11%, to Php9,824 million in 2002 mainly due to higher
depreciation of our assets primarily resulting from additional completed
projects.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Compensation and benefits increased
by Php119 million, or 2%, to Php7,836 million in 2002 mainly due to the impact
of collective bargaining agreement-related increases in salaries and benefits
of PLDT employees partly offset by PLDT&#146;s ongoing MRP and lower overtime costs.
</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Provision for doubtful accounts
increased by Php779 million, or 27%, to Php3,659 million in 2002 on account of
higher provision for anticipated uncollectible accounts from various
specifically identified second-tier international telecommunications carriers.
To address the receivable issue, we have adopted a prepayment policy as a
prerequisite for its acceptance of incoming international traffic from these
carriers.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Maintenance expenses decreased by
Php634 million, or 22%, to Php2,244 million primarily due to lower maintenance
costs for PLDT&#146;s outside and inside plant facilities partially offset by higher
electricity expense that resulted from increased power consumption coupled with
increased power rates.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Selling and promotion expenses
increased by Php32 million, or 3%, to Php1,082 million mainly due to increased
advertising costs attributable to subscriber acquisition campaigns.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Professional and other service fees
decreased by Php14 million, or 1%, to Php994 million mainly because of lower
advisory, consultancy and payment facility expenses incurred by PLDT as a
result of streamlining of its outsourced services.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Rental expense increased by Php74
million, or 9%, to Php889 million mainly due to higher rental charges incurred
by PLDT for its international leased circuit requirements.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Insurance and securities increased
by Php73 million, or 13% to Php643 million in 2002 pertained to higher premiums
on all risks insurance for properties, and directors&#146; and officers&#146; liability
insurance for 2002 as compared to 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Taxes and licenses increased by
Php128 million, or 30%, to Php548 million mainly on account of higher provision
for NTC supervision and regulation fees.  See <i>Note 24 &#150; Provisions and
Contingencies</i> to the accompanying consolidated financial statements in Item
18 for a discussion relating to NTC supervision and regulation fees.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence amounting to Php87 million
in 2002 pertained to maintenance-related inventory items which were
specifically identified as slow and non-moving stocks in 2002.  There was no
provision for inventory obsolescence in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Amortization of goodwill and other
intangible assets amounted to Php69 million in 2001, as amortization of
goodwill is no longer applicable under U.S. GAAP beginning January 1, 2002.  Instead, a test of goodwill impairment should be done at least annually.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Other operating expenses increased
by Php48 million, or 5%, to Php1,022 million primarily due to higher
consumption of office supplies as part of PLDT&#146;s.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Information and
Communications Technology</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Consolidated operating expenses
associated with our information and communications technology business in 2002
totaled Php1,457 million, an increase of Php253 million, or 21%, from Php1,204
million in 2001.  The increase was due principally to the full commercial
operations of ePLDT and its newly formed subsidiaries.   The three largest
expense items related to our information and communications technology business
in 2002 were depreciation, compensation and benefits, and rent representing
24%, 24% and 18%, respectively, of our total operating expenses related to this
business.  In comparison, the three largest expense items related to our
information and communications technology business in 2001 were rent,
professional and other services and depreciation representing 19%, 11% and 10%,
respectively, of total operating expenses related to this business.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Net Operating Income</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated net operating
income in 2002 was Php12,029 million, compared to a net operating loss of
Php5,942 million in 2001.  Accordingly, our consolidated operating margin (net
operating income as a percentage of operating revenues) improved to positive
13% in 2002 from negative 7% in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table shows the
breakdown of our consolidated net operating income (loss) for the years ended December 31, 2002 and 2001 by business segment:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=11 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Wireless </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php9,016</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:4.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">75</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php23,940)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">403</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php32,956</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">138</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Fixed line </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,819</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style=';margin-right:
 1.0pt;text-align:center;text-indent:9.6pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18,828</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(317)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15,009)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(80)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Information and communications
 technology </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(806)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:4.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(7)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(830)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php12,029</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.05in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(Php5,942)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php17,971</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:double windowtext 2.25pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">302</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Wireless</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our wireless
business segment registered an operating income of Php9,016 million in 2002,
compared to an operating loss of Php23,940 million in 2001.  This improvement
was due to a substantial increase in our cellular operating income contribution
and a decline in asset impairment provisions from 2001 to 2002.</p>

<p style='margin-top:6.0pt;text-indent:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Fixed Line</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In 2002, our
fixed line business segment contributed an operating income of Php3,819
million, which was lower by Php15,009 million, or 80%, than Php18,828 million
in 2001.  This lower operating income contribution was mainly due to the
overall decline in our fixed line operating revenues by 1% coupled with an
increase in our fixed line-related operating expenses by 53% primarily owing to
Piltel&#146;s impairment of its E.O. 109 assets in 2002 amounting to Php13,204
million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Information and Communications Technology</i></p>

<p style='border:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2002, our information and
communications technology business segment posted an operating loss of Php806
million, an improvement of Php24 million, or 3%, compared to an operating loss
of Php830 million incurred in 2001.  These operating losses reflect the
start-up nature of ePLDT&#146;s businesses and those of ePLDT&#146;s subsidiaries.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Other Expenses &#150; Net</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following
table shows our consolidated other expenses &#150; net for the years ended December 31, 2002 and 2001:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December
 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Increase (Decrease)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest expenses and
 related items, net of capitalized interest</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">Php12,780</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">Php14,697</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php1,917)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">(13)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Add:  Other expenses &#150; net</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">5,417</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in;height:
 1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">10,829</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:12.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(5,412)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:12.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#D9D9D9;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">(50)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Subtotal</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">18,197</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">25,526</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(7,329)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">(29)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less:  Interest and other income</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">1,574</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">1,278</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:12.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">296</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:11.5pt;text-align:right' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:1.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in;height:1.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">Php16,623</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">Php24,248</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php7,625)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in;
 height:1.0pt'>
 <p align=right style='margin-right:.2in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:1.0pt'>
 <p align=right style='margin-right:8.65pt;text-align:right' style="margin-top:0;margin-bottom:0">(31)</p>
 </td>
 </tr>
</table></center></div>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On a consolidated basis, our other expenses, net of other
income, decreased by Php7,625 million, or 31%, to Php16,623 million in 2002
from Php24,248 million in 2001 due to the combined effects of:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a decrease in interest expense and related items, net of
capitalized interest, of Php1,917 million attributable mainly to (1) a decrease
of Php920 million in Smart&#146;s interest expense due to a lower level of
indebtedness in 2002; (2) a decrease in Piltel&#146;s interest expense of Php858
million due to its debt restructuring plan; and (3) a decrease of Php171
million in Mabuhay Satellite&#146;s interest expense due to debt payments and lower
interest rates mainly on Mabuhay Satellite&#146;s foreign currency-denominated loans
bearing fluctuating interest rates.  The above decreases were partially offset
by (1) a net increase of Php19 million in PLDT&#146;s interest expense and related
items mainly due to the inclusion of the tender premium of Php518 million
related to our tender offer for notes due 2004 completed in May 2002, which was
substantially offset by the combined effects of lower interest rates,
particularly London Interbank Offered Rate, or LIBOR, and amortizations and
prepayments of various loans in 2002; and (3) a net increase of Php15 million
in ePLDT&#146;s and its subsidiaries&#146; interest expenses;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
an increase in interest and other income of Php296 million mainly
due to a net gain of Php633 million resulting from PLDT&#146;s termination of a
derivative instrument; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a decrease of Php5,412 million in other expenses&#150;net due mainly
to a decrease in equity in net losses of investees of Php4,126 million and a
non-recurrence of a provision for permanent decline in value of investment of
Php2,052 million recognized in 2001. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Loss Before Income Tax, Cumulative Effect of Change in
Accounting Principle and Minority Interest in Net Income of Consolidated
Subsidiaries</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our loss before income tax,
cumulative effect of change in accounting principle and minority interest in
net losses of consolidated subsidiaries in 2002 was Php4,594 million, a
decrease of Php25,596 million, or 85%, from a loss of Php30,190 million in
2001.</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">In 2002 and 2001, our effective corporate tax rate on a
consolidated basis was 31% and 9%, respectively.  Our effective corporate tax
rate was lower than the 32% statutory corporate tax rate due to the following:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the effect of a three-year income tax holiday granted to Smart by
the Philippine Board of Investments in connection with the pioneer status it
awarded to Smart&#146;s GSM network expansion project;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
income already subjected to a final tax; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
equity in net income of our subsidiaries, which is not subject to
tax in PLDT as this has already been subject to tax in the subsidiaries.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart&#146;s three-year income tax
holiday, which will expire in May 2004, applies to the incremental income
generated from its GSM network expansion.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Net Income</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As a result of the foregoing
factors, our consolidated net loss in 2002 was Php6,158 million, a decrease of
Php21,624 million, or 78%, over our consolidated net loss of Php27,782 million
in 2001.  This improvement was largely due to the increase in net income of
Smart and the decrease in net loss of of Piltel and other wireless subsidiaries
for 2002.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Basic and diluted loss per share of
common share amounted to Php52.08 in 2002, compared to basic and diluted loss
per share of Php176.85 in 2001, after giving retroactive effect to share
dividend declarations.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779217"></a><a name="_Toc46082276">Liquidity and Capital Resources</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table shows our consolidated cash flows, capitalization and other
selected financial data as of and for the years ended December 31, 2003, 2002 and 2001:</p>

<p style='text-indent:.5in;line-height:9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:92.46%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p style='border:none;padding:0in' style="margin-top:0;margin-bottom:0">Years Ended December 31,</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash Flows</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net cash provided by
 operating activities</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php40,920</p>
 </td>
 <td   colspan=4 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php39,722</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php20,113</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net cash used in investing activities</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18,359</p>
 </td>
 <td   colspan=4 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,167</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">29,376</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Capital expenditures</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,943</p>
 </td>
 <td   colspan=4 valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,239</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">28,201</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net cash provided by (used in) financing
 activities</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:5.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(14,135)</p>
 </td>
 <td   colspan=4 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15,954)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,841</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Effect of exchange rate changes on cash
 and cash equivalents</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:5.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(28)</p>
 </td>
 <td   colspan=4 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">97</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net increase (decrease) in cash and cash
 equivalents</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,398</p>
 </td>
 <td   colspan=4 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,698</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5,398)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p style='border:none;padding:0in' style="margin-top:0;margin-bottom:0">December 31,</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Capitalization</p>
 </td>
 <td   colspan=3 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:.1in'>
 <td   style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt;
 height:.1in'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash and cash equivalents</p>
 </td>
 <td   colspan=3 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt;height:.1in'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php19,372</p>
 </div>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt;
 height:.1in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt;height:.1in'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php10,974</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Short-term debt</p>
 </td>
 <td   colspan=3 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Current portion of long-term debt</p>
 </td>
 <td   colspan=3 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">23,816</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,625</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Notes payable</p>
 </td>
 <td   colspan=3 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,133</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">760</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Long-term debt &#150; net of current portion</p>
 </td>
 <td   colspan=3 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">160,459</p>
 </div>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">171,283</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.0pt'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt;height:9.0pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Total debt</p>
 </td>
 <td   colspan=3 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt;height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">186,408</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt;
 height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt;height:9.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">191,668</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Stockholders&#146; equity</p>
 </td>
 <td   colspan=3 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">24,745</p>
 </div>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">16,413</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">Total capitalization</p>
 </td>
 <td   colspan=3 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php211,153</p>
 </div>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php208,081</p>
 </div>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Since 2002, PLDT has pursued a
number of liability management initiatives with the objectives of further
improving the balance between its cash flows and debt service requirements and
reducing its overall indebtedness.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Through these initiatives, PLDT was
able to successfully raise the necessary external financing to fund its
operating, investing and debt service requirements. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, consolidated cash and cash equivalents amounted to Php19,372 million.  Our principal
sources of consolidated cash in 2003 were cash flows from operations amounting
to Php40,920 million, drawings from existing long-term credit facilities
totaling Php17,507 million, and net equity funds raised through PLDT's SIP
amounting to Php94 million.  These funds were used principally for capital
outlays of Php17,943 million, (including capitalized interest of Php887
million) and debt principal repayments of Php31,548 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Principal sources of consolidated cash in 2002 and 2001 were
cash flows from operations amounting to Php39,722 million and Php20,113
million, respectively; drawings from long-term and short-term credit facilities
amounting to Php36,011 million and Php7,872 million, respectively, in 2002, and
Php21,823 million and Php13,483 million, respectively in 2001; and equity funds
raised through the issuance of capital stock amounting to Php464 million in
2002.  These funds were used principally for capital outlays of Php17,239
million (including capitalized interest of Php1,343 million) and payments of
long-term debt amounting to Php43,870 million in 2002; and capital outlays of
Php28,201 million, (including capitalized interest of Php2,404 million) and
payments of long-term and short-term debt totaling to Php28,960 million and
equity funds raised through the issuance of capital stock amounting to Php232
million in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Operating Activities</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">On a consolidated basis, net cash
flows from operating activities in 2003 amounted to Php40,920 million, an
increase of Php1,198 million, or 3%, from Php39,722 million in 2002 and an
increase of Php19,609 million, or 97% from Php20,113 million in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">A growing portion of our
consolidated cash flow is generated by our wireless and data businesses.  The
revenue contribution of these businesses has grown over the last three years
with wireless business contributing 58%, 50% and 42% in 2003, 2002 and 2001,
respectively, and data business contributing an average of 5% in 2003 and 6% in
2002 and 2001.  Revenues from our local exchange service accounted for
approximately 19% of our consolidated operating revenues in 2003, down from 23%
in 2002 and from 27% in 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our dependence on international and
national long distance services has decreased over the past several years.  In
2003, 2002 and 2001, these services together accounted for 17%, 20% and 25%,
respectively, of our consolidated operating revenues.  Revenues from our long
distance businesses increased by 5% in 2003 compared to 2002 and decreased by
9% in 2002 compared to 2001 due to cellular substitution and declining prices.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT's contribution to our
consolidated cash flows from operations in 2003 was Php11,195 million, a
decrease of Php5,992 million, or 35%, from Php17,187 million in 2002, which in
turn represents an increase of Php4,321, or 34%, from Php12,866 in 2001.  The
decrease in 2003 was due to an increase in PLDT&#146;s working capital management,
including the decline in level of settlements of certain liabilities
outstanding during 2003, compared to 2002.  The increase in 2002, on the other
hand, was attributable to the decline in the level of settlements in 2002 of
certain payables outstanding, compared to 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our subsidiaries, particularly Smart,
made significant contributions to our cash from operations.  In 2003, Smart
generated cash from operations of Php28,982 million, or 71% of our consolidated
cash flows from operations.  In 2002, Smart generated cash from operations of
Php19,725 million, or 50%, of our consolidated cash flow from operations.
Smart&#146;s strong cash flows reflect the continuing strong performance of its
cellular business.  However, Smart is subject to loan covenants that restrict
its ability to pay dividends, redeem preferred shares, make distributions to
PLDT or otherwise provide funds to PLDT or any associate without the consent of
its lenders.  After receiving approvals from Finnvera and certain
lenders for the payment of dividends to PLDT in an amount not to exceed 40% of
Smart&#146;s net income under Philippine GAAP in 2001, Smart made its first dividend
payment of Php1,540 million to PLDT in December 2002.  In addition, Smart paid dividends in the amount of Php4,300 million to PLDT in June 2003, representing 70% of
Smart&#146;s 2002 net income under Philippine GAAP and paid additional dividends in
the amount of Php1,866 million to PLDT in
November 2003, equivalent to the remaining 30% of its 2002 net income under
Philippine GAAP.  Further, after receiving similar approvals from Finnvera
and certain lenders, Smart paid dividends amounting to Php11,280 million to
PLDT in May 2004, representing 70% of Smart&#146;s 2003 net income under Philippine
GAAP.  Smart will also be required to obtain further
waivers from Finnvera and certain lenders to pay additional dividends in future
periods.  We cannot assure that Smart will be able to obtain such waivers in
the future, or what amount, if any, Smart would be permitted or financially
able to distribute.  We expect that we will have difficulty meeting our debt
payment obligations if we do not continue to receive cash dividends from Smart.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Investing Activities</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On a consolidated basis, net cash
used in investing activities in 2003 was Php18,359 million, an increase of
Php1,192 million, or 7%, from Php17,167 million in 2002 mainly as a result of
higher aggregate capital spending.  In contrast, consolidated net cash used in
investing activities in 2002 was Php17,167 million, a decrease of Php12,209
million, or 42%, from Php29,376 million in 2001 as a result of Smart&#146;s lower
capital spending.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our consolidated capital expenditures in 2003 totaled Php17,943
million, an increase of Php704 million, or 4%, from Php17,239 million in 2002
primarily due to Smart&#146;s increased capital spending partially offset by PLDT&#146;s
lower capital spending.  Smart's capital spending of Php11,305 million in 2003
was used to further expand and upgrade its GSM network to meet the increasing
demand for cellular services.  PLDT's capital outlay of Php6,100 million in
2003 was principally used to finance the continued build-out of its data and
broadband/IP infrastructure and its investment in Asia Pacific Cable Network
2.  ePLDT and its subsidiaries&#146; capital spending of Php178 million was used to
fund its internet data center, other internet-related business initiatives and
call center business investments.  The remaining balances were spent by other
subsidiaries mainly PLDT Global, Mabuhay Satellite and Subic Telecom.  In
December 2002, Smart acquired certain PLDT assets, consisting of a portion of
PLDT&#146;s digital fiber optic cable from Luzon to Mindanao and certain related
equipment, valued at Php4,138 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;line-height:normal;punctuation-wrap:
hanging' style="margin-top:0;margin-bottom:0">Under the terms of Piltel&#146;s debt
restructuring plan, PLDT issued a Letter of Support for the benefit of Piltel
and its creditors under which PLDT has agreed to cover any funding shortfalls
of Piltel up to a maximum amount of US$150 million.  Under the Letter of
Support, PLDT provided to Piltel Php2,317 million (US$48 million) in 2000,
Php2,039 million (US$41 million) in 2001, and Php571 million (US$11 million) in
2002.  There was no drawdown under the Letter of Support in 2003.  Drawings
under the PLDT Letter of Support are converted into U.S. dollars at the prevailing
exchange rates at the time of drawdown.  As of December 31, 2003, the remaining
undrawn balance under the PLDT Letter of Support was US$50 million
(approximately Php2,793 million).  If, among other things, Piltel's financial
and operating performance were to deteriorate or any amounts were required to
be paid to Piltel's unrestructured creditors in cash to settle their claims
(which comprise an aggregate principal of US$0.9 million as of December 31,
2003), additional drawings under the Letter of Support would likely be required
to provide all or a portion of the funds needed by Piltel.  We cannot assure
that additional amounts will not have to be drawn under the Letter of Support
nor can we predict when the remaining undrawn balance under the Letter of
Support will be exhausted.  Piltel is currently in discussion with its
unrestructured creditors and is seeking to restructure such debt on the terms
and conditions of Piltel&#146;s debt restructuring.  However, Piltel may not be able
to restructure or otherwise pay the claims relating to its unrestructured
debt.  See &#147;Item 3. Key Information &#151; Risk Factors &#151; Risks Relating to Us &#151;
Piltel has experienced financial difficulties and we cannot assure you that it
will be able to discharge any of its debt or other obligations, including its
debts or other obligations owed to us and our affiliates.&#148;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">For 2004, we anticipate reducing the level of our capital
expenditures and equity investments.  Our 2004 budget for consolidated capital
expenditures is approximately Php22,000 million, of which approximately
Php7,000 million is budgeted to be spent by PLDT for its fixed line data and
network services and approximately Php15,000 million is budgeted to be spent by
Smart for further expansion and upgrading of its GSM network.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our consolidated capital expenditures in 2002 totaled Php17,239
million mainly from PLDT's and Smart's capital spending of Php8,194 million and
Php7,564 million, respectively.  Our consolidated capital expenditures of
Php28,201 million (including capitalized interest of Php2,404 million) in 2001
was largely attributable to PLDT and Smart.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Financing Activities</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On a consolidated basis, we used net cash of Php14,135 million
and Php15,954 million for financing activities in 2003 and 2002, respectively,
as against net cash provided from financing activities of Php3,841 million for
the year 2001.  The net cash used in financing activities in 2002 as against
net cash provided by financing activities in 2001 was mainly due to PLDT&#146;s debt
repayments in line with its liability management program.  The net cash
provided by financing activities in 2001 was primarily due to proceeds from the
issuance of PLDT's common shares to NTT Communications Capital (UK) Limited, or
NTTC-UK, a wholly-owned subsidiary of our strategic partner NTT Communications,
amounting to Php13,878 million in 2000.  On a stand-alone basis, Smart&#146;s
financing activities in 2003 and 2002 used net cash of Php9,251 million and
Php11,764 million, respectively, specifically for debt payments in excess of
loan drawdowns.  Conversely, Smart&#146;s financing activities in 2001 provided net
cash of Php11,798 million representing drawings from various credit facilities.</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Debt
Financing</i></p>

<p style='text-indent:.5in;line-height:50%;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">Additions to our
consolidated long-term debt in 2003 totaled Php17,507 million, consisting of
(1) drawings totaling Php13,943 million, primarily from PLDT&#146;s loan facilities
extended and/or guaranteed by various export credit agencies; and (2) Smart&#146;s
drawings of Php3,564 million, principally from its Phase 5 GSM loan facilities.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated indebtedness as of
December 31, 2003 was Php186,408 million, lower by Php5,260 million, or 3%,
compared to Php191,668 million as of December 31, 2002 mainly due to the
reductions of Php3,771 million and Php2,305 million in PLDT&#146;s and Smart&#146;s
indebtedness, respectively.  PLDT&#146;s non-consolidated indebtedness decreased by
3%, from Php141,107 million as of December 31, 2002 to Php137,336 million as of
 December 31, 2003, due to debt payments in line with our thrust to reduce
PLDT&#146;s overall indebtedness.  Smart&#146;s indebtedness as of December 31, 2003 stood at Php20,586 million, a decrease of 10% from Php22,891 million as of December 31, 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, PLDT had
undrawn committed dollar-denominated long-term credit facilities of US$120
million, inclusive of the US$50 million undrawn portion of the US$149 million
Kreditanstalt fur Wiederaufbau, or KfW, refinancing facility described below,
US$8 million undrawn portion of the US$12 million term loan facility extended
by DEG-Deutsche Investitions-und Entwicklungsgesellschaft mbH under an
agreement dated May 29, 2003 and the JPY5,615
million syndicated term loan facility supported by Nippon Export and Investment
Insurance of Japan, or NEXI, under an agreement dated June 11, 2003.  Smart also
had undrawn committed dollar-denominated long-term credit facilities in the
aggregate of US$40 million under the US$100 million NEXI loan facility signed
by Smart in November 2002 which was drawn on April 5, 2004.  In addition, Smart still has available facilities under its &#128;50
million Framework Agreement with HypoVereinsbank up to a maximum aggregate
amount of &#128;44 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">After giving effect to the
anticipated application of existing refinancing facilities, the scheduled
maturities of our outstanding long-term debt as of December 31, 2003 are as follows:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:88.66%;margin-left:5.4pt;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b><u>Consolidated</u></b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>Maturity</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:15.85pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php23,816</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:15.85pt;text-align:right' style="margin-top:0;margin-bottom:0">30,172</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:15.85pt;text-align:right' style="margin-top:0;margin-bottom:0">28,762</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:15.85pt;text-align:right' style="margin-top:0;margin-bottom:0">29,059</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2008</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:15.85pt;text-align:right' style="margin-top:0;margin-bottom:0">5,733</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2009 and onwards</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:15.85pt;text-align:right' style="margin-top:0;margin-bottom:0">66,733</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Approximately Php117,542 million principal amount of
our consolidated outstanding long-term debt as of December 31, 2003 is scheduled
to mature over the period 2004 to 2008.  Of this amount, approximately
Php89,429 million is attributable to PLDT, Php20,586 million to Smart, and the
remainder to Mabuhay Satellite, Maratel, ePLDT and Piltel.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">See &#147;&#151; Certain Indebtedness&#148; for an overview of our
indebtedness. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Covenants</i></p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our debt instruments contain
restrictive covenants and require us to comply with specified financial ratios
and other financial tests, calculated on the basis of Philippine GAAP, at
relevant measurement dates, principally at the end of each quarterly period.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
financial tests under our debt instruments, as amended, include maintaining a
positive tangible net worth and compliance with the following ratios:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
interest coverage ratio, calculated on a non-consolidated basis
and excluding PLDT&#146;s equity share in net earnings or losses of investees, of
not less than 180% or 200%;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
total debt to EBITDA on a non-consolidated basis of not more than
5.5:1 on December 31, 2003, not more than 5.0:1 from March 2004 to June 2004,
not more than 4.5:1 from September 2004 to December 2004 and not more than
4.0:1 from March 2005 and thereafter;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
long-term indebtedness to appraised value of equity/tangible net
worth on a non-consolidated basis, ranging from not more than 1.1:1 to not more
than 3.0:1;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
current ratio on a non-consolidated basis, ranging from not less
than 0.9:1 to not less than 1.2:1;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
debt service coverage ratio on a non-consolidated basis of at
least 1.1:1; and</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
debt to free cash flow ratio on a non-consolidated basis of not
more than 5.5:1 from September 30, 2003 to June 30, 2004, not more than 5.0:1
from September 30, 2004 to June 30, 2005, not more than 4.5:1 from September
30, 2005 to June 30, 2006, and not more than 4.0:1 from September 30, 2006
onwards.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In addition, some of PLDT's debt
instruments contain covenants requiring PLDT to comply with specified financial
tests on a consolidated basis calculated on the basis of Philippine GAAP.
These include:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
long-term debt to appraised value of equity/tangible net worth of
not more than 2.33:1;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
total debt to EBITDA of not more than 4.5:1 in 2003 and 2004, and
not more than 4.0:1 in 2005 and thereafter;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
current ratio ranging from not less than 0.75:1 to 0.9:1; and</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
interest coverage ratio of not less than 200%.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">For purposes of deriving appraised
value of equity/tangible net worth, we determined the revaluation surplus in
respect of PLDT&#146;s properties.  PLDT&#146;s properties in service as of December 31,
1997 were reappraised by an independent firm of appraisers to reflect their
sound value, as part of NTC&#146;s financial reporting requirements, based on the
December 29, 1997 exchange rate of Php40.116 to US$1.00.  As of December 31, 1997, the sound value was Php225,966 million and the revaluation surplus was
Php82,723 million.  This reappraisal was approved by the NTC on January 28, 2000 under NTC Case No. 98-183.  As of December 31, 2003 and 2002, the revaluation surplus on PLDT&#146;s 1997 appraised properties still in service, net
of a 5% disallowance factor, amounted to Php38,441 million and Php44,984
million, respectively.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The principal factors that can
negatively affect our ability to comply with these financial ratios and other
financial tests are depreciation of the peso relative to the U.S. dollar, poor
operating performance of PLDT and its consolidated subsidiaries, impairment or
similar charges in respect of investments or other long-lived assets that may
be recognized by PLDT and its consolidated subsidiaries, and increases in our
interest expenses.  Interest expense may increase as a result of various
factors, including issuance of new debt, the refinancing of lower cost
indebtedness by higher cost indebtedness, depreciation of the peso, the
lowering of PLDT's credit ratings or the credit ratings of the Philippines,
increase in reference interest rates, and general market conditions.  Since
approximately 96% of PLDT's total debt is denominated in foreign currencies,
principally in U.S. dollars, many of these financial ratios and other tests are
negatively affected by any weakening of the peso.  As of December 31, 2003, the peso depreciated by 4% to Php55.586 to US$1.00, from Php53.254 to US$1.00 as of
 December 31, 2002.  The peso has been subjected to significant fluctuations.
In 2003, the peso depreciated to Php55.075 to US$1.00 on March 12, 2003 then recovered to a high of Php52.021 to US$1.00 on May 8, 2003 only to depreciate again to a low of Php55.767 to US$1.00 on November 27, 2003.  As of May 31, 2004, the exchange rate was Php55.807 to US$1.00, as compared to Php55.586 at
the end of 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">PLDT's ability to maintain compliance with financial covenant
requirements measured on a non-consolidated basis is principally affected by
the performance of its fixed line business.  PLDT cannot be assured of the
benefit of net revenues and cash flows generated by Smart and PLDT&#146;s other
investees in assisting in complying with non-consolidated covenants.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">We have maintained compliance with all of our financial ratios
and covenants as measured under our loan agreements and other debt
instruments.  However, if negative factors adversely affect our financial
ratios, we may be unable to maintain compliance with these ratios and covenants
or be unable to incur new debt.  Under some of our loan agreements, certain of
our financial ratios have become more restrictive at the end of the second and
fourth quarters of 2003 and the first quarter of 2004 and will continue to
become more restrictive in increments thereafter, which will make it more
difficult for PLDT to maintain compliance with this ratio in the future.
Inability to comply with our financial ratios and covenants or raise new
financing could result in a declaration of default and acceleration of some or
all of our indebtedness.  The terms of some of our debt instruments have no
minimum amount for cross-default.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under PLDT's loan agreements that
require maintenance of an interest coverage ratio of at least 180%, interest
coverage ratio is the ratio calculated on the basis of Philippine GAAP of (x)
our after-tax net income for the 12 months immediately preceding the
calculation date after:  (1) adding back interest charges, depreciation,
amortization and other non-cash charges (including equity share in net earnings
or losses of investees but excluding provision for doubtful accounts) and
provision for income taxes, and <br>
(2) deducting capitalized subscriber acquisition costs, to (y) the estimated
aggregate interest charges payable during the 365-day period following the
calculation date on all of PLDT's indebtedness outstanding on such calculation
date.  Our interest coverage ratio calculated on the basis of Philippine GAAP
under these agreements for the 12 months period ended December 31, 2003 was 300% as against the required threshold of not less than 180%. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Under PLDT's loan agreements that require maintenance of an
interest coverage ratio of at least 200%, interest coverage ratio is the ratio
calculated on the basis of Philippine GAAP of (x) our after-tax net income
after adding back reserves for higher plant replacement costs, income taxes,
interest charges, depreciation, amortization and non-cash charges (including
equity share in net earnings or losses of investees and provision for doubtful
accounts) during 12 consecutive months within the 15 calendar months
immediately preceding the calculation date, to (y) the sum of (1) the estimated
aggregate interest charges on all indebtedness, net of interest capitalized to
construction, plus (2) dividends on mandatorily redeemable preferred stock, in
each case scheduled to be paid during the 12 months following the calculation
date.  Our interest coverage ratio calculated on the basis of Philippine GAAP
under these agreements for the 12 months period ended December 31, 2003 was 388% as against the required threshold of not less than 200%.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Non-consolidated total debt to
EBITDA is the ratio calculated on the basis of Philippine GAAP of (x) PLDT's
total indebtedness (not including amounts payable by PLDT to Piltel under the
Letter of Support) to (y) net income for the preceding 12 months, after adding
back interest accrued on all indebtedness, depreciation, amortization and other
non-cash charges (including equity share in net earnings or losses of
investees, but excluding provision for doubtful accounts) and provision for
income taxes and deducting any capitalized subscriber acquisition costs.  As of
 December 31, 2003, our non-consolidated total debt to EBITDA calculated on the
basis of Philippine GAAP was 4.68:1 as against the required threshold of not
more than 5.5:1. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Non-consolidated long-term indebtedness to appraised value of
equity (or under some covenants, to tangible net worth) is the ratio calculated
on the basis of Philippine GAAP of (x) PLDT's aggregate indebtedness (or portion
of such indebtedness) due more than one year following the calculation date and
par value of all mandatorily redeemable preferred stock to (y) the sum of the
aggregate par value of all of PLDT's outstanding common and convertible
preferred stock (other than preferred stock subject to mandatory redemption),
paid-in capital in excess of the par value of such stock, PLDT's retained
earnings, reserve for higher plant replacement costs and revaluation increment
arising from independent certified appraisals of PLDT's telephone plant
approved by the NTC.  As of December 31, 2003, our non-consolidated long-term
indebtedness to appraised value of equity/tangible net worth calculated on the
basis of Philippine GAAP was 0.88:1 as against the most restrictive threshold
of not more than 1.10:1. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Non-consolidated current ratio is
the ratio calculated on the basis of Philippine GAAP of (x) non-consolidated
current assets to (y) non-consolidated current liabilities, excluding from
current liabilities 50% of the portion of long-term indebtedness due within one
year of the calculation date.  As of December 31, 2003, our non-consolidated
current ratio calculated on the basis of Philippine GAAP was 1.28:1 as against
the most restrictive threshold of not less than 1.20:1.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Debt service coverage ratio is the ratio calculated on the basis
of Philippine GAAP of (x) PLDT&#146;s cash flow from operations after adding back
interest charges (to the extent previously deducted) plus (1) dividends
received from investees, cash received upon any redemption of redeemable
preferred shares issued by Smart, any cash received under PLDT&#146;s SIP, and
interest income received less (2) capital expenditures (excluding capitalized
interest) and investments in investees for the 12 months immediately preceding
the calculation date plus (3) PLDT&#146;s closing cash balance as of the last day of
the calculation period to (y) the sum of the projected interest charges and
principal debt repayments (excluding debt to be repaid with a refinancing
facility) during the 12 months following the calculation date.  Our debt
service coverage ratio for the 12 months period ended December 31, 2003 calculated on the basis of Philippine GAAP was 1.15:1 as against the required
threshold of not less than 1.10:1.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Debt to free cash flow ratio is the
ratio calculated on the basis of Philippine GAAP of (x) PLDT&#146;s debt less PLDT&#146;s
closing cash balance of the last day of the calculation period to (y) PLDT&#146;s
cash flow from operations after adding back interest charges (to the extent
previously deducted) plus <br>
(1) dividends received from investees, cash received upon any redemption of
redeemable preferred shares issued by Smart, any cash received under PLDT&#146;s
SIP, and interest income received less (2) capital expenditures (excluding
capitalized interest) and investments in investees for the 12 months
immediately preceding the calculation date.  Our debt to free cash flow ratio
for the 12 months period ended December 31, 2003 calculated on the basis of
Philippine GAAP was 4.95:1 as against the required threshold of not more than
5.5:1.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated long-term debt to
appraised value of equity/tangible net worth, consolidated total debt to
EBITDA, consolidated interest coverage and consolidated current ratios during
the year 2003, each to be calculated pursuant to Philippine GAAP, remained
within the limits stipulated in the various loan agreements, including the most
restrictive current ratio threshold of not less than 0.9:1.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT's debt instruments contain a
number of other negative covenants that, subject to certain exceptions and
qualifications, restrict PLDT's ability to take certain actions without
lenders' approval, including:  (1) incurring additional indebtedness; (2)
prepaying other debt; (3) making investments;<br>
(4) extending loans; (5) extending guarantees or assuming the obligations of
other persons; (6) paying dividends or other distributions or redeeming,
repurchasing or otherwise acquiring shares of PLDT&#146;s capital stock; (7)
disposing of all or substantially all of its assets or of assets in excess of
specified thresholds of its tangible net worth; (8) entering into management
contracts providing for the management of its business or operations by a third
party; (9) creating any lien or security interest;<br>
(10) permitting set-off against amounts owed to PLDT; (11) merging or
consolidating with any other company; (12) entering into transactions with
shareholders and affiliates; and (13) entering into sale and leaseback
transactions.</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the indenture of PLDT's
10.625% Notes due 2007 and 11.375% Notes due 2012, PLDT is required to comply
with a number of additional covenants, including covenants that, subject to
certain exceptions, restrict PLDT's ability to (1) incur debt unless its ratio
of debt to EBITDA calculated on the basis of Philippine GAAP (calculated on a
non-consolidated basis based on definitions provided in the same indenture,
except under certain circumstances), after giving effect to the incurrence of
such debt, would be less than 5.5:1 on or prior to December 31, 2003, 5.0:1
from January 1, 2004 to December 31, 2004 and 4.5:1 thereafter and (2) pay
dividends, repurchase or redeem its capital stock, make investments and prepay
subordinated debt, among other things.  Subject to certain exceptions, these
covenants also restrict our ability to sell assets and to use the proceeds of
these asset sales.  Our consolidated leverage ratio at December 31, 2003 calculated on the basis of Philippine GAAP was 5.4:1 as against the required
threshold of not more than 5.5:1.  We expect that we will have difficulty
meeting our debt payment obligations if we do not continue to receive cash
dividends from Smart.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the terms of the US$149
million facility with KfW, PLDT is prohibited from paying any dividends on
common stock until after December 31, 2004.  In addition, under the terms of
PLDT's US$145 million multicurrency term facility agreement and JPY5,615 million syndicated term loan facility,
PLDT is restricted from distributing dividends to common stockholders unless
(i) no default has occurred which is continuing, and (ii) its debt to free cash
flow ratio, after giving effect to the distribution of such dividends and,
under certain circumstances, other adjustments to PLDT&#146;s closing cash balance,
would be less than 4.0:1.  Under other loan agreements, PLDT may not declare or
pay dividends on any of its capital stock without the prior written consent of
the lenders (i) if PLDT is in default in the payment of any amounts due and
payable under such loan agreement or after the occurrence and during the
continuance of any other event of default or potential event of default under
such agreements, (ii) if after giving effect to such action the current ratio
would be less than 1.2:1 or <br>
(iii) in an amount greater than PLDT&#146;s net income after taxes during the fiscal
year to which such payment or distribution relates.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In case of a change in control of
PLDT, PLDT may be required to repurchase or prepay certain indebtedness.  Under
the terms of the 10.625% Notes due 2007 and 11.375% Notes due 2012, we are
required to offer to purchase all outstanding notes due 2007 and notes due 2012
for cash at a price of 101% of their principal amounts plus accrued interest in
the event that (1) the aggregate of NTT Communications' and First Pacific's
direct and indirect voting interest in PLDT's outstanding capital stock having
voting rights falls below 35% of such capital stock, (2) any person or, in
certain instances, group of persons, which is not controlled directly or
indirectly by First Pacific or NTT Communications acquires a direct or indirect
voting interest in PLDT's outstanding capital stock having voting rights which
equals or exceeds 35% of such capital stock and (3) if a rating agency at such
time maintains a rating on either series of notes, the rating agency downgrades
its credit rating on the series within 90 days (or more, in certain
circumstances) following notice of the occurrence of the events specified in
(1) and (2) above.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the terms of our JP&yen;9,760
million loan from JBIC, in the event of any proposed sale or transfer of PLDT's
stock that would result in NTT Communications holding less than 14.95% of
PLDT's voting stock, we will be required to prepay, immediately upon
effectiveness of such sale or transfer, all principal outstanding under the
loan, together with accrued interest.  However, prepayment will not be required
if, following such sale or transfer, (1) NTT Communications continues to have
prior approval rights with respect to all matters as to which NTT
Communications has approval rights under the stock purchase agreement pursuant
to which it acquired its shares in PLDT, or (2) JBIC, in its sole discretion,
determines that NTT Communications&#146; participation in the expansion of Smart's
GSM network capacity to extend PLDT&#146;s cellular business in Smart would not be
reduced below its level of participation as of the date of the loan agreement.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the terms of both PLDT&#146;s
US$145 million multicurrency term facility agreement and JP&yen;5,615 million
syndicated term loan facility, if any lender so requests in writing, PLDT shall
prepay in full such lender&#146;s participation in the loan within 45 days from
notification of the change in control and no later than the date on which PLDT
is required to repurchase its 10.625% Notes due 2007 and 11.375% Notes due 2012
(&#147;Bonds&#148;) from bondholders accepting the change in control offer.  A change in
control is deemed to occur when (1) the aggregate of NTT Communications&#146; and
First Pacific&#146;s direct and indirect voting interest in PLDT&#146;s outstanding capital
stock having voting rights fall below 35% of such capital stock, (2) any person
or, in certain instances, group of persons, which is not controlled directly or
indirectly by First Pacific or NTT Communications acquires a direct or indirect
voting interest in PLDT&#146;s outstanding capital stock having voting rights which
equals or exceeds 35% of such capital stock and <br>
(3) if a rating agency at such time maintains a rating on the Bonds, the rating
agency downgrades its credit rating on the Bonds within 90 days (or more, in
certain circumstances) following notice of the occurrence of the events
specified in (1) and (2) above.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">PLDT&#146;s debt instruments contain customary and other default
provisions that permit the lender to accelerate amounts due or terminate their
commitments to extend additional funds under its debt instruments.  These
default provisions include:  (1) cross-defaults and cross-accelerations that
permit a lender to declare a default if PLDT is in default under another debt
instrument; in some cases, the cross-default provision is triggered upon a
payment or other default permitting the acceleration of PLDT&#146;s debt, whether or
not the defaulted debt is accelerated.  In other cases, the cross-default
provision requires the defaulted loan to be accelerated. In some debt
instruments, the cross-default provision will be triggered only if the
principal amount of the defaulted indebtedness exceeds a threshold amount
specified in these debt instruments; (2) failure by PLDT to meet certain
financial ratio covenants referred to above; (3) the occurrence of any material
adverse change in circumstances that a lender reasonably believes materially
impairs PLDT&#146;s ability to perform its obligations under its debt instrument
with the lender; <br>
(4) the revocation, termination or amendment of any of the permits or
franchises of PLDT in any manner unacceptable to the lender; (5) the
abandonment, termination or amendment of the project financed by a loan in a
manner unacceptable to the lender; (6) the nationalization or sustained
discontinuance of all or a substantial portion of PLDT&#146;s business; and (7)
other typical events of default, including the commencement of bankruptcy,
insolvency, liquidation or winding up proceedings by PLDT.</p>

<p style='margin-left:63.0pt;text-indent:-27.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Financing
Requirements</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We believe
that our available cash, including cash flow from operations and drawings from
existing credit facilities, will provide sufficient liquidity to fund our
projected operating, investment, capital expenditures and debt service
requirements for the next 12 months.  Further, as described above, we have
completed a number of initiatives under our liability management program to
meet our debt service requirements in the short and medium term.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We continue to pursue various
initiatives and financing transactions with the objective of further improving
the balance between our cash flows and debt service requirements and reducing
our overall indebtedness.  In addition, PLDT has reduced its capital
expenditures and investments, suspended dividend payments to common shareholders
and increased its application of available cash to reduce its indebtedness.
Further, we expect to benefit from increasing revenue and cash flow
contributions from our subsidiaries, particularly Smart.  After receiving
approvals from Finnvera and certain lenders for the payment of dividends to
PLDT in an amount not to exceed 40% of Smart&#146;s net income under Philippine GAAP
in 2001, Smart made its first dividend payment of Php1,540 million to PLDT in
December 2002.  In
addition, Smart paid dividends in the amount of Php4,300 million to PLDT in June 2003, representing 70% of
Smart&#146;s 2002 net income under Philippine GAAP, and paid additional dividends in
the amount of Php1,866 million to PLDT in
November 2003, equivalent to the remaining 30% of its 2002 net income under
Philippine GAAP.  Further, after receiving similar approvals from Finnvera and
certain lenders, Smart paid dividends amounting to Php11,280 million to
PLDT in May 2004, representing 70% of Smart&#146;s 2003 net income under Philippine
GAAP.  Smart will be required to obtain further
waivers from Finnvera and certain lenders to pay additional dividends in future
periods.  We cannot assure that Smart will be able to obtain such waivers in
the future, or what amount, if any, Smart would be permitted or financially
able to distribute.  We expect that we will have difficulty meeting our debt
payment obligations if we do not continue to receive cash dividends from Smart.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Credit
Ratings</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;text-indent:.5in' style="margin-top:0;margin-bottom:0">Our credit ratings may
significantly affect the terms of our prospective financings, particularly
financing costs.  None of our existing indebtedness contains provisions under
which credit rating downgrades would trigger a default, changes in applicable
interest rates or other similar terms and conditions.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On April 8, 2004, Fitch Ratings
upgraded PLDT&#146;s long-term foreign currency and local currency rating to
&#147;BB&#148; from &#147;BB-&#148; (BB minus) while the rating of PLDT&#146;s convertible preferred
share was similarly upgraded to &#147;B+&#148; (B plus) from &#147;B&#148;.  The rating action
follows a sustained period of improvement in PLDT&#146;s operating and financial
profile mainly due to the growth of Smart.  The stable outlook also reflects
Fitch&#146;s view that neither the existing competitive landscape not the planned
resumption of common share dividends by PLDT would materially disrupt our
deleveraging efforts.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On March 23, 2004, Standard and Poor&#146;s Ratings Group affirmed its &#147;BB&#148; rating and stable outlook on PLDT.  On April 22, 2003, Standard &amp; Poor&#146;s Ratings Group affirmed its &#147;BB&#148; rating and stable
outlook on PLDT.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On January 27, 2004, PLDT&#146;s foreign
currency senior unsecured debt rating was upgraded by Moody&#146;s Investors Service
to &#147;Ba2&#148; from a recent &#147;Ba3&#148; as of July 29, 2003 and preferred share rating
moved up to &#147;B1&#148; from &#147;B2.&#148;  The rating reflects continued improvements in the
operating performance of Smart and the expectation of on-going free cash flow
to help repay debt maturities in the coming years.  The negative outlook on
PLDT's rating is constrained, reflecting Moody's decision to downgrade the
Philippine Government's long-term foreign currency bond rating to &#147;Ba2&#148; with a
negative outlook also on January 27, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On December 10, 2003, PhilRatings affirmed its rating of &#147;PRS1&#148;
for PLDT&#146;s Php2.0 Billion One-Year Peso Notes which registration was rendered
effective by the Philippine Securities and Exchange Commission on April 9, 2003.  PRS1 is the highest rating possible on PhilRatings&#146; scale for short-term
securities and is based on the issuer&#146;s &#147;strongest capability for timely
payment of debt on both principal and interest.&#148;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">A credit rating is not a recommendation to purchase, hold or
sell securities as much as such rating does not comment as to market price or
suitability for a particular investor.  In addition, a credit rating is subject
to revision or withdrawal at any time by the credit rating assigning
organization.  There is no assurance that the credit ratings will remain in
effect for any given period or that the ratings will not be revised, downwards
or upwards, by the rating agency in the future.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Off-Balance Sheet Arrangements</i></p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On October 10, 2002, PLDT entered into a Receivables Purchase Deed with a foreign financial institution, or the
Purchaser, under which PLDT agreed (1) to sell its receivables from certain
eligible foreign carriers for an advance payment of US$50 million and (2) to
service, administer and collect the receivables on behalf of the Purchaser.
The Purchaser will have no recourse to PLDT should the eligible carrier fail or
refuse to settle the assigned/purchased receivables, except when PLDT commits a
breach on its representations and warranties under the Receivables Purchase
Deed.  For the years ended December 31, 2003 and 2002, receivables sold under
the Receivables Purchase Deed amounted to US$11 million (Php608 million) with
resulting losses of US$1.5 million (Php84 million) and US$3 million (Php165
million), and with resulting losses of US$0.5 million (Php 25 million),
respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Pursuant to separate Master
Receivables Purchase and Sale Agreements with Citibank, N.A., Hong Kong and
Charta Corporation of New York, PLDT made sales of eligible receivables from
certain foreign carriers totaling US$59 million (Php3,029 million) in 2001 that
resulted in losses of US$2 million (Php103 million).  In 2002, no receivables
were sold under these two agreements.  The agreement with Charta Corporation
was terminated on June 27, 2002, while the agreement with Citibank N.A., Hong
 Kong, was terminated on September 18, 2002.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Equity Financing</i></p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Through our SIP, which provides postpaid
fixed line subscribers the opportunity to buy shares of our 10% Cumulative
Convertible Preferred Stock as part of the upfront payments collected from
subscribers, PLDT was able to raise Php94 million, Php464 million and Php232
million in 2003, 2002 and 2001, respectively.  As approved by the NTC, the SIP
was made optional in 2003 from being compulsory in earlier years.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Cash dividend payments amounted to
Php1,603 million in 2003 and Php1,582 million in 2002, all of which were paid
solely to preferred shareholders of PLDT.  In 2001, cash dividend payments
totaled Php1,819 million, of which Php402 million was paid to common
shareholders of PLDT and the remainder to its preferred shareholders.  The most
recent cash dividends paid by PLDT to its common shareholders was in April
2001, and no dividends were paid to PLDT&#146;s common shareholders in 2002 or 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Contractual Obligations
and Commercial Commitments </i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Contractual
Obligations</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table discloses our
contractual obligations outstanding as of December 31, 2003:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:97.32%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=9 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Payments Due by Period</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Long-term debt obligations</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Long-term lease obligations</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Unconditional purchase obligations</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Other long-term obligations</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php23,816</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=center style='margin-right:8.65pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php978</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1,629</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php26,423</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,172</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">829</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,132</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32,133</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">28,762</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">625</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,121</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,508</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">29,059</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">482</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,112</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,653</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2008</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,733</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">280</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,112</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,774</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">20,899</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2009 and onwards</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">66,733</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,154</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,447</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,124</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">80,458</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php184,275</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php4,348</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php10,553</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php21,898</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php221,074</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:0in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Long-term
Debt Obligations</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">For
discussion of our long-term debt obligations, see <i>Note 14 &#150; Long-term Debt</i>
to the accompanying consolidated financial statements in Item 18.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Long-term
Lease Obligations</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>Municipal Telephone Projects</i></b>.
In 1993, PLDT entered into two lease agreements with the Philippine Department
of Transportation and Communications, or DOTC, covering telecommunications
facilities established under the Municipal Telephone Act.  Under these
agreements, PLDT was granted the exclusive right to perform telecommunications
management services, to expand services, and to promote the use of
DOTC-contracted facilities in certain covered areas for a period of 15 years.
Title to the properties shall be transferred to PLDT upon expiration of the
lease term.  As of December 31, 2003, PLDT&#146;s aggregate remaining obligation
under these agreements was approximately Php875 million.  In case of
cancellation, PLDT is liable to pay Php100 million under each of the two
contracts as liquidated damages.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>Domestic Fiber Optic Network
Submerged Plant Agreement</i></b>.   On July 4, 2000, PLDT entered into an
agreement with NTT World Engineering Marine Corporation for submarine cable
repair and related services for the maintenance of PLDT's DFON submerged plant
for a period of five years up to July 4, 2005.  Under this agreement, PLDT is
required to pay NTT World Engineering Marine Corporation a fixed annual
standing charge of US$2 million, excluding cost for the use of a
remotely-operated submersible vehicle at US$5,000 for every day of use and
repair cost computed at US$19,000 per day of actual repair.  As of December 31, 2003, PLDT&#146;s aggregate remaining obligation under this agreement was
approximately Php185 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>Digital Passage
Service Contracts.</i></b>   PLDT has existing Digital Passage Service
Contracts with foreign telecommunication administrations for several dedicated
circuits to various destinations for ten to 25 years expiring at various
dates.  As of December 31, 2003, PLDT&#146;s aggregate remaining obligation under
these contracts amounted to approximately Php41 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>License Agreement with Mobius
Management Systems (</i></b><b><i>Australia</i></b><b><i>) Pty Ltd., or Mobius</i></b><i>.
</i>PLDT entered into a license agreement with Mobius pursuant to which Mobius
has granted PLDT a non-exclusive, non-assignable and non-transferable license
for the use of computer software components.  Under this agreement, Mobius is
also required to provide maintenance services for a period of one year at no
additional maintenance charge.  PLDT may purchase maintenance services upon
expiration of the first year for a fee of 15% of the current published license
fee.  As of December 31, 2003, PLDT&#146;s aggregate remaining obligation under this
agreement was approximately Php65 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>Other Long-term Lease
Obligations</i></b>.   We have various long-term lease contracts for periods
ranging from two to ten years covering certain offices, warehouses, cell sites,
telecommunication equipment locations and various office equipment.  In
particular, Smart has lease obligations aggregating Php2,309 million as of December 31, 2003 in respect of office and cell site rentals with over 2,000 lessors
nationwide.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Unconditional Purchase
Obligations</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>Air time Purchase Agreement
with ACeS International Limited</i></b>.   PLDT is a party to a Founder NSP,
Air Time Purchase Agreement with AIL in March 1997, which was amended in
December 1998, under which PLDT is granted the exclusive right to sell AIL
services in the Philippines.  In exchange, the Air Time Purchase Agreement
states that PLDT is required to purchase from AIL a minimum of US$5 million
worth of air time annually over ten years commencing on the date of commercial
operations of the Garuda I satellite.  In the event AIL&#146;s aggregate billing
revenue is less than US$45 million in any given year, the Air Time Purchase
Agreement also states that PLDT is required to make supplemental air time
purchase payments not to exceed US$15 million per year during the ten-year
term.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT and the other founder NSPs are
endeavoring to amend the Air Time Purchase Agreement due to the occurrence of
partial satellite loss, changes in the primary business of ACeS and other
events affecting the business.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In March 2003, PLDT, together with
the other founder NSPs, entered into a Standstill Agreement with AIL suspending
the application and enforcement of the minimum and supplemental air time
payments under the original Air Time Purchase Agreement.  In lieu of these
payments, the parties agreed that AIL shall provide PLDT and the other founder
shareholders with unlimited use of air time for the year 2003 in exchange for a
fixed fee in the amount of US$3.8 million for PLDT.  Moreover, PLDT was also
obliged to purchase from AIL 13,750 satellite phone units in 2003 at US$395
F.O.B. per unit, subject to quarterly price adjustments.  On February 10, 2004,
notwithstanding the ongoing negotiations, AIL advised PLDT of the termination
of the Standstill Agreement and the reinstatement of the terms of the original
Air Time Purchase Agreement following the lapse of the November 15, 2003
deadline for the negotiation of the revised Air Time Purchase Agreement.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, PLDT&#146;s aggregate remaining minimum obligation under the original Air Time Purchase
Agreement was approximately Php10,081 million.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>International Affiliate
Agreement with VeriSign, Inc., or VeriSign.</i></b>   On September 15, 2000, ePLDT entered into an agreement with VeriSign for the non-exclusive,
non-transferable right and license to use the VeriSign software, brand and
Certification Practice Statement for the purpose of approving, issuing,
suspending or revoking digital certificates for users of the internet or
similar open systems in the Philippines for a period of seven years.  Under
this agreement, ePLDT is required to pay VeriSign a certain percentage of the
revenue derived from the services subject to minimum annual royalty payments
aggregating to US$1.18 million, which was subsequently reduced to US$0.9
million, for the seven-year contract period.  In addition, ePLDT was required
to pay an annual support fee totaling US$0.5 million during the first year and
US$0.3 million in each year thereafter.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Effective July 1, 2003, VeriSign
has agreed to amend the Agreement and issued Addendum 6 to write-off all past
due invoices and payments owed to VeriSign, which were invoiced or scheduled to
be invoiced under the agreement prior to this Addendum 6.  All royalty payments
and annual support fees due through June 2003 will be part of the write-off in
the amount of US$0.8 million.  For contract year 4 (September 2003-August
2004), the annual support fee will be reduced from US$0.3 million to US$40,000
and for contract years 5-7 (September 2003-August 2007) from US$0.3 million to
US$0.16 million.  In addition, VeriSign agreed to reduce the affiliate revenue
sharing rates from 50% of suggested retail price to 25% of suggested retail
price for both enterprise and internet products for 12 months starting July
2003 and negotiable thereafter.  As of December 31, 2003, ePLDT&#146;s aggregate
remaining minimum obligation under this agreement was approximately Php26
million pertaining to annual support fee.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>License Purchase Agreement
with I-Contact Solutions Pte. Ltd.</i></b>   On April 2, 2003, iPlus Intelligent Network Inc., or iPlus, a wholly-owned subsidiary of ePLDT, entered into an Application
Services Provider, or ASP, and Reseller Contract with I-Contact Solutions Pte.
Ltd., or I-Contact, of Singapore.  Under the agreement, iPlus will purchase
licenses of the CosmoCall UniverseTM IP-based contact center
solution.  CosmoCall Universe supports multi-channel customer interactions
including telephone, web chat, web voice, web video, web collaboration, e-mail
and voicemail in one high capacity, high-availability, multi-tenant platform.
CosmoCall Universe is a complete, unified contact center suite that includes
ACD, IVR, CTI, predictive dialing, multimedia recording and a complement of
other management applications.  The aggregate value of these licenses is US$2.1
million and these licenses will be granted quarterly over a two-year period.
Further to the agreement, I-Contact will appoint iPlus as the exclusive
reseller and ASP for the Philippine market and will provide iPlus with all the
necessary support in terms of sales, marketing, and technical services.  As of December 31, 2003, iPlus&#146; aggregate remaining obligation under this agreement was US$1.5
million (approximately Php83 million).</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>Other Unconditional Purchase
Obligations.   </i></b>PLDT has various purchase contracts for periods ranging
from two to three years covering the use of fraud management system and
satellite hub and remote VSAT network systems.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Other Long-term Obligations</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>Mandatory Conversion and
Purchase of Shares</i></b>.   On June 4, 2001, PLDT issued a total of 3 million
shares of Series V Convertible Preferred Stock, 5 million shares of Series VI
Convertible Preferred Stock and 4 million shares of Series VII Convertible
Preferred Stock in exchange for a total of 58 million shares of Series K, Class
I Convertible Preferred Stock of Piltel pursuant to the debt restructuring of
Piltel.  In 2002, PLDT issued additional 30,100 shares of Series V Convertible
Preferred Stock and 14,087 shares of Series VI Convertible Preferred Stock in
exchange for a total of 220,935 shares of Series K, Class I Convertible
Preferred Stock of Piltel.  In 2003, PLDT issued additional 110,908 shares of
its Series VI Convertible Preferred Stock in exchange for 554,540 shares of
Piltel&#146;s Series K, Class I Convertible Preferred Stock.  Each share of Series
V, VI and VII PLDT Convertible Preferred Stock is convertible at any time at
the option of the holder into one share of PLDT&#146;s common stock.  On the date
immediately following the seventh anniversary of the issue date of the Series V
and Series VI Convertible Preferred Stock and on the eighth anniversary of the
issue date of the Series VII Convertible Preferred Stock, the remaining
outstanding shares under these series will be mandatorily converted to shares
of PLDT&#146;s common stock.  Under a put option exercisable for 30 days, holders of
common share received on mandatory conversion will be able to require PLDT to
purchase such shares of PLDT&#146;s common stock for Php1,700 or US$36.132 or
JP&yen;4,071.89 per share, depending on the series.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, 145,320 shares of Series V Convertible Preferred Stock and 531,251 shares of Series VI
Convertible Preferred Stock were converted to shares of PLDT&#146;s common stock.
The aggregate value of the put option based on outstanding shares as of
December 31, 2003 was Php21,898 million, of
which Php13,774 million is payable on June 4,
2008 and Php8,124 million on June 4, 2009, if
all of the outstanding shares of Series V, VI and VII Convertible Preferred
Stock were mandatorily converted and all the underlying shares of common stock
were put to PLDT.  The market value of the underlying shares of common stock
was Php10,763 million, based on the market
price of PLDT&#146;s common stock of Php970 per
share as of December 31, 2003.  See <i>Note 16 &#150; Preferred Stock Subject to
Mandatory Redemption</i> and <i>Note 17 &#150;Stockholders&#146; Equity</i> to the
accompanying consolidated financial statements in Item 18 for further
discussion.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Commercial
Commitments</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003 and 2002, our outstanding commercial commitments, in the form of letters of credit, amounted
to Php2,640 million and Php3,610 million, respectively.  These commitments will
expire within one year.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In October 1998, Smart entered into
a Frame Supply Contract with Nokia Telecommunications OY for the supply of
hardware, software and documentation for its GSM cellular network.  In the same
month, Smart and Nokia (Philippines), Inc., or Nokia, signed a Frame Services
Contract that covers the design, planning, installation, commissioning,
integration, acceptance testing, training and handling over of the GSM
network.  In August 2001, Smart issued a Master Purchase Order, or MPO, in the
amount of US$200 million in favor of Nokia Networks OY for the purchase of
additional equipment to expand its GSM cellular network.  The US$200 million
MPO was completed in November 2003.  On May 30, 2003, Smart entered into a
Technical Support Services Order, or TSSO, with Nokia in the amount of US$8
million.  This TSSO has been fully served as of December 31, 2003.</p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In January 2004, Smart signed a new
MPO in favor of Nokia amounting to US$117 million (Phase 7 under the Frame
Supply Contract between Smart and Nokia).  Smart is, however, under no legal
obligation to incur these expenditures.</p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0">As of December 31, 2003, Smart had no guarantee obligations,
standby repurchase obligations or other commercial commitments.</p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779218"></a><a name="_Toc46082277">Effect of Peso Depreciation</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2001, 2002 and 2003, our
operating revenues that have been received in U.S. dollars or in respect of
which we have been able to adjust our service fees to reflect changes in the
peso-to-dollar exchange rate, exceeded our U.S. dollar-linked operating
expenses.  As a result, the depreciation of the peso against the dollar over
this period had a positive net impact on our operating profit.  However, since
substantially all of our indebtedness is denominated in U.S. dollars, such
depreciation has also increased our interest expense in peso terms and
increased the peso amounts of our U.S. dollar-denominated indebtedness.  PLDT
has capitalized its foreign exchange losses in respect of its U.S.
dollar-denominated indebtedness, and net income in future periods is expected
to be negatively affected as a result of higher depreciation expense resulting
from such capitalization.  Our cash flows are negatively affected by the higher
peso cost of repaying U.S. dollar-denominated debts, and our ability to comply
with financial covenants and ratios is negatively affected by the increase in
the amount of our debts and our interest expenses in peso terms.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">To manage foreign exchange risks,
stabilize cash flows, and improve investment and cash flow planning, we enter
into forward foreign exchange contracts, foreign currency swap contracts,
currency options and other hedging products aimed at reducing and/or managing
the adverse impact of changes in foreign exchange rates on our operating
results and cash flows.  However, these hedges do not cover all of our exposure
to foreign exchange risks, and hedges to cover all of our exposure are not
currently nor readily available.  On a limited basis, we enter into interest
rate swap agreements in order to manage our exposure to interest rate
fluctuations.  See &#147;Item 11. Quantitative and Qualitative Disclosures about
Market Risks &#151; Foreign Exchange Risk Management and &#151;
Interest Rate Risk Management.&#148;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779219"></a><a name="_Toc46082278">Impact of Inflation and Changing Prices</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Inflation can be a significant
factor in the Philippine economy, and we are continually seeking ways to
minimize its impact.  In recent periods, while decreases in the relative value
of the peso have had a significant effect on us, we do not believe inflation has
had a material impact on our operations.  The average inflation rate in the Philippines
in 2003 was 3%, the same level as in 2002.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779220"></a><a name="_Toc46082279">Other Information</a></p>

<p align=left style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.55in;margin-bottom:.0001pt;text-align:left;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h6>

<p style="margin-top:0;margin-bottom:0"><b><i>GSM Association honors Smart Load</i></b></p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Smart Load</i>, the first
&#147;over-the-air&#148; reloading service introduced by Smart, which allows for
small-denomination reloads was awarded as the &#147;Best Mobile Application or
Service &#150; Consumer Market&#148; at the annual GSM Association awards.  The Best
Mobile Application or Service award recognizes new and innovative products or services
which contribute to industry growth.  The GSM association is comprised of over
600 GSM mobile operators and 140 suppliers from more than 200 countries
worldwide.</p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style="margin-top:0;margin-bottom:0"><b><i>PLDT Named as Best Managed Company in the </i></b><b><i>Philippines</i></b><b><i>
for 2003 by Asiamoney</i></b></p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT has been named as the Philippines&#146;
Overall Best Managed Company in 2003 by <i>Asiamoney</i>.<i>  </i>PLDT was top
picked in a survey that ranked Asia&#146;s leading listed companies in 2003 by more
than 200 investors from over 180 institutions worldwide.  PLDT also placed
first in the following categories:</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:63.0pt;text-indent:-27.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Best in Corporate Strategy</p>

<p style='margin-left:.5in;line-height:6.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:63.0pt;text-indent:-27.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Best in Financial Management</p>

<p style='margin-left:.5in;line-height:6.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:63.0pt;text-indent:-27.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Best in Operational Efficiency</p>

<p style='margin-left:.5in;line-height:6.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:63.0pt;text-indent:-27.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Best in Investor Relations</p>

<p style='margin-left:.5in;line-height:6.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:63.0pt;text-indent:-27.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Best Focus on Shareholder Value</p>

<p style='margin-left:.5in;line-height:6.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:63.0pt;text-indent:-27.0pt' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Most Improved in Corporate Governance</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Smart&#146;s Proposed Exchange Offer to Piltel Creditors</i></b></p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style="margin-top:0;margin-bottom:0">On March 23, 2004, Smart sent out invitations to the creditors
of Piltel, subject to certain terms and conditions, to offer to sell their
indebtedness to Smart in exchange for:  (a) cash (in U.S. Dollars or Philippine
Pesos); and/or (b) U.S. dollar-denominated loan obligations of Smart; and/or
(c) in consideration of delivery of U.S. dollar-denominated bonds guaranteed by
the Republic of the Philippines.  This offer is only being extended to persons
outside of the United States and no jurisdictional means of the United States
are being used in connection with the offer.  The options available to Piltel
creditors are as follows:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cash settlement up to an aggregate amount of US$20 million at a
maximum exchange price of US$0.40 for each US$1.00 equivalent of Piltel debt
exchanged;</p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$ Smart debt maturing in December 2007 at the rate of US$0.525
for each US$1.00 equivalent of Piltel debt exchanged, with interest at US$
LIBOR plus 1% per annum, payable quarterly;</p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$ Smart debt maturing in December 2008 at the rate of US$0.575
for each US$1.00 equivalent of Piltel debt exchanged, with interest at US$
LIBOR plus 1% per annum, payable quarterly;</p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$ Smart 10-year debt maturing in June 2014, at par by reference
to the US$1.00 equivalent of Piltel debt exchanged, with fixed interest at
2.25% per annum, payable quarterly;</p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For Yen Trade creditor, US$ Smart 10-year debt maturing in June
2014, at par by reference to the US$1.00 equivalent of Piltel debt exchanged,
with fixed interest at 2.25% per annum, payable quarterly and with an option to
elect, by not less than 15 months&#146; prior notice, for an early repayment at a
discount either on December 2007 at 52.5% of the relevant debt amount or on
December 2008 at 57.5% of the relevant debt amount; and</p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12-year US$ Republic of the Philippines-guaranteed bonds, at par,
with a 2% coupon per annum, payable semi-annually (this option is not available
to Piltel bondholders).</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Piltel creditors were initially given four weeks from the date
the letters of invitation were issued to respond to Smart&#146;s offer.  Smart
stated in the invitations to the creditors of Piltel that it will only proceed
with the debt transaction if the following conditions are met:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At least 75% in aggregate of existing Piltel debt by value
offered by the creditors is exchanged for one or more of the menu of options;</p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Minimum acceptance thresholds for each facility are met, as
follows:</p>

<p style='margin-left:.8in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:.25in' style="margin-top:0;margin-bottom:0">-&nbsp;&nbsp;
100% by principal amount of Yen Trade Facility;</p>

<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-indent:.25in' style="margin-top:0;margin-bottom:0">-&nbsp;&nbsp; 67% by
principal amount of the Peso and US$ Facility Agreements;</p>

<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-indent:.25in' style="margin-top:0;margin-bottom:0">-&nbsp;&nbsp; US$65 million
face value of the bonds (Conversion Notes);</p>

<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-indent:.25in' style="margin-top:0;margin-bottom:0">-&nbsp;&nbsp; 67% by
principal amount of the US$ Trade Facilities; and</p>

<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:0in;
margin-left:1.0in;margin-bottom:.0001pt;text-indent:.25in' style="margin-top:0;margin-bottom:0">-&nbsp; 50.01%
by principal amount of the Term Notes Facility Agreement. </p>

<p style='margin-left:1.0in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-14.25pt' style="margin-top:0;margin-bottom:0">&bull;   Certain waivers/amendments relating to
Piltel&#146;s existing indebtedness are obtained, including the termination of the
PLDT Letter of Support.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On April 24, 2004, Smart extended the deadline for Piltel creditors to make an offer to sell their Piltel debt for
10 days until April 30, 2004.  On May 3, 2004, Smart granted one further
extension of the deadline for Piltel creditors to make offers to sell their
Piltel debt until May 31, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of June 8, 2004, Smart had received offers from Piltel creditors representing approximately 69% in aggregate of
the outstanding restructured Piltel debt, to sell their Piltel debt to Smart.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Some Piltel creditors who opted not to participate in the
transaction nonetheless have indicated that they will consent to certain
amendments to the agreements governing Piltel&#146;s restructured indebtedness, thus
permitting Smart to achieve its overall commercial objectives in proceeding to
close the transaction.  Given this development, the board of directors of PLDT
has authorized Smart to proceed with the transaction despite not having met the
abovementioned 75% aggregate acceptance level.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Based on the offers received by Smart, the following is a
breakdown of the options to be allocated to the participating Piltel creditors
and their percentages of the total amount of Piltel&#146;s outstanding restructured
debt:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='margin-left:.2in;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td  rowspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">Option</h1>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=left style='margin-bottom:0in;margin-bottom:.0001pt;text-align:
 left' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h1>
 </td>
 <td  colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Allocation</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Exchange</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>New Debt/Cash</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Ratio (%)</b></p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Outlay of Smart</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  colspan=7 valign=top style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">(in millions, except
 percentage)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2014 Smart Debt(1)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:17.3pt;text-align:right' style="margin-top:0;margin-bottom:0">US$271.5</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">65.4</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">US$271.5</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2007 Smart
 Debt</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:17.3pt;text-align:right' style="margin-top:0;margin-bottom:0">6.9</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">1.7</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">52.5</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">3.6</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2008 Smart Debt</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:17.3pt;text-align:right' style="margin-top:0;margin-bottom:0">5.0</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">1.2</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">57.5</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">2.9</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Cash</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:17.3pt;text-align:right' style="margin-top:0;margin-bottom:0">3.8</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">0.9</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">40.0</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0">1.5</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:17.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$287.2</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>69.2</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:10.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$279.5</b></p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:4.5pt' style="margin-top:0;margin-bottom:0">___________</p>

<p style='line-height:4.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:13.7pt;text-indent:-13.7pt' style="margin-top:0;margin-bottom:0">(1) <i>Included in Other Creditors are creditors
representing 9.2% of Piltel&#146;s outstanding restructured debt equivalent to
US$38.1 million who had chosen the Republic of the Philippines-guaranteed bond
option and are going to be allocated their chosen alternative option.  After
intensive efforts to arrange an appropriate Republic of the
Philippines-guaranteed facility, Smart has determined that it would not be
possible to arrange this facility in time for the proposed closing of the
transaction.  Accordingly, Smart will be advising those creditors who chose the
Republic of the Philippines-guaranteed bond option of its decision to provide
them with their alternative selection, which in all cases, is the 2014 Smart
debt.  </i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Based on the allocation above, Smart will be issuing US$278 million
of new debt and paying US$1.5 million of cash upfront.  Smart currently plans
to close this debt transaction in the month of July 2004.  Closing is subject
to, among other things, the trustees and agents of the various Piltel debt
facilities confirming their ability to act in the manner contemplated by the
invitation, including to enable implementation of the relevant waivers and
amendments.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">In anticipation of the successful closure of the debt exchange
transaction and after having now received consents from its creditors, Smart
intends to commence the process of acquiring PLDT&#146;s equity interests in Piltel
consisting of 767 million common shares (representing 45.3% of Piltel&#146;s
outstanding common shares) and 59 million shares of Series K, Class I
Convertible Preferred Stock (convertible into Piltel common stock at a ratio of
170:1).  The consideration for the share transfer will be determined at a later
date.  Smart expects to complete this part of the transaction later in the
second half of 2004 and expressed no intention to enter into a statutory merger
with Piltel or to use Piltel as a backdoor listing vehicle.  </p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779221"></a><a name="_Toc46082280">Certain Indebtedness</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our aggregate
outstanding indebtedness (including short-term debt), on a consolidated basis
as of December 31, 2003, amounted to Php186,408 million (US$3,353 million) and
their respective maturities are shown below:  </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0  style='width:477.0pt;margin-left:5.4pt;border-collapse:collapse;border-collapse:
 collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Maturity</b></p>
 </td>
 <td  valign=bottom style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center;line-height:13.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Aggregate
 Outstanding Indebtedness</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php137,336</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">20,586</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Piltel</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">23,433</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Mabuhay Satellite</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,722</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">ePLDT</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">305</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Maratel</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">26</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">Php186,408</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:6.1pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:13.0pt;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Maturity</p>
 </div>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:13.0pt;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Aggregate Outstanding<br>
 Indebtedness</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:13.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004
 (January 1 through December
 31, 2004)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:.1in;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$467</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php25,949</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:.1in;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">543</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,172</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:.1in;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">517</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">28,762</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:.1in;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">523</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">29,059</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt' style="margin-top:0;margin-bottom:0">2008 </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:.1in;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">103</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,733</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt' style="margin-top:0;margin-bottom:0">2009 and onwards</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:.1in;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,201</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">66,733</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Approximately 94% of our total
consolidated indebtedness is denominated in currencies other than Philippine
pesos, predominately U.S. dollars.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Overview of PLDT's
Indebtedness</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT obtains
credit from a variety of sources, including bank loans and capital markets
issuances.  As of December 31, 2003, PLDT on a non-consolidated basis had
US$2,471 million aggregate principal amount of outstanding indebtedness (including
short-term debt).  Approximately 96% of PLDT's non-consolidated outstanding
indebtedness is denominated in currencies other than Philippine pesos,
predominately U.S. dollars, and 28% accrues interest at a floating rate.
US$1,644 million of this debt is scheduled to mature through 2008.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT's
aggregate outstanding indebtedness (including short-term debt) on a
non-consolidated basis as of December 31, 2003 and their respective maturities
are shown below:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:6.1pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:13.0pt;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Maturity</p>
 </div>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:13.0pt;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Aggregate Outstanding<br>
 Indebtedness</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:13.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004
 (January 1 through December
 31, 2004)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$320</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php17,783</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">399</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,188</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">388</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">21,547</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">455</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">25,282</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt' style="margin-top:0;margin-bottom:0">2008 </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">82</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,562</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:13.0pt' style="margin-top:0;margin-bottom:0">2009 and onwards</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">827</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:13.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">45,974</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2003 and 2002, PLDT pursued a
number of liability management initiatives with the objectives of further
improving the balance between its cash flows and debt service requirements and
reducing its overall indebtedness.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As part of these initiatives, PLDT
was successful in raising external financing to fund a portion of its projected
operating, investing and debt service requirements.  On January 25, 2002, PLDT signed two loan agreements with KfW that provided PLDT with a refinancing
facility of US$149 million.  On May 2, 2002, PLDT completed a global offering
of notes in the aggregate amount of US$350 million with a simultaneous tender
offer for PLDT&#146;s 8.5% Notes due 2003 and 10.625% Notes due 2004, which closed
on May 15, 2002.  On July 26, 2002, PLDT signed a loan agreement with JBIC in
the total amount of JP&yen;9,760 million under JBIC&#146;s overseas investment loan
program.  On September 4, 2002, PLDT signed a US$145 million syndicated
multicurrency term loan facility, the first tranche of which was drawn on June
18, 2003 to refinance a portion of the outstanding principal balance of the
Japanese yen syndicated term loan which matured on the same date, and the
second tranche was drawn on December 22, 2003 to refinance a portion of the
outstanding principal balance of a U.S. dollar term loan which matured on the
same date.  On November 28, 2002, Smart signed a US$100 million term loan
facility supported by NEXI of which US$60 million was drawn on November 28, 2003 and was outstanding as of December 31, 2003.  The US$40 million balance
was drawn on April 5, 2004.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On May 29, 2003 PLDT obtained a US$12 million term loan facility from DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH.  As of December 31, 2003, this loan has an
outstanding balance of US$4 million.   </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On June 11, 2003, PLDT also signed a JPY5,615 million syndicated term
loan facility supported by NEXI.  As of December 31, 2003, we have not made any drawdowns under this facility.  An initial drawdown of JP&yen;960 million
was made on April 5, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">For a discussion of some of the
covenants, including financial ratios, negative pledges and defaults under our
debt instruments, see &#147;&#151; Liquidity and Capital Resources &#151; Financing Activities
&#151; Debt Financing &#151; Covenants.&#148;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Loans Supported by
Export Credit Agencies</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In order to
obtain imported components for our network infrastructure in connection with
our expansion and service improvement programs, PLDT obtained loans extended
and/or guaranteed by various export credit agencies.  These financings account
for a significant portion of PLDT's indebtedness.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">KfW, a German state-owned
development bank, is our largest single creditor.  As of December 31, 2003, PLDT owed to KfW an aggregate principal amount of US$398 million, as follows:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$298 million provided under various export credit agency-backed
facilities, of which US$221 million was provided in connection with our
expansion and service improvement programs and US$77 million in connection with
the US$149 million refinancing facility discussed below; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$100 million provided for the 15% downpayment portion and
credit facilities without guarantee/insurance cover from the export credit
agencies, of which US$22 million was in connection with the US$149 million
refinancing facility discussed below.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On January 25, 2002, PLDT signed two loan agreements with KfW
that provided PLDT with a US$149 million facility to refinance in part the
repayment installments under PLDT&#146;s existing loans from KfW due from January
2002 until December 2004.  The facility is composed of a nine-year loan,
inclusive of a three-year disbursement period and a two-year grace period
during which no principal is payable.  It partly enjoys the guarantee of
HERMES, the export credit agency of the Federal Republic of Germany.
Disbursements under this facility, which are made as the KfW loans to be repaid
fall due, are currently available.  We have drawn US$99 million (Php5,520
million) under this facility as of December 31, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">After giving effect to the
refinancing facility, US$38 million of our KfW loans mature in 2004, US$82
million mature in 2005, US$57 million mature in 2006, US$78 million mature in
2007, US$58 million mature in 2008 and US$85 million mature in 2009 and
onwards.  Principal amortization on these loans is generally payable in equal
semi-annual installments.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">PLDT has also obtained loans extended and/or guaranteed by other
export credit agencies, including JBIC, the Export-Import Bank of the United
 States, and respective export credit agencies of France, Italy, Israel, Sweden,
 Denmark, Canada, Australia, Singapore and the United Kingdom, in the aggregate
outstanding principal amount of US$201 million as of December 31, 2003.  Of the amounts outstanding under these loans, US$63 million mature in 2004, US$52
million mature in 2005, US$42 million mature in 2006, US$32 million mature in
2007, US$8 million mature in 2008 and US$4 million mature in 2009 and onwards.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Fixed Rate Notes</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0">PLDT has eight series of
non-amortizing fixed rate notes outstanding as of December 31, 2003, as follows:</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:95.42%;margin-left:22.5pt;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';margin-top:3.0pt' style="margin-top:0;margin-bottom:0"><b><u>Principal Amount</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-top:3.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style=';margin-top:
 3.0pt;margin-right:9.0pt;margin-bottom:0in;margin-left:0in;margin-bottom:
 .0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b><u>Issue Date</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style=';margin-top:
 3.0pt;text-align:center' style="margin-top:0;margin-bottom:0"><b><u>Interest Rate</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style=';margin-top:
 3.0pt;text-align:center' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style=';margin-top:
 3.0pt;margin-right:22.5pt;margin-bottom:0in;margin-left:0in;margin-bottom:
 .0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b><u>Maturity</u></b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">US$77,002,000</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:10.75pt' style="margin-top:0;margin-bottom:0">June 2, 1994</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;text-indent:6.45pt' style="margin-top:0;margin-bottom:0">10.625%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:11.15pt' style="margin-top:0;margin-bottom:0">June 2, 2004</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">US$138,210,000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:10.75pt' style="margin-top:0;margin-bottom:0">July 31, 1995</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:23.05pt;text-indent:6.45pt' style="margin-top:0;margin-bottom:0">9.875%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:11.15pt' style="margin-top:0;margin-bottom:0">August 1, 2005</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">US$175,000,000</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:10.75pt' style="margin-top:0;margin-bottom:0">June 28, 1996</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:23.05pt;text-indent:6.45pt' style="margin-top:0;margin-bottom:0">9.250%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:11.15pt' style="margin-top:0;margin-bottom:0">June 30, 2006</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">US$200,000,000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:10.75pt' style="margin-top:0;margin-bottom:0">March 6, 1997</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:23.05pt;text-indent:6.45pt' style="margin-top:0;margin-bottom:0">7.850%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:11.15pt' style="margin-top:0;margin-bottom:0">March 6, 2007</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">US$100,000,000</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:10.75pt' style="margin-top:0;margin-bottom:0">May 2, 2002</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;text-indent:6.45pt' style="margin-top:0;margin-bottom:0">10.625%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:11.15pt' style="margin-top:0;margin-bottom:0">May 15, 2007</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">US$175,000,000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:10.75pt' style="margin-top:0;margin-bottom:0">April 13, 1999</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;text-indent:6.45pt' style="margin-top:0;margin-bottom:0">10.500%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:11.15pt' style="margin-top:0;margin-bottom:0">April 15, 2009</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">US$250,000,000</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:10.75pt' style="margin-top:0;margin-bottom:0">May 2, 2002</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;text-indent:6.45pt' style="margin-top:0;margin-bottom:0">11.375%</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:11.15pt' style="margin-top:0;margin-bottom:0">May 15, 2012</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">US$300,000,000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:10.75pt' style="margin-top:0;margin-bottom:0">March 6, 1997</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:22.3pt;text-indent:6.45pt' style="margin-top:0;margin-bottom:0">8.350%</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 4.5pt 0in 4.5pt'>
 <p style='text-indent:11.15pt' style="margin-top:0;margin-bottom:0">March 6, 2017</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On May 2, 2002, PLDT issued 10.625%
Notes due 2007 in the aggregate principal amount of US$100 million and 11.375%
Notes due 2012 in the aggregate principal amount of US$250 million.  The net
proceeds from the issuance of the notes were used to effect the repurchase of
(1) US$63 million in principal amount of our 8.5% Notes due 2003 and US$117 million
in principal amount of our 10.625% Notes due 2004 validly tendered by holders
in our tender offer and (2) US$10 million in principal amount of our 10.625%
Notes due 2004 and US$12 million in principal amount of our 9.875% Notes due
2005 from the open market, and to prepay or repay various loans in the
aggregate amount of US$125 million, of which US$53 million (JP&yen;6,260 million)
pertained to the Japanese yen term loan which matured on June 18, 2003 and
US$52 million in connection with the US$150 million term loan which matured on
December 22, 2003.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Term Loans</b></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Local Exchange Transfer
Loans</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In connection with the transfer to
PLDT of Smart&#146;s local exchange business, PLDT entered into loan agreements with
Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V., or FMO,
of the Netherlands, Exportkreditnamden, or EKN, of Sweden and Export Credits
Guarantee Department, or ECGD, of the United Kingdom for loans in the principal
amounts of US$135 million, US$36 million and US$27 million, respectively. These
loans were amended in August and September 2001 to increase the maximum total
debt to EBITDA ratio that PLDT on a non-consolidated basis and calculated on
the basis of Philippine GAAP is permitted to maintain during the terms of the
respective loans.  Approximately US$108 million of these loans was outstanding
as of December 31, 2003.  The FMO loan will mature on September 1, 2007, and the EKN and ECGD loans on December 31, 2007.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>US$150 Million Term Loan</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In
connection with PLDT&#146;s fixed line expansion projects, PLDT obtained a US$150
million term loan, which was subsequently assigned to Norddeutsche Landesbank
Girozentrale, Singapore Branch.  This loan matured on December 22, 2003 and the principal balance of US$52 million then outstanding was partly refinanced by
Tranche B of US$145 million multicurrency refinancing facility in the amount of
JP&yen;3,191 million and US$19 million.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>JP&yen;19,807 Million Term Loan</i></p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style="margin-top:0;margin-bottom:0">In December 1997, in connection with a refinancing of its
maturing debt, PLDT obtained a Japanese yen term loan from a syndicate of
foreign banks.  This loan matured on June 18, 2003 and the principal balance of
JP&yen;12,359 million then outstanding was partly refinanced by Tranche A of US$145
million multicurrency refinancing facility in the amount of JP&yen;7,723 million
and US$34 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>JBIC JP&yen;9,760 Million
Overseas Investment Term Loan</i></p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On July 26, 2002, PLDT signed a loan agreement with JBIC for a
credit facility of JP&yen;9,760 million under the JBIC&#146;s Overseas Investment Loan
(OIL) program.  The loan, which was drawn on July 31, 2002, will be amortized semi-annually beginning March 21, 2005 and will mature on March 21, 2008.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Multicurrency Refinancing
Facility</i></p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">On September 4,
 2002, PLDT signed a loan agreement with
a syndicate of banks for a US$145 million multicurrency term loan facility
consisting of Japanese yen and U.S. dollar commitments of JP&yen;10,914 million and
US$53 million, respectively.  This facility was split into two tranches.
Tranche A was drawn on June 18, 2003 in the amount of JP&yen;7,723 million and US$34 million
to refinance a portion of the outstanding principal balance of the Japanese yen
syndicated term loan which matured on the same date.  Tranche B was drawn on December 22, 2003 in
the amount of JP&yen;3,191 million and US$19 million to refinance a portion of the
US$52 million principal amount outstanding under the U.S. dollar term loan
which matured on the same date.  The new syndicated facility will be amortized
semi-annually beginning June 2004 and will mature in December 2006.</p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>US$12 Million Term Loan
Facility</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On May 29, 2003, PLDT obtained a US$12 million term loan
facility from DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH.  As
of December 31, 2003, this loan has an outstanding balance of US$4 million.
This loan will mature in December 2009 and is payable in semi-annual
installments starting June 15, 2004.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>JP&yen;5,615 Million Syndicated Term Loan Facility</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On June 11, 2003, PLDT signed a JP&yen;5,615 million syndicated term
loan facility supported by NEXI.  As of December 31, 2003, we have not made any drawdown under this facility.  An initial drawdown of JP&yen;960 million
was made on April 5, 2004.</p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>JBIC 4 Program of the
Development Bank of the </i><i>Philippines</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">In connection with the Asia
Pacific Cable Network 2 project, PLDT entered into a loan agreement with
Citibank, N.A., as facility agent, and a syndicate of banks in the aggregate
principal amount of Php1,700 million, of which
about Php1,284 million was outstanding as of December 31, 2003.  The loan, which is funded under the JBIC Facility for Private Sector
Development of the Development Bank of the Philippines, will mature on October
26, 2005, and since April 2002, is payable in quarterly installments as set
forth below:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:7.0pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:12.0pt;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Quarterly
 Payment Number</p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:12.0pt;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Percentage of
 Principal Payable<br>
 on Each Quarterly Payment Date</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Payments 1-7</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">3.500%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Payments 8-11</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">8.875%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Payments 12-15</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">10.000%</p>
 </td>
 </tr>
</table></center></div>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Php2,770 Million Peso
Fixed Rate Corporate Notes</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">In connection with
PLDT&#146;s service improvement and expansion programs, PLDT has entered into two loan
agreements, pursuant to each of which PLDT issued fixed rate corporate notes in
three tranches.  Interest on each tranche is payable semi-annually.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the first loan agreement,
PLDT borrowed an aggregate amount of Php1,500
million, of which Php230 million matured on November 11, 2002, Php500 million will mature on November 9, 2004, and Php770 million on November 9, 2006.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the second loan agreement,
PLDT borrowed an aggregate amount of Php1,270
million, of which Php360 million matured on June 9, 2003, Php100 million will mature on June 9, 2005, and Php810 million on June 9, 2010.</p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Php2,000 Million One-Year
Peso Notes</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">On April 28,
 2003 and May 14, 2003, PLDT issued, at a
discount, Php1,600 million and Php400 million One-Year Peso Notes, respectively,
under its Php2 billion Peso Notes program registered with the Philippine SEC.
Net proceeds of the issue totaled Php1,803 million.  PLDT targeted retail
investors primarily for this issue in order to further diversify its funding
sources.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The Peso Notes program, for which the registration was rendered
effective by the Philippine SEC on April 9, 2003, has been given &#147;PRS 1&#148; rating
by PhilRatings, an affiliate of Standard &amp; Poor&#146;s.  PhilRatings affirmed
the &#147;PRS1&#148; rating on December 10, 2003.  PRS1 is the highest rating possible on
PhilRatings&#146; scale for short-term securities and is assigned to issues with
&#147;the strongest capability for timely payment of debt on both principal and
interest.&#148;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Overview of Smart&#146;s
Indebtedness</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">As of December 31, 2003,
Smart had US$370 million of aggregate indebtedness outstanding which are
scheduled to mature as follows:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:12.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Aggregate
 Outstanding</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:3.5pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:12.0pt;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Maturity</p>
 </div>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:12.0pt;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Indebtedness</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:12.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:.15in'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:.15in'>
 <p style='text-align:justify;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2004 (January 1 through December 31, 2004)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:.15in'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$128</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt;height:.15in'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php7,104</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">127</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,081</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">93</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">5,191</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">22</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">1,205</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">2008 and onwards</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:3.5pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 </tr>
</table></center></div>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">As of December
 31, 2003, Smart had no outstanding
short-term borrowings.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In connection with the build-out
expansion of its GSM network, Smart has entered into a number of loan
agreements to finance the various phases of this expansion.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$224 Million Term Loan
Facilities</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The loan facilities for Phases 1 to
4 of the GSM network expansion, under which US$106 million was outstanding as
of December 31, 2003, are repayable in ten equal semi-annual installments with
final repayments due in October 2005 and April 2006.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$195 Million Term Loan
Facility</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On June 8, 2001, Smart signed its GSM Phase 5A financing
comprised of US$195 million loans.  The US$195 million loans, of which US$121
million was outstanding as of December 31, 2003, are payable over five to six
years, with final repayments due in September 2006, March 2007 and June 2007.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Php1 Billion Term Loan Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On June 14, 2001, Smart signed its GSM Phase 5A financing of Php1,000 million term loan.  The Php1,000 million
facility, of which Php533 million was outstanding as of December 31, 2003, is payable quarterly with final repayment in December 2005.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$6 Million Term Loan Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On September 25, 2001, Smart obtained a US$6 million term loan facility from Electro Banque S.A., which was later
assigned to Alcatel SVF 1999A-Trust fee effective December 3, 2002.  The loan facility, of which US$3 million was outstanding as of December 31, 2003, is payable semi-annually, with final repayment due in May 2005.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>US$11
Million Term Loan Facility</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">On October 26, 2001, Smart obtained a US$11 million term loan facility from Credit Lyonnais S.A., of which the
undrawn balance of US$4 million was cancelled upon expiry of the availability
period on April 26, 2003.  The loan facility, comprised of three tranches of
which US$5 million was outstanding as of December 31, 2003, is payable
semi-annually with final repayments due in January 2007, November 2007 and May
2008.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$100 Million Term Loan
Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On December 13, 2001, Smart signed its GSM Phase 5B financing of US$100 million, of which US$61 million was
outstanding as of December 31, 2003. The loan is payable over five years with
final repayment due in September 2006.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Php300 Million Term Loan
Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On January 9, 2002, Smart signed a loan facility in the amount of Php300 million.  This loan has been fully drawn
and is payable quarterly with final repayment in February 2007.  However, the
outstanding balance of Php280 million was prepaid on November 4, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$7 Million Term Loan Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On April 14, 2002, for the purpose
of financing the purchase of certain equipment, Smart obtained a US$7 million
term loan facility from Bayerische Hypo-und Vereinsbank Aktiengesellschaft
pursuant to the standard loan agreement No. 1 dated August 14, 2002 under the
&#128;50 million Framework Agreement for the financing of individual export
contracts dated November 8 and 13, 2001.  The outstanding balance as of December 31, 2003 was US$6 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$100 Million Term Loan
Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On November 28, 2002, Smart signed a US$100 million term loan
facility supported by NEXI, of which US$60 million was drawn on November 28, 2003 and was outstanding as of December 31, 2003.  The US$40 million undrawn
balance was drawn on April 5, 2004.  This loan is payable semi-annually over
four years in eight equal installments starting May 28, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Facilities under GSM Phases 1 to 4,
the Finnish Export Credit plc tranche of GSM Phase 5A facility and GSM Phase 5B
facility are covered by guarantees from Finnvera, the Finnish export credit
agency, for 95% of political risk and 50% of commercial risk.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Interest on Smart&#146;s dollar-denominated loans is either
fixed of based on LIBOR plus premium.  The Php1,000 million loan accrues
interest based on the weighted average interest rate, or WAIR, plus
Participating Financial Institution, or PFI, premium.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Smart is subject to loan covenants that restrict its
ability to pay dividends, redeem preferred shares, make distributions to PLDT
or otherwise provide funds to PLDT or any affiliate without the consent of its
lenders.  Some of these covenants contain an absolute prohibition on paying
dividends before December 2002, while others require that a portion of the loan
equal to the amount of the dividend be prepaid.  After
receiving approvals from Finnvera and certain lenders for the payment of
dividends to PLDT in an amount not to exceed 40% of Smart&#146;s net income under
Philippine GAAP in 2001, Smart made its first dividend payment of Php1,540
million to PLDT in December 2002.  In addition, Smart paid dividends in the
amount of Php4,300 million to PLDT in June 2003, representing 70% of Smart&#146;s
2002 net income under Philippine GAAP and paid additional dividends in the
amount of Php1,866 million to PLDT in November 2003 equivalent to the remaining
30% of its 2002 net income.  Further, after receiving similar approvals from
Finnvera and certain lenders, Smart
paid dividends amounting to Php11,280 million to PLDT in May 2004, representing
70% of Smart&#146;s 2003 net income under Philippine GAAP.  Smart will be required
to obtain further waivers from Finnvera and certain lenders to pay additional
dividends in future periods.  We cannot assure you that Smart will be able to
obtain such waivers in the future, or what amount, if any, Smart would be
permitted or financially able to distribute.  We expect that we will have
difficulty meeting our debt payment obligations if we do not continue to
receive cash dividends from Smart.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Smart&#146;s loan agreements contain certain restrictive
covenants requiring Smart to comply with specified financial ratios and other
financial tests calculated on the basis of Philippine GAAP at semi-annual
measurement dates.  The financial tests under Smart&#146;s loan agreements include
compliance with a debt-to-equity ratio of not more than 1.50:1 and a debt
service coverage ratio of not less than 1.50:1.  Smart has maintained
compliance with all of its financial covenants.  The agreements also contain
customary and other default provisions that permit the lender to accelerate amounts
due under the loans or terminate their commitments to extend additional funds
under the loans.  These default provisions include:</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
cross-defaults and cross-accelerations that permit a lender to
declare a default if Smart is in default under another loan agreement.  These
cross-default provisions are triggered upon a payment or other default
permitting the acceleration of Smart debt, whether or not the defaulted debt is
accelerated;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
failure by Smart to comply with certain financial ratio
covenants;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any reduction in PLDT's ownership of Smart&#146;s shares below 51% of
the total of each class of Smart&#146;s issued shares;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any reduction in First Pacific's and Metro Pacific Corporation&#146;s
collective direct and/or indirect ownership of PLDT&#146;s common stock below 17.5%
of the total common stock outstanding or 17.5% of the voting power of the total
common stock outstanding; and</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the occurrence of any material adverse change in circumstances
that the lender reasonably believes materially impairs Smart's ability to perform
its obligations under its loan agreements with the lender or that the lender
believes materially impairs an applicable guarantor's ability to perform its
obligations under an applicable guaranty.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">In addition, some of these loan agreements restrict Smart's
ability to enter into transactions with affiliates except on arm&#146;s-length terms
and for valuable consideration.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Overview of Piltel&#146;s Indebtedness</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On June 4, 2001, Piltel completed
the restructuring of approximately Php41 billion of indebtedness and other
claims owed to banks, trade creditors, bondholders and preferred shareholders,
or the aggregate financial debt of Piltel, representing approximately 98% of
its total liabilities as of that date.  As of December 31, 2003, approximately 99.8% of Piltel&#146;s debt have been restructured except for convertible bonds
with a principal value of US$0.9 million.  Under the terms of the debt
restructuring, 50% of Piltel&#146;s debt was cancelled in exchange for Piltel
convertible preferred shares, which were mandatorily exchanged for PLDT
convertible preferred shares, and the balance was restructured into 10-year and
15-year loans secured by substantially all of the present and future assets of
Piltel.  See <i>Note 14 &#150; Long-term Deb</i>t and <i>Note 16 &#150; Preferred Stock
Subject to Mandatory Redemption</i> to the accompanying consolidated financial
statements in Item 18 for further discussion.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">As of December 31, 2003, Piltel&#146;s aggregate indebtedness outstanding consists of:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:96.32%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;line-height:12.0pt' style="margin-top:0;margin-bottom:0"><b>Aggregate Outstanding<br>
 Indebtedness</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-top:0in;margin-right:4.5pt;
 margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:center;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in
 millions)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='line-height:12.0pt' style="margin-top:0;margin-bottom:0">Restructured debt</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.15in;line-height:12.0pt' style="margin-top:0;margin-bottom:0">10-year
 Tranche B</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">US$147</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">Php8,160</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.15in;line-height:12.0pt' style="margin-top:0;margin-bottom:0">15-year
 Tranche C</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:16.6pt;line-height:12.0pt' style="margin-top:0;margin-bottom:0">147</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:16.6pt;line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:16.6pt;line-height:12.0pt' style="margin-top:0;margin-bottom:0">8,160</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.15in;line-height:12.0pt' style="margin-top:0;margin-bottom:0">15-year
 Conversion Notes</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">122</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:22.1pt;line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 text-indent:22.1pt;line-height:12.0pt' style="margin-top:0;margin-bottom:0">6,769</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.15in;line-height:12.0pt' style="margin-top:0;margin-bottom:0">15-year Term
 Notes Facility</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">293</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='line-height:12.0pt;page-break-after:auto' style="margin-top:0;margin-bottom:0">Unrestructured
 debt</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt;page-break-after:auto' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt;page-break-after:auto' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt;page-break-after:auto' style="margin-top:0;margin-bottom:0">51</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='line-height:12.0pt;page-break-after:auto' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt;page-break-after:auto' style="margin-top:0;margin-bottom:0">US$422</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='line-height:12.0pt;page-break-after:auto' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt;page-break-after:auto' style="margin-top:0;margin-bottom:0">Php23,433</p>
 </td>
 </tr>
</table></center></div>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Piltel&#146;s restructured debt as of December 31, 2003 are scheduled to mature as follows:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:96.32%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:6.1pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 line-height:12.0pt;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Maturity</p>
 </div>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:12.0pt;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Aggregate
 Outstanding<br>
 Indebtedness</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:12.0pt' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 12.0pt' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">US$1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">Php24</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">243</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">21</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">1,166</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">2008</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">21</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">1,166</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">2009 and onwards</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">374</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:12.0pt' style="margin-top:0;margin-bottom:0">20,760</p>
 </td>
 </tr>
</table></center></div>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:31.5pt' style="margin-top:0;margin-bottom:0">Under the terms of the debt
restructuring, 50% of the financial debt of each participating creditor was
released in consideration for the allotment of Piltel convertible preferred
shares.  One (1) Piltel convertible preferred share was exchanged for every
Php340 worth of debt for which it was being exchanged (converted into Pesos at
an exchange rate of Php47.05 to US$1.00 for dollar-denominated debt and Php1.00
to JP&yen;2.39522 for yen-denominated debt), which shares were immediately and
mandatorily converted into PLDT convertible preferred shares.  One PLDT convertible
preferred share was issued for every five (5) Piltel convertible preferred
shares.</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.25in;margin-bottom:.0001pt;text-indent:-.25in;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:left;text-indent:.5in;line-height:normal' style="margin-top:0;margin-bottom:0">Approximately half of
the remaining 50% of all participating creditors&#146; (except for bondholders and
preferred shareholders) financial debt was restructured in a participation in a
Tranche B Loan in the same currency as their previous financial debt and the
other half was exchanged for participation in a Tranche C Loan, also in the
same currency as their previous financial debt.  In the case of bondholders and
preferred shareholders, the remaining 50% of their financial debt was exchanged
for participation in the Conversion Notes and in a single Tranche Peso loan
(the &#147;Term Notes Facility&#148;), respectively.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:left;text-indent:.5in;line-height:normal' style="margin-top:0;margin-bottom:0">In addition, under the
terms of the restructuring, PLDT issued a Letter of Support for the benefit of
Piltel and its creditors under which PLDT has agreed to cover any funding
shortfalls of Piltel up to a maximum amount of US$150 million less all amounts
paid or committed to be paid to or on behalf of Piltel by PLDT on or after
March 23, 2000.  Under the Letter of Support, PLDT will provide funding to
Piltel in the event that the cash flows from Piltel&#146;s operations falls short of
amounts required by it to discharge in full its obligations to any creditor of
Piltel or any of its operating and financing subsidiaries and affiliates.  As
of December
 31, 2003
the undrawn balance available under the Letter of Support was US$50 million
(approximately Php2,793 million).</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0"><b><i>Tranche
B Loans</i></b></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:left;text-indent:31.5pt;line-height:normal' style="margin-top:0;margin-bottom:0">Piltel&#146;s Tranche B Loans
consist of peso, U.S. dollar and Japanese yen participations of Php2,166
million, US$35 million and JP&yen;7,822
million, respectively.  These Tranche B loans have nominal principal
amortizations representing 0.10% of the original Tranche B loan amount payable
each year beginning 2004 to 2010, while the remaining balance of 99.3% will
fall due in June
 4, 2011.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0"><b><i>Tranche
C Loans</i></b></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:left;text-indent:.5in;line-height:normal' style="margin-top:0;margin-bottom:0">Piltel&#146;s Tranche C Loans
consist of peso, U.S. dollar and Japanese yen participations of Php2,166
million, US$35 million and JP&yen;7,822
million, respectively.  These Tranche C loans have principal amortizations of
0.10% of the original Tranche C loan amount payable each year in 2004 and 2005,
2% in 2006, 10% payable each year from 2007 to 2015, while the remaining
balance of 7.8% will fall due in June 4, 2016.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Term Notes Facility</i></b></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:left;text-indent:.5in;line-height:normal;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The Php293
million Term Notes Facility has nominal principal amortizations representing
0.10% of the original loan amount payable each year beginning 2004 to 2015
while the remaining balance of 98.8% will fall due on June 14, 2016.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0"><b><i>Conversion
Notes </i></b></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
..5in;line-height:normal' style="margin-top:0;margin-bottom:0">As of December 31, 2003, approximately US$122
million of Piltel Conversion Notes were outstanding.  These Conversion Notes
have principal amortizations of 0.10% of the amount outstanding payable each
year in 2004 and 2005, 1.05% in 2006, 5.05% payable each year from 2007 to
2010, 54.65% in 2011, 5% payable each year from 2012 to 2015, while the
remaining balance of 3.9% will fall due in June 4, 2016.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:auto' style="margin-top:0;margin-bottom:0">Piltel&#146;s restructured obligations are secured by
substantially all present and future assets of Piltel under the Mortgage Trust
Indenture, or MTI, dated June 4, 2001 between Piltel and JP Morgan Chase (successor to
Chase Manhattan Bank) as security agent for the creditors, which established
the security arrangements relating to the restructured debts.  The
participating creditors (other than the preferred shareholders) share equally
in first ranking security and non-participating creditors and the preferred
shareholders share equally in second ranking security created under the MTI.
Such a mortgage was approved by at least two-thirds of Piltel&#146;s shareholders at
its annual shareholders&#146; meeting on April 18, 2001
and the NTC on May 18, 2001.</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:auto' style="margin-top:0;margin-bottom:0">Piltel likewise agreed to pay into a dedicated
account (a &#147;Sinking Fund Account&#148;) the amount by which (a) earnings before
interest, tax, depreciation and amortization for a financial year is greater
than (b) 200 percent of the projected debt service costs and permitted capital
expenditure for the following financial year (the &#147;Excess Cash flow&#148;).  The money
in that Sinking Fund Account will be used (before drawings are made under the
Letter of Support) to fund cash flow deficiencies of Piltel.  Also, if actual
capital expenditure for a financial year differs from the projected capital
expenditure, Piltel will either pay into the Sinking Fund established at the
end of that year an amount equal to any over-projection of capital expenditure
or will be entitled to withdraw funds, if any, equal to any under-projection.
Any credit balance in a Sinking Fund after two financial years will be used to
prepay all participating creditors ratably.</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:auto' style="margin-top:0;margin-bottom:0">Under the debt restructuring agreements, Piltel
undertook, with respect to each financial year (other than the financial year
in which the final repayment installment for Tranche B falls due), that the
aggregate of earnings before interest, tax, depreciation and amortization plus
the available amount under the Letter of Support shall be greater than 1.05
times debt service and 1.5 times interest cost.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:auto' style="margin-top:0;margin-bottom:0">Piltel is currently not in
compliance with the terms of convertible bonds with principal amount of US$0.7
million (approximately US$0.9 million redemption price at the option of the
holders).</p>

<p style='text-indent:.5in;page-break-after:auto' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:auto' style="margin-top:0;margin-bottom:0">Piltel may not be able to
restructure or otherwise pay the claims relating to its unrestructured debt.
However, default on and acceleration of Piltel&#146;s unrestructured indebtedness
does not create a cross-default provision under Piltel&#146;s restructured
indebtedness or any indebtedness of PLDT.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a name="_Toc75779222"></a><a
name="_Toc46082281">Item 6.   Directors, Senior Management and Employees</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779223"></a><a name="_Toc46082282">Directors, Key Officers and Advisors</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The names,
ages, positions and periods of service of the directors (including independent
directors) and key officers and advisors of PLDT as of May 31, 2004 are as follows:</p>

<p style='line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0  style='width:6.5in;border-collapse:collapse;border-collapse:collapse !msorm'>

 <tr>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>Name</u></b></p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b><u>Age</u></b></p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>Position(s)</u></b></p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-left:18.6pt;text-align:center;
 text-indent:-18.6pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b><u>Period during which individual
 has served as such</u></b></p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>

 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Manuel V. Pangilinan</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">57</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Director </p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">President and Chief</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">November 28, 1998 to February 19,
 2004</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Executive Officer </p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Chairman of the Board</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">February 19, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Napoleon
 L. Nazareno</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">President and Chief</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">February 19, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Executive Officer </p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Antonio
 O. Cojuangco</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">April 21, 1982 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Chairman of the Board</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">November 24, 1998 to February 19,
 2004</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Helen
 Y. Dee</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">60</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">June 18, 1986 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Corazon S. de la Paz </p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">63</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">September 25, 2001 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Albert
 F. del Rosario</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">64</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Ray
 C. Espinosa</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Rev.
 Fr. Bienvenido F. Nebres, S.J.(1) </p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">64</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Pedro
 E. Roxas(1) </p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">March 1, 2001 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Juan B. Santos(1)</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">65</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">December 3, 2002 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Shigeru
 Yoshida(2)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">March 31, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Mitsuhiro
 Takase(4)</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">56</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">March 24, 2000 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Ricardo
 R. Zarate(3)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">62</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Director</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">March 1, 2001 to June 8, 2004</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Ma. Lourdes C. Rausa-Chan</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Corporate Secretary</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">November 24, 1998 to present </p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President,
 Corporate Affairs and Legal Services Head</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">January 5, 1999 to present </p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Anabelle L. Chua </p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">43</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Treasurer</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">February 1, 1999 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President </p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">February 26, 2002 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Corporate Finance and <br>
 Treasury Head</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">March 1, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">George
 N. Lim</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">51</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President,
 Network Services Head</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">February 26, 1999 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Claro Carmelo P. Ramirez</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">44</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Senior Vice President, Retail Business Head</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">July 1, 1999 to June 15, 2004</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">International and Carrier <br>
 Business Head</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">June 16, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Victorico
 P. Vargas</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President, Human
 and Infrastructure Resources Management Head</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">February 15, 2000 to present</p>
 </td>
 </tr>
 <tr style='height:20.25pt' style='height:20.25pt !msorm'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:20.25pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Rosalie
 R. Montenegro</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:20.25pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:20.25pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">55</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:20.25pt'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:20.25pt'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President, Call Center
 Business Head</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:20.25pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:20.25pt'>
 <p style="margin-top:0;margin-bottom:0">July 10, 2000 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Ariel A. Roda</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">41</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">August 10, 2000 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Business Development Head</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">February 1, 2003 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Alfredo
 S. Panlilio</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">41</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">May 8, 2001 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">International and Carrier <br>
 Business Head</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">February 1, 2003 to June 15,
 2004</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">PLDT Global Corporation Head</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">June 16, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Ernesto
 R. Alberto</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">43</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Senior Vice President,
 Corporate Business Head</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">May 15, 2003 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Celso
 T. Dimarucut</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">42</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">First Vice President</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">January 31, 2003 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Financial Reporting and<br>
 Control Head</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">August 16, 2000 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Jun
 R. Florencio</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">First Vice President</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">March 28, 2000 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Audit and Assurance Head</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">September 1, 2000 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Eugenio F. Garcia</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">51</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">First Vice President</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">October 1, 2000 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Information Systems Head</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Menardo G. Jimenez, Jr.</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">41</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">First Vice President</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">February 19, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Corporate Communications and
 Public Affairs Head</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#D9D9D9;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">December 1, 2001 to June 15, 2004</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Retail Business Head</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">June 16, 2004 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Christopher
 H. Young</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Chief Financial Advisor </p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">November 24, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Peter
 J. Lawrence</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Chief Financial Advisor of
 Smart</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">November 9, 1998 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Donald
 J. Rae</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">43</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Chief Operations Advisor of
 Smart</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">January 1, 1999 to present</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Anastacio
 R. Martirez</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">51</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style=';text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Personal Communications and Mobile Services
 Head of Smart</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">September 1, 1993 to present</p>
 </td>
 </tr>
</table></center></div>

<p style='line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</p>

<p style='line-height:1.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:56.25pt;text-indent:-56.25pt' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;
</i><i> Independent directors.</i></p>

<p style='line-height:1.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:56.25pt;text-indent:-56.25pt' style="margin-top:0;margin-bottom:0"><i>(2)&nbsp;&nbsp;
</i><i> Replaced Mr. Taketo Suzuki
as director effective </i><i>March 31,
 2004</i>.</p>

<p style='line-height:1.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:56.25pt;text-indent:-56.25pt' style="margin-top:0;margin-bottom:0"><i>(3)&nbsp;&nbsp;
</i><i>Replaced by Ms. Teresita Sy
as director effective </i><i>June 8, 2004</i><i>.</i></p>

<p style='line-height:1.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:56.25pt;text-indent:-56.25pt' style="margin-top:0;margin-bottom:0"><i>(4)&nbsp;&nbsp;
</i><i>Resigned as director
effective </i><i>June 21, 2004</i><i>.</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Under the Shareholders Agreement entered into among First
Pacific, NTT Communications and NTTC-UK on September 28, 1999, NTT
Communications is entitled to nominate two directors (Shigeru Yoshida and
Mitsuhiro Takase) to the PLDT board of directors and First Pacific and its
affiliates are entitled to nominate six directors (Manuel V. Pangilinan,
Napoleon L. Nazareno, Antonio O. Cojuangco, Albert V. Del Rosario, Ray C.
Espinosa and Ricardo R. Zarate).<b>  </b>The Shareholders Agreement also
entitles NTT Communications to nominate two directors to Smart's board of
directors and, subject to specified conditions, one member to the board of
directors of all other PLDT subsidiaries.  NTT Communications is also entitled
to appoint members or advisors of certain PLDT management and board committees,
including the audit, executive compensation and finance committees described
above under &#147;&#151; Audit, Nomination, Executive Compensation and Finance
Committees.&#148;  Under the Shareholders Agreement, each party has agreed, under
certain circumstances, to vote its shares of common stock in favor of the
nominees designated by the other parties.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The business address of Anastacio
R. Martirez, Peter J. Lawrence and Donald J. Rae is Smart Tower II, Ayala
 Avenue, Makati City, Philippines.  The business address of each of the other
directors, key officers and advisors identified above is the Ramon Cojuangco Building,
 Makati Avenue, Makati City, Philippines.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following is a brief description of the business experience during the past
five years of each of our directors, key officers and advisors.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Manuel V. Pangilinan</b> is
the chairman of our board effective February 19, 2004 and chairman of the board
of Smart, ePLDT, Mabuhay Satellite and Infocom.  He was PLDT's president and
chief executive officer from November 1998 up to his appointment as chairman
effective February 19, 2004.  He founded and was the managing director of First
Pacific from 1981 and served as its executive chairman from February 1999 to
May 2003.  He has been re-appointed as managing director and chief executive
officer of First Pacific effective June 2003.  He is also the chairman of Metro
Pacific Corporation and Philippine Business for Social Progress and president
commissioner of P.T. Indofood Sukses Makmur tbk.  He also holds directorships
in Philippine Telecommunications Investment Corporation, Negros Navigation Co.,
Inc., Metro Asia Link Holdings, Inc., Enterprise Investments Holdings, Inc.,
Metro Pacific Assets Holdings Inc., Metro Pacific Resources, Inc. and several
property holding development companies.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Napoleon L. Nazareno</b> is
the president and chief executive officer of PLDT effective February 19, 2004 and
concurrently the president and chief executive officer of Smart and president
of ACeS Philippines.  He is the chairman of the board of Piltel and I-Contacts
Corporation and also holds directorships in Pacific Plaza Towers Condominium
Corporation, Negros Navigation Company, Inc., Philippine Telecommunications
Investment Corporation and some subsidiaries of PLDT, namely, ePLDT, ACeS
Philippines, Mabuhay Satellite and PLDT Global.  He was the president and chief
executive officer of Metro Pacific Corporation from August 1995 until December
1999 and of Piltel from November 1998 to January 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Antonio O. Cojuangco</b>,
the chairman of our board until his resignation effective February 19, 2004, served as president and chief executive officer of PLDT for over 12 years until
November 1998, when he assumed the chairmanship of the board.  He is the
president and chief executive officer of the television network ABC-5, the
chairman of the Bank of Commerce and CAP Life Insurance Corporation, and a
director of C&amp;O Investment Realty Corporation, Kuok Phil. Properties, Inc.,
Bancommerce Investment Corporation and Philippine Telecommunications Investment
Corporation.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Ms. Helen Y. Dee</b> is the
chairperson and president and/or chief executive officer of Hydee Management
&amp; Resources, Inc. and House of Investments, Inc. and chairperson of Landev
Corporation, Manila Memorial Park, Inc, Mapua Information Technology Center,
Inc., Pacific Plans, Inc. and Hi-Eisai Pharmaceuticals, Inc.  She is the
president of Moira Management, Inc., Equitas Insurance Brokers, Inc. and YGC
Corporate Services, Inc.  She is the vice chairperson of Zurich Insurance (Taipei)
Ltd. and also sits on the boards of Chailease Finance Corporation, KK
Converter, Inc., EEI Corporation, Petro Energy Resources Corp., Nippon Life
Insurance Co., South Western Cement Corp., Seafront Resources Corp., Manila
Peninsula Hotel, Inc., Malayan Insurance Co. Inc., MICO Equities, Inc., and La
Funeraria Paz, Inc.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Ms. Corazon S. de la Paz</b> is
the vice chairperson of the Social Security Commission and the president and
chief executive officer of the Social Security System.  She is a director of
San Miguel Corporation, Philex Mining Corporation, Republic Glass Holding
Corp., PCI Leasing and Finance, Inc., PCI Capital Corporation, Equitable
Cardnetwork, Inc., and Makati Medical Center.  She is also a trustee of several
educational and non-profit organizations.  Until June 30, 2001, she was the senior partner and the chairperson of Joaquin Cunanan &amp; Co., a member firm of
PricewaterhouseCoopers Worldwide.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Albert F. del Rosario</b> is
the Philippine Ambassador Plenipotentiary and Extraordinary to the United
 States of America.  He is the chairman of the board of Gotuaco del Rosario
and Associates, Inc. and Philippine Indocoil Corporation, the vice chairman of
the board of Asia Traders Insurance Corporation, and the president of ADR
Holdings, Inc. and ARS Reinsurance Brokers, Inc.  He has been appointed as
non-executive director of First Pacific effective on June 2, 2003.  Mr. del Rosario also sits on the boards of Infrontier (Philippines) Inc., Philippine
Investments Holdings, Inc., Philippine Telecommunications Investment
Corporation, Smart Communications Holdings, Inc., LMG Chemicals Corporation, LR
Philippines Realty Corporation, Spoon Ventures, Inc., Pacific Plaza Condominium
Corporation and Pacific Plaza Towers Condominium Corporation.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Atty. Ray C. Espinosa</b> is the
president of ePLDT, the chairman and chief executive officer of Parlance and
Vocativ, and the chairman of mySecureSign, Inc.  He is a member of the boards
of BayanTrade Dotcom, Inc., Cyber Bay Corporation, Digital Paradise, Inc.,
Intelligent Network Plus, Inc., Nation Broadcasting Corporation, Enterprise
Investment Holdings, Inc., ePDS, Inc., Tahanan Mutual Building and Loan
Association, Inc., Unilink Communications Corporation, Mediaquest Holdings,
Inc., Philippine Home Cable Holdings, Inc. and some of its subsidiaries,
Netopia Computer Technologies, Inc., Sidera Technologies, Inc., Stradcom
Corporation and PLDT Global.  He is a trustee of PLDT Beneficial Trust Fund and
PLDT Foundation, Inc.  Until June 30, 2000, he was a partner and member of the
executive committee of the law firm SyCip Salazar Hernandez &amp; Gatmaitan.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Rev. Fr. Bienvenido F. Nebres,
S.J.</b> is the president of the Ateneo de Manila University and a member of
the boards of trustees of the Asian Institute of Management and several other
private educational institutions.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Pedro E. Roxas</b> is the
chairman and/or chief executive officer of various business organizations in
the fields of agri-business, sugar manufacturing and real estate development
including Roxas Holdings, Inc., Central Azucarera Don Pedro, Inc., CADP Group
Corp., Roxaco Land Corporation, Roxas &amp; Company, Inc., Jade Orient Sugar
Corp. and Batangas Assets Corporation.  He holds directorships in BDO Private
Bank, Batangas Assets Corporation and Fuego Development Corporation.  Mr. Roxas
is a trustee and/or officer of several non-profit organizations.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Juan B. Santos</b> is the
chairman of Nestl&#233; Philippines, Inc. and was its president and chief executive
officer until March 31, 2003.  Prior to his appointment as president of Nestl&#233; Philippines
in 1987, he served as chief executive officer of the Nestl&#233; Group of Companies
in Thailand.  From 1989 to 1995, he acted in concurrent capacity as chief
executive officer of Nestl&#233; Singapore Pte. Ltd. and Nestl&#233; Philippines.  He is
the chairman of Gold Coin Management Holdings, Inc., a director of San Miguel
Corporation and Malayan Insurance Co., Inc.  He serves as member of the board
of trustees of several non-profit organizations.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Shigeru Yoshida</b> is a
vice president of NTT Worldwide Telecommunications Corporation, or NTT
Worldwide.  From 2001 to 2003, he was the vice president of the Solution
Division and led the strategic planning and project development of &#147;e-Japan&#148;, a
governmental program to enhance Japanese national IT infrastructure.  He headed
the Business Users, Consumers and Office Users Business Division and managed
the sales activity of Arcstar network and international telephone service from
2000 to 2001.  Prior to that, he worked at the Business Communications
Headquarters of NTT Worldwide and headed the global private network sales
activities for big customers.  Mr. Yoshida replaced Mr. Taketo Suzuki as
director effective March 31, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Mitsuhiro Takase</b> is the
senior vice president of the Corporate Planning Department of NTT
Communications.  Mr. Takase is a member of the board of directors of NTT
Communications and Sri Lanka Telecom.  From 1996 to 1998, he was the vice
president for strategic planning and international cooperation department of
the global business headquarters of NTT Corporation, in charge of strategic
planning and general personnel matters for NTT's international/overseas business.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Ricardo R. Zarate</b> was an
executive vice president of PLDT and the head of PLDT's fixed line business
until August 2003.  From 1993 to 2000, he was the executive vice president for
the network services group, in charge of operations and maintenance, regional
business and technical and operations support.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Ms. Ma. Lourdes C. Rausa-Chan </b>is
senior vice president for corporate affairs and legal services and corporate
secretary of PLDT. She was the group vice president for legal affairs, and the
corporate secretary of some subsidiaries of Metro Pacific Corporation prior to
joining PLDT in November 1998.  She served as a director of PLDT from March
2000 to February 2001 and from June to December 2002.  Ms. Rausa-Chan also
serves as corporate secretary of some subsidiaries of PLDT.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Ms. Anabelle L. Chua</b> is the
treasurer of PLDT and senior vice president for PLDT&#146;s corporate finance and
treasury sector.  She was a vice president at Citibank, N.A. where she worked
for ten years prior to her appointment as first vice president in March 1998,
as treasurer in February 1999 and as a senior vice president on February 26, 2002.  She has over 15 years of experience in the areas of corporate finance,
treasury, financial control and credit risk management.  Ms. Chua is currently
a director of the Philippine Stock Exchange, Inc., Smart, ePLDT and several
subsidiaries of ePLDT.  She is also a member of the board of trustees of the
PLDT Beneficial Trust Fund and PLDT Foundation, Inc.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. George N. Lim</b> is senior
vice president for the network services group of PLDT.  He has over 25 years of
work experience in telecommunications management and is a director of some
subsidiaries of PLDT and Philippine Home Cable Holdings, Inc.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Claro Carmelo P. Ramirez</b>
is senior vice president for the international and carrier business group of
PLDT.  He served as head of the retail business group of PLDT prior to his
appointment to his current post.  He has over 20 years of work experience in
the field of marketing.  He worked as associate director for Colgate-Palmolive
Company, Global Business Development in New York, and as marketing director for
 Colgate-Palmolive Argentina, S.A.I.C.  Prior to his appointment as senior
vice president in July 1999, he was the marketing director of Colgate-Palmolive
Philippines, Inc.  He is a director of some subsidiaries of PLDT.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Victorico P. Vargas</b> is
senior vice president for human and infrastructure resources management of
PLDT.  He has over 20 years of work experience in various industries (insurance,
consumer goods, real estate, banking and finance, and telecommunications/IT) in
the area of human resource management.  Prior to joining PLDT in February 2000,
he was the country human resources director of Citibank N.A., Manila, and spent
two years outside the Philippines as country human resources director of
Citibank, N.A., Bangkok.  He is also a member of the board of trustees of the
PLDT Beneficial Trust Fund.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Ms. Rosalie R. Montenegro</b> is
senior vice president for the call center business group of PLDT.  Prior to
that, she served as consumer banking head of ABN-AMRO Savings Bank and vice
president for remote banking of ABN-AMRO Consumer Bank, Singapore Regional
Office from 1997 to 1999.  She was vice president for global consumer banking,
CitiPhone banking and service quality director of Citibank N.A. from 1985 to
1996 servicing both banking and the credit cards businesses.  Ms. Montenegro is
also the president of Vocativ and Parlance and a director of some subsidiaries
of PLDT.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Ariel A. Roda</b> is senior
vice president for business development group of PLDT.  He was a co-managing
director of ePLDT from August 2000 to February 2003 and prior to that, served
as the Information Technology head of PLDT beginning in April 1999.  He has
over 15 years of work experience in the field of information technology.  He
held various positions in Manila Electric Company and was its information
technology head until he joined PLDT in April 1999.  He is a director of some
subsidiaries of PLDT.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Alfredo S. Panlilio</b> is
president for PLDT Global Corporation.  He served as senior vice president for
the international and carrier business group prior to his current post and
previously headed the corporate business group of PLDT.  He has over 15 years
of experience in the field of business development and information technology.
He held management positions at IBM Philippines, Inc. and was the vice
president for business development of the Lopez Communications Group (ABS-CBN
Broadcasting, BayanTel and SKYCable) prior to joining PLDT in July 1999.  Mr.
Panlilio is also a director of some subsidiaries of PLDT.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Ernesto R. Alberto</b> is
senior vice president for the corporate business group of PLDT.  He has over 20
years of experience in the area of corporate banking, relationship management
and business development.  Prior to joining PLDT in May 2003, he was a vice
president and the group head of the national corporate group of Citibank N.A., Manila
from 1996 to 2003, and previously served as vice president and group head of
the relationship management group of Citytrust Banking Corporation.  Mr.
Alberto is a director of some subsidiaries of PLDT.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Celso T. Dimarucut</b> is
the first vice president for PLDT&#146;s financial reporting and control sector.
Prior to joining PLDT, he was the controller and treasurer of Piltel and had
previously served as the group financial controller for domestic subsidiaries
of Metropolitan Bank and Trust Company.  He specialized in audit, tax and
business advisory services for ten years having worked with an Indonesian firm,
Prasetio Utomo &amp; Co. for three years and with SGV &amp; Co. for seven
years.  He also serves as director and treasurer of several of PLDT&#146;s
subsidiaries.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Jun R. Florencio</b> is the
first vice president for PLDT&#146;s audit and assurance group.  He has over 20
years of experience in the areas of external and internal audit, credit
management, information technology, financial management and controllership. He
held various positions in the finance organization of Eastern Telecommunications
and was the financial controller of Smart for four years prior to his
appointment as vice president and head of the financial reporting and control
sector of PLDT in April 1999.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Eugenio F. Garcia </b>held
the position of vice president, information technology of Metro Drug, Inc. for
three years prior to his appointment as Information Technology Head of PLDT in
September 2000.  He worked with Citibank N.A. from 1987 and was its vice
president for Data Center until mid-1997.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
text-indent:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><b>Mr. Menardo G. Jimenez, Jr.</b> is head of the retail business group of PLDT
effective June 16, 2004 and has managed various broadcasting and production
companies in radio, television and stage-theater prior to his appointment as
Corporate Communications and Public Affairs Head of PLDT in December 2001.  He
is a recipient of numerous significant awards for cultural achievement and in
the fields of musical theater, broadcast promotions and publications.  He is
the President of Mediaquest Holdings, Inc., and PLDT Foundation, Inc.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Christopher H. Young</b>,
our chief financial advisor, worked in PricewaterhouseCoopers in London and Hong
 Kong from 1979 until 1987, at which time he joined First Pacific in Hong Kong
as group financial controller.  He joined Metro Pacific Corporation in 1995 as
finance director, a position he held until he joined us in November 1998.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Peter J. Lawrence</b>, chief
financial advisor to Smart, is a chartered accountant and spent a number of
years as a senior tax consultant with Arthur Andersen &amp; Co. (Australia).
He joined First Pacific in 1991 as vice-president for group taxation and, in
January 1996, was promoted to the position of finance director &#151; Asia Link
Holdings Limited (the telecommunications arm of First Pacific).</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Donald J. Rae</b>, the chief
operations advisor to Smart, served as the chief operating officer for Time
Telecommunications Sdn. Bhd. in Malaysia prior to joining Smart in January
1999.  He also spent over ten years with Deloitte &amp; Touche Consulting
specializing in the Asian telecommunications sector.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>Mr. Anastacio R. Martirez</b> is
a director and the head of personal communications and mobile services of
Smart.  He is the president of I-Contacts Corporation, a subsidiary of Smart,
and a director of ACeS Philippines.  He has been involved in general and
marketing management for over 25 years with experience in consumer packaged
goods, consumer and industrial lighting, telecommunications and banking.  He
held senior marketing positions in SKYCable, Philips Electronics and Lighting
and Citytrust Banking Corporation.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779224"></a><a name="_Toc46082283">Terms of Office</a></p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
directors of PLDT are elected each year to serve until the next annual meeting
of shareholders and until their successors are elected and qualified.  The term
of office of all officers is coterminous with that of the board of directors
that elected or appointed them.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779225"></a><a name="_Toc46082284">Family Relationships</a></p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">None of the directors, key officers and chief financial and
chief operations advisors of PLDT and Smart are related to each other.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779226"></a><a name="_Toc46082285">Compensation</a></p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
aggregate compensation paid to the chief executive officer, key officers, chief
financial and chief operations advisors of PLDT and Smart and directors, as a
group, for 2003 amounted to Php245 million.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Each of the directors, including
the members of the advisory board of PLDT, is entitled to a director's fee in
the amount of Php125,000 for each meeting of the board attended, except Manuel
V. Pangilinan, who has waived his right to receive a director's fee.  Each of
the members or advisors of the audit, executive compensation, nomination and
finance committees is entitled to a fee in the amount of Php50,000 for each
committee meeting attended.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">There are no agreements between PLDT and any of its directors,
key officers and chief financial and chief operations advisors of PLDT and
Smart advisors providing for benefits upon termination of employment, except
for such benefits to which they may be entitled under PLDT's retirement plan.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779227"></a><a name="_Toc46082286">Executive Stock Option Plan</a></p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">On April 27, 1999
and December 10, 1999, the board of directors and shareholders, respectively,
of PLDT approved the executive stock option plan covering a total of 1,289,745
shares of common stock and the amendment of the seventh article of the Articles
of Incorporation of PLDT denying the pre-emptive right of holders of common share
to subscribe for any issue of the 1,289,745 shares of common stock pursuant to
the executive stock option plan.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Stock options may be granted pursuant to the
executive stock option plan to management executives and advisors/consultants
of PLDT.  The executive compensation committee of our board determines the
eligibility of a management executive or advisor/consultant to receive a stock
option, as well as the number of shares of common stock to be covered by each
stock option.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Stock options granted under the executive stock
option plan become fully vested after the completion of five years from the
relevant option offer date.  An option holder may exercise his option to
purchase that number of vested shares of common stock underlying his option, in
whole or in part, at the price at Php814 per share, subject to adjustment upon
the occurrence of specific events described in the executive stock option
plan.  The option holder is required to give written notice of exercise to the
executive compensation committee, indicating the number of vested shares to be
purchased, accompanied by payment in cash of the full amount of the purchase
price for those shares.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779228"></a><a name="_Toc46082287">Share Ownership</a> </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table sets forth information regarding ownership of our common stock,
preferred stock and executive stock options as of May 31, 2004 by our continuing directors, key officers and advisors.  Each individual below owns less than 1%
of our outstanding common shares and less than 1% of our preferred shares. </p>

<p style='line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;margin-left:5.5pt;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:7.25pt'>
 <p align=center style='text-align:center;line-height:94%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Name of Owner</b></p>
 </div>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Shares of</b></p>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Common Stock</b></p>
 </div>
 </td>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Shares of</b></p>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Preferred Stock</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Shares of Common Stock Underlying Executive</b></p>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Stock Options(1)</b></p>
 </div>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:94%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Manuel V. Pangilinan</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">74,419</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">360</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">97,571</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.05pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt;height:13.05pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Napoleon L. Nazareno</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt;height:13.05pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,427</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt;height:13.05pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">495</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt;height:13.05pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Antonio O. Cojuangco</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,060</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Helen Y. Dee</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-top:0in;margin-right:.05in;
 margin-bottom:0in;margin-left:7.9pt;margin-bottom:.0001pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,055(2)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
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 <td   valign=top style=' background:#E0E0E0;padding:
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 <td   valign=top style=' background:#F3F3F3;padding:
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 <td   valign=top style=' background:#E0E0E0;padding:
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 <td   valign=top style=' background:#F3F3F3;padding:
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 <p align=right style='margin-right:7.1pt;text-align:right;
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 <td   valign=top style=' background:#F3F3F3;padding:
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 <td   valign=top style=' background:#E0E0E0;padding:
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 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
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 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
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 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
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 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
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 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
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 <td   valign=top style=' background:#F3F3F3;padding:
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 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">180</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
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 <tr style='page-break-inside:avoid'>
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 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
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 <td   valign=top style=' background:#E0E0E0;padding:
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 <p align=right style='margin-right:7.1pt;text-align:right;
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 <td   valign=top style=' background:#F3F3F3;padding:
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 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
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 <td   valign=top style=' background:#E0E0E0;padding:
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 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
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 <td   valign=top style=' background:#E0E0E0;padding:
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 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
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 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
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 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
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 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">460</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
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 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">530</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
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 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Eugneio F. Garcia</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,046</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Menardo G. Jimenez, Jr.</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">22</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Christopher H. Young</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">104,315</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Peter J. Lawrence</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">32,000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">180</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Donald J. Rae</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='text-align:justify;line-height:12.0pt' style="margin-top:0;margin-bottom:0">Anastacio R. Martirez</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:14.45pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">380</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 line-height:12.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
</table></center></div>

<p style='border:none' style="margin-top:0;margin-bottom:0">_____________</p>

<p style='margin-left:13.7pt;text-indent:-13.7pt;line-height:
50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp; </i><i>As
of </i><i>May 31, 2004</i><i>, under PLDT&#146;s executive stock option plan,
options to purchase 300,492 common stocks have been granted to the key officers
listed in the table above.  No options have been granted to non-executive directors.
All outstanding options are exercisable at an exercise price of Php814 per
share and have an expiration date of December 10, 2009.  No outstanding options
were exercisable until </i><i>December 10, 2001</i><i>, at which time 25%
became exercisable.  An additional 25% vested on December 10, 2002 and 2003,
and will vest on December 10, 2004.  As of </i><i>May 31, 2004</i><i>, there were 225,369 vested options equivalent to 75% of the shares granted. </i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:50%' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(2)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>As chairperson and president
of Hydee Management &amp; Resources, Inc., Ms. Dee may exercise voting rights
in respect and may be considered to have beneficial ownership of 21,957 shares
of common share owned by Hydee Management Resources, Inc.</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:50%' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(3)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>As president and chief
executive officer of the Social Security System, Ms. de la Paz may exercise
voting rights in respect of 12,543,129 shares of common share owned by the
Social Security System and may be considered to have beneficial ownership of
these shares.</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:50%' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(4)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Resigned as director
effective </i><i>June 21, 2004</i><i>.</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The aggregate number of common and
preferred shares directly owned by directors, key officers and advisors listed
above as at May 31, 2004 were 12,854,946 and 9,635, respectively, or 7.5832%
and 0.0013% of PLDT&#146;s outstanding common and preferred shares, respectively. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Board of Directors</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">Our board of directors is composed of 13 members, at least three
of whom, namely Rev. Fr. Bienvenido F. Nebres, S.J., Mr. Pedro E. Roxas and Mr.
Juan B. Santos, are independent directors as determined by our Nomination
Committee.  The independence standards/criteria are provided in our by-laws and
Governance Manual pursuant to which, in general, a director may not be deemed
independent if he is, or in the past five years had been, employed in an
executive capacity by us or any company controlling, controlled by or under
common control with us or he is, or within the past five years had been,
retained as a professional adviser by us or any of our related companies, or he
is not free from any business or other relationships with us which could, or
could reasonably be perceived, to materially interfere with his exercise of
independent judgment in carrying out his responsibilities as a director.</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779229"></a><a name="_Toc46082288">Audit, Nomination, Executive Compensation and Finance Committees</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our board of directors is authorized under the by-laws to create
committees, as it may deem necessary.  We currently have four board committees,
namely, the audit, nomination, executive compensation and finance committees,
the purpose of which is to assist our board of directors.  Each of these
committees has a board-approved written charter that provides for such
committee&#146;s composition, membership qualifications, functions and
responsibilities, conduct of meetings, and reporting procedure to the board of
directors.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Audit Committee</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our audit committee is composed
of three members all of whom are independent directors, namely, Fr. Bienvenido
F. Nebres, S.J., who chairs the committee, Pedro E. Roxas and Juan B. Santos.
Shigeru Yoshida, who is a non-independent member of our board of directors,
Corazon de la Paz and Roberto R. Romulo serve as advisors to the audit
committee.  In addition, Corazon de la Paz also serves as consultant to the
audit committee.  All of the members of our audit committee are independent
directors and financially literate and our consultant is an accounting and
financial management expert.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As provided for in the audit
committee charter, the purposes of the audit committee are to assist our board
of directors:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
in its oversight of PLDT&#146;s accounting and financial reporting
principles and policies and internal audit controls and procedures;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
in its oversight of the integrity of PLDT&#146;s financial statements
and the independent audit thereof;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
in its oversight of PLDT&#146;s compliance with legal and regulatory
requirements; </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
in selecting and recommending the external auditors to be
appointed by our board of directors, evaluating such external auditors&#146;
qualifications and independence and, where deemed appropriate, replacing the
external auditors; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
in its oversight of the performance of the internal auditing
organization and the external auditors.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">With respect to the external
auditors, the audit committee has the following duties and powers:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to review and evaluate the qualifications, performance and
independence of the lead partner of the external auditors;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to select and recommend the external auditors to be appointed by
the board of directors and to recommend the removal or replacement of the
external auditors;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to review in consultation with the head of the internal auditing
organization and the chief financial advisor the fees charged by the external
auditors for audit and non-audit services;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to approve all audit engagement fees and terms, as well as all
significant non-audit engagements with the external auditors;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to ensure that the external auditors prepare and deliver annually
the Statement as to Independence and Auditors&#146; Statement, to discuss with the
external auditors any relationships or services disclosed in such statements
that may impact the objectivity, independence or quality of services of our
external auditors and to take appropriate action in response to such statements
to satisfy itself of the external auditor&#146;s independence;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to ensure that the lead partner of the external auditors is
rotated at least once every five (5) years; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to instruct the external auditors that they are ultimately
accountable to the board of directors through the audit committee.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Nomination Committee</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our
nomination committee is composed of four members, three of whom are independent
directors namely, Fr. Bienvenido F. Nebres, S.J., who chairs the committee,
Pedro E. Roxas and Juan B. Santos, and Victorico P. Vargas, who is a non-voting
member.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The principal functions and responsibilities of our Nomination
Committee are:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To
review and evaluate the qualifications of the persons nominated for election as
directors (including independent directors) or other positions requiring Board
appointment;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To
identify the qualified nominees and recommend that the Board select and
recommend such qualified nominees for election as directors/independent
directors at the annual meeting of shareholders; and</p>

<p style='margin-left:1.0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To
provide an assessment on our Board&#146;s effectiveness in the process of replacing
or appointing new directors or members of the Board Committees.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Executive Compensation Committee</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our executive compensation committee is composed of four
members, three of whom are regular members of our board of directors.  Albert
F. del Rosario, who chairs the committee, Ray C. Espinosa and Pedro E. Roxas
are regular members of our board of directors.  One of these three is an
independent and two are non-independent directors.  The fourth member of the
committee is Oscar S. Reyes, a member of our advisory board.  Taketo Suzuki,
who is a non-independent member of our board of directors, was an advisor to
the committee.  Effective March 31, 2004, Mr. Suzuki resigned and was replaced
by Mr. Shigeru Yoshida.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
principal functions and responsibilities of our Executive Compensation
Committee are:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To
provide guidance to and assist our board of directors in developing a
compensation philosophy or policy consistent with our culture, strategy and
control environment;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:0in' style="margin-top:0;margin-bottom:0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To
oversee the development and administration of our compensation programs;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To
review and approve corporate goals and objectives relevant to the compensation
of our Chief Executive Officer, evaluate the performance of our Chief Executive
Officer in light of those goals and objectives, and set the compensation level
of our Chief Executive Officer based on such evaluation.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Finance Committee</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our finance committee is composed
of five members, three of whom are regular members of our board of directors.
Corazon S. de la Paz, who chairs the committee, Antonio O. Cojuangco and
Teresita T. Sy are regular members of our board of directors.  Christopher H.
Young, our chief financial advisor and Amado S. Bagatsing comprise the fourth
and fifth members.  Mitsuhiro Takase, who is a member of our board of
directors, is an advisor to the committee.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The principal function of our
Finance Committee is to consider and approve our loans, funding and financing
requirements involving amounts of US$3 million or above but less than US$5
million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779230"></a><a name="_Toc46082289">Employees and Labor Relations</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">As of December 31, 2003, we had 18,191 employees on a consolidated basis.  On a non-consolidated
basis, we had 10,230 employees, of which 52% were rank and file, 44% were
management/supervisory staff and 4% were executives.  This number represents a
decrease of 1,901 employees, or approximately 16%, from the staff level as of
the end of 2002, mainly as a result of the ongoing MRP.  From a peak of 20,312
at the end of 1994, the number of our employees declined by 10,082, or 50%, by
the end of 2003.  As of December 31, 2002, we had 19,139 and 12,131 employees
on a consolidated and non-consolidated basis, respectively.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT has three employee unions, the
members of which in the aggregate represent 48% of the employees of the PLDT
Group.  We consider our relationship with our rank-and-file employees&#146; union,
our supervisors' union and our sales supervisors' union to be good.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On February 13, 2004, PLDT and the <i>Manggagawa
ng Komunikasyon sa Pilipinas</i>, or MKP, our rank-and-file employees&#146; union,
concluded and signed a new three-year Collective Bargaining Agreement, or CBA,
covering the period from November 9, 2003 to November 8, 2006.  This CBA
provides each member a signing bonus equivalent to one month salary plus
Php10,000; monthly salary increases of Php1,800, Php1,850 and Php2,450 for the
first year, second year and third year, respectively; an increase in monthly
relay station allowance from Php500 to Php600; an increase in per diem from
Php500 to Php570; a food station allowance of Php650 per covered employee; an
increase in yearly Christmas gift certificate from Php6,000 to Php7,000; an
increase in the amount of coverage under the group life insurance plan from
Php400,000 to Php500,000; and an additional contribution of Php1 million to the
Educational Loan Fund.  Other highlights of this CBA include emergency loan
eligibility, an emergency case hospitalization clause and additional benefits
under the medical hospitalization plan for single members&#146; dependents.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On May 31, 2002, PLDT and <i>Gabay
ng Unyon sa Telekomunikasyon ng mga Superbisor</i>, or GUTS, our supervisors&#146;
union, concluded and signed a new three-year CBA up to 2005.  This CBA provided
each member monthly salary increases of 8% of basic pay or Php2,000, whichever
is higher, for 2002; 10% of basic pay or Php2,700, whichever is higher, for
2003; and another 10% of basic pay or Php2,400, whichever is higher, for 2004.
Other highlights of this CBA were improvements of existing benefits and a
one-time signing bonus of Php23,000 for each member of GUTS.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On June 26, 2002, PLDT and PLDT
Sales Supervisors&#146; Union, or PSSU, concluded and signed a new three-year CBA
covering the period from April 23, 2002 to March 1, 2005.  This CBA provided
each member monthly salary increases of 8% of basic pay or Php2,000, whichever
is higher, for the first year; 10% of basic pay or Php2,700, whichever is
higher, for the second year; and another 10% of basic pay or Php2,400,
whichever is higher, for the third year.  Other highlights of this CBA were
improvements of existing benefits and a one-time signing bonus of Php23,000 for
each member of PSSU.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2002, PLDT decided to
rationalize the operations of its operator-assisted call-handling units located
principally in certain of its provincial exchanges.  In recent years,
operator-assisted calls have dramatically declined due to the popularity of direct
dialing and other alternative means of communications, such as e-mailing and
text messaging.  Consequently, 322 employees of PLDT manning its regional
operator services, where call volumes had significantly declined, were
separated from service with an enhanced retirement/redundancy pay package,
effective December 31, 2002.  In response to this, the MKP filed a Notice of
Strike with the Department of Labor and Employment, or DOLE, on November 8, 2002, and filed a complaint against PLDT for alleged unfair labor practices.
After a series of failed conciliation meetings between representatives of PLDT
and MKP before a DOLE conciliator, MKP staged a 14-day strike beginning on December 23, 2002.  The strike ended on January 6, 2003 by virtue of a return-to-work
order issued by the DOLE Secretary.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779231"></a><a name="_Toc46082290">Pension and Retirement Benefits</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">PLDT has a trusteed, non-contributory defined benefit plan
covering all permanent and regular employees.  The benefit plan provides
benefits upon normal retirement beginning at age 65, early retirement beginning
at age 50 or completion of at least 30 years of credited service, voluntary
separation beginning at age 40 or completion of at least 15 years of credited
service, total and physical disability, death and involuntary separation.
Benefits are based on the employee's final monthly basic salary and length of
service.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The normal retirement benefit is
equal to a percentage of the final monthly basic salary per year of credited
service.  The percentage is 100% for those with less than 15 years of service
at retirement and 125% for those with 15 years of service at retirement.
Thereafter, the percentage increases by 5% for every additional year of
credited service up to a maximum of 200%.  The early retirement benefit is
equal to the accrued normal retirement benefit with salary and service at the
date of early retirement.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The benefit plan's assets include
indirect ownership of 100% of the shares of Home Cable.  All of the shares of
Home Cable are pledged to a group of lenders as security for a loan of Home
Cable, in respect of which Home Cable has defaulted on payment.  On April 10, 2002, the loan agent, at the request of a majority of the lenders, delivered a
notice to Home Cable declaring an event of default and accelerating this loan.
Consequently, the lenders are entitled to foreclose on or sell the collateral
granted as security for the loan, including Unilink's shares in Home Cable.  As
a result, the benefit plan could lose its indirect ownership in these shares or
the pledged assets of Home Cable.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In the event the benefit plan's
assets were insufficient to pay the required retirement benefits, PLDT would be
obligated to fund the amount of the shortfall.  In addition, claims of PLDT's
employees for retirement benefits that have accrued would rank above the claims
of all other creditors of PLDT, in the event of PLDT's bankruptcy or
liquidation.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We spent Php943 million for
pension, retirement and similar benefits for our employees for the year 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">For more information about the
benefit plan, see <i>Note 19 &#150; Employees&#146; Benefit Plans</i> to the accompanying
consolidated financial statements in Item 18.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779232"></a><a name="_Toc46082291">Employees' Stock Plan</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Since 1966,
PLDT has had an employees' stock plan under which shares of common capital
stock may be offered and sold to our regular employees, other than directors,
at a discount from market value.  On September 27, 1999, our board of directors
approved the amendments to the employees' stock plan changing the plan name to
&#147;PLDT Stock Purchase Plan&#148; and limiting the coverage of the plan to
rank-and-file and supervisory employees.  These amendments were approved by our
shareholders at a special meeting held on December 10, 1999.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Beginning January 3, 2000 to March 31, 2000, we made our ninth offering under the PLDT Stock Purchase Plan, under which we made available up
to 991,200 shares of common stock to all eligible employees as of January 3, 2000.  The shares were offered at a discounted price of Php877.63 per share,
which was 85% of the average market price of our common share on the PSE on January 3, 2000.  The 36-month installment payment period began on April 30, 2000 and ended last April 15, 2003.  We believe that the PLDT Stock Purchase Plan gives our
employees the opportunity to invest in our company on beneficial terms and
broadens our shareholder base.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779233"></a><a name="_Toc46082292">Legal Proceedings</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On April 10, 2001, a group of private individuals filed a complaint with the Office of the Ombudsman against
former President Joseph Estrada and other individuals, including Mr. Manuel V.
Pangilinan, who, prior to his appointment as our chairman on February 19, 2004, was our president, chief executive officer and one of our directors.
The complaint alleged that the defendants were involved in acts involving
direct and indirect bribery, corruption of public officials, illegal giving or
offering of gifts to public officials and/or &#147;economic plunder.&#148;  In the case
of Mr. Pangilinan, the complaint alleged that a Php20 million check issued by
Mr. Pangilinan was deposited in a bank account owned by former President
Estrada.  The Office of the Ombudsman reviewed the charges against Mr.
Pangilinan to determine whether there is probable cause to warrant prosecution
of the charges before the Sandiganbayan, a special court that hears anti-graft
cases.  The Office of the Ombudsman subsequently concluded that there was
insufficient evidence against Mr. Pangilinan.  We are not aware that any
further investigation has taken place thereafter.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Mr. Pangilinan, in his capacity as
Chairman of the Board of Metro Pacific Corporation, a stockholder of Metro
Tagaytay Land Company, Inc., or MTLCI, and four (4) other individuals are
respondents in I.S. 04-A-1057 for alleged violation of Article
315(1)(b)(&#147;estafa&#148;) of the Revised Penal Code filed by Mr. Vicente A. Tuason on
behalf of Universal Leisure Club, Inc., or ULCI, and Mr. Jose L. Merin on
behalf of Universal Rightfield Property Holdings, Inc., or URPHI.  The case is
now pending preliminary investigation before the Makati Prosecutor&#146;s Office.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In the complaint-affidavit, Messrs.
Tuason and Merin alleged that, in violation of the trust reposed by ULCI and
certain contractual commitments and representations, MTLCI, with the
participation and/or conformity of the respondents, misappropriated and
converted Php139 million that ULCI entrusted for the purpose of incorporating
Golf Land Co., Inc., or GLCI, a corporation to be wholly-owned by MTLCI and to
which a property of MTLCI was to be transferred in exchange for shares in
GLCI.  Said GLCI shares were then supposed to be transferred to ULCI.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Based on counsel&#146;s advice, Mr.
Pangilinan cannot be held liable for violating Article 315(1)(b) of the Revised
Penal Code because no document or other evidence has been presented to prove
that Mr. Pangilinan actually participated in the negotiation, preparation,
approval, execution and/or implementation of the agreement/contract upon which
the claims of the complainants are purportedly based, much less that Mr.
Pangilinan, with abuse of trust and confidence, misappropriated any amounts
paid by ULCI to MTLCI.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On March 25, 2004, Mr. Pangilinan submitted his counter-affidavit in I.S. No. 04-A 1057 and, due to the falsity
of the principal allegations of the complaint-affidavit, he also filed a
compaint-affidavit against Messrs. Tuason and Merin for perjury and unjust
vexation. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779234"></a><a name="_Toc46082293">Item 7.   Major
Shareholders and Related Party Transactions</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">The following table sets forth information regarding
ownership of PLDT common share as of May 31, 2004 of
all shareholders known to us to beneficially own more than 5% of PLDT's common
share.  All shares of PLDT's common stock have one vote per share.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 5.5pt 0in 5.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:94%;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Name
 of Beneficial Owner</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0"><b>Number of Shares</b></p>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Beneficially
 Held(1)</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:93%' style="margin-top:0;margin-bottom:0"><b>Percentage</b></p>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;line-height:93%;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>of
 Class</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style='text-align:right;line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.5pt 0in 5.5pt'>
 <p align=right style=';margin-right:
 13.5pt;text-align:right;line-height:93%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='line-height:12.0pt' style="margin-top:0;margin-bottom:0">First
 Pacific(2)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:12.0pt' style="margin-top:0;margin-bottom:0">53,238,376</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style=';margin-right:
 13.5pt;text-align:right;line-height:12.0pt' style="margin-top:0;margin-bottom:0">31.41</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='line-height:12.0pt' style="margin-top:0;margin-bottom:0">PCD
 Nominee Corporation(3)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:12.0pt' style="margin-top:0;margin-bottom:0">54,089,304</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style=';margin-right:
 13.5pt;text-align:right;line-height:12.0pt' style="margin-top:0;margin-bottom:0">31.91</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='line-height:12.0pt' style="margin-top:0;margin-bottom:0">J.P.
 Morgan Hong Kong Nominees Limited(4)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:12.0pt' style="margin-top:0;margin-bottom:0">25,000,119</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style=';margin-right:
 13.5pt;text-align:right;line-height:12.0pt' style="margin-top:0;margin-bottom:0">14.75</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='line-height:12.0pt' style="margin-top:0;margin-bottom:0">NTT
 Communications(5)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:12.0pt' style="margin-top:0;margin-bottom:0">25,266,971</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style=';margin-right:
 13.5pt;text-align:right;line-height:12.0pt' style="margin-top:0;margin-bottom:0">14.91</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p style='line-height:12.0pt' style="margin-top:0;margin-bottom:0">Social
 Security System(6)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=center style='text-align:center;line-height:12.0pt' style="margin-top:0;margin-bottom:0">12,543,129</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.5pt 0in 5.5pt'>
 <p align=right style=';margin-right:
 13.5pt;text-align:right;line-height:12.0pt' style="margin-top:0;margin-bottom:0">7.40</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&#151;&#151;&#151;&#151;&#151;&#151;&#151;</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(1)</i>   <i>Under
the rules of the Commission, and as used in this table, &#147;beneficial ownership&#148;
means the sole or shared power to vote or direct the voting or to dispose or
direct the disposition of any security.  In addition, a person is deemed to be
the beneficial owner of securities that can be acquired within 60 days, through
the exercise of any option or warrant.  Common stocks subject to options or
warrants that are currently exercisable or exercisable within 60 days are
deemed outstanding for computing the ownership percentage of the person holding
such options or warrants, but are not deemed outstanding for computing the
ownership percentage of any other person.  The amounts and percentages are
based upon 169,519,694 shares of common stock outstanding as of May 31, 2004.</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(2)   Consists of shares held by affiliates of First
Pacific, including 26,034,263 shares held of record by Philippine
Telecommunications Investment Corporation, or PTIC, 6,717,319 shares held of
record and 455,000 shares held in street name by and for Larouge B.V.;
2,919,260 shares held of record by Asia Link, B.V.; and 17,112,534 shares held
of record by Metro Pacific Resources, Inc., or MPRI. Pursuant to resolution
adopted by the board of directors of PTIC, a copy of which had been furnished
to PLDT, the President of PTIC, Mr. Manuel V. Pangilinan, has the continuing
authority to represent PTIC at any and all meetings of the shareholders of a
corporation in which PTIC owns of record or beneficially any shares of stock or
other voting security, and to sign and deliver, in favor of any person he may
deem fit, a proxy or other power of attorney, with full power of delegation and
substitution, authorizing his designated proxy or attorney-in-fact to vote any
and all shares of stock and other voting securities owned of record or
beneficially by PTIC at any and all meetings of the shareholders of the
corporation issuing such shares of stock or voting securities.  Based on
resolution of the Board of MPRI and of the sole shareholder of each of Asia
Link B.V. and Larouge B.V., copies of which had been furnished to PLDT, MPRI&#146;s
board of directors designated MPRI&#146;s President, Mr. Manuel V. Pangilinan was
appointed as authorized representative and proxy to represent each of the
abovenamed companies and to vote their respective shares in PLDT in the Annual
Meeting of Shareholders of PLDT for the year 2004 and to vote the shares
registered in the name of MPRI in the books of PLDT on any and all matters
which may properly come before the shareholders during the aforementioned
meeting.</i></p>

<p style='margin-left:.25in;text-indent:-.25in;line-height:
9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(3)   Registered owner of shares beneficially owned by
participants in the Philippine Central Depository or PCD, a private company
organized to implement an automated book entry system of handling securities
transactions in the </i><i>Philippines</i><i>.</i></p>

<p style='margin-left:.25in;text-indent:-.25in;line-height:
9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(4)   Holds shares as nominee of JPMorgan Chase Bank,
successor depositary of the shares of common stock underlying the American
Depositary Shares (ADSs) each representing one share of common stock of PLDT
and evidenced by American Depositary Receipts (ADRs).  Pursuant to the Common
Stock Deposit Agreement, dated October 14, 1994, as amended on February 10,
2003, if the depositary does not receive voting instructions from a holder of
ADRs, such holder will be deemed to have instructed the depositary to provide a
discretionary proxy to a person designated by PLDT for the purpose of exercising
the voting rights pertaining to the shares of common stock represented by such
holder of ADRs, except that no discretionary proxy will be given with respect
to any matter as to which substantial opposition exists or which materially and
adversely affects the rights of the holders of such ADRs.</i></p>

<p style='margin-left:.25in;text-indent:-.25in;line-height:
9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(5)   On December 11, 2002, NTT Communications Capital
(UK) Limited, or NTTC-UK, and NTT Communications signed an agreement to
transfer NTTC-UK&#146;s ownership of shares in PLDT to NTT Communications to enable
the latter to consolidate its ownership by becoming the direct beneficial owner
thereof.  Prior to this transfer, NTT Communications and NTT were already the
indirect beneficial owners of the PLDT shares held by NTTC-UK, a wholly-owned
subsidiary of NTT Communications.  Inasmuch as NTT Communications is NTT&#146;s
wholly-owned subsidiary, NTT remains to be the indirect beneficial owner of the
shares in PLDT.  In connection with the Annual Meeting of the Shareholders of
PLDT for the year 2004, Mr. Kiyoshi Maeda, an authorized representative of NTT
Communications, executed a proxy in favor of Mr. Manuel V. Pangilinan with full
power of substitution and delegation to vote the PLDT common shares of NTT
Communications at the aforementioned meeting.</i></p>

<p style='margin-left:.25in;text-indent:-.25in;line-height:
9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(6)   Includes 7,518,340 shares held of record by PCD
Nominee Corporation.</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">As of May 31, 2004, approximately 87.4% of the outstanding
capital stock of PLDT was registered in the names of Philippine persons.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779235"></a><a name="_Toc46082295">Related Party Transactions</a></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">Companies within the
PLDT Group are engaged in arm's-length transactions in the ordinary course of
business.  We believe that the terms of these transactions are comparable with
those available from unrelated parties.  The following is a discussion of the
major agreements with or between members of the PLDT Group and related parties.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Agreements
with NTT Communications</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT is a
party to the following agreements with NTT Communications and/or its
affiliates:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Advisory Services
Agreement.   </i>On March 24, 2000,
PLDT entered into an agreement with NTT Communications, as amended on December
31, 2003, under which NTT Communications provides PLDT with technical,
marketing and other consultants for various business areas of PLDT starting
April 1, 2000;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Domestic Fiber Optic
Network Submerged Plant Maintenance Agreement.</i>   On July 4, 2000, PLDT entered into an agreement with NTT World Engineering Marine
Corporation, or NTT WEMC, for the submarine cable repair and other allied
services for the maintenance of PLDT&#146;s DFON submerged plant for a period of
five years up to July 4, 2005.  Under the agreement, PLDT shall pay NTT WEMC a
fixed annual standing charge of US$2 million, excluding cost for the use of a
remotely operated submersible vehicle at US$5,000 for every day of use and
repair cost computed at US$19,000 per day of actual repair;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Arcstar Licensing
Agreement and Arcstar Service Provider Agreement.   </i>On March
 24, 2000, PLDT entered into an
agreement with NTT Worldwide Telecommunications Corporation under which PLDT
markets managed data and other services under NTT Communications&#146; &#147;Arcstar&#148;
brand to its corporate customers in the Philippines.  PLDT also
entered into a Trade Name and Trademark Agreement with NTT Communications under
which PLDT has been given the right to use the tradename &#147;Arcstar&#148; and its
related trademark, logo and symbols, solely for the purpose of PLDT&#146;s
marketing, promotional and sales activities for the Arcstar services within the
Philippines; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Conventional International
Telecommunications Services Agreement.</i>   On March 24, 2000, PLDT entered into an agreement with NTT
Communications under which PLDT and NTT Communications agreed to cooperative
arrangements for conventional international telecommunications services to
enhance their respective international businesses.  </p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Total fees under these agreements amounted to Php288 million,
Php289 million and Php362 million for the years ended December 31, 2003, 2002 and 2001, respectively.  As of December 31, 2003 and 2002, outstanding
obligations of PLDT amounted to Php40 million and Php36 million, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>PLDT Letter of Support in Favor
of Piltel</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In connection with Piltel's debt
restructuring, on June 4, 2001, PLDT issued a letter of support for the benefit
of Piltel and its creditors, under which PLDT is obligated to provide up to a
maximum amount of US$150&nbsp;million to make up shortfalls in Piltel's
operating cash flows.  As of December 31, 2003, US$50 million remained
available under the letter of support.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Agreements between Smart and
Piltel</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">In connection with the integration of their operations, Smart
and Piltel have entered into the following agreements:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An agreement for the
co-location, or sharing, of cellular sites selected at the option of Smart,
whereby Piltel is paid a usage fee of Php45,000 per shared site per month, subject to a 10% annual increase.  Co-location
expenses under this agreement amounted to Php139 million in 2003 and Php151
million in 2002.  On December 18, 2003, Smart made an advance payment of co-location fees under this agreement
amounting to Php783 million covering the period from January 1, 2004 up to December 31, 2008.  The advance payment was based on the rate applicable to 2003
on which the annual escalation rate was applied over the five-year period and
discounted at 10%;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An agreement whereby Smart
manages the operation of Piltel&#146;s cellular system.  This agreement is divided
into three sub-agreements as follows:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.15in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A Facilities Management Agreement under which Smart operates, maintains
and manages the physical facilities and technical services of Piltel&#146;s existing
cellular system.  Piltel pays Smart a fixed monthly fee of Php4 million and a
variable monthly fee of Php13,735 per site covered by the agreement.
Additional fees of Php186,878 per month and Php624 per site per month are
payable at the end of each calendar year upon rendition of the services in
conformity with the agreement.  This agreement was amended in May 2001 to
include the management, operation and maintenance of Piltel&#146;s prepaid wireless
telecommunications network in the E.O. 109 areas in Mindanao including the
business and central offices, base stations, and public calling offices of
Piltel located in South Cotabato, Saranggani and General Santos, Davao City,
Davao del Sur, Zamboanga del Norte, Zamboanga del Sur and Misamis Occidental.
In November 2003, the agreement was further amended to eliminate the monthly
fixed costs of Php4 million and the additional fees of Php186,878 per month and
increase the monthly variable cost to Php27,470 per site and the additional
fees to Php1,248 per site per month;</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.15in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A Customer Service Management Agreement under which Piltel outsources
the operation of its customer service and billing functions for its cellular
system to Smart for a fixed monthly fee of Php9 million and a variable cost of
Php17 per prepaid cellular subscriber.  An additional fee of Php399,926 per
month and Php1.00 per prepaid subscriber per month is payable at the end of
each calendar year upon rendition of the services in accordance with the
agreement; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.15in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An Administrative Support and Management Services Agreement under which
Smart provides administrative support and services to Piltel including payroll
administration and training, finance and financial accounting, audit, legal,
purchasing and materials management, public affairs, information technology,
rates and tariffs administration, sales and marketing, product development and
carrier services for a fixed monthly fee of Php8 million.  An additional fee of
Php353,764 per month is payable at the end of each calendar year upon rendition
of the services in accordance with the agreement.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:81.0pt' style="margin-top:0;margin-bottom:0">This agreement was amended in
December 2002 to include the provision of sales and distribution services for
Piltel&#146;s products and services.  Piltel pays Smart the residual percentage
discount between Piltel&#146;s prescribed distributor discount rate and the discount
rate that Smart gives to its retailers and wholesalers for the sale of prepaid
cards and the residual commission between Piltel&#146;s prescribed discount and the
discount that Smart extends to its retailers and wholesalers for phonekit and
SIM pack sales.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total
management fees under these three sub-agreements totaled Php721 million, Php661
million and Php540 million for the years ended December 31, 2003, 2002 and 2001, respectively.  Under these agreements, outstanding receivables of Smart as of
 December 31, 2003 and 2002 amounted to Php906 million and Php569 million,
respectively.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A Facilities Service Agreement under which Piltel accesses
Smart&#146;s existing GSM network and facilities to enable Piltel to offer prepaid
cellular service using GSM technology in exchange for approximately 50% of
Piltel&#146;s revenues, net of interconnection expenses.  In December 2003, this
agreement was amended to change the basis of computation of the facility
service fee from card sales to usage, retroactive to January 1, 2003.  Total fees under this agreement amounted to Php4,247 million, Php2,494 million and
Php1,647 million for the years ended December 31, 2003, 2002 and 2001,
respectively.  Under this agreement, outstanding receivables of Smart amounted
to Php633 million and Php247 million as of December 31, 2003 and 2002, respectively. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A Billing Service Agreement for the printing and delivery of the
billing statements of Piltel&#146;s LEC subscribers.  Under the agreement, Piltel agrees
to pay Smart an average of Php4.60 per bill printed and an average of Php5.40
per bill delivered.  Total fees under this agreement amounted to Php6 million
and Php4 million for the years ended December 31, 2003 and 2002, respectively.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Facilities Management Agreement between PLDT and Piltel </i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On July 19, 2001, PLDT entered into
a Facilities Management Agreement with Piltel under which PLDT undertakes the
management, operation and maintenance of Piltel&#146;s regional telecommunication
and E.O. 109, network operations and services, including E.O. 109 fixed line
build-out installations, public calling offices and payphone facilities and the
systems required to support these services.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The agreement covers Piltel&#146;s
regional telecommunication services in Baguio, Puerto Princesa, Masbate, and
Boac and E.O. 109 services in Alabel, Banga, Dapitan, Davao, Digos, Dipolog,
General Santos, Kiamba, Koronadal, Pagadian, Polomolok and Surallah in Mindanao.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the agreement, PLDT also
undertakes the management of the computer system, billing, revenue assurance
and inter-carrier settlements reporting of Piltel&#146;s regional telecommunication
services in Olongapo and Subic.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">The monthly management
fee payable by Piltel is based on cost, and for cost components where margin is
allowed, 15% is applied.  All third party invoices are passed on to Piltel at
cost, including value-added tax.</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">The agreement supersedes the
Facilities Management Agreement between PLDT and Piltel, dated May 12, 2000,
under which PLDT undertook the management, maintenance and operation of the
regional telecommunication services of Piltel, including public calling offices
and payphone operations located in Baguio City, Puerto Princesa, Boac and
Masbate.  The new agreement is effective for three years from July 2001 to July
2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Total management fees under these
agreements amounted to Php52 million for each of the years ended December 31, 2003 and 2002 and Php118 million for the year ended December 31, 2001.  Fees for billing services amounted to Php18 million, Php19 million and Php17
million for the years ended December 31, 2003, 2002 and 2001, respectively.
Outstanding receivables of PLDT under these agreements amounted to Php329
million and Php258 million as of December 31, 2003 and 2002, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Facilities Management Agreement between Piltel and </i><i>Subic</i><i>
Telecom</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On September 5, 2001, Piltel and Subic Telecom entered into a Facilities Management Agreement of the regional
telephone network, customer operations, network operations and payphones of Piltel
in Subic and Olongapo City.  The monthly management fee payable by Piltel is
based on cost, and for cost components where margin is allowed, 15% is
applied.  In addition, Piltel pays a monthly variable cost per account in the
amount of Php44 for repairs and maintenance.  All third party invoices are
passed on to Piltel at cost, including value-added tax.  This agreement
supersedes the facilities management agreement entered into by Piltel and Subic
Telecom on May 29, 2000.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Total management fees under this
agreement amounted to Php21 million, Php22 million and Php24 million for the
years ended December 31, 2003, 2002 and 2001, respectively.  The new agreement
is effective for three years until September 2004.  Outstanding receivables of
Subic Telecom under this agreement amounted to Php11 million and Php2 million
as of December 31, 2003 and 2002, respectively. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Air Time Purchase
Agreement between PLDT and PT Asia Cellular Satellite and Related Agreements</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In March
1997, PLDT entered into a Founder NSP Air Time Purchase Agreement, or ATPA with
PT Asia Cellular Satellite, as amended in December 1998, under which PLDT was
granted the exclusive right to sell ACeS services in the Philippines.  In
exchange, the Air Time Purchase Agreement states that PLDT has to purchase from
PT Asia Cellular Satellite at least US$5 million worth of air time annually
over ten years, commencing on the date of commercial operations, which has been
set as January 1, 2002.  The commercial operations date is defined as the
earlier of:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the day on which PT Asia Cellular Satellite places the Garuda I
satellite in commercial operation; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the date of final acceptance of the Garuda I satellite and
associated equipment under the terms of the Spacecraft Contract, dated August
28, 1995, between PT Asia Cellular Satellite and Martin Marietta Overseas
Corporation.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">However, the commercial operations
date may not occur without the consent of PLDT if there is a constructive total
loss or partial loss of the satellite under its launch insurance contract and
the satellite cannot provide commercial service in the Philippines.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In the event that PT Asia Cellular
Satellite&#146;s aggregate billing revenue is less than US$45 million in any given
year, the Air Time Purchase Agreement states that PLDT has to make supplemental
air time purchase payments not to exceed US$15 million per year during the
ten-year term.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">PLDT and the other founder NSPs are endeavoring to amend the Air
Time Purchase Agreement due to the occurrence of partial satellite loss,
changes in the primary business of ACeS and other events affecting the
business.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In March
2003, PLDT, together with the other founder NSPs, entered into a Standstill
Agreement with AIL suspending the application and enforcement of the minimum
and supplemental air time payments under the original Air Time Purchase
Agreement.  In lieu of these payments, the parties agreed that AIL shall
provide PLDT and the other founder shareholders, with unlimited use of air time
for the year 2003 in exchange for a fixed fee in the amount of US$3.8 million
for PLDT.  PLDT was also obliged to purchase from AIL 13,750 satellite phone
units in 2003 at US$395 F.O.B. per unit, subject to quarterly price
adjustment.  The parties to the Standstill Agreement also agreed to negotiate
in good faith and use their best efforts to reach an agreement on a revised Air
Time Purchase Agreement before November 15, 2003 that will cover, among other
matters, the amended minimum and supplemental air time payment provisions
subject to the approval of AIL&#146;s creditors.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">On February 10, 2004, notwithstanding the on-going negotiations,
AIL advised PLDT of the termination of the Standstill Agreement and the
reinstatement of the terms under the original Air Time Purchase Agreement
following the lapse of the deadline set in the Standstill Agreement for the
establishment of a revised Air Time Purchase Agreement.  See <i>Note 18
&#150;Related Party Transactions </i>to the accompanying consolidated financial
statements in Item 18 for further discussion.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT also entered into a Founder
NSP Operating Agreement with PT Asia Cellular Satellite on March 12, 1997, under which PLDT may:</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
authorize distributors to
resell ACeS services in the Philippines upon prior approval from PT Asia Cellular
Satellite; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
appoint agents to solicit and
bill PLDT&#146;s or its authorized distributors&#146; subscribers for ACeS services and
to sell terminals on behalf of PLDT.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under an Assignment and Assumption
Agreement dated December 29, 1998, PT Asia Cellular Satellite agreed to assign
and transfer to AIL all of PT Asia Cellular Satellite&#146;s rights under the
Founder NSP Air Time Purchase Agreement and Founder NSP Operating Agreement.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under an Acknowledgment of
Assignment of Air time Purchase Agreement entered into on December&nbsp;29,
1998, by and among PLDT, P.T. Bank Internasional Indonesia and AIL, PLDT
consented to the assignment by AIL of the Founder NSP Air time Purchase
Agreement to P.T. Bank Internasional Indonesia, as security agent, for the
benefit of the secured parties under the Security Agreement dated as of
December 29, 1998, which was executed in connection with the Amended and
Restated Credit Agreement dated December 29, 1998 among PT Asia Cellular
Satellite, AIL, P.T. Bank Internasional Indonesia and various other banks.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">On September 30, 2002, PT Asia Cellular Satellite, AIL, as
guarantor, P.T. Bank International Indonesia, as security agent, and various
other banks signed a Rescheduling Agreement, which amended the terms of the
Amended and Restated Credit Agreement dated December 29, 1998, moving the
principal repayment dates to agreed periods with the final maturity date on
January 31, 2012.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><i>Transponder Lease Agreement</i> <i>between PLDT and
Mabuhay Satellite </i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On December 28, 1995, PLDT and Mabuhay Satellite entered into a Transponder Lease Agreement, as amended on May 10, 2000, pursuant to which Mabuhay Satellite leases to PLDT C-band transponders on
board the Agila II satellite, in consideration of a basic rent.  This agreement
has a term of ten years commencing on December 18, 1997, unless earlier terminated
in accordance with the terms thereof.  Originally, the lease covered 14 C-band
transponders, however, on December 18, 2000, PLDT terminated the Transponder
Lease Agreement with respect to four transponders which service was interrupted
and not restored resulting in PLDT&#146;s inability to access and use the
transponders.  This was further reduced to eight C-band transponders on December 18, 2002.  The annual basic rent for the transponders is approximately US$14
million with US$1.8 million annual lease per transponder.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Under an Acknowledgment and Consent Agreement dated January 4, 1996, PLDT acknowledged and consented to Mabuhay Satellite's:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
transfer and assignment of all amounts payable by PLDT under the
Transponder Lease Agreement; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
grant of a continuing security interest of first priority in all
of Mabuhay Satellite's rights, title and interest in, to and under the
Transponder Lease Agreement, in favor of the collateral agent for the benefit
of the lenders who are parties to the Omnibus Credit and Security Agreement
dated December 14, 1995, as amended.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Total fees under these agreements amounted to Php747 million,
Php925 million and Php927 million for the years ended December 31, 2003, 2002 and 2001, respectively.  Outstanding obligations of PLDT under these
agreements amounted to Php26 million and Php270 million as of December 31, 2003 and 2002, respectively.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><i>Agreements between Smart and ACeS </i><i>Philippines</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;text-indent:.5in' style="margin-top:0;margin-bottom:0">On July 18, 2000, Smart entered
into a Service Distribution Agreement with ACeS Philippines under which ACeS
Philippines appointed Smart as an authorized service provider of ACeS Global
Mobile Personal Communication by Satellite Services, or GMPCS Services, in the
Philippines having the task of exerting its best efforts to market and sell
access to usage of the said services to prospective subscribers.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">An amendment to this Service Distribution Agreement was made on
February 16, 2001, whereby Smart shall remit to ACeS Philippines a Facility
Usage Fee based on a revenue sharing formula.  ACeS Philippines shall in turn
pay Smart&#146;s charges for the payphone-related services.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Also on February 16, 2001, Smart entered into a Facilities
Management Agreement, or FMA, and Administrative Support and Management
Services Agreement, or the Service Agreement, with ACeS Philippines.  In
exchange for its services, Smart shall receive fixed and variable monthly fees
from ACeS Philippines.  Under the FMA, Smart undertakes the management,
maintenance and operation of the ACeS GMPCS Services, which are currently ready
and available for actual use or operation.  Under the Service Agreement, Smart
shall provide certain administrative support and services in certain aspects of
ACeS Philippines&#146; business operations such as payroll administration and
training, finance, audit, legal, purchasing and materials management, public
affairs, information technology, sales and marketing, ACeS Philippines NSP
relations, AIL relations and other support services.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;text-indent:.5in' style="margin-top:0;margin-bottom:0">Total fees under these agreements,
net of Smart&#146;s share, amounted to Php12
million for the years ended December 31, 2003 and 2002 and Php17 million for the year ended December 31, 2001.  Smart had no outstanding
obligation as of December
 31, 2003 and 2002.</p>

<p align=left style='text-align:left' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:0in' style="margin-top:0;margin-bottom:0"><i>Agreements between Smart and </i><i>Asia</i><i>
Link B.V</i>.<i>, or ALBV</i></p>

<p style="margin-top:0;margin-bottom:0">Smart has an existing Technical Assistance Agreement with ALBV
for the latter to provide technical support services and assistance in the
operations and maintenance of CMTS for a period of five years, subject to
renewal upon mutual agreement between the parties.  The agreement provides for
quarterly payments of technical service fees equivalent to 2% of the net
revenues of Smart.  In January 2003, the agreement was amended, reducing the
technical service fees to be paid by Smart to ALBV to 1% of net revenues
effective January 1, 2003.</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Smart also has an existing Services Agreement with ALBV for a
period of 25 years starting January 1, 1999, which shall automatically expire
unless renewed by mutual agreement of both parties.  Under the agreement, ALBV
provides advice and assistance to Smart in sourcing capital equipment and
negotiating with international suppliers, arranging international financing and
other services therein consistent with and for the furtherance of the
objectives of the services.  Services Agreement fees were prepaid for the whole
25-year period.</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">ALBV is a subsidiary of the First
Pacific Group.</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">Total fees under these agreements amounted
to Php429 million for each of the years ended December 31, 2003 and 2002, and
Php249 million for the year ended December 31, 2001.
Outstanding obligations of Smart under the Technical Service Agreement amounted
to Php228 million and Php31 million as of December 31, 2003
and 2002, respectively.</p>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:
..5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:0in;text-indent:0in' style="margin-top:0;margin-bottom:0"><i>Agreements relating to insurance companies</i></p>

<p style='margin-left:0in;text-indent:.5in' style="margin-top:0;margin-bottom:0">Gotuaco del Rosario and Associates, or Gotuaco, acts
as the broker for certain insurance companies to cover certain insurable
properties of the PLDT Group.  Insurance premiums are remitted to Gotuaco and
the brokers&#146; fees are settled between Gotuaco and the insurance companies.  In
addition, PLDT has signed an insurance policy with Malayan Insurance Co.  Inc.,
or Malayan, wherein premiums are paid directly to Malayan.  Total payments to
Gotuaco and Malayan in 2003 covering the 12-month period ending July 31, 2004
amounted to Php447 million.  Two directors of PLDT have a direct/indirect
interest in or serve as director/officer of Gotuaco and Malayan.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Other Transactions</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT, Smart, Piltel, Clark Telecom,
Subic Telecom and Maratel are parties to various interconnection agreements
with each other.  The terms of these agreements are similar to the terms of
other interconnection agreements with telecommunications providers that are not
affiliated with PLDT.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On December 9, 2002, PLDT
transferred and conveyed to Smart certain inland and submarine domestic fiber
optic cable loops, digital transmission equipment and corresponding network
management systems with an aggregate net book value of Php4,138
million, as consideration and in exchange for 298 million preferred shares of
Smart subscribed by PLDT at Php13.875 per
share, or a total subscription price of Php4,138
million.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As part of our strategy to foster
operational efficiencies within the PLDT Group, Subic Telecom conveyed the
management of certain of its receivables to PLDT Global on August 1, 2003.  In addition, negotiations were ongoing as of December 31, 2003 for the transfer of
certain of Subic Telecom&#146;s assets to PLDT.  Settlement of the transfer is
intended to be in the form of offsetting arrangements.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">There have been no
loans between PLDT and any related party during the period beginning January 1, 2003 through the date of filing of this annual report.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Except for the transactions described above and the
related party transactions discussed in <i>Note 18 &#150; Related Party Transactions</i>
to the accompanying consolidated financial statements in Item 18, there were no
other material transactions during the last two years, nor there are any
material transactions currently proposed, to which PLDT was or is to be a
party, in which a director or key officer or owner of more than 10% of the
common shares of PLDT, or any member of the immediate family of a director or
key officer or owner of more than 10% of the common shares of PLDT had or is to
have a direct or indirect material interest.  In the ordinary course of
business, PLDT has transactions with other companies in which some of such
persons may have an interest.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">No director or officer of PLDT or
associate of any such director or officer was indebted to PLDT at any time
during the period from January 1, 2003 through the date of filing of this
annual report.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779236"></a><a name="_Toc46082296">Item 8.   Financial
Information</a></p>

<p style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779237"></a><a name="_Toc46082297">Consolidated Statements and Other Financial Information</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Consolidated financial statements
are set forth under &#147;Item 18. Financial Statements.&#148;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779238"></a><a name="_Toc46082298">Legal Proceedings</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Except as disclosed in the following paragraphs, PLDT is not a
party to, and none of its property is subject to, any pending legal proceedings
which PLDT considers to be potentially material to its business.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Quo Warranto Action</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">On June 4, 1990, the Solicitor General of the Philippines
instituted legal proceedings in the Regional Trial Court of Makati City seeking
to &quot;oust Philippine Long Distance Telephone Company (PLDT) from exercising
its franchise and/or to revoke, cancel and/or pre-terminate its franchise (Act
No. 3436, as amended) and/or to break up an unlawful monopoly and give equal
and fair opportunity to other service corporations.&quot;  The Solicitor
General cited constitutional and statutory grounds for his action.  These
include alleged foreign investors' participation in the control and management
of PLDT on a basis disproportionate to their holdings of PLDT's capital stock,
violation of the requirement that 60% of the capital of a public utility be
owned by Philippine citizens, inadequate and costly equipment and service, and
blocking of the right of other parties to provide telephone service in the
Philippines.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We believe that these allegations
are without merit.  The Philippine Congress granted PLDT's amended franchise
under R.A. 7082 notwithstanding the existence of these proceedings and the
opposition of the Solicitor General.  The case has been archived by virtue of a
court order dated January 20, 1999.  No further action has been taken and the
case remains inactive.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Victor C. Fernandez</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On December 9, 1999, a holder of preferred shares of PLDT, Victor C. Fernandez, filed a petition against the
incumbent directors of PLDT questioning the validity of the resolutions of the
board of directors of PLDT then authorizing the acquisition of Smart.
Fernandez claimed that he would suffer injury from dilution of his shares and
the possible revocation of PLDT's franchise in view of the violation of the
Philippine Constitution's foreign equity restrictions if these resolutions were
implemented.  Fernandez also claimed that the approval rights to be granted to
NTT Communications in connection with the Smart acquisition would constitute
foreign intervention in the management and operation of a public utility and
that the Smart shares being acquired by PLDT were overvalued.  The respondent
directors denied all these claims and have articulated their legal arguments in
their answer to the complaint.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Fernandez's application for a
restraining order to enjoin the holding of the PLDT shareholders' meeting on December 10, 1999 was denied by the Philippine SEC.  At this meeting, the shareholders
approved the resolutions passed by the board of directors authorizing the
acquisition of Smart.  On June 20, 2000, Fernandez's application for a writ of
preliminary injunction was denied.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">In view of the provisions of R.A. 8799 enacted in July
2000, referred to as the Securities Regulations Code, transferring the
jurisdiction of intra-corporate controversies to the Regional Trial Court, the
Philippine SEC transferred the case to the Regional Trial Court of Manila.  By
a motion filed by the parties, the case was later ordered transferred to the
proper venue, the Regional Trial Court of Makati City and was raffled to Branch 142 of the Regional Trial Court of Makati City (the &#147;Makati Court&#148;).</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">During the pre-trial hearing, the parties agreed to
limit the resolution of the case to merely issues of law except for the issue
on respondent directors&#146; counterclaims.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">The transactions subject of the suit (&#147;Questioned
Transactions&#148;) were limited to PLDT&#146;s acquisition of Smart and NTT&#146;s entry into
PLDT and the issues to be resolved were limited to whether (a) the remaining
Questioned Transactions violate the constitutional limitations on foreign
equity in public utilities, The Foreign Investments Act and the Anti-Dummy Law;
(b) the Questioned Transactions result in a monopoly; and (c) Fernandez is
entitled to annul the Questioned Transactions.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Makati Court in its decision
dated February 21, 2002 (the &#147;Decision&#148;) held that the Questioned Transactions
&#147;resulting from resolutions which have been approved by PLDT&#146;s shareholders and
government regulatory agencies, such as the NTC and the SEC, are valid and
legal&#148; and thus dismissed the petition of Fernandez.  On April 14, 2003, Fernandez filed with the Supreme Court a petition for review on certiorari seeking a
review of the Decision (the &#147;Petition&#148;).</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Prior to the scheduled hearing on the counterclaims of
the respondent directors, Fernandez filed on April 29, 2003, a motion for the
suspension of the proceedings pending resolution by the Supreme Court of the
Petition (the &#147;Motion for Suspension&#148;).  The Motion for Suspension was denied
by the Makati Court and the hearing for the reception of evidence on the
respondent directors&#146; counterclaims was set.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">On May 22, 2003, Fernandez filed a motion to refer the Petition to
the Supreme Court <i>En Banc </i>(the<i> &#147;</i>Motion for Referral to SC<i> En
Banc</i>&#148;)<i>. </i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Subsequently, the Supreme Court in a resolution dated June 9, 2003 denied
the Petition and in a resolution dated July 9, 2003,
also denied the Motion for Referral to SC <i>En Banc</i>.  On July 22, 2003,
Fernandez filed a motion for reconsideration of the resolution denying the
Petition (the &#147;Motion for Reconsideration&#148;), and in a manifestation and motion
dated August 15, 2003, moved for a reconsideration of the Resolution denying
the Motion for Referral to the SC <i>En Banc</i>.  The respondent directors
filed their comment on the Motion for Reconsideration on December 15, 2003.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On August 8, 2003, the Makati Court scheduled the presentation
of evidence pertaining to each of the counterclaims of the respondent directors
for moral and exemplary damages.  The respondent directors no longer testified
on their counterclaims during the September 2, 2003 hearing.  On December 4, 2003, Fernandez filed a demurrer to evidence (&#147;demurrer&#148;) and moved for the
dismissal of the respondents&#146; counterclaims, which the respondent directors
opposed.  In an Order dated February 27, 2004, (the &#147;Order&#148;), the Makati Court
granted the Demurrer and dismissed respondent directors counterclaims for moral
and exemplary damages and attorney&#146;s fees citing the lack of clear and
convincing evidence to show malice or bad faith on the part of Fernandez in
respect of the filing of the case.  The respondent directors filed their motion
for reconsideration of the Order on March 24, 2004 and the hearing on the
motion for reconsideration was scheduled on April 23, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Taxation</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>NTC Fees</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">Since 1976, PLDT has received assessments from NTC for permit,
supervision and regulation fees, or SRF, and other charges pursuant to Section
40 of Commonwealth Act 146, otherwise known as the Public Service Act.  As of December 31, 2003, PLDT has paid a total amount of Php1,483 million in SRF, of which
Php1,301 million were paid under protest. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT is contesting the manner by
which these assessments were calculated and the basis for such calculations.
The case is now with the Supreme Court and upon the rules and practice of
court, now stands submitted for decision.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart and Piltel have similarly
received assessments from NTC for permit, SRF and other charges which were paid
under protest.  Total payments made by Smart amounted to Php122 million in
2003, Php114 million in 2002 and Php86 million in 2001.  Total payments made by
Piltel amounted to Php9 million in 2002 and Php68 million in 2001.  There was
no payment made by Piltel in 2003.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have made
a reasonable estimate of the amount necessary to pay or settle the contested
assessment in the event of an unfavorable judgment against us and have made the
appropriate provisions in our consolidated financial statements as of December 31, 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Local
Business and Franchise Taxes</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">PLDT is presently a party to several cases involving
the issue of exemption of PLDT from local franchise and business taxes.  PLDT
believes, based on the opinion of its legal counsel, that it is exempt from
payment of local franchise and business taxes.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">The Local Government Code of 1991, or R.A. 7160, which
took effect on January 1, 1992, extended to LGUs the power to tax business within
their territorial jurisdiction granted under Batas Pambansa No. 337 and
withdrew tax exemptions previously granted to franchise grantees under Section
12 of R.A. 7082.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">PLDT believes, based on the opinion of its legal
counsel, that R.A. 7925, which took effect on March 16, 1995, and the grant of
similar local franchise and business taxes exemption privileges to other
franchise holders subsequent to the effectivity of R.A. 7160, implicitly
restored its local franchise and business taxes exemption privilege under
Section 12 of R.A. 7082, or the PLDT Franchise, pursuant to Section 23 thereof,
or the equality of treatment clause.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">To confirm this position, PLDT sought and obtained on June 2, 1998 a ruling
from the Bureau of Local Government Finance, or BLGF, of the Philippine
Department of Finance which ruled that PLDT is exempt from the payment of local
franchise and business taxes imposable by LGUs under R.A. 7160.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">By virtue of the BLGF Ruling, PLDT stopped paying
local franchise and business taxes starting with the fourth quarter of 1998 and
has filed with certain LGUs claims for tax refund covering the period from the
second quarter of 1995 to the third quarter of 1998.  PLDT has received
assessments for local franchise and business taxes from several cities and
provinces following PLDT&#146;s decision to stop payment of local franchise and
business taxes.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">Following a decision of the Supreme Court on March 25, 2003, a
judgment in the amount of Php4 million against PLDT involving the City of Davao became
final and executory on April 9, 2003, pursuant to which PLDT was not exempt from the local
franchise tax.  Although PLDT believes that it is not liable to pay local
franchise and business taxes, PLDT has taken steps to arrive at compromise
settlements with several LGUs in order to maintain and preserve its good
standing and relationship with these LGUs.  PLDT has paid a total amount of
Php170 million as of December 31, 2003 for local franchise tax covering the fourth quarter
of 1998 to 2003 to certain LGUs which have agreed to a compromise settlement.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">PLDT continues to contest assessments amounting to
Php5,142 million as of December 31, 2003, a number of which were based on the gross revenues
of PLDT derived from its operations within the entire Philippines.
PLDT claims that assuming that it is liable for local franchise tax, R.A. 7160
provides that local franchise tax shall be based on the gross receipts of the
preceding year received or collected for services rendered within the jurisdiction
of the taxing authority.  Therefore, the use by some LGUs of gross revenues as
the basis for computation of franchise tax is in gross violation of the law
because it pertains to all income earned regardless of whether it was received
or not, unlike gross receipts which are essentially the amount of money or its
equivalent actually or constructively received.  Moreover, gross revenues refer
to all income earned by PLDT within and outside the jurisdiction of the local
taxing authority; thus, the use thereof as a basis of computation will
exceptionally overstate the local franchise tax.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">In a petition recently filed with the Supreme Court
involving another LGU, PLDT has appealed to the Supreme Court for a
re-examination of its decision in the City of Davao case in light of the strong
dissenting opinion in that case concurred in by four other Members of the
Supreme Court.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart has, likewise,
received assessments for local franchise and business taxes from certain cities
and provinces in the aggregate amount of Php313 million, which Smart continues
to contest.  Smart believes, based on the opinion of its legal counsel, that
Smart is not liable to pay the local franchise and business taxes by virtue of
(i) the opinion issued by the BLGF dated August 13, 1998; and (ii) Smart&#146;s
exemption under its legislative franchise which took effect after the effective
date of R.A. 7160.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;punctuation-wrap:hanging' style="margin-top:0;margin-bottom:0">Piltel
also received assessments from the local government of the City of Makati in
the aggregate amount of Php45 million covering the period from 1999 to 2001.
Piltel has formally protested the assessments, based on: (1) Piltel&#146;s belief
that the opinion rendered by the BLGF for Smart should likewise hold true for
Piltel; and (2) the effective date of the legislative franchise of Piltel (R.A.
7293) which came after the effectivity of R.A.7160.  The franchise tax
prescribed under Section 137 of the Local Government Code is deemed part of the
Piltel franchise (the later law) which states, among other things, that Piltel
shall pay only a franchise tax equivalent to three percent of all gross
receipts of the business transacted under its franchise and such percentage
shall be in lieu of all taxes on the franchise or earnings thereof.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have made a
reasonable estimate of the amount necessary to pay or settle the contested
assessment in the event of an unfavorable judgment against us and have made the
appropriate provisions in our consolidated financial statements as of December 31, 2003.  </p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Mabuhay Satellite
Arbitration</p>

<p style="margin-top:0;margin-bottom:0">Mabuhay
Satellite was engaged in an arbitration commenced by Space Systems Loral, Inc.,
or SS/L, as a result of a dispute between the parties concerning their
satellite joint venture.  On June 5, 2002, Mabuhay Satellite received an arbitration decision
requiring Mabuhay Satellite to pay SS/L the principal amount of approximately
US$10 million, plus accrued interest representing Mabuhay Satellite&#146;s unpaid
balance for its 65% equity share in the joint venture.  On June 30, 2003,
Mabuhay Satellite and SS/L concluded a settlement agreement whereby Mabuhay
will lease two (2) transponders under a transponder agreement on a full-term
basis to SS/L and offset the lease charges due from Loral Skynet Network
Services, Inc. (formerly Loral Cybestar, Inc.), an affiliate of SS/L, among others
for a full and final settlement of the arbitration decision.  See <i>Note 8 &#150;
Investments</i> to the accompanying consolidated financial statements in Item
18 for further discussion.</p>

<p style="margin-top:0;margin-bottom:0">U.S. Federal Communications Commission, or FCC, Ruling
versus Philippine Telecommunications Companies</p>

<p style="margin-top:0;margin-bottom:0">Effective as of February 1, 2003,
PLDT stopped terminating traffic sent directly by each of AT&amp;T and MCI,
because PLDT&#146;s termination rate agreements with AT&amp;T and MCI lapsed in
December 2002 without either agreeing with PLDT on any provisional arrangement
or final agreement on new termination rates. In orders dated February 7 and 26,
2003, the National Telecommunications Commission, or NTC, confirmed that
&#147;absent any provisional or interim agreement&#148; with U.S. carriers,
there would be no provision of termination services between the parties &#147;who
are thereby encouraged to seek other routes or options to terminate traffic to
the Philippines.&#148; Upon petitions of AT&amp;T and MCI, on March 10,
2003, the International Bureau of the U.S. FCC issued an Order which directed
all facilities-based carriers subject to U.S. FCC jurisdiction to suspend
payments for termination services to Philippine carriers, including PLDT, Smart
and Subic Telecom, until such time as the U.S. FCC issues a Public Notice that
AT&amp;T&#146;s and MCI&#146;s circuits on the U.S.&#150;Philippine route are fully restored.
The Order also removed the Philippines from the list of U.S.&#150;international routes approved
for the provision of International Simple Resale, or ISR. In response to the
International Bureau&#146;s Order, the NTC issued a Memorandum Order dated March 12,
2003, directing all affected Philippine carriers &#147;(1) not to accept terminating
traffic via direct circuits from U.S. facilities-based carriers who do not pay
Philippine carriers for services rendered; and (2) to take all measures
necessary to collect payments for services rendered in order to preserve the
viability, efficiency, sustained growth and development and continued
competitiveness of the Philippine telecommunications industry.&#148;</p>

<p style="margin-top:0;margin-bottom:0">On October 17,
2003, based on negotiations between the NTC and the U.S. FCC to resolve the
issue regarding termination rates, the NTC, in the expectation that the U.S.
FCC would fully lift the March 10, 2003 Order, lifted its March 12, 2003 Order
and directed all Philippine carriers to immediately accept terminating traffic
via direct circuits from U.S. facilities-based carriers at mutually acceptable
final or interim termination rates and other terms and conditions agreed upon
by the parties.</p>

<p style="margin-top:0;margin-bottom:0">On November 17,
2003, after Smart reached interim agreements with each of AT&amp;T and MCI on
September 30 and November 12, 2003, respectively, the International Bureau of
the U.S. FCC lifted its March 10, 2003 Order with respect to Smart and ordered
the U.S. carriers to resume making payments to Smart.</p>

<p style="margin-top:0;margin-bottom:0">On January 15,
2004, after PLDT reached interim agreements with each of MCI and AT&amp;T and
reopened its circuits with these carriers on November 12, 2003 and January 9,
2004, respectively, the International Bureau of the U.S. FCC lifted its March
10, 2003 Order also with respect to PLDT and ordered the U.S. carriers to
resume making payments to PLDT.</p>

<p style="margin-top:0;margin-bottom:0">On May 13, 2004,
the U.S. FCC partially dismissed and partially denied applications by
Philippine carriers, including PLDT, and certain U.S. carriers for review of
the March 10, 2003 Order of the International Bureau of the U.S. FCC.  In
particular, the U.S. FCC affirmed the March 10, 2003
Order&#146;s finding that &#147;Philippine carriers engaged in collective action to
&#147;whipsaw&#148; AT&amp;T and MCI.&#148; The U.S. FCC stated, however, that the findings of
the March 10, 2003 Order were not findings under the U.S.
anti-trust laws and that the U.S. Department of Justice is independently
&#147;investigating the possibility of anticompetitive practices among Philippine
carriers under its authority pursuant to U.S. anti-trust laws.&#148;  The U.S. FCC also upheld the March 10, 2003 Order
in respect of the suspension of payments for termination services to the
Philippine carriers pending restoration of the circuits.  In addition, the U.S.
FCC denied a request to modify the March 10, 2003 Order of the International
Bureau of the U.S. FCC to restore the Philippines to the list of
U.S.-international routes approved for the provision of ISR and to eliminate
the current requirement that U.S. carriers make payments in accordance with the
U.S. FCC&#146;s International Settlements Policy.  Moreover, in a recently announced
order, the U.S. FCC has omitted the Philippines from the list of countries exempted from the U.S.
FCC&#146;s International Settlements Policy.  These requests were dismissed because
the U.S. FCC&#146;s recently adopted International Settlements Policy Reform Order
eliminated ISR policies and identified the U.S.-Philippines route as eligible
for the newly established process of removing the International Settlements
Policy.  This process will begin with an opportunity for the public to file
comments with the U.S. FCC on June 28,
 2004.</p>

<p style="margin-top:0;margin-bottom:0">As of December
31, 2003, the remaining receivables from U.S. carriers amounted to approximately
US$28 million, of which US$17 million was attributable to PLDT, US$6 million to
Smart and US$5 million to Subic Telecom.</p>

<p style="margin-top:0;margin-bottom:0">Investigation by U.S.
Department of Justice<b> </b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In January 2004, PLDT, a
PLDT employee and an employee of Smart received grand jury subpoenas seeking
documents and testimony in connection with a criminal investigation being
conducted by the U.S. Department of Justice with respect to alleged antitrust
violations relating to the provision of international termination services in
the Philippines.  The U.S. Department of Justice has also requested testimony
and documents from Smart in connection with this investigation.  Moreover, in
March 2004, PLDT (US) Ltd., a subsidiary of PLDT Global, also received a grand
jury subpoena seeking documents in connection with this investigation.  At this
time, PLDT cannot predict the outcome of this investigation.  See <i>Note 28 &#150; Other
Matters(e)</i> to the accompanying
consolidated financial statements in Item 18.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779239"></a><a
name="_DV_M2"></a><a name="_DV_M3"></a><a name="_DV_M4"></a><a name="_DV_M5"></a><a
name="_DV_M6"></a><a name="_DV_M7"></a><a name="_DV_M8"></a><a name="_DV_M9"></a><a
name="_DV_M10"></a><a name="_DV_M11"></a><a name="_DV_M12"></a><a name="_DV_M13"></a><a
name="_DV_M14"></a><a name="_DV_M15"></a><a name="_DV_M16"></a>Dividend Distribution Policy</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The most recent dividend
declaration made by PLDT in respect of its common shares was in March 2001.
PLDT continues to pay dividends in respect of its preferred shares.  The
current policy of PLDT is to thoroughly analyze its ability to declare and pay
dividends, regularly taking into consideration the interests of its
shareholders as well as PLDT&#146;s working capital, capital expenditure and debt
service requirements.  PLDT also takes into account the prohibitions and
restrictions under certain of its debt instruments with respect to the
declaration and payment of dividends as discussed in &#147;Item 5. Operating and
Financial Review and Prospects &#151; Liquidity and Capital Resources &#151; Financing
Activities &#151; Debt Financing &#151; Covenants&#148;, &#147;Item 10. Additional Information &#151;
Articles of Incorporation and By-Laws &#151; Dividends&#148; and in <i>Note 16 &#150;
Preferred Stock Subject to Mandatory Redemption</i> and <i>Note 17 &#150;
Stockholders&#146; Equity</i> to the accompanying consolidated financial statements
in Item 18.  The retention of earnings is still necessary to meet the funding
requirements of our business expansion, service improvement and development
programs.  Except for dividends on PLDT's Series III and Series VI Convertible
Preferred Shares, which are payable in U.S. dollars and PLDT's Series VII
Convertible Preferred Shares, which are payable in Japanese yen, dividends are
generally paid in Philippine pesos.  In the case of shareholders residing
outside the Philippines, PLDT's transfer agent in Manila, which acts as the
dividend disbursing agent, converts the peso dividends into U.S. dollars at the
prevailing exchange rates, and remits the dollar proceeds abroad, net of
withholding tax.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a name="_Toc75779240"></a><a
name="_Toc46082300">Item 9.   The Offer and Listing</a></p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779241"></a><a name="_Toc46082301">Common Capital Stock and American Depositary Receipts (&#147;ADRs&#148;)</a></p>

<p style='text-indent:0in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The common shares of PLDT are
listed and traded on the PSE, and prior to October 19, 1994, were listed and
traded on the American Stock Exchange and Pacific Exchange in the United
States.  On October 19, 1994, an ADR facility was established, pursuant to
which Citibank, N.A., as the Depositary, issued ADRs evidencing ADSs, with each
ADS representing one common share with a par value of Php5 per share.
Effective February 10, 2003, PLDT appointed JP Morgan Chase Bank as successor
depositary of PLDT&#146;s ADRs.  The facility was established in accordance with a
Common Stock Deposit Agreement dated October 19, 1994, as amended on February 10, 2003, between the Depositary and the holders of ADRs.  The ADSs have been
listed and are traded on the New York Stock Exchange and the Pacific Exchange in
the United States under the symbol &#147;PHI&#148;.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2003, a total of 41.1 million
shares of PLDT's common stock were traded on the PSE.  During the same year,
the volume of trading was 38.6 million ADSs on the New York Stock Exchange but
none on the Pacific Exchange.</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of May 31, 2004, there were 13,083 shareholders of record who are Philippine persons and held approximately 42% of
PLDT&#146;s common stock.  As of December 31, 2003 there were 13,908 shareholders of
record who are Philippine persons and held approximately 45% of PLDT&#146;s common
stock.  In addition, there were a total of 26.8 million and 28.7 million ADSs
outstanding, substantially all of which PLDT believes were held in the United
 States by 438 holders and 448 holders as of May 31, 2004 and December 31, 2003, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">High and low sales prices for
PLDT's common shares on the PSE and ADSs on the New York Stock Exchange, or
NYSE, for each of the five most recent fiscal years, each full quarterly period
during the two most recent fiscal years, and each month in the most recent six
months were as follows:</p>

<p style='line-height:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.66%;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>PSE</b></p>
 </div>
 </td>
 <td   colspan=4 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>NYSE(1)</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.7pt'>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.7pt'>
 <p align=center style='margin-bottom:6.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.7pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-bottom:6.0pt;text-align:center;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>High</b></p>
 </div>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.7pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-bottom:6.0pt;text-align:center;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Low</b></p>
 </div>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.7pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-bottom:6.0pt;text-align:center;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>High</b></p>
 </div>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 5.4pt 0in 5.4pt;
 height:11.7pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='margin-bottom:6.0pt;text-align:center;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Low</b></p>
 </div>
 </td>
 </tr>

 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1999</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php1,290.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php770.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$33</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1/2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$18</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">9/16</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,100.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">660.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">28</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1/4</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">7/8</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,060.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">332.50</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">20.75</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">6.55</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">565.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">209.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">11.30</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3.85</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">First Quarter</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">550.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">407.50</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10.72</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">7.91</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Second Quarter</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">565.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">367.50</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">11.30</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">7.32</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Third Quarter</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">380.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">277.50</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">7.55</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5.16</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fourth Quarter</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">292.50</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">209.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5.53</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3.85</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">670.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">265.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">12.48</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4.85</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">First Quarter</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">337.50</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">265.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">6.18</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4.85</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Second Quarter</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">565.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">312.50</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10.77</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5.80</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Third Quarter</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">670.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">482.50</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">12.48</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">8.78</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Fourth Quarter</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">990.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">635.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">17.79</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">11.70</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">December</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">990.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">755.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">17.79</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">13.90</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004 </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,165.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">810.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">21.20</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">14.38</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">First Quarter</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,050.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">810.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">18.60</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">14.38</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">January</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,050.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">860.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">18.60</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">14.90</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">February</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">980.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">810.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">18.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">14.38</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">March</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">970.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">885.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">17.43</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15.38</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Second Quarter</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">April</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,165.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">960.00</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">21.20</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">17.35</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:27.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">May</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,145.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">965.00</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">20.05</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">16.97</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
</table></center></div>

<p style='page-break-after:avoid;border:none' style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>(1)</i>   <i>Effective
</i><i>January 29, 2001</i><i>, PLDT converted from fractional to the decimal
system of pricing in compliance with the new trading standard required by the
U.S. SEC.</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779242"></a><a name="_Toc46082302">Series III Convertible Preferred Stock and Global Depositary
Receipts (&#147;GDRs&#148;)</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On November 29, 1994 and on December 12, 1994, PLDT issued an aggregate of approximately 4.6 million shares of
Series III Convertible Preferred Stock, with a par value of Php10 per share.
In connection therewith, a Global Depositary Receipt facility was established,
pursuant to which Citibank N.A., as Depositary, issued GDRs evidencing Global
Depositary Shares, or GDS, with each GDS representing one share of Series III
Convertible Preferred Stock.  Each share is convertible into common stock at
the option of the holder at any time, at the conversion price of US$29.19 per
share of common stock (equivalent to a conversion ratio of 1.7129 shares of
common stock for each share of Series III Convertible Preferred Stock, each
share of convertible preferred stock being valued for this purpose at its
reference amount of US$50 per share), subject to adjustment in certain events.
Effective February 10, 2003, PLDT appointed JP Morgan Chase Bank as successor
depositary of PLDT&#146;s GDRs.  The facility was established in accordance with a
Preferred Stock Deposit Agreement dated November 29, 1994, as amended on September 6, 1999 and on February 10, 2003, between the Depositary and the
holders of GDRs.  The GDSs have been listed and are traded on the New York
Stock Exchange and the Pacific Exchange in the United States under the symbol
&#147;PHI Pra&#148;.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">High and low sales prices for the
series III convertible preferred shares and the GDSs for each of the five most
recent fiscal years, each full quarterly period during the two most recent
fiscal years, and each month in the most recent six months were as follows:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>NYSE(1)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>High</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Low</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1999 </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$57</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1/2</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$38</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">7/16</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2000 </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1/2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">31</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">1/4</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001(1)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">39.875</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">16.000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002 </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">26.000</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">13.000</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">First Quarter </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">26.000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">18.000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Second Quarter </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">25.900</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">20.100</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Third
 Quarter </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">20.200</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">15.930</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Fourth
 Quarter </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">22.750</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">13.000</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2003 </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">40.900</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">20.500</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">First
 Quarter </p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">25.750</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">20.500</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:35.1pt;text-indent:-17.1pt' style="margin-top:0;margin-bottom:0">Second Quarter</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">37.750</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">25.750</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:35.1pt;text-indent:-17.1pt' style="margin-top:0;margin-bottom:0">Third Quarter</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">40.900</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">34.300</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Fourth
 Quarter </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">47.600</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">40.200</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:27.0pt' style="margin-top:0;margin-bottom:0">December</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">47.600</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">43.750</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">2004 </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">First
 Quarter</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">49.500</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">45.600</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:9.0pt' style="margin-top:0;margin-bottom:0">January</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">49.000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">46.250</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:9.0pt' style="margin-top:0;margin-bottom:0">February</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">49.500</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">45.600</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:9.0pt' style="margin-top:0;margin-bottom:0">March</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">48.750</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">45.600</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Second
 Quarter</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:9.0pt' style="margin-top:0;margin-bottom:0">April</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">48.250</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">46.000</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in;text-indent:9.0pt' style="margin-top:0;margin-bottom:0">May</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">48.000</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">42.500</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
</table></center></div>

<p style='border:none' style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>(1)   Effective </i><i>January 29, 2001</i><i>, PLDT converted from fractional to the decimal system of pricing in compliance with
the new trading standard required by the U.S. SEC.</i></p>

<p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, there were approximately 4.6 million GDSs outstanding, which PLDT believes were
substantially held in the United States.</p>

<p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779243"></a><a name="_Toc46082303">Item 10. Additional
Information</a></p>

<p style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779244"></a><a name="_Toc46082304">Articles of Incorporation and By-Laws</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The following summarizes certain
provisions of PLDT's Articles of Incorporation and By-Laws and applicable
Philippine law.  This summary is qualified in its entirety by reference to the
Corporation Code of the Philippines (the &#147;Corporation Code&#148;) and PLDT's
Articles of Incorporation and By-Laws.  Information on where investors can
obtain copies of the Articles of Association and By-Laws is described under the
heading &#147;Documents Available.&#148;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Purpose of PLDT</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT's
Articles of Incorporation have been filed with the Philippine SEC and PLDT has
been issued SEC Reg. No. 55.  The Second Article of PLDT's Articles of
Incorporation provides that the purposes for which PLDT was formed are to
install, maintain, and operate any and all kinds of equipment for
communications; to install, maintain, operate or lease telephone lines and
systems, and to purchase, sell and deal in all kinds of products which may be
combined with the building, installing and operation of those systems and lines
and in general, to engage in any and all acts and business which may be
necessary or convenient, in the furtherance of such lines of communication and
business.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Directors</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT's
Amended By-Laws provide that the Board of Directors shall consist of thirteen
members, each of whom must hold at least one share of stock of PLDT in his own
name and possess the minimum qualifications and have none of the
disqualifications provided in the By-Laws.  There are no provisions in PLDT's
Amended Articles of Incorporation or Amended By-laws with respect to (a) a
director's power to vote on a proposal, arrangement or contract in which the
director is materially interested; (b) the directors' power, in the absence of
an independent quorum, to vote compensation to themselves or any members of
their body; (c) borrowing powers exercisable by the directors and how such
borrowing powers can be varied; or (d) retirement or non-retirement of
directors under an age limit requirement.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Description of PLDT
Capital Stock</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Authorized Capital Stock</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The authorized capital stock of
PLDT is Php9,395 million divided into two classes consisting of 234 million
shares of Common Capital Stock with a par value of Php5 per share (the &#147;Common
Stock&#148;) and 822.5 million shares of serial Preferred Stock with a par value of
Php10 per share (the &#147;Preferred Stock&#148;).</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Common Stock</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Set out below is a statement of the
dividend, voting, pre-emption and other rights of the holders of Common Stock
as set out in the Articles of Incorporation and/or By-Laws of PLDT:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">(a)&nbsp;&nbsp;&nbsp; After the
requirements with respect to preferential dividends on the serial Preferred
Stock shall have been met and after PLDT shall have complied with all the
requirements, if any, with respect to the setting aside of sums as purchase,
retirement or sinking funds, the holders of the Common Stock shall be entitled
to receive such dividends as may be declared from time to time by the Board of
Directors out of funds legally available therefor.</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">(b)&nbsp;&nbsp;&nbsp; After
distribution in full of the preferential amounts to be distributed to the
holders of serial Preferred Stock in the event of the voluntary or involuntary
liquidation, dissolution, distribution of assets or winding up of PLDT, the
holders of Common Stock shall be entitled to receive all the remaining assets
of PLDT of whatever kind available for distribution to stockholders ratably in
proportion to the number of Common Stock held by them, respectively.</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">(c)&nbsp;&nbsp;&nbsp; Except as may be
otherwise required by law, or by the Articles of Incorporation of PLDT, each
holder of Common Stock shall have one vote in respect of each share of such
stock held by him on all matters to be voted upon by the stockholders, and the
holders of Common Stock shall have the exclusive right to vote for the election
of directors and for all other purposes.  At every election of directors, a
holder of Common Stock is entitled to vote such shares of Common Stock held by
him for as many persons as there are directors to be elected, or to cumulate
said shares and give one candidate as many votes as the number of directors to
be elected multiplied by the number of his shares shall equal, or to distribute
such votes on the same principle among as many candidates as he shall think
fit.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">In addition to the foregoing
rights, the Corporation Code provides for other stockholders' rights
generally.  These include:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">(a)&nbsp;&nbsp;&nbsp; Appraisal
right or the right of a dissenting stockholder to demand payment of the fair
value of his shares of stock in the following instances:  (a) in case any
amendment to the articles of incorporation has the effect of changing or
restricting the rights of any stockholders or class of shares, or of
authorizing preferences in any respect superior to those of outstanding shares
of any class, or of extending or shortening the term of corporate existence;
(b) in case of sale, lease, exchange, transfer, mortgage, pledge or other
disposition of all or substantially all of the corporate property and assets of
the corporation; and (c) in case of merger or consolidation.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">(b)&nbsp;&nbsp;&nbsp; The right to
approve certain corporate acts, such as:  (a) election of directors; (b)
removal of directors; (c) extension or shortening of the corporate term; (d)
increase or decrease of capital stock, and incurring, creating or increasing
bonded indebtedness; (e) sale or other disposition of all or substantially all
of the corporate assets; (f) investment of corporate funds in any other
corporation or business or for any purpose other than the primary purpose for
which it was organized; (g) declaration of stock dividend; (h) entering into a
management contract with another corporation; (i) plan of merger or
consolidation; and (j) voluntary dissolution of the corporation by shortening
the corporate term.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">(c)&nbsp;&nbsp;&nbsp; The right to
inspect at reasonable hours on business days the records of all business
transactions of the corporation and the minutes of any meeting; however, the
stockholders' right to inspect corporate records and books is not an absolute
right so that the corporation may deny said right on the basis of impropriety
of the purpose or motive of the stockholder.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">(d)&nbsp;&nbsp;&nbsp; The right to be
furnished the most recent financial statements of the corporation, within ten
days from receipt by the corporation of a written request from a stockholder.
The same right exists at the annual meeting of stockholders at which the Board
of Directors must present to the stockholders a financial report of the
operations of the corporation for the preceding year which shall include
financial statements duly signed and certified by an independent certified
public accountant.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Restrictions on Foreign
Ownership</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Constitution of the Republic of
the Philippines (Section 11, Article XII) states that no franchise,
certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to
corporations or associations organized under the laws of the Philippines at
least 60% of whose capital is owned by such citizens.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">While the Articles of Incorporation
and By-Laws of PLDT do not contain any specific restriction on the sale, assignment
or transfer of shares that would violate the aforecited ownership requirement,
the Articles of Incorporation of PLDT provide that the Board of Directors shall
have full power and authority to authorize (whether by adoption of amendments
to the By-Laws of PLDT or of resolutions, the promulgation of rules or
regulations or otherwise) the taking by said corporation of all such actions as
the Board of Directors may deem necessary or appropriate to ensure compliance
by said corporation with any applicable provision of the Constitution of the
Republic of the Philippines or any other applicable law, treaty, rule or
regulation relating to the ownership of securities of said corporation by
citizens of the Philippines, aliens or other persons or group of persons.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Meetings</i></p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
Corporation Code requires corporations to hold an annual meeting of
stockholders and to send notice thereof to stockholders.  Under PLDT's By-Laws,
the annual meeting of stockholders shall be held at the principal office of the
corporation, or at such other place designated by the Board of Directors in the
city or municipality where the principal office of the corporation is located,
on the second Tuesday in June of each year.  In the annual meeting, the Board
of Directors shall be elected and such other business may be transacted as
shall come before the meeting.  At least fifteen (15) business days written or
printed notice of the date, time and place of holding every annual
stockholders' meeting shall be given by the Secretary or by an Assistant
Secretary by personal delivery or by mail to each stockholder at his or her
last known place of residence or business.  Special meetings of stockholders
may be called at any time by the President or three (3) of the Directors or by
a number of stockholders representing two-thirds (2/3) of the subscribed
capital stock.  Notice in writing of such meeting stating the date, time or
place thereof, shall be given to each stockholder by the Secretary or Assistant
Secretary or, in case of his absence, inability, refusal or neglect to act,
then by the President, Directors or stockholders calling said meeting, by
personal delivery or by mail to each stockholder at his or her last known place
of residence, at least fifteen (15) business days before the date fixed for the
meeting.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The By-Laws of PLDT provide that
each stock which has voting rights on any matter under consideration may be
represented at any meeting of stockholders by the holder thereof or by his
attorney duly authorized by proxy in writing on forms prescribed by the Board
of Directors which shall be furnished to a stockholder upon his request.
Unless otherwise provided in the proxy, it shall be valid only for the meeting
in respect of which such proxy was issued.  Proxies must be filed with the Secretary,
Assistant Secretary or transfer agent of PLDT at least two (2) days before the
day of the meeting.  Any proxy filed with the Secretary, Assistant Secretary or
transfer agent of the corporation may be revoked by the stockholder concerned
either in an instrument in writing duly presented to the Secretary, Assistant
Secretary or transfer agent of the corporation at least two (2) days before the
day of the meeting or by his personal presence at the meeting.  The decision of
the Secretary on the validity of proxies shall be final and binding until and
unless set aside by a court of competent jurisdiction.  As provided in the
Corporation Code, unless otherwise provided in the proxy, it shall be valid
only for the meeting for which it is intended and no proxy shall be valid and
effective for a period longer than five (5) years at any one time.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The By-Laws of PLDT also provide
that at any meeting of the stockholders, persons representing, in person or by
proxy, a majority of the shares issued and outstanding and entitled to vote at
said meeting shall constitute a quorum for the transaction of any business,
except as otherwise provided by law, and except that a lesser number may
adjourn the meeting.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Issues of Shares</i></p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Board of Directors of PLDT has
the power to authorize the issue and sale of authorized but unissued shares of
Common Stock of said corporation for such consideration as it shall determine,
provided that such consideration shall not be less than the par value of such
shares and, provided further, that such issue and sale is not otherwise
prohibited under applicable laws.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the Securities Regulation
Code of the Philippines (R.A. 8799), or SRC, no securities except of a class
exempt under the provisions thereof or unless sold in any transaction exempt
under any of the provisions thereof, shall be sold or offered for sale or
distribution to the public unless such securities shall have been registered
and permitted to be sold pursuant to the SRC.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Transfer
of Shares</i></p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The shares
of Common Stock may be transferred by delivery of certificate(s) endorsed by
the shareholder named in the certificate or his duly authorized attorney or
representative.  No transfer, however, shall be valid, except as between the
parties, until the transfer is recorded in the stock and transfer books of PLDT
maintained by Hongkong and Shanghai Banking Corporation, the stock transfer
agent of PLDT for the Common Stock.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Philippine law does not require
transfers of Common Stock to be effected on PSE, but any off-exchange transfers
will subject the transferor to a capital gains tax that may be significantly
greater than the stock transfer tax applicable to transfers effected on the
PSE.  All transfers of shares of Common Stock on the PSE must be effected
through a licensed broker in the Philippines.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Share
Certificates</i></p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Certificates
representing fully paid shares of Common Stock are issued in such denominations
as stockholders may request, except that certificates will not be issued for
any fractional part of a share or any undivided interest in any share.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Dividends</i></p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Under the
Corporation Code, the Board of Directors may declare dividends on the Common
Stock out of the unrestricted retained earnings which may be payable in cash,
in property or in stock to all stockholders on the basis of outstanding shares
held by them.  The declaration of stock dividends require the approval of the
stockholders of PLDT representing not less than two-thirds of the outstanding
capital stock of PLDT.  If a stock dividend would require an increase in the
authorized capital stock, Philippine SEC approval would be required.  Common
Stock issued as stock dividends should be registered with and licensed by the
Philippine SEC and listed on the PSE.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The Corporation Code requires a Philippine corporation with
retained earnings in excess of 100% of its paid-in capital to declare and
distribute as dividends the amount of such surplus.  Notwithstanding this
general requirement, a Philippine corporation may retain all or any portion of
such surplus in the following cases:  (i) when justified by definite corporate
expansion projects or programs approved by the board of directors; or (ii) when
the corporation is prohibited under any loan agreement with any financial
institution or creditor, whether local or foreign, from declaring dividends
without its/his consent, and such consent has not yet been secured; or (iii)
when it can be clearly shown that such retention is necessary under special
circumstances relevant to the corporation, such as when there is a need for
special reserve for probable contingencies.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT has entered into certain loan
and credit agreements, which restrict the declaration and payment of dividends
by PLDT.  Under the terms of the US$149 million facility with KfW, PLDT is
prohibited from paying any dividends on Common Stock until after December 31, 2004.  In addition, under the terms of PLDT's US$145 million multicurrency
term facility agreement and JPY5,615
million syndicated term loan facility agreement, PLDT is restricted from
distributing dividends to common stockholders unless (i) no default has
occurred which is continuing, and (ii) its debt to free cash flow ratio, after
giving effect to the distribution of such dividends and, under certain
circumstances, other adjustments to PLDT&#146;s closing cash balance, would be less
than 4.0:1.  Under other loan agreements, PLDT may not declare or pay dividends
on any of its capital stock without the prior written consent of the lenders
(i) if PLDT is in default in the payment of any amounts due and payable under
such loan agreement or after the occurrence and during the continuance of any
other event of default or potential event of default under such agreements,
(ii) if after giving effect to such action the current ratio would be less than
1.2:1 or (iii) in an amount greater than PLDT&#146;s net income after taxes during
the fiscal year to which such payment or distribution relates.  For the year
2001, PLDT declared cash dividends on outstanding shares of Common Stock in the
amount of approximately Php202 million.  PLDT has not declared dividends on the
Common Stock since March 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Preferred Stock</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Preferred Stock may be issued from time to time in one or more
series as the Board of Directors may determine.  The Board of Directors is
authorized to establish and designate the title and number of shares of each
series and to fix the terms thereof, including dividend rate, redemption and
sinking fund provisions, conversion rights and the amount to be received upon
liquidation, provided that the amounts payable upon redemption or liquidation
may not be more than 110%, nor less than 100%, of par value, plus in each such
case accrued and unpaid dividends.  Except as otherwise provided by law, the
holders of Preferred Stock are not entitled to vote for the election of
directors or for any other purpose; provided, however, that PLDT may not change
the rights of the holders of any series of Preferred Stock in any manner
prejudicial to the holders thereof without the affirmative vote of the holders
of a majority of the shares of such series.  No such approval is needed to
increase the number of shares of Preferred Stock (up to the number from time to
time authorized by the Articles) or to authorize classes of shares ranking on a
parity with the Preferred Stock.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Issued
and Outstanding Preferred Stock</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The series
of Preferred Stock and the number of shares issued and outstanding under each
series as of May 31, 2004 are as follows:<b> </b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 6.0pt;margin-left:0in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>Series</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-top:6.0pt;margin-right:0in;
 margin-bottom:6.0pt;margin-left:0in;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>No. of Shares</u></b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 6.0pt;margin-left:0in' style="margin-top:0;margin-bottom:0">Series A to DD 10%
 Cumulative Convertible</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:6.0pt;margin-right:.5in;
 margin-bottom:6.0pt;margin-left:0in;text-align:right' style="margin-top:0;margin-bottom:0">409,393,612</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 6.0pt;margin-left:0in' style="margin-top:0;margin-bottom:0">Series III Convertible</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:6.0pt;margin-right:.5in;
 margin-bottom:6.0pt;margin-left:0in;text-align:right' style="margin-top:0;margin-bottom:0">4,616,200</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 6.0pt;margin-left:0in' style="margin-top:0;margin-bottom:0">Series IV Cumulative
 Non-Convertible Redeemable</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:6.0pt;margin-right:.5in;
 margin-bottom:6.0pt;margin-left:0in;text-align:right' style="margin-top:0;margin-bottom:0">36,000,000</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 6.0pt;margin-left:0in' style="margin-top:0;margin-bottom:0">Series V Cumulative
 Convertible Redeemable</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:6.0pt;margin-right:.5in;
 margin-bottom:6.0pt;margin-left:0in;text-align:right' style="margin-top:0;margin-bottom:0">2,576,120</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 6.0pt;margin-left:0in' style="margin-top:0;margin-bottom:0">Series VI Cumulative
 Convertible Redeemable</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:6.0pt;margin-right:.5in;
 margin-bottom:6.0pt;margin-left:0in;text-align:right' style="margin-top:0;margin-bottom:0">4,763,853</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 6.0pt;margin-left:0in' style="margin-top:0;margin-bottom:0">Series VII Cumulative
 Convertible Redeemable</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:6.0pt;margin-right:.5in;
 margin-bottom:6.0pt;margin-left:0in;text-align:right' style="margin-top:0;margin-bottom:0">3,842,000</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Series A to DD 10% Cumulative
Convertible Preferred Stock are entitled to receive cumulative dividends at the
rate of 10% per annum; redeemable at the option of PLDT, at par value plus
accrued dividends, five years after the year of issuance; convertible to shares
of Common Stock a year after the year of share issuance, at a price equivalent
to 10% below the average market price of the Common Stock at the PSE over a
period of 30 consecutive trading days before the conversion date; and entitled
to be paid an amount equal to the par value of the shares plus accrued and
unpaid dividends thereon to the date fixed for such payment in the event of a
voluntary or involuntary liquidation, dissolution, distribution of assets or
winding up of the affairs of the corporation.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Series III Convertible
Preferred Stock are entitled to receive annual fixed cumulative dividends of
US$3.50 per share; in the event of any voluntary or involuntary liquidation,
dissolution or winding up of PLDT, are entitled to receive out of the assets of
PLDT available for distribution to the stockholders of PLDT, before any
distribution of assets is made to holders of shares of Common Stock or any
other shares of stock of PLDT ranking as to such a distribution junior to the
Series III Convertible Preferred Stock, liquidating distributions in the amount
of Php11 per share plus accrued and unpaid dividends; are convertible into
shares of Common Stock at the holder's option at any time, at the conversion
price of US$29.19 per share of Common Stock (equivalent to a conversion ratio
of 1.7129 shares of Common Stock for each share of Series III Convertible
Preferred Stock, each share being valued for this purpose at its reference
amount of US$50 per share), subject to adjustment in certain events; and are
not redeemable.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Series IV Cumulative
Non-Convertible Redeemable Preferred Stock are entitled to receive cumulative
dividends at the rate of 13.5% per annum calculated on the par value of such
shares or if such shares are not yet fully paid, the actual amount paid; are
not convertible into shares of Common Stock; are redeemable at the option of
PLDT one year at any time after subscription at an amount equal to the par
value of such shares so redeemed or if such shares are not yet fully paid, the
actual amount paid, plus accrued and unpaid dividends thereon; and in the event
of a voluntary or involuntary liquidation, dissolution or winding up of affairs
of PLDT, shall be entitled to be paid an amount equal to the par value of such
shares or if such shares are not yet fully paid, the actual amount paid, plus
an amount equal to the dividends accrued thereon to the date fixed for
payment.  The outstanding shares of Series IV Cumulative Non-Convertible
Redeemable Preferred Stock have not been fully paid.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Series V, VI and VII Convertible
Preferred Stock are entitled to receive annual dividends of Php18.70 per share,
US$0.397 per share and JPY40.7189 per
share, respectively.  Each share of Series V, VI and VII Convertible Preferred
Stock is convertible at any time at the option of the holder into one share of
Common Stock.  In the event of any voluntary or involuntary liquidation,
dissolution or winding up of PLDT, the holders of the Series V, VI and VII
Convertible Preferred Stock are entitled to receive out of the assets of PLDT
available for distribution to the shareholders of PLDT, before any distribution
of assets is made to holders of shares of Common Stock or any other shares of
stock of PLDT ranking as to such distribution junior to the Series V, VI and VII
Convertible Preferred Stock, liquidating distributions in the amount of Php11
per share plus accrued and unpaid dividends.  On the date immediately following
the seventh anniversary of the issue date of the Series V and Series VI
Convertible Preferred Stock and on the eighth anniversary of the issue date of
the Series VII Convertible Preferred Stock, the remaining outstanding shares
under these series will be mandatorily converted to shares of Common Stock at a
conversion rate of one share of Common Stock for each share of Series V, VI or
VII Convertible Preferred Stock subject to adjustments in certain events.
Under a put option exercisable for 30 days, holders of shares of Common Stock
received on mandatory conversion will be able to require PLDT to purchase such
shares of Common Stock for Php1,700 or US$36.132 or JP&yen;4,071.89 per share,
depending on the series.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, 145,320 shares of Series V Convertible Preferred Stock and 531,251 shares of Series VI
Convertible Preferred Stock were converted to PLDT Common Stock.  The aggregate
value of the put option based on outstanding shares as of December 31, 2003 was
Php21,898 million, of which Php13,774 million is payable on June 4, 2008 and Php8,124 million on June 4, 2009 if all of the outstanding
shares of Series V, VI and VII Convertible Preferred Stock were mandatorily
converted and all the underlying shares of Common Stock were put to PLDT.  The
market value of the underlying shares of Common Stock was Php10,763 million, based on the market price of PLDT&#146;s
Common Stock of Php970 per share as of December 31, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Change in Control</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Article V,
Section 1 of PLDT's Amended By-Laws may have the effect of preventing a change
in control of PLDT.  This section provides that any person who is engaged in
any business that competes with or is antagonistic to that of PLDT or its
subsidiaries is ineligible for nomination or election to the Board of
Directors.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779245"></a><a name="_Toc46082305">Material Contracts</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">For a description of the Stock Purchase and Strategic Investment
Agreement relating to the acquisition of Smart and the investment by NTT, see
&#147;Item 7. Major Shareholders and Related Party Transactions &#151; Related Party
Transactions.&#148; </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779246"></a><a name="_Toc46082306">Exchange Controls and Other Limitations Affecting Securities Holders</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In Circular No. 1389 dated November 10, 1993, as amended by Circular No. 224 dated January 26, 2000, of the BSP, foreign investments in the shares of stock of Philippine companies listed in
the PSE may be registered either with the BSP or with an investor&#146;s designated
custodian bank.  The foreign investments in listed shares of stock, which are
duly registered with the BSP or with a custodian bank duly designated by the
foreign investor, are entitled to full and immediate capital repatriation and
dividend and interest remittance privileges.  Without the need to obtain prior
BSP approval, commercial banks are authorized to sell and to remit the
equivalent foreign exchange (at the exchange rate prevailing at the time of
actual remittance) representing sales and divestment proceeds or dividends of a
duly registered foreign equity investment upon presentation of a BSP
Registration Document (&#147;BSRD&#148;) together with other supporting documents.  The
BSRD is issued by the BSP or the custodian bank upon registration of the
foreign investment and serves as the authority to repatriate such divestment
and sales proceeds or remittance of cash dividends.  Effective April 3, 2000, only pre-numbered BSRD forms, printed on BSP security paper may be used and
issued as proof of registration of foreign investments in accordance with
existing BSP rules.  The remitting commercial bank must submit to the BSP a
statement of remittance together with the supporting documents within two
banking days from date of actual remittance.  Foreign investments not duly registered
with the BSP or with the investor's designated custodian bank are not entitled
to repatriation and remittance privileges through the banking system except
capital repatriation or dividend remittance of direct foreign equity
investments made prior to March 15, 1973 when BSP registration was not yet
required.  The BSP should be notified of the transfer of sale of foreign
investments in equity or securities already registered with the BSP, in order
that the registration of the foreign investment may be transferred in the name
of the transferee or purchaser.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Cash dividends on PLDT's stock are
paid in Philippine pesos, except dividends on the Series III and Series VI
Convertible Preferred Stock, which are paid in U.S. dollars and on the Series
VII Convertible Preferred Stock, which are paid in Japanese yen.  PLDT&#146;s
Custodian for its Series III Convertible Preferred Stock, Citibank, N.A. &#150;
Manila and PLDT&#146;s Transfer Agent and Dividend Paying Agent for its Series VI
and VII Convertible Preferred Stock, Hongkong and Shanghai Banking Corporation,
converts and remits in the particular foreign currency, at the prevailing
exchange rate, cash dividends due to holders of the Series III, Series VI and
VII Convertible Preferred Stock.  PLDT's Transfer Agent for its common stock,
The Hongkong and Shanghai Banking Corporation, (which also acts as dividend
paying agent) converts and remits in U.S. dollars, at the prevailing exchange
rate, cash dividends due all common shareholders residing outside the
Philippines.  Under the above-mentioned regulations, PLDT has been able to
remit the cash dividends due to shareholders residing outside the Philippines.
As of December 31, 2003, approximately 88% of PLDT&#146;s outstanding shares of
common and preferred stock were held by Philippine persons.  For certain
restrictions on the declaration and payment of dividends by PLDT, see <i>Note
16 &#150; Preferred Stock Subject to Mandatory Redemption</i> and <i>Note 17 &#150;
Stockholders&#146; Equity</i> to the accompanying consolidated financial statements
in Item 18.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">For certain constitutional
limitations on the capital ownership of public utilities, see &#147;Item 8.
Financial Information &#151; Legal Proceedings &#151; Quo Warranto Action.&#148;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Principal of and interest on PLDT's
10.625% Notes due 2004, 9.875% Notes due 2005, 9.25% Notes due 2006, 7.85%
Notes due 2007, 8.35% Notes due 2017, 10.5% Notes due 2009, 10.625% Notes due
2007 and 11.375% Notes due 2012 are payable in U.S. dollars which may be
purchased from the local banking system either pursuant to the registration of
such Notes with the BSP or otherwise pursuant to specific BSP approval of such
payment.  Such principal and interest may also be paid utilizing PLDT's own
dollar resources without necessity of BSP approval.  The BSP, with the approval
of the President of the Philippines, may, however, restrict the availability of
foreign exchange during an exchange crisis, when an exchange crisis is
imminent, or in times of national emergency.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779247"></a><a name="_Toc46082307">Taxation</a></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The following is a summary of the
material Philippine and United States federal income tax consequences to United
States Holders (as defined below) of owning shares of Common Stock, Series III
Convertible Preferred Stock, ADSs and GDSs (collectively, the &#147;Equity
Securities&#148;).  It applies to you only if you hold your Equity Securities as
capital assets for tax purposes.  This section does not apply to you if you are
a member of a special class of holders subject to special rules, including a
dealer in securities, a trader in securities that elects to use a
mark-to-market method of accounting for securities holdings, a tax-exempt
organization, a life insurance company, a person liable for alternative minimum
tax, a person that actually or constructively owns 10% or more of PLDT&#146;s voting
stock, a person that holds Equity Securities as part of a straddle or a hedging
or conversion transaction, or a United States Holder (as defined below) whose
functional currency is not the U.S. dollar.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">This section is based on the United
States Internal Revenue Code of 1986, as amended (the &#147;U.S. Tax Code&#148;), its
legislative history, existing and proposed regulations, published rulings and
court decisions, and the laws of the Philippines including the Philippine
National Internal Revenue Code of 1997 (the &#147;Philippine Tax Code&#148;) all as
currently in effect, as well as on the Convention Between the Philippines and
the United States (the &#147;Philippines-United States Tax Treaty&#148;).  These laws are
subject to change, possibly on a retroactive basis.  In addition, this section
is based in part on the representations of the Depositary and the assumption
that each obligation in the Deposit Agreement and any related agreement will be
performed according to its terms.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;text-indent:.5in;
line-height:normal' style="margin-top:0;margin-bottom:0">You
are a United States Holder if you are a beneficial owner of Equity Securities
and you are a citizen or resident of the United States, a domestic corporation,
an estate whose income is subject to United States federal income tax
regardless of its source, or a trust if a United States court can exercise
primary supervision over the trust&#146;s administration and one or more United
States persons are authorized to control all substantial decisions of the
trust.</p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0">This discussion addresses only United States federal income
taxation and Philippine income taxation, estate and donor&#146;s taxation, stock
transaction taxation and documentary stamp taxes.</p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0"><i>Philippine Taxation</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Taxes on Exchange of ADSs for
Common Stock and GDSs for Series III Convertible Preferred Stock</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Philippine capital gains or stock
transaction taxes and documentary stamp taxes may be payable upon the transfer
of shares of Common Stock to a holder of ADRs or shares of Series III
Convertible Preferred Stock to a holder of GDRs.  See &#147;Capital Gains Tax and
Stock Transaction Tax&#148; and &#147;Documentary Stamp Taxes.&#148;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Taxation of Dividends</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the Philippine Tax Code,
dividends paid by a Philippine corporation to citizens of the Philippines and
resident aliens in the Philippines are subject to a final withholding tax of
10% while those paid to non-resident aliens engaged in trade or business within
the Philippines are subject to a final withholding tax of 20%.  Dividends paid
to non-resident aliens not engaged in trade or business within the Philippines
are subject to a final withholding tax of 25%. Dividends paid by a Philippine
corporation to other Philippine corporations or to resident non-Philippine
corporations are not subject to tax.  Dividends paid to non-resident
non-Philippine corporations not engaged in a trade or business in the
Philippines by Philippine corporations shall be subject to a final withholding
tax of 15%, subject to the condition that the country in which the non-resident
non-Philippine corporation is domiciled either (i) allows a credit against the
tax due from the non-resident non-Philippine corporation taxes deemed to have
been paid in the Philippines equivalent to 17% (which represents the difference
between the regular income tax on non-resident non-Philippine corporations of
32% and the 15% tax on dividends) (this condition is not satisfied in the case
of corporations domiciled in the United States if such corporations own less
than 10% of the voting stock of PLDT) or (ii) imposes no income taxes on
dividends received by such non-resident non-Philippine corporations from
Philippine corporations (this condition is not satisfied in the case of
corporations domiciled in the United States).  If neither of the foregoing
conditions are met, the dividends paid to the non-resident non-Philippine
corporation shall be subject to the regular income tax rate of 32%.  Under
rulings issued by Philippine tax authorities, Hong Kong is viewed as falling
within clause (ii) and, thus, companies that are organized in Hong Kong that
are not engaged in trade or business in the Philippines may be entitled to the
benefit of the 15% rate.  Such rulings, however, were based upon the laws of Hong
 Kong as in effect at the time such rulings were issued, and any subsequent
changes in the relevant laws of Hong Kong may affect the validity of such
rulings.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As further discussed below, in
respect of regular quarterly cash dividends payable on the shares of Series III
Convertible Preferred Stock underlying the GDSs, while such shares are on
deposit with the Depositary, PLDT intends to make payments of withholding tax
pursuant to the terms of such Series III Convertible Preferred Stock, at the
rate of 15%, which is the rate applicable to dividends payable to residents of
the domicile of the registered shareholder, which is a company organized in
Hong Kong not engaged in trade or business in the Philippines.  PLDT reserves
the right to change the rate at which it makes payments of withholding tax
whenever it deems it appropriate under applicable law.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Holders will receive regular
quarterly cash dividends paid in respect of the Series III Convertible
Preferred Stock, but not on the common stock issuable on conversion of such
Series III Convertible Preferred Stock, free and clear of withholding tax, such
withholding tax being an obligation of PLDT pursuant to the terms of the Series
III Convertible Preferred Stock.  Any other dividends will be subject to
withholding tax at the relevant applicable rate.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">If the holder of Common Stock is a
non-resident foreign partnership, which is treated as a corporation for
Philippine tax purposes, dividends on the Common Stock should be subject to a
final withholding tax of 32%.  Cede &amp; Co., the partnership nominee of
Depository Trust Company (&#147;DTC&#148;), should qualify as a non-resident foreign
partnership that would be treated as a corporation for Philippine tax purposes.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In certain circumstances where the
holder holds Common Stock, a tax treaty rate may be applicable with respect to
the Philippine withholding tax.  For instance, holders under such circumstances
and as to which the Philippines-United States Tax Treaty would be applicable would
be eligible for a treaty rate of 25% (or 20% in certain instances).  The 20%
treaty rate is generally not applicable in the case of non-resident
non-Philippine corporations domiciled in the United States which own less than
10% of the voting stock of PLDT.  Holders are required, however, to establish
to the Philippine taxing authorities their eligibility for such treaty rate.
Philippine tax authorities have prescribed, through an administrative issuance,
procedures for availment of tax treaty relief.  PLDT intends to pay withholding
tax at the reduced treaty rate in respect of shares the registered holder of
which is Cede &amp; Co., on the basis that Cede &amp; Co. is a resident of the United
 States for purposes of the Philippines-United States Tax Treaty.  PLDT reserves
the right to change the rate at which it makes payments of withholding tax
whenever it deems it appropriate under applicable law.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Capital Gains Tax and Stock
Transaction Tax</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Philippine Tax Code provides
that gain from the sale of shares of stock in a Philippine corporation shall be
treated as derived entirely from sources within the Philippines, regardless of
where the shares are sold.  Subject to applicable tax treaty rates, the rate of
tax on such gain, where the share is not disposed of through the Philippine
Stock Exchange, is a final tax of 5% for gains not exceeding Php100,000 and a
final tax of 10% for gains in excess of that amount.  The rate is the same for
both non-resident individuals and non-resident non-Philippine corporations.  While
this tax is not collected through withholding, the Philippine Tax Code
prohibits a transfer from being recorded on the books of the corporation unless
the Philippine Commissioner of Internal Revenue certifies that the tax has been
paid or certain other conditions are met.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The sale of shares which are listed in and sold through the PSE
are subject to the stock transaction tax imposed at the rate of 1/2 of 1% of
the gross selling price.  This tax is required to be collected and paid to the
government by the selling stockbroker on behalf of his client.  Sales of shares
other than through a Philippine stock exchange will be subject to Philippine
capital gains tax in the manner described above.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the Philippines-United States
Tax Treaty, gains derived by a United States resident from the sale of shares
of stock of a Philippine corporation will not be subject to Philippine tax,
either capital gains tax or stock transaction tax, unless the shares are those
of a corporation over 50% of the assets of which consist of real property
interests located in the Philippines.&nbsp; PLDT does not believe that it
currently is such a corporation.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Conversion
Feature</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT believes that there would be
no Philippine capital gains taxes upon the conversion of shares of Series III
Convertible Preferred Stock into shares of Common Stock.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Documentary Stamp Taxes</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Philippines imposes a
documentary stamp tax upon transfers of shares of stock issued by a Philippine
corporation at a rate of Php1.50 on each Php200, or fractional part thereof, of
the par value of the shares.  The documentary stamp tax is collectible wherever
the document is made, signed, issued, accepted or transferred, when the
obligation or right arises from Philippine sources or the property is situated
in the Philippines.  Effective March 20, 2004, the documentary stamp tax rate
upon transfer of shares of stock issued by a Philippine corporation is Php0.75
on each Php200, or fractional part thereof, of the par value of the shares.
However, the imposition of documentary stamp tax on secondary transfer of
shares of stock of a Philippine Corporation which is listed and traded through
the facilities of the Philippine Stock Exchange is suspended for a period of
five years counted from the same effective date.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Estate and Donor's Taxes</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Shares of stock issued by a
corporation organized or constituted in accordance with Philippine law are
deemed to have a Philippine situs and their transfer by way of succession or
donation is subject to Philippine estate and gift taxes.  The transfer of
shares of stock by a deceased individual to his heirs by way of succession,
whether such an individual was a citizen of the Philippines or an alien,
regardless of residence, will be subject to Philippine estate tax at
progressive rates ranging from 5% to 20% if the net estate is over Php200,000.
Individual and corporate shareholders, whether or not citizens or residents of
the Philippines, who transfer the Equity Securities by way of gift or donation
will be liable for Philippine donor&#146;s tax on such transfers at progressive
rates ranging from 2% to 15%, if the net gifts made during the calendar year
exceed Php100,000.  The rate of tax with respect to net gifts made to a
stranger, who is not a brother, sister, spouse, ancestor, lineal descendant or
relative by consanguinity in the collateral line within the fourth degree of
relationship of the donor, is a flat rate of 30%. Estate and gift taxes will
not be collected in respect of intangible personal property such as the Equity
Securities:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
if the deceased at the time of death, or the donor at the time of
donation, was a citizen and resident of a foreign country which at the time of
his death or donation did not impose a transfer tax of any character in respect
of intangible personal property of citizens of the Philippines not residing in
that foreign country, or</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
if the laws of the foreign country of which the deceased or the
donor was a citizen and resident at the time of his death or donation allow a
similar exemption from transfer or death taxes of every character or
description in respect of intangible personal property owned by citizens of the
Philippines not residing in that foreign country.</p>

<p style='margin-left:.5in;text-indent:-.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Shares of stock of a deceased
shareholder or shares that have been donated may not be transferred on the
books of the corporation without a certificate from the Philippine Commissioner
of Internal Revenue that the applicable estate or donor's taxes have been
paid.  In the case of ADRs and GDRs, however, there is no corresponding
requirement, unless a transfer of the ADRs and GDRs would also entail a change
in the registration of the underlying shares.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>United States</i><i>
Federal Taxation </i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">For United
 States federal income tax purposes, United States Holders of GDRs or ADRs
will be treated as the owners of the underlying shares of Series III
Convertible Preferred Stock or Common Stock.  Deposits and withdrawals by
United States Holders of shares of Series III Convertible Preferred Stock or
Common Stock in exchange for GDRs or ADRs will not be subject to United States
federal income tax.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Taxation
of Dividends</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the United States federal
income tax laws, and subject to the passive foreign investment company, or
PFIC, rules discussed below, if you are a United States Holder, the gross
amount of any dividend we pay out of our current or accumulated earnings and
profits (as determined for United States federal income tax purposes) is
subject to United States federal income taxation.  If you are a non-corporate
United States Holder, dividends paid to you in taxable years beginning after
December 31, 2002 and before January 1, 2009 that constitute qualified dividend
income will be taxable to you at a maximum tax rate of 15% provided that, in
the case of Common Stock or ADSs, you hold the Common Stock or ADSs for more
than 60 days during the 120-day period beginning 60 days before the ex-dividend
date or, in the case of Series III Convertible Preferred Stock or GDSs, if the
dividend is attributable to a period or periods aggregating over 366 days,
provided that you hold the Series III Convertible Preferred Stock or GDSs for
more than 90 days during the 180-day period beginning 90 days before the
ex-dividend date and meet other holding period requirements.  The IRS has
announced that it will permit taxpayers to apply a proposed legislative change
to the holding period requirement described in the preceding sentence as if
such change were already effective.  This legislative &#147;technical correction&#148;
would change the minimum required holding period, retroactive to January 1,
2003, with respect to Common Stock or ADSs, to more than 60 days during the
121-day period beginning 60 days before the ex-dividend date or, with respect
to Series III Convertible Preferred Stock or GDSs, to more than 90 days during
the 181-day period beginning 90 days before the ex-dividend date.  Dividends we
pay with respect to the Equity Securities generally will be qualified dividend
income.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">You must include any Philippine tax
withheld from the dividend payment or, in the case of Series III Convertible
Preferred Stock or GDSs, paid on your behalf by PLDT, in this gross amount even
though you do not in fact receive it.  The dividend is taxable to you when you,
in the case of Common Stock or Series III Convertible Preferred Stock, or the
Depositary, in the case of ADSs or GDSs, receive the dividend, actually or
constructively.  The dividend will not be eligible for the dividends-received
deduction generally allowed to United States corporations in respect of
dividends received from other United States corporations.  The amount of the
dividend distribution that you must include in your income as a United States
Holder will be the U.S. dollar value of the Philippine peso payments made,
determined at the spot Philippine peso/U.S. dollar rate on the date the
dividend distribution is includible in your income, regardless of whether the
payment is in fact converted into U.S. dollars.  Generally, any gain or loss
resulting from currency exchange fluctuations during the period from the date
you include the dividend payment in income to the date you convert the payment
into U.S. dollars will be treated as ordinary income or loss and will not be
eligible for the special tax rate applicable to qualified dividend income.  The
gain or loss generally will be income or loss from sources within the United
 States for foreign tax credit limitation purposes.  Distributions in excess
of current and accumulated earnings and profits, as determined for United
 States federal income tax purposes, will be treated as a non-taxable return
of capital to the extent of your basis in the Equity Securities and thereafter
as capital gain. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Subject to certain limitations, the
Philippine tax withheld in accordance with the Philippines-United States Tax
Treaty and paid over to the Philippines will be creditable against your United
 States federal income tax liability.  Special rules apply in determining the
foreign tax credit limitation with respect to dividends that are subject to the
maximum 15% tax rate.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Dividends will be income from sources
outside the United States, but generally will be &#147;passive income&#148; or &#147;financial
services income&#148; which is treated separately from other types of income for
purposes of computing the foreign tax credit allowable to you.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Certain Withholding Tax Payments</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Holders will receive regular quarterly cash dividends paid in
respect of the Series III Convertible Preferred Stock, but not on the Common
Stock issuable on conversion of such Series III Convertible Preferred Stock,
free and clear of withholding tax, such withholding tax being an obligation of
PLDT pursuant to the terms of the Series III Convertible Preferred Stock.  PLDT
intends to make such payments of withholding tax based on an applicable
withholding tax rate of 15%.  A United States Holder that receives dividends
free and clear of withholding tax will be treated for United States federal
income tax purposes as having received an additional distribution with respect
to the Series III Convertible Preferred Stock in the amount of the withholding
tax which is paid to the Philippine Bureau of Internal Revenue on behalf of
such United States Holder.  Such a deemed additional distribution will
generally be subject to the rules described above under &#147;Taxation of
Dividends.&#148;  The amount of additional income deemed to have been received by
the United States Holder will be equal to the initial amount of tax paid by
PLDT (based on the applicable withholding tax rate) divided by the difference
between one and the applicable withholding tax rate.  For example, assuming a
US$100 dividend received free and clear of a withholding tax of 15% (the rate
believed by PLDT to be the applicable withholding tax rate; see &#147;Philippine
Taxation &#151; Taxation of Dividends&#148;), the United States Holder will be treated as
having received additional income in the amount of US$15/(1-.15), or US$17.65.
Subject to certain limitations, the Philippine tax paid over to the Philippines
will be creditable against your United States federal income tax liability.
Special rules apply in determining the foreign tax credit limitation with
respect to dividends that are subject to the maximum 15% rate.  Dividends will
be income from sources outside the United States but will generally be &#147;passive
income&#148; or &#147;financial services income&#148; which is treated separately from other
types of income for purposes of calculating the foreign tax credit allowable to
you.  </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Sale</i><i>
or Other Disposition of Equity Securities</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">A United States Holder will
recognize capital gain or loss upon the sale of Equity Securities in an amount
equal to the difference between such United States Holder's basis in the Equity
Securities and the amount realized upon the sale.  Such gain or loss generally
will be long-term capital gain or loss if, at the time of sale, exchange or
retirement, the Equity Securities have been held for more than one year.
Capital gain of a non-corporate U.S. holder that is recognized on or after May 6, 2003 and before January 1, 2009 is generally taxed at a maximum rate of 15% where
the property is held for more than one year.  Generally, any such gain or loss
will be treated as realized income or loss from sources within the United
 States for foreign tax credit limitation purposes.  United States Holders may
not be eligible to credit against their United States federal income tax
liability amounts paid in respect of the Philippine stock transaction tax.  See
&#147;&#151; Philippine Taxation &#151; Capital Gains Tax and Stock Transaction Tax.&#148;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Conversion Feature</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In general, no gain or loss will be
recognized for United States federal income tax purposes on a conversion of
Series III Convertible Preferred Stock into Common Stock except with respect to
cash received in lieu of fractional shares of stock.  The tax basis for Common
Stock received upon conversion will be equal to the basis of the Series III
Convertible Preferred Stock converted and the holding period of the common
stock received upon conversion will include the holding period of the Series
III Convertible Preferred Stock.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The U.S. Tax Code does not
authorize a comparable credit for foreign gift or donor's taxes such as those
imposed by the Philippines.  See &#147;&#151; Philippine Taxation &#151; Estate and Donor's
Taxes.&#148;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Passive Foreign Investment
Company Rules</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We believe that the Equity
Securities should not be treated as stock of a PFIC for United States federal
income tax purposes, but this conclusion is a factual determination that is
made annually and thus may be subject to change.  If we were to be treated as a
PFIC, unless the Equity Securities are &#147;marketable stock&#148; and a United States
Holder elects to be taxed annually on a mark-to-market basis with respect to
the Equity Securities, gain realized on the sale or other disposition of your
Equity Securities would in general not be treated as capital gain.  Instead, if
you are a United States Holder, you would be treated as if you had realized
such gain and certain &quot;excess distributions&quot; ratably over your
holding period for the Equity Securities and would be taxed at the highest tax
rate in effect for each such year to which the gain was allocated, together
with an interest charge in respect of the tax attributable to each such year.
In addition, dividends that you receive from us will not be eligible for the
special tax rates applicable to qualified dividend income if we are a PFIC
either in the taxable year of the distribution or the preceding taxable year,
but instead will be taxable at rates applicable to ordinary income.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779248"></a><a name="_Toc46082310">Documents On Display</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We are
subject to the informational requirements of the Exchange Act, and file reports
and other information with the Commission, as required by this act.  Reports
and other information filed by us with the Commission may be inspected and
copied at the Commission&#146;s Public Reference Room at 450 Fifth Street, N.W., Washington,
 D.C. 20549.  The public may obtain information on the operation of the
Commission&#146;s Public Reference Room by calling the Commission in the United
 States at 1-800-SEC-0330.  The Commission also maintains a website that
contains reports, proxy statements and other information regarding registrants
that file electronically with the Commission.  Copies of this material may be
obtained by mail from the public reference section of the Commission, 450 Fifth
 Street, N.W., Washington, D.C. 20549, at prescribed rates.  These reports and
other information may also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005 and the Pacific Exchange, 301
 Pine Street, San Francisco, California 94104, on which the American
Depositary Shares representing our Common Stock are listed.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a name="_Toc75779249"></a><a
name="_Toc46082311">Item 11. Quantitative and Qualitative Disclosures about
Market Risks</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our
operations are exposed to various risks, including liquidity risk, foreign
exchange risk and interest rate risk.  The importance of managing these risks
has significantly increased in light of considerable change and continuing
volatility in the Philippine and international financial markets.  With a view
to managing these risks, we have incorporated financial risk management
functions in our organization, particularly in our treasury operations.</p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779250"></a><a name="_Toc46082312">Liquidity Risk Management</a></p>

<p style='text-indent:.5in;line-height:10.0pt;border:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We seek to manage our liquidity
profile to be able to finance our capital expenditures and service our maturing
debts.  To cover our financing requirements, we intend to use internally
generated funds and proceeds from debt and equity issues and sales of certain
assets.</p>

<p style='text-indent:.5in;line-height:10.0pt;border:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As part of our liquidity risk
management program, we regularly evaluate our projected and actual cash flow
information and continuously assess conditions in the financial markets for
opportunities to pursue fund-raising initiatives.  These initiatives may
include bank loans, export credit agency-guaranteed facilities, and debt
capital market issues.</p>

<p style='text-indent:.5in;line-height:10.0pt;border:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779251"></a><a name="_Toc46082313">Foreign Exchange Risk Management</a></p>

<p style='text-indent:.5in;line-height:10.0pt;page-break-after:
avoid;border:none' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">At December 31, 2003,
the Philippine peso depreciated against the U.S. dollar to Php55.586 to US$1.00
from Php53.254 to US$1.00 at December 31,
 2002, which in turn depreciated from
Php51.690 to US$1.00 at December 31, 2001.</p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">The following table
shows our consolidated foreign currency-denominated monetary assets and
liabilities and their peso equivalents as of December 31, 2003, 2002 and 2001:</p>

<p style='line-height:10.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:102.84%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p style='line-height:93%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Years
 Ended December 31,</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2003(1)</b></p>
 </div>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002(2)</b></p>
 </div>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2001(3)</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>US$</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 93%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php</p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>US$</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 93%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php</p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>US$</b></p>
 </div>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Php</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=4 valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style='text-align:center;line-height:93%;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in
 millions)</b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Assets</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:4.5pt;line-height:93%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cash and cash
 equivalents</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$146</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php8,105</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$76</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php4,040</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$40</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php2,091</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:4.5pt;line-height:93%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accounts receivable</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">192</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,676</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">149</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,910</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">146</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,536</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:4.5pt;line-height:93%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Other current assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">262</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">55</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">91</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:4.5pt;line-height:93%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Other noncurrent assets</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">24</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">1,360</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">5</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">271</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&#150;</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">5</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">367</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">20,403</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">231</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">12,276</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">188</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">9,723</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Liabilities</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:4.5pt;line-height:93%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Notes payable </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">150</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">320</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,189</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:13.5pt;text-indent:-9.0pt;line-height:
 93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Accounts
 payable </p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">74</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,108</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">56</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,969</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">27</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,411</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:4.5pt;line-height:94%;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrued expenses and
 other current liabilities </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,007</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">165</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,782</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">165</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,529</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:4.5pt;line-height:94%' style="margin-top:0;margin-bottom:0">Long-term debt</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,101</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">172,349</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,256</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">173,401</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 line-height:93%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,459</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">178,777</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:4.5pt;line-height:94%' style="margin-top:0;margin-bottom:0">Deferred credits and other noncurrent
 liabilities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">143</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">7,981</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">126</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">6,722</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">53</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">2,725</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='line-height:94%' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">3,375</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">187,595</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">3,609</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">192,194</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 right;line-height:93%;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">3,727</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 right;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">192,631</p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;line-height:
 94%' style="margin-top:0;margin-bottom:0">Net foreign
 currency-denominated liabilities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">US$3,008</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 right;line-height:93%;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php167,192</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='text-align:right;line-height:93%;
 page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">US$3,378</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 right;line-height:93%;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php179,918</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 right;line-height:93%;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">US$3,539</p>
 </div>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <div style='border:none;border-bottom:double windowtext 2.25pt;padding:0in 0in 1.0pt 0in;
 margin-left:0in;margin-right:2.9pt'>
 <p align=right style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 right;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php182,908</p>
 </div>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">______________</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:2.4in;text-indent:-2.4in' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>The exchange rate used was
Php55.586 to US$1.00.</i></p>

<p style='margin-left:2.4in;text-indent:-2.4in' style="margin-top:0;margin-bottom:0"><i>(2)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>The exchange rate used was
Php53.254 to US$1.00.</i></p>

<p style='margin-left:2.4in;text-indent:-2.4in' style="margin-top:0;margin-bottom:0"><i>(3)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>The exchange rate used was
Php51.690 to US$1.00.</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">While a
certain percentage of our revenues is either linked to or denominated in U.S.
dollars, substantially all of our indebtedness, a substantial portion of our
capital expenditures and a portion of our operating expenses are denominated in
foreign currencies, mostly in U.S. dollars.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">As of December 31, 2003, approximately 94% and 96% of our total
debt, on a consolidated and non-consolidated basis, respectively, were
denominated in foreign currencies, principally in U.S. dollars.  Of our foreign
currency-denominated debts, 11% and 8% are in Japanese yen, on a consolidated
and non-consolidated basis, respectively, and the balance in U.S. dollars.
Thus, a weakening of the peso against the U.S. dollar or Japanese yen will
increase both the principal amount of our unhedged foreign currency-denominated
debts (representing 63% and 58% of our consolidated and non-consolidated debts,
respectively), and interest expense on our debt in peso terms.  In addition,
many of our financial ratios and other financial tests would be negatively
affected.  If, among other things, the value of the peso against the U.S.
dollar drops from its current level, we may be unable to maintain compliance
with these ratios, which could result in acceleration of some or all of our
indebtedness.  For further information on our loan covenants, see &#147;Item 5.
Operating and Financial Review and Prospects &#151; Liquidity and Capital Resources
&#151; Financing Activities &#151; Debt Financing &#151; Covenants&#148; above and <i>Note 14 &#150;
Long-term Debt</i> to the accompanying consolidated financial statements in
Item 18.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">To manage foreign exchange risks,
stabilize cash flows, and improve investment and cash flow planning, we enter
into forward foreign exchange contracts, foreign currency swap contracts,
currency options and other hedging products aimed at reducing and/or managing
the adverse impact of changes in foreign exchange rates on our operating
results and cash flows.  However, these hedges do not cover all of our exposure
to foreign exchange risks, and hedges to cover all of our exposure are not
currently nor readily available.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Specifically, we use forward
foreign exchange contracts, foreign currency swap contracts and currency option
contracts to manage the foreign exchange risk associated with our foreign
currency-denominated loans.  As of December 31, 2003, PLDT&#146;s outstanding
forward foreign exchange contracts, principal-only long-term cross-currency
swap contracts and currency option contracts amounted to US$125 million
(Php6,948 million), US$725 million (Php40,300 million) and US$79 million
(Php4,391 million), respectively.  For further discussions of these contracts,
see <i>Note 26 &#150; Derivatives and Hedging Instruments</i> to the accompanying
consolidated financial statements in Item 18.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779252"></a><a name="_Toc46082314">Interest Rate Risk Management</a></p>

<p style='text-indent:.5in;line-height:9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">On a limited basis, we enter into
interest rate swap agreements in order to manage our exposure to interest rate
fluctuations.  As of December 31, 2003, PLDT had no outstanding interest rate
swap agreement.</p>

<p style='text-indent:.5in;line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">We make use of hedging instruments and structures solely for
reducing or eliminating financial risks associated with our liabilities and not
for trading or speculative purposes.</p>

<p style='text-indent:.5in;line-height:9.0pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The table below sets out the
information about PLDT's derivative financial instruments and other
transactions as of December 31, 2003 that are sensitive to foreign exchange
rates and to changes in interest rates:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:95.18%;;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style=';
 text-align:center;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </div>
 </td>
 <td   colspan=2 style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style=';
 text-align:center;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Fair Value</b></p>
 </div>
 </td>
 </tr>
 <tr>
 <td   style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Below 5
 years</b></p>
 </div>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>5 to 8.5
 years</b></p>
 </div>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style=';
 text-align:center;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>Over 8.5 years</b></p>
 </div>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>In Dollars</b></p>
 </div>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>In Pesos</b></p>
 </div>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;
 margin-left:0in;'>
 <p align=center style='margin-top:0in !msorm;margin-right:
 0in !msorm;margin-bottom:0in !msorm;;text-align:
 center;page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>In Dollars</b></p>
 </div>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>In Pesos</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>

 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Liabilities</b></p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Long-term Debt</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:4.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fixed Rate</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$ Notes (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">690</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">425</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .4pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">299</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,414</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">78,581</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,444</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">80,273</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Average interest rate</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">7.85% to 10.625%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10.50% to 11.375%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .4pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">8.350%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;;margin-bottom:
 0in;margin-left:9.0pt;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$ Fixed Loans (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">170</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">19</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">189</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,506</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">203</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,309</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Average interest rate</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5.83% to 8.03%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5.65% to 6.56%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japanese Yen (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">91</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">91</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,068</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">92</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,120</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Average interest rate</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2.125%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Philippine Peso (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">48</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">63</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,484</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">69</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,817</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Average interest rate</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">11.18% to 17.50%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15.00%</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:18.35pt;text-indent:-9.35pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Variable Rate</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S. Dollar (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">409</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">168</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">577</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">32,095</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">577</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">32,095</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Average interest rate</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">0.15% to 4.30% </p>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">over LIBOR</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">0.65% to 3.625% </p>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">over LIBOR</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japanese Yen (in millions)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">102</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">102</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,668</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">102</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,668</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-4.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Average interest rate</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">3.85% over </p>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japanese Yen </p>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">LIBOR</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:4.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0"><b>Forward Foreign Exchange</b></p>
 <p style='margin-left:9.0pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0"><b>Agreement</b></p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">(Receive
 US$/Pay Philippine</p>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Peso)
 Contract Amount </p>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">(in
 millions)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">125</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">125</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,974</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">125</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,934</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Average
 Contractual Exchange Rate</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php55.90</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:4.5pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0"><b>Resettable Cross Currency </b></p>
 <p style='margin-left:4.5pt' style="margin-top:0;margin-bottom:0"><b>Swap
 Agreement</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">(Receive
 US$/Pay Philippine</p>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Peso)
 Contract Amount </p>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">(in
 millions)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">175</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">550</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">725</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">37,138</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">725</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">40,300</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Average
 Contractual Exchange Rate</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';text-align:
 right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 .6pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php51.225</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779253"></a><a name="_Toc46082315">Item 12. Description
of Securities Other than Equity Securities</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Not Applicable.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779254"></a><a name="_Toc46082316">PART II</a></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a name="_Toc75779255"></a><a
name="_Toc46082317">Item 13. Defaults, Dividend Arrearages and Delinquencies</a></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Piltel has
experienced significant financial difficulties in recent years.  It has
restructured substantially all of its debts in accordance with its debt
restructuring plan, which was signed on June 4, 2001.  In June and October
2002, more creditors of Piltel agreed to participate in its restructuring plan
on the same terms.  As of December 31, 2003, total restructured long-term debt
of Piltel amounted to Php23,382 million, with maturities of up to June 14, 2016.  As of December 31, 2003, Piltel had an aggregate principal amount of Php51
million of unrestructured debt.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;text-indent:.5in' style="margin-top:0;margin-bottom:0">Piltel is
currently not in compliance with the terms of convertible bonds with principal
amount of US$0.7 million (approximately US$0.9 million redemption price at the
option of the holders).  See &#147;Item 5. Operating and Financial Review and
Prospects &#151; Certain Indebtedness &#151; Overview of Piltel&#146;s Indebtedness&#148;.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The Series C, Class I Preferred Stock of Piltel, is entitled to
annual cumulative cash dividends of Php0.20 per share (10% on the par value per
share).  Piltel is in arrears with payments of dividends with respect to the
Series C, Class I Preferred Stock in the amount of Php1 million for the years
ended December 31, 2003, 2002, 2001 and 2000.  As of the date of this annual
report on Form 20-F, the total arrearage with respect to the Series C, Class I
Preferred Stock of Piltel amounted to approximately Php4.2 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">See &#147;Item 3. Key Information &#151; Risk
Factors &#151; Risks Relating to Us &#151; Piltel has
experienced financial difficulties and we cannot assure you that it will be
able to discharge any of its debt or other obligations owed to us and our
affiliates&#148; and <i>Note 9 &#150; Information with respect to Piltel </i>and <i>Note
14 &#150; Long-term Debt </i>to the accompanying consolidated financial statements
in Item 18.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779256"></a><a name="_Toc46082318">Item 14. Material
Modifications to the Rights of Security Holders and Use of Proceeds</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">None.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779257"></a><a name="_Toc46082319">Item 15. Controls
and Procedures</a></p>

<p style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style="margin-top:0;margin-bottom:0">Our principal executive officer and principal financial officer,
carried out an evaluation of the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934, as amended) as of December 31, 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Based on this evaluation, our chief executive officer and
principal financial officer concluded that our disclosure controls and
procedures were effective as of December 31, 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">During 2003, no change to our internal control over financial
reporting occurred that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779258"></a><a name="_Toc46082320">Item 16A.   Audit
Committee Financial Expert</a></p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our board of directors has
determined that currently none of the members of the Audit Committee is an
audit committee financial expert as defined under the applicable rules of the
U.S. SEC issued pursuant to Section 407 of the Sarbanes-Oxley Act of 2002.  Our
board of directors believes that the audit committee members along with its
advisors, possess sufficient financial knowledge and experience.  Our board of
directors has appointed one of our non-independent directors, Corazon de la
Paz, as Audit Committee consultant to render advice on complex financial reporting
or accounting issues that may be raised in our Audit Committee&#146;s evaluation of
our financial statements and other related matters.  Formerly the Chairman and
Senior Partner of Joaquin Cunanan &amp; Company (a member firm of
PricewaterhouseCoopers Worldwide), Corazon de la Paz, is a certified public
accountant and possesses in depth knowledge of accounting principles (including
U.S. GAAP), internal controls and procedures for financial reporting and audit
committee functions, as well as extensive experience in overseeing or actively
supervising the preparation, audit, analysis or evaluation of financial
statements and in addressing complex and general financial reporting,
accounting and audit issues.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779259">Item 16B.   Code of Business Conduct and
Ethics</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On March 30, 2004, our board of directors approved and adopted our Code of Business Conduct and Ethics, or Code
of Ethics, that sets out our business principles and standards of behavior and
business relationships.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">It is our declared objective that all our actions and those of
our directors, officers and employees must, at all times, be consistent with
the principles of accountability, integrity, fairness and transparency.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our Code of Ethics provides standards to foster honest and
ethical behavior including the following:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Compliance with applicable laws, rules and regulations;</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Ethical
handling of conflicts of interest, corporate opportunities and confidential
information;</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Protection and proper use of our assets;</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fair dealing with our employees, customers, service providers, suppliers
and competitors;</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Compliance with our reporting and disclosure obligations to the relevant
regulators and the investors;</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Compliance with our disclosure and financial reporting controls and
procedures;</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assessment and management of risks involved in our business endeavours;
and</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Adoption of international best practices of good corporate governance in
the conduct of our business.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Corporate Governance</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our Code of Ethics has been adopted
to strengthen the implementation of our Corporate Governance Manual, or
Governance Manual, which was adopted and approved by our board of directors in
September 2002.  Our Governance Manual seeks to institutionalize the principles
of good governance which our board of directors and management believe to be a
necessary component of sound business management.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our Governance Manual conforms
with the requirements of the Code of Corporate Governance, or SEC Governance
Code, that was promulgated by the Philippine Securities and Exchange
Commission, or Philippine SEC, under the Philippine SEC Memorandum Circular No.
2, Series of 2002, on April 5, 2002, in line with the Philippine Government&#146;s
policy to promote corporate governance reform aimed to raise investor
confidence, develop capital market and help achieve sustained growth for the
Philippine corporate sector and the economy.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In
compliance with the SEC Governance Code and consistent with the relevant
provisions of the Securities Regulation Code and Corporation Code of the Philippines,
our Governance Manual covers the following key areas:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The qualifications and grounds for disqualification for directorship;</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
requirement that at least two or twenty percent of the members of our board of
directors, whichever is lesser, must be independent directors and the standards/criteria
for the determination of independent directors;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
duties and responsibilities of our board of directors and the individual
directors;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Our
board committees, specifically, the nomination committee, audit committee and
executive compensation committee, the composition and the principal duties and
responsibilities of such committees;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
role of our chairman in ensuring compliance with the corporate governance
principles;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
role of our president/chief executive officer in ensuring that our
organizational and procedural controls are adequate and effective to ensure
reliability and integrity of financial and operational information,
effectiveness and efficiency of operations, safeguarding of assets and
compliance with laws, rules, regulations and contracts;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
duties and responsibilities of our corporate secretary/assistant corporate
secretary in terms of the support services that they need to provide our board
in upholding sound corporate governance;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
duties and responsibilities of the head of our internal audit organization that
would provide our board of directors, management and shareholders with
reasonable assurance that our key organizational and procedural controls are
appropriate, adequate, effective and reasonably complied with;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
functions of our independent auditors that would reasonably ensure an
environment of sound corporate governance as reflected in our financial records
and reports; the requirement that non-audit work of the independent auditors
should not conflict with their function as independent auditors; the
requirement to rotate, at least once every five years, the independent auditors
or the lead partner assigned to handle the independent audit of our financial
statements;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">10.&nbsp;&nbsp; Our commitment to
respect and promote shareholders&#146; rights such as voting right, pre-emptive
right, inspection right, dividend right, appraisal right, and right to receive
information about the background, business experience, compensation and
shareholdings of our directors and officers and their transactions with us;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">11.&nbsp;&nbsp; The requirement to
appoint a compliance officer and the duties and responsibilities of such
compliance officer including the establishment of an evaluation system to
determine and measure compliance with the provisions of our Governance Manual;
and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">12.&nbsp;&nbsp; The penalties for
violations of our Governance Manual.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Corporate Governance
Officer</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our
corporate governance officer is responsible for monitoring compliance with,
interpreting and deciding any issues arising from, investigating and
determining violations and recommending the disciplinary actions against
violators of our Governance Manual and Code of Ethics.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Board Committees</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We have four board committees
namely, the nomination, audit, executive compensation and finance committees.
Each committee has a board- approved written charter that provides for such
Committee&#146;s composition, membership qualifications, functions and
responsibilities, conduct of meetings, and reporting procedure to the board.
See &#147;Item 6. Directors, Senior Management and Employees &#150;&#150; Audit, Nomination,
Executive Compensation and Finance Committees&#148; for further details.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Internal Audit
Organization</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have an
internal audit organization that determines whether our network or risk
management, control and governance processes are adequate and functioning to
ensure that:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Risks
are appropriately identified and managed;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Significant
financial, managerial, and operating information are accurate, reliable, and
timely;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employees&#146;
actions are in compliance with policies, standards, procedures, and applicable
laws and regulations;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Resources
are acquired economically, used efficiently, and adequately protected;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Programs,
plans and objectives are achieved;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Quality
and continuous improvement are fostered in our control process;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Significant
legislative or regulatory issues impacting us are recognized and addressed
appropriately; and</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interaction
with various governance groups occurs as needed.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">To ensure independence, the head of our internal audit
organization reports functionally to our audit committee and administratively
to our president and chief executive officer.  He is accountable to management
and our audit committee in the discharge of his duties and is required to:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provide
annually an assessment on the adequacy and effectiveness of our processes for
controlling our activities and managing our risks;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Report
significant issues related to the processes of controlling our activities,
including potential improvements to those processes, and provide information
concerning such issues;</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Periodically
provide information on the status and results of the annual audit plan and the
sufficiency of our internal audit organization&#146;s resources; and</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Coordinate
with and provide oversight of other control and monitoring functions (risk
management, compliance, security, legal, ethics, environmental, external
audit).</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Our internal audit organization has a charter that has been
approved by our audit committee.  It seeks to comply with the Standards for the
Professional Practice of Internal Auditing of The Institute of Internal
Auditors in the discharge of its scope of work and responsibilities.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Policy on Employee
Disclosure of Questionable Accounting or Auditing Matters</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have a written policy on the
handling of employees&#146; complaints or disclosures about irregularities regarding
accounting, internal controls and auditing matters and the protection against
retaliation for those employees who make such complaints or disclosures.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Any employee may submit a complaint
or disclosure of the above nature, in writing, to the Audit Committee or,
verbally, to the internal audit organization, in either case, through the head
of our internal audit organization.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The head of our internal audit organization facilitates the
investigation of these complaints or disclosures and ensures the appropriate
reporting to our audit committee on the results of the investigations and the
prompt referrals of findings to the appropriate units concerned.  Our committee
on employee discipline is responsible for evaluating and approving the
appropriate disciplinary action against erring employees with the rank of
assistant vice president or lower while our corporate governance officer
jointly with our corporate secretary are responsible for evaluating and
recommending to our president/chief executive officer the appropriate
disciplinary action against erring officers with the rank of vice president or
higher.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The public may obtain information
on our Code of Ethics, Corporate Governance Guidelines and Charters of our Board
Committees.  We undertake to provide a copy, without charge, to any person
requesting for such copy from our Corporate Secretary, Ma. Lourdes Rausa-Chan,
with e-mail address <i>lrchan@pldt.com.ph</i> or telephone number
+632-814-3552.  We also maintain a website at <i>www.pldt.com.ph </i>wherein
reports filed by us and other information may be accessed.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779260">Item 16C.   Principal Accountant Fees and
Services</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;text-indent:.5in' style="margin-top:0;margin-bottom:0">The following table summarizes the
fees paid or accrued for services provided by our external auditors for the fiscal
years ended December
 31, 2003 and 2002:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='margin-left:77.4pt;border-collapse:collapse'>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.5pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in;padding-bottom:1.0pt;border-bottom:1.5pt solid windowtext' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </div>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.5pt;padding:0in 0in 1.0pt 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>2002</b></p>
 </div>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(in millions)</b></p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' background:#DDDDDD;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Audit Fees</p>
 </td>
 <td  valign=bottom style=' background:#DDDDDD;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php24</p>
 </td>
 <td  valign=bottom style=' background:#DDDDDD;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php45</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Tax Fees</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' background:#DDDDDD;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">All Other Fees</p>
 </td>
 <td  valign=bottom style=' background:#DDDDDD;
 padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p style='page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">13</p>
 </div>
 </td>
 <td  valign=bottom style=' background:#DDDDDD;
 padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>
 <p style='page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">4</p>
 </div>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:double windowtext 1.5pt;padding:0in 0in 1.0pt 0in'>
 <p style='margin-bottom:3.0pt;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php42</p>
 </div>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <div style='border:none;border-bottom:double windowtext 1.5pt;padding:0in 0in 1.0pt 0in'>
 <p style='margin-bottom:3.0pt;page-break-after:avoid;
 border:none;padding:0in' style="margin-top:0;margin-bottom:0">Php51</p>
 </div>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Audit Fees</i>.
This category includes the audit of our annual financial statements, review of
interim financial statements and services that are normally provided by the
independent auditors in connection with statutory and regulatory filings or
engagements for those fiscal years.  This category also includes advice on
audit and accounting matters that arose during, or as a result of, the audit or
the review of interim financial statements and statutory audits required by
non-U.S. jurisdictions, including statutory audits required.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Tax Services.</i>  This category includes tax compliance, tax advice and tax planning
services performed by our independent auditors in respect of Smart.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>All
Other Fees</i>.  This category consists
primarily of fees for consultation with respect to IAS 39 &#150; Financial
Instruments, risk management review in respect of Smart&#146;s information security
infrastructure, due diligence review for certain projects and specialized
trainings.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The
fees presented above includes out-of-pocket expenses incidental to our
independent auditors&#146; work, which amounts do not exceed 5% of the agreed-upon
engagement fees.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our
Audit Committee pre-approves all audit and non-audit services as these are
proposed or endorsed before these services are performed by our independent
auditors.  </p>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc46082321">&nbsp;</a></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779261">Item 16D.   Exemption from the listing
Standards for Audit Committees</a></p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.3in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Not applicable.</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.3in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779262">Item 16E.   Purchases of Equity
Securities by the Issuer and Affiliated Purchaser</a></p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.3in;margin-bottom:.0001pt;text-indent:-.3in;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:.3in;margin-bottom:.0001pt;text-indent:-.3in;line-height:normal' style="margin-top:0;margin-bottom:0">Not applicable.</p>

<p style='page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc75779263">PART III</a></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc46082322"></a><a name="_Toc75779264">Item 17. Financial
Statements</a> </p>

<p style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style="margin-top:0;margin-bottom:0">Not applicable.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779265">Item 18. Financial Statements</a></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Index to Financial Statements</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b><u>Page</u></b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;margin-right:.5in;margin-bottom:
 3.0pt;margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">PHILIPPINE
 LONG DISTANCE TELEPHONE COMPANY AUDITED ANNUAL FINANCIAL STATEMENTS</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:3.0pt' style="margin-top:0;margin-bottom:0">Report
 of Independent Auditors</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">F-1</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:3.0pt' style="margin-top:0;margin-bottom:0">Balance
 Sheets as of December 31, 2003 and 2002</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">F-3</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:3.0pt' style="margin-top:0;margin-bottom:0">Statements
 of Income for the Years Ended December
 31, 2003, 2002 and 2001</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">F-4</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
 margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Statements
 of Changes in Stockholders' Equity for the Years Ended December 31, 2003, 2002
 and 2001</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">F-5</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:3.0pt' style="margin-top:0;margin-bottom:0">Statements
 of Cash Flows for the Years Ended December 31, 2003,
 2002 and 2001</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">F-6</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:3.0pt' style="margin-top:0;margin-bottom:0">Notes
 to Financial Statements</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-bottom:3.0pt;text-align:center' style="margin-top:0;margin-bottom:0">F-8</p>
 </td>
 </tr>
</table></center></div>

<p style='margin:0in;margin-bottom:.0001pt;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><a name="_Toc75779266">Item 19. Exhibits</a></p>

<p style='line-height:8.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">See Item 18 above for details
of the financial statements filed as part of this annual report.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Exhibits to this report:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.66%;margin-left:5.4pt;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Articles of Incorporation and By-laws</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2.</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have not included as exhibits certain instruments with respect to
 our long-term debt, the amount of debt authorized under each of which does
 not exceed 10% of out total assets, and we agree to furnish a copy of any
 such instrument to the Securities and Exchange Commission upon request.</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4.</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Material Contracts</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6.</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Computation of Earnings per Share</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7.</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Calculation of Ratio of Earnings to Fixed Charges</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8.</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Subsidiaries</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12.1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Certification of Chief Executive Officer required by Rule 13a-14(a) of
 the Exchange Act </p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12.2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Certification of the Principal Financial Officer required by Rule
 13a-14(a) of the Exchange Act</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';' style="margin-top:0;margin-bottom:0">13.1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Certification of Chief
 Executive Officer required by Rule 13a-14(b) of the Exchange Act</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';' style="margin-top:0;margin-bottom:0">13.2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Certification of the
 Principal Financial Officer required by Rule 13a-14(b) of the Exchange Act</p>
 </td>
 </tr>
</table></center></div>

<br clear=all
style='page-break-before:always'>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
normal' style="margin-top:0;margin-bottom:0">SIGNATURE</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;text-indent:.5in' style="margin-top:0;margin-bottom:0">The registrant
hereby certifies that it meets all of the requirements for filing on Form 20-F
and that it has duly caused and authorized the undersigned to sign this annual
report on its behalf.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align=right>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  colspan=3 valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">PHILIPPINE LONG DISTANCE TELEPHONE COMPANY</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style=';margin-right:.8pt' style="margin-top:0;margin-bottom:0">By:</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">/s/</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style=';text-align:
 center' style="margin-top:0;margin-bottom:0">Ma. Lourdes C. Rausa-Chan</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style=';text-align:
 center' style="margin-top:0;margin-bottom:0">MA. LOURDES C. RAUSA-CHAN</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style=';margin-right:
 .1in;text-align:right' style="margin-top:0;margin-bottom:0">Senior Vice President,
 Corporate Affairs and Legal </p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style=';text-align:
 center' style="margin-top:0;margin-bottom:0">Services Head and Corporate Secretary</p>
 </td>
 </tr>
</table></center></div>

</div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Date:  June 24, 2004</p>

<b><br
clear=all style='page-break-before:always'>
</b>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779267"></a><a name="_Toc67395411">EXHIBIT INDEX</a></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>

 <tr>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;page-break-after:auto' style="margin-top:0;margin-bottom:0"><a name="_Toc46082326">Exhibit<br>
 Number</a></p>
 </td>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:45.0pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Description of Exhibit</b></p>
 </td>
 </tr>

 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">1(a)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Articles of Incorporation
 (incorporated by reference to PLDT's Form 20-F as filed with the Securities
 and Exchange Commission in May 2001)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">1(b)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">By-Laws (incorporated by
 reference to PLDT&#146;s Form 20-F as filed with the Securities and Exchange
 Commission in July 2003)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">We have not included as
 exhibits certain instruments with respect to our long-term debt, the amount
 of debt authorized under each of which does not exceed 10% of out total
 assets, and we agree to `furnish a copy of any such instrument to the
 Securities and Exchange Commission upon request.</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">4(a)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Stock Purchase and
 Strategic Investment Agreement, dated September 28, 1999, by and among PLDT,
 First Pacific Limited, Metro Pacific Corporation, Metro Pacific Asia Link
 Holdings, Inc., Metro Pacific Resources, Inc. and NTT Communications
 Corporation (incorporated by reference to PLDT's Form 6-K for the month of
 September 1999 [2])</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">4(b)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Executive Stock Option Plan
 (incorporated by reference to PLDT's Form 20-F as filed with the Securities
 and Exchange Commission in May 2001)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">4(c)</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Master Restructuring
 Agreement, dated June 21, 2000, as amended on December 12, 2000 and December
 19, 2000, between Piltel, Piltel (Cayman) Limited, PLDT, The Chase Manhattan
 Bank, as escrow agent, Metropolitan Bank and Trust Company, as administrative
 agent and the creditors named therein (incorporated by reference to PLDT's
 Form 20-F as filed with the Securities and Exchange Commission in May 2001)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Computation of Earnings per
 Share</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Calculation of Ratio of
 Earnings to Fixed Charges </p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Subsidiaries </p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">12.1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Certification of Chief
 Executive Officer required by Rule 13a-14(a) of the Exchange Act </p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">12.2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Certification of the
 Principal Financial Officer required by Rule 13a-14(a) of the Exchange Act</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">13.1</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Certification of Chief
 Executive Officer required by Rule 13a-14(b) of the Exchange Act</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">13.2</p>
 </td>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Certification of the
 Principal Financial Officer required by Rule 13a-14(b) of the Exchange Act</p>
 </td>
 </tr>
</table></center></div>

<p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<b><br clear=all
style='page-break-before:always'>
</b>

<p align=right style='text-align:right;line-height:10.0pt' style="margin-top:0;margin-bottom:0"><b>EXHIBIT
6</b></p>

<p align=right style='text-align:right;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:11.0pt' style="margin-top:0;margin-bottom:0">PHILIPPINE LONG DISTANCE TELEPHONE COMPANY</p>

<p style='line-height:11.0pt' style="margin-top:0;margin-bottom:0">Computation of Net Operating
Income and Earnings Per Share</p>

<p style='line-height:11.0pt' style="margin-top:0;margin-bottom:0"><b>For the years 2001 through
2003</b></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0 align=left
   style='width:100.0%;border-collapse:collapse;margin-left:6.75pt;
 margin-right:6.75pt;border-collapse:collapse !msorm;margin-left:6.75pt !msorm;
 margin-right:6.75pt !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b><u>2003</u></b></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b><u>2003</u></b><u>(1)</u></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b><u>2002</u></b></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b><u>2001</u></b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style=';text-align:
 center' style="margin-top:0;margin-bottom:0"><b>(in millions, except net operating
 income (loss) per common share)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0"><b>1. Net operating income
 (loss) per share</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:.3in;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Net operating income (loss) </p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php33,473</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$602</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php12,029</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(Php5,942)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:17.1pt' style="margin-top:0;margin-bottom:0">Deduct:
 Dividends on preferred stock</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,739</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">31</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,645</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,503</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:64.1pt;text-indent:-19.1pt' style="margin-top:0;margin-bottom:0">Amortization of difference between fair market value
 and put option price of preferred stock subject to mandatory conversion</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,309</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,004</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">542</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:.3in;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Net operating income (loss) applicable to common shareholders</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php30,425</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$547</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php9,380</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php7,987)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:.3in;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Net operating income (loss) </p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php33,473</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$602</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php12,029</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php5,942)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:17.1pt' style="margin-top:0;margin-bottom:0">Deduct:
 Dividends on preferred stock</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">49</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,036</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,503</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:58.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Amortization of difference between fair market value
 and put option price of preferred stock subject to mandatory conversion</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,309</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,004</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">542</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:.3in;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Net operating income (loss) applicable to common
 shareholders</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php32,115</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$577</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php9,989</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php7,987)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:12.6pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:31.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Weighted average number of common shares (in
 thousands)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:17.1pt;text-indent:9.9pt' style="margin-top:0;margin-bottom:0">Outstanding common shares, beginning</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">169,361</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,895</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,498</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:.3in;text-indent:5.4pt' style="margin-top:0;margin-bottom:0">Effect of common shares issuance during the year</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">200</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">169,413</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">169,095</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:12.6pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:31.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Weighted average number of common shares (in
 thousands)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:17.1pt;text-indent:9.9pt' style="margin-top:0;margin-bottom:0">Outstanding common shares, beginning</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">169,361</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,895</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,498</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:27.0pt' style="margin-top:0;margin-bottom:0">Effect
 of common shares issuance during the year</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">24,274</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">22,360</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">193,635</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">191,255</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Net operating income (loss)
 per share </p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php179.59</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$3.23</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php55.47</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php47.36)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">165.85</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2.98</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">52.23</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(47.36)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>
 </td>
 <td   colspan=7 valign=top style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='margin-right:5.75pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0"><u>&nbsp;</u></p>
 </td>
 <td   colspan=7 valign=top style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='margin-right:5.75pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>(in millions, except earnings per common share)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0"><b>2. Earnings per share(2)</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:17.1pt' style="margin-top:0;margin-bottom:0">Net
 income (loss)</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php11,045</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$199</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php6,158)</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php27,782)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:17.1pt' style="margin-top:0;margin-bottom:0">Deduct:
 Dividends on preferred shares</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,739</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">31</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,645</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,503</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:48.6pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Amortization of difference between fair market<br>
 value and option price of preferred stock<br>
 subject to mandatory conversion</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,309</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,004</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">542</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:17.1pt' style="margin-top:0;margin-bottom:0">Net
 income (loss) applicable to common shareholders</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php7,997</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$144</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php8,807)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php29,827)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:12.6pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Net
 income (loss)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php11,045</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$199</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php6,158)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php27,782)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:12.6pt;text-indent:5.4pt' style="margin-top:0;margin-bottom:0">Deduct:  Dividends on preferred shares</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,485</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">27</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,645</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,503</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:49.5pt' style="margin-top:0;margin-bottom:0">Amortization
 of difference between fair market<br>
 value and option price of preferred stock <br>
 subject to mandatory conversion</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,309</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,004</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">542</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:12.6pt;text-indent:5.4pt' style="margin-top:0;margin-bottom:0">Net income (loss) applicable to common shareholders</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php8,251</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$148</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php8,807)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php29,827)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:12.6pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:31.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Weighted average number of common shares (in
 thousands)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:17.1pt;text-indent:9.9pt' style="margin-top:0;margin-bottom:0">Outstanding common shares, beginning</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">169,361</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,895</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,498</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:.3in;text-indent:5.4pt' style="margin-top:0;margin-bottom:0">Effect of common shares issuance during the year</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">200</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='text-indent:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">169,413</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">169,095</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='text-indent:9.0pt' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #D9D9D9;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='text-indent:.25in' style="margin-top:0;margin-bottom:0">Weighted
 average number of common shares (in thousands)</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='text-indent:27.0pt' style="margin-top:0;margin-bottom:0">Outstanding
 common shares, beginning</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">169,361</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,895</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,498</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='text-indent:27.0pt' style="margin-top:0;margin-bottom:0">Effect
 of common shares issuance during the year</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">11,121</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">200</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='text-indent:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">180,482</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">169,095</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Earnings per share(2) </p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.7pt' style='page-break-inside:
 avoid !msorm;height:11.7pt !msorm'>
 <td   valign=top style=' background:#D9D9D9;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:11.7pt'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:11.7pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php47.20</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:11.7pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$0.85</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:11.7pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php52.08)</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm;height:11.7pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php176.85)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">45.72</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">0.82</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>The PLDT Group maintains its
accounts in Philippine pesos.  For convenience, the peso financial information
as of and for the year ended December 31, 2003 has been translated into U.S.
dollars at the exchange rate of Php55.586 to US$1.00, the peso-dollar rate as
quoted through the Philippine Dealing System as of December 31, 2003.</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>(2)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>Our convertible preferred
stocks were deemed anti-dilutive for the years ended </i><i>December 31, 2002</i><i> and 2001.  Since the amount of preferred dividends over the equivalent
number of common stocks were greater than the basic earnings per share, the
amounts reported for the years ended December 31, 2002 and 2001 basic and
diluted earnings per common share were the same.</i></p>

<i><br clear=all
style='page-break-before:always'>
</i>

<p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>EXHIBIT 7</b></p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;
page-break-after:auto' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b>PHILIPPINE LONG DISTANCE TELEPHONE COMPANY</b></p>

<p style="margin-top:0;margin-bottom:0"><b>Calculation of Ratio of Earnings to Fixed Charges</b></p>

<p style="margin-top:0;margin-bottom:0">For the years 2001 through
2003</p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:96.06%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b><u>2003</u></b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b><u>2003(1)</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b><u>2002</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b><u>2001</u></b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>(in millions, except ratio of earnings (loss) to fixed
 charges)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">Earnings
 (a)</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php25,119</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$453</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">Php11,455</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">(Php13,117)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Fixed charges &#150; (b)</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Fixed
 charges excluding amortization of capitalized interest</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php13,698</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$247</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php14,312</p>
 </td>
 <td   valign=bottom style=' background:#D9D9D9;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php15,839</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.6pt' style='page-break-inside:
 avoid !msorm;height:12.6pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm;
 height:12.6pt'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">Capitalized
 interest, net of amortization</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm;
 height:12.6pt'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(262)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm;
 height:12.6pt'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(5)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm;
 height:12.6pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">(393)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm;
 height:12.6pt'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1,170</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php13,436</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$242</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php13,919</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#D9D9D9;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php17,009</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Ratio (a/b) (2)</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1.8</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1.8</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">_____________</p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;line-height:
9.0pt' style="margin-top:0;margin-bottom:0"><i>(1)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>PLDT maintains its accounts
in Philippine pesos.  For convenience, the peso financial information as of and
for the year ended December 31, 2003 has been translated into U.S. dollars at
the exchange rate of Php55.586 to US$1.00, the peso-dollar rate as quoted
through the Philippine Dealing System as of December 31, 2003.</i></p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in;line-height:
9.0pt' style="margin-top:0;margin-bottom:0"><i>(2)&nbsp;&nbsp;&nbsp;&nbsp;
</i><i>For purposes of this ratio,
&#147;Earnings&#148; consist of income before provision for income tax (excluding PLDT&#146;s
share in undistributed income of less than 50%-owned affiliates) and fixed
charges (excluding capitalized interest).  &#147;Fixed charges&#148; consist of interest
(including capitalized interest, discounts and other financing costs) on all
indebtedness, amortization of deferred financing costs and the estimated
financing component of rent expense (i.e., one-third of rent expense).</i></p>

<p style='line-height:9.0pt' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;line-height:9.0pt' style="margin-top:0;margin-bottom:0"><i>Due to PLDT&#146;s net losses in 2002 and 2001, the coverage
ratio on a consolidated basis was less than 1.0x in all of these two years.  In
order to achieve a coverage ratio of 1.0x, we would have had to generate
additional consolidated earnings of Php2,464 million and Php30,126 million for
each of the two years ended </i><i>December
 31, 2002</i><i> and 2001, respectively.</i></p>

<p style='line-height:50%' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<b><i><br
clear=all style='page-break-before:always'>
</i></b>

<p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>EXHIBIT 8</b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">SUBSIDIARIES</h1>

<p style='margin-top:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.5%;margin-left:.9pt;border-collapse:collapse'>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal;page-break-after:auto' style="margin-top:0;margin-bottom:0">Name of Subsidiary</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Jurisdiction</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Principal Activity</b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Percentage of Ownership<br>
 (As of </b><b>December 31, 2003</b><b>)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Wireless</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Smart Communications, Inc. and subsidiaries</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Cellular mobile
 services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:12.6pt' style="margin-top:0;margin-bottom:0">Telesat,
 Inc.</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Satellite
 communications services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">94.4</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">ACeS Philippines Cellular Satellite
 Corporation</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Satellite phone
 services </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">93.7</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Mabuhay Satellite Corporation (formerly
 Mabuhay Philippines Satellite Corporation)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Satellite communications
 services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">67.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Pilipino Telephone Corporation and
 subsidiaries</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Cellular mobile
 services and telecommunications services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">45.3</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Fixed
 Line</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:12.6pt' style="margin-top:0;margin-bottom:0">PLDT
 Clark Telecom, Inc.</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:.05in' style="margin-top:0;margin-bottom:0">Subic
 Telecommunications</p>
 <p style='margin-left:9.0pt;text-indent:8.1pt' style="margin-top:0;margin-bottom:0">Company, Inc.</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:12.6pt' style="margin-top:0;margin-bottom:0">Smart-NTT
 Multimedia, Inc.</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Data and network services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">PLDT Global and subsidiaries</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">British Virgin Islands</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Telecommunications services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">PLDT-Maratel, Inc. (formerly Maranao Telephone
 Company, Inc.)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Telecommunications
 services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">97.5</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:17.1pt;text-indent:-4.5pt' style="margin-top:0;margin-bottom:0">Bonifacio Communications Corporation</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Telecommunications,
 infrastructure and related value-added services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">75.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">Information
 and Communications Technology</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='text-indent:12.6pt' style="margin-top:0;margin-bottom:0">ePLDT,
 Inc. and subsidiaries</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Philippines</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Information and
 communications infrastructure for internet-based services, e-commerce, call
 centers and IT-related services</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:31.5pt;text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<br
clear=all style='page-break-before:always'>

<p style='text-indent:5.5in' style="margin-top:0;margin-bottom:0"><b>EXHIBIT 12.1</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0"><a name="_Toc75779268">CERTIFICATION</a></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-bottom:12.0pt' style="margin-top:0;margin-bottom:0">I, Napoleon L. Nazareno,
certify that:</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
I have reviewed this annual report on Form 20-F of Philippine
Long Distance Telephone Company;</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Company as of, and for, the periods presented in this report;</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and have:</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:
..75in;text-indent:-.25in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this report is being prepared;</h2>

<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:
..75in;text-indent:-.25in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
[Omitted
pursuant to the guidance of Release Nos. 33-8238 (June 5, 2003) and 33-8392 (February 24, 2004)];</h2>

<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:
..75in;text-indent:-.25in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Evaluated
the effectiveness of the Company's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and</h2>

<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:
..75in;text-indent:-.25in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Disclosed
in this report any change in the Company&#146;s internal control over financial
reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the
Company&#146;s internal control over financial reporting; and</h2>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s other certifying officers and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the Company&#146;s auditors and the audit committee of the Company&#146;s
board of directors (or persons performing the equivalent functions):</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial information; and</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:7.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company&#146;s internal control over financial
reporting.</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Date:  June 24, 2004</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in;line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='margin-left:288.9pt;border-collapse:collapse'>
 <tr>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-right:.05in;text-align:center' style="margin-top:0;margin-bottom:0">/s/ Napoleon L. Nazareno</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Napoleon
 L. Nazareno</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">President and Chief Executive Officer</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(Principal Executive Officer)</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=right style='margin-left:22.3pt;text-align:right;
text-indent:-22.3pt' style="margin-top:0;margin-bottom:0"><b>Exhibit 12.2</b></p>

<p align=center style='margin-left:22.3pt;text-align:center;
text-indent:-22.3pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='margin-left:22.3pt;text-align:center;
text-indent:-22.3pt' style="margin-top:0;margin-bottom:0"><b>CERTIFICATION</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-bottom:12.0pt' style="margin-top:0;margin-bottom:0">I, Anabelle L. Chua, certify
that:</p>

<p style='margin-left:.75in;text-indent:-.5in' style="margin-top:0;margin-bottom:0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I
have reviewed this annual report on Form 20-F of Philippine Long Distance
Telephone Company;</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Company as of, and for,
the periods presented in this report;</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Company&#146;s other certifying officer(s) and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the Company and have:</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:
..75in;text-indent:-.25in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">a)   Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the Company,
including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;</h2>

<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:
..75in;text-indent:-.25in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">b)   [Omitted pursuant to the guidance of Release Nos.
33-8238 (June 5,
 2003) and 33-8392
(February 24, 2004)];</h2>

<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:
..75in;text-indent:-.25in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">c)   Evaluated the effectiveness of the Company's
disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation; and</h2>

<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:
..75in;text-indent:-.25in;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">d)   Disclosed in this report any change in the Company&#146;s
internal control over financial reporting that occurred during the period
covered by the annual report that has materially affected, or is reasonably
likely to materially affect, the Company&#146;s internal control over financial
reporting; and</h2>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Company&#146;s other certifying officer(s) and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
Company&#146;s auditors and the audit committee of the Company&#146;s board of directors
(or persons performing the equivalent functions):</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">a)   All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial information; and</p>

<p style='line-height:8.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">b)   Any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company&#146;s internal control over financial reporting.</p>

<p style='line-height:10.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Date:  June 24, 2004</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='margin-left:297.9pt;border-collapse:collapse'>
 <tr>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">/s/ Anabelle L. Chua</p>
 </td>
 </tr>
 <tr style='height:38.65pt'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 height:38.65pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Anabelle
 L. Chua</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Senior Vice President and Treasurer</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(Principal Financial Officer)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:382.5pt' style="margin-top:0;margin-bottom:0"><a name=node35></a><b>EXHIBIT
13.1</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='margin-left:22.5pt;text-align:center;
text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>CERTIFICATION</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=left style='margin-right:.25in;text-align:left;
text-indent:27.0pt' style="margin-top:0;margin-bottom:0">Pursuant
to 18 U.S.C. &#167; 1350, I, Napoleon
L. Nazareno, President
and Chief Executive Officer of Philippine Long Distance Telephone Company, hereby
certify, to my knowledge, that our annual report on Form 20-F for the year
ended December 31, 2003 (the &#147;Report&#148;) fully complies with the requirements of
Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934,
and that the information contained in the Report fairly presents, in all
material respects, our financial condition and results of operations.</p>

<p align=left style='text-align:left;text-indent:24.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;text-indent:24.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left' style="margin-top:0;margin-bottom:0">Date:  June 24, 2004</p>

<p align=left style='text-align:left' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='margin-left:31.9pt;border-collapse:collapse'>
 <tr>
 <td  valign=bottom style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">/s/ Napoleon L. Nazareno</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Napoleon
 L. Nazareno</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">President and Chief Executive Officer</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">(Principal Executive Officer)</p>
 </td>
 </tr>
</table></center></div>

<p align=left style='margin-top:24.0pt;text-align:left;
text-indent:27.0pt' style="margin-top:0;margin-bottom:0">The
foregoing certification is being furnished solely pursuant to 18 U.S.C. &#167; 1350
and is not being filed as part of the Report or as a separate disclosure
document.</p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<br
clear=all style='page-break-before:always'>

<p align=right style='margin-left:22.5pt;text-align:right;
text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>Exhibit 13.2</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='margin-left:22.5pt;text-align:center;
text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>CERTIFICATION</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-left:22.5pt;text-indent:-22.5pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=left style='margin-right:27.0pt;text-align:left;
text-indent:27.0pt' style="margin-top:0;margin-bottom:0">Pursuant
to 18 U.S.C. &#167; 1350, I, Anabelle
L. Chua, Senior Vice
President and Treasurer of Philippine Long Distance Telephone Company, hereby
certify, to my knowledge, that our annual report on Form 20-F for the year
ended December 31, 2003 (the &#147;Report&#148;) fully complies with the requirements of
Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934,
and that the information contained in the Report fairly presents, in all
material respects, our financial condition and results of operations.</p>

<p align=left style='text-align:left;text-indent:24.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;text-indent:24.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left' style="margin-top:0;margin-bottom:0">Date:  June 24, 2004</p>

<p align=left style='text-align:left;text-indent:24.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=left style='text-align:left;text-indent:24.0pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
 <td  valign=bottom style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">/s/ Anabelle L. Chua</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Anabelle
 L. Chua</p>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Senior Vice President and Treasurer</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' padding:2.9pt 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">(Principal Financial Officer)</p>
 </td>
 </tr>
</table></center></div>

<p align=left style='margin-top:24.0pt;text-align:left;
text-indent:27.0pt' style="margin-top:0;margin-bottom:0">The
foregoing certification is being furnished solely pursuant to 18 U.S.C. &#167; 1350
and is not being filed as part of the Report or as a separate disclosure
document.</p>

<br
clear=all style='page-break-before:always'>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style=';border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0"><img width=698 height=67
 src="pldtform20f2003001.gif"></p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style="margin-top:0;margin-bottom:0"><b>Report of Independent Auditors</b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">To the Board of Directors and the Stockholders of</p>

<p style="margin-top:0;margin-bottom:0">Philippine Long Distance Telephone Company</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">We have audited the accompanying consolidated balance sheets
of Philippine Long Distance Telephone Company and subsidiaries as of December 31, 2003 and 2002, and the related consolidated statements of income, changes in
stockholders&#146; equity and cash flows for each of the three years in the period
ended December 31, 2003.  These financial statements are the responsibility of
the Company&#146;s management.  Our responsibility is to express an opinion on these
financial statements based on our audits.</p>

<p style='margin-top:12.0pt' style="margin-top:0;margin-bottom:0">We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States).  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements.  An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion. </p>

<p style='margin-top:12.0pt' style="margin-top:0;margin-bottom:0">In our opinion, the consolidated
financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Philippine Long Distance Telephone
Company and subsidiaries as of December 31, 2003 and 2002, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2003, in conformity with United States generally
accepted accounting principles.</p>

<p style='margin-top:12.0pt' style="margin-top:0;margin-bottom:0">As discussed in Note 3 to the
consolidated financial statements, the Company changed its method of accounting
for asset retirement obligations in 2003, goodwill and other intangible assets
in 2002, and derivatives and hedging instruments in 2001.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><u>   /s/ SyCip Gorres Velayo &amp; Co.   </u></p>

<p style="margin-top:0;margin-bottom:0">SYCIP GORRES VELAYO &amp; CO.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Makati City, Philippines</p>

<p style="margin-top:0;margin-bottom:0">May 31, 2004</p>

<br clear=all
style='page-break-before:always'>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style=';text-align:center;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY AND SUBSIDIARIES</b></p>

<p align=center style=';text-align:center;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>CONSOLIDATED
BALANCE SHEETS</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>DECEMBER 31, 2003</b><b> AND 2002</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in
millions of pesos, except par value amounts)</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.86%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.6pt'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:12.6pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:12.6pt'>
 <p align=right style='margin-right:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in;
 height:12.6pt'>
 <p align=right style='margin-right:11.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   colspan=3 valign=bottom style=' padding:0in 0in 0in 0in;
 height:10.0pt'>
 <p align=center style=';text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>ASSETS</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.6pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <p style='margin-top:4.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Current Assets</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cash and cash equivalents (Notes 4 and
 25)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>19,372</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,974</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accounts receivable &#150; net (Notes 5, 18,
 25 and 26) </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>19,066</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,317</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inventories and supplies &#150; net (Note 6)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,676</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,506</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Deferred income tax &#150; net (Note 21)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,932</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,690</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Prepaid expenses</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>906</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,562</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Other current assets (Note 25)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>728</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">251</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total Current Assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>50,680</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">40,300</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.2pt'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:13.2pt'>
 <p style='margin-top:4.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Noncurrent Assets</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:13.2pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.2pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.25pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.25pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Property, plant and equipment &#150; net
 (Note 7)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.25pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>190,217</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:11.25pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">194,664</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.75pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:6.75pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Investments &#150; net (Note 8)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:6.75pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,566</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:6.75pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,757</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Goodwill and other intangible assets &#150;
 net (Note 10)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>15,464</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,058</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Deferred income tax &#150; net (Note 21)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>12,780</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,163</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Other noncurrent assets &#150; net (Notes 11
 and 25)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,921</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,445</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total Noncurrent Assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>225,948</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">229,087</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.0pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:6.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:6.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>276,628</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:6.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">269,387</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   colspan=3 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='margin-top:6.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>LIABILITIES AND
 STOCKHOLDERS&#146; EQUITY</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-top:4.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Current Liabilities</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Current portion of long-term debt (Note 14) </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>23,816</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,625</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Accounts payable (Notes 18 and 25)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>6,655</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,071</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrued expenses and other current
 liabilities (Notes 12 and 25)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>16,046</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,076</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unearned revenues on sale of prepaid cards</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,809</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,022</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Notes payable (Notes 13 and 25)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,133</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">760</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Income tax payable</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>840</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">982</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.75pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 6.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Dividends payable (Notes 17 and 25)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 6.75pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>577</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 6.75pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">429</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total Current Liabilities</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>52,876</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,965</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.75pt'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.75pt'>
 <p style='margin-top:4.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Noncurrent Liabilities</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.75pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.75pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.25pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:11.25pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Long-term debt &#150; net of current portion
 (Notes 14, 23 and 25) </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:11.25pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>160,459</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:11.25pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">171,283</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Deferred credits and other noncurrent
 liabilities (Notes 15, 19, 23 and 25)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>23,562</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,374</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total Noncurrent Liabilities</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>184,021</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">193,657</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.85pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 11.85pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Minority Interest in Consolidated
 Subsidiaries</b> </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 11.85pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,665</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 11.85pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,413</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Preferred Stock Subject to Mandatory
 Redemption </b>(Notes 16, 23 and 25)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>13,321</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,939</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-top:4.0pt;margin-right:0in;margin-bottom:
 0in;margin-left:9.0pt;margin-bottom:.0001pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Stockholders&#146; Equity</b> (Note 17)</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-top:4.0pt;margin-right:13.45pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Preferred stock, Php10 par value,
 authorized 822,500,000 shares: </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series A to DD (issued and outstanding 409,876,226
 shares as of December 31, 2003 and 406,826,136 shares as of December 31, 2002)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,099</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,068</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series III (issued and outstanding 4,616,200 shares
 as of December 31, 2003 and 2002)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>46</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series IV (issued and outstanding 36,000,000 shares
 as of December 31, 2003 and 2002)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>360</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">360</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Common stock, Php5 par value, authorized
 234,000,000 shares; issued and outstanding169,476,120 shares as of December 31, 2003 and
 169,360,901 shares as of December 31,
 2002</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>847</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">847</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Capital in excess of par value</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>74,520</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">74,324</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accumulated deficit </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-top:0in;margin-right:.15in;
 margin-bottom:0in;margin-left:12.95pt;margin-bottom:.0001pt;text-align:right;
 text-indent:-12.95pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(58,031)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.0pt'>
 <p align=right style='margin-top:0in;margin-right:9.35pt;
 margin-bottom:0in;margin-left:12.95pt;margin-bottom:.0001pt;text-align:right;
 text-indent:-12.95pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(66,016)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accumulated other comprehensive income</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p align=right style='margin-right:14.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,904</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p align=right style='margin-right:13.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,784</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.0pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total Stockholders&#146; Equity</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p align=right style='margin-right:14.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>24,745</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 10.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,413</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.0pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:6.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:6.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>276,628</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:6.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">269,387</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-top:3.0pt' style="margin-top:0;margin-bottom:0"><i>See
accompanying Notes to Consolidated Financial Statements.</i></p>

<b><br clear=all
style='page-break-before:always'>
</b>

<p align=center style=';text-align:center;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY AND SUBSIDIARIES</b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>CONSOLIDATED
STATEMENTS OF INCOME</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>FOR
THE YEARS ENDED </b><b>DECEMBER 31, 2003</b><b>, 2002 AND 2001</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in
millions of pesos, except per share amounts)</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.84%;margin-left:.4pt;border-collapse:collapse;border-collapse:
 collapse !msorm'>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>OPERATING REVENUES </b>(Note 18)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Wireless </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.3pt' style='page-break-inside:
 avoid !msorm;height:6.3pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:6.3pt'>
 <p style='margin-left:7.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cellular services </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:6.3pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>51,001</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:6.3pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,583</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:6.3pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,820</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='margin-left:7.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cellular handset sales </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>12,433</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,982</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,015</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='margin-left:7.1pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Satellite, very small aperture terminal and others</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>898</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">733</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">762</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>64,332</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,298</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">33,597</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fixed line</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='margin-left:7.1pt;text-indent:-.15pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Local exchange</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>20,728</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21,345</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21,356</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='margin-left:7.1pt;text-indent:.05pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">International long distance</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>12,634</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,636</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,701</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='margin-left:7.1pt;text-indent:.05pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">National long distance </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>6,694</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,818</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,500</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p style='margin-left:7.1pt;text-indent:.05pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Data and other network</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,802</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,561</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,653</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p style='margin-left:7.1pt;text-indent:.05pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Miscellaneous</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>337</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">491</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">113</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>46,195</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45,851</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,323</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:9.75pt' style='page-break-inside:
 avoid !msorm;height:9.75pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Information and communications
 technology</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,509</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">651</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:9.75pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">374</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>112,036</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">92,800</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">80,294</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>OPERATING EXPENSES</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation (Note 7)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>21,882</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,566</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,218</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost of cellular handsets sold </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>15,886</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,203</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,179</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Compensation and benefits (Notes 3, 12 and 19)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>13,304</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,893</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,632</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.35pt' style='page-break-inside:
 avoid !msorm;height:10.35pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Maintenance </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,742</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,856</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,025</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Selling and promotions </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,423</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,603</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,686</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for doubtful accounts (Note 5)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,092</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,160</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,221</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Rent </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,837</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,106</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,586</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Taxes and licenses (Note 24)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,126</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">980</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">940</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost of satellite air time (Notes 18 and 23)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,919</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Professional and other service fees (Note 18)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,895</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,304</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,381</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:4.0pt' style='page-break-inside:
 avoid !msorm;height:4.0pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:4.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Insurance and securities</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:4.0pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,514</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:4.0pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,354</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:4.0pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,083</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.35pt' style='page-break-inside:
 avoid !msorm;height:10.35pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortization of goodwill and other intangible assets (Note 10)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>766</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">766</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,177</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Asset impairment charges (Note 7)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>675</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,279</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,735</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.35pt' style='page-break-inside:
 avoid !msorm;height:10.35pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence (Note 6)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>254</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">476</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:10.35pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">211</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Other operating expenses (Note 18) </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,248</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,175</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,162</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>78,563</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">80,771</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">86,236</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.25pt' style='page-break-inside:
 avoid !msorm;height:3.25pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:3.25pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">OPERATING
 INCOME (LOSS)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:3.25pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>33,473</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:3.25pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,029</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:3.25pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5,942)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>INTEREST EXPENSE AND RELATED ITEMS</b> - Net of capitalized interest (Notes 7, 13 and 14)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(12,</b><b>161)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(12,780)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(14,697)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>INTEREST AND OTHER INCOME</b> &#150; Net</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,052</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,574</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,278</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>EQUITY IN NET LOSSES OF INVESTEES </b>(Note 8)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(88)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(142)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,268)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>OTHER EXPENSES </b>&#150; Net (Note 20)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(12,456)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5,275)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,561)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:4.0pt' style='page-break-inside:
 avoid !msorm;height:4.0pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:4.0pt'>
 <p style='margin-left:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>INCOME (LOSS) BEFORE INCOME TAX,
 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES AND MINORITY INTEREST IN
 NET INCOME OF CONSOLIDATED SUBSIDIARIES</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:4.0pt'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>9,820</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:4.0pt'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,594)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:4.0pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(30,190)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>BENEFIT FROM (PROVISION FOR) INCOME TAX </b>(Note 21)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,400</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,438)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,570</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>INCOME (LOSS) BEFORE CUMULATIVE
 EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES AND MINORITY INTEREST IN NET INCOME
 OF CONSOLIDATED SUBSIDIARIES</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,220</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,032)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(27,620)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>CUMULATIVE </b><b>EFFECT</b><b> </b><b>ON</b><b>
 PRIOR YEARS (UP TO </b><b>DECEMBER 31,
 2000</b><b>) OF ADOPTING <br>
 SFAS 133</b> &#150; Net of tax effect (Note
 26)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150; </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(54)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:7.1pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>CUMULATIVE </b><b>EFFECT</b><b> </b><b>ON</b><b>
 PRIOR YEARS (UP TO </b><b>DECEMBER 31,
 2002</b><b>) OF ADOPTING <br>
 SFAS 143</b> &#150; Net of tax effect (Note
 15)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(61)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:7.1pt;text-indent:-7.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>INCOME (LOSS) BEFORE MINORITY
 INTEREST IN NET INCOME OF CONSOLIDATED SUBSIDIARIES</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,159</b></p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,032)</p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(27,674)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:7.1pt;text-indent:-7.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>MINORITY INTEREST IN NET INCOME OF
 CONSOLIDATED SUBSIDIARIES</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(114)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(126)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(108)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>NET INCOME (LOSS)</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,045</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,158)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(27,782)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>DIVIDENDS AND ACCRETION OF PREFERRED STOCK</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(3,048)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,649) </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,045)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS </b>(Note 22)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,997</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,827)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Earnings Per Common Share </b>(Note
 22)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Basic earnings per common share before
 cumulative effect of change in accounting principles</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>47.56</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08) </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.53)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cumulative effect of change in
 accounting principles</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(0.36)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(0.32)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Basic earnings per common share</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>  47.20</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Diluted earnings per common share before
 cumulative effect of change in accounting principles</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>46.06</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.53)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cumulative effect of change in
 accounting principles</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(0.34)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(0.32)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Diluted earnings per common share before
 cumulative effect of change in accounting principles</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>  45.72</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-top:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>See accompanying Notes to Consolidated Financial
Statements</i><i>.</i></p>

<p style='margin-top:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-top:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p align=center style=';text-align:center;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY AND SUBSIDIARIES</b></p>

<p align=center style=';margin-top:
3.0pt;margin-right:2.45pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;
text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; EQUITY</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>FOR THE YEARS
ENDED </b><b>DECEMBER 31, 2003</b><b>, 2002 AND 2001</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>(in millions of
pesos)</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.22%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:12.75pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:12.75pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:12.75pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Preferred<br>
 Stock</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:12.75pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Common<br>
 Stock</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:12.75pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Capital in <br>
 Excess of <br>
 Par Value</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:12.75pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Accumulated Deficit</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:12.75pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Accumulated Other Comprehensive Income</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:12.75pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Balances as of January 1, 2001
 </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">3,921</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">843</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">73,642</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(27,181)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">2,535</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">53,760</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Comprehensive loss:</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' style="margin-top:0;margin-bottom:0">Net loss for the year</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(27,782)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(27,782)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p style='text-indent:14.6pt' style="margin-top:0;margin-bottom:0">Translation
 gains</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">173</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.6pt;text-align:right' style="margin-top:0;margin-bottom:0"> 173</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:14.55pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 14.55pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Net comprehensive loss</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 14.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 14.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 14.55pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 14.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 14.55pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 14.55pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(27,609)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt' style="margin-top:0;margin-bottom:0">Cash dividends (Note 17)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,666)</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,666)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt' style="margin-top:0;margin-bottom:0">Accretion to redemption value of Preferred Stock
 subject to mandatory redemption </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(542)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(542)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt' style="margin-top:0;margin-bottom:0">Issuance of capital stock</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">208</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">319</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 529</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Balances as of December 31, 2001 </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,129</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 845</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">73,961</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(57,171)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">2,708</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">24,472</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Comprehensive loss:</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' style="margin-top:0;margin-bottom:0">Net loss for the year</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(6,158)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(6,158)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' style="margin-top:0;margin-bottom:0">Translation gains</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">76</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">  76</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Net comprehensive loss</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(6,082)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:14.1pt'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:14.1pt'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt' style="margin-top:0;margin-bottom:0">Cash dividends (Note 17)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:14.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;height:14.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:14.1pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:14.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,683)</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:14.1pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;height:14.1pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,683)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt' style="margin-top:0;margin-bottom:0">Accretion to redemption value of Preferred Stock
 subject to mandatory redemption </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,004)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,004)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt' style="margin-top:0;margin-bottom:0">Partial redemption of Series IV Preferred Stock
 (Note 16)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(72)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(72)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p style="margin-top:0;margin-bottom:0">Issuance of capital stock</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">417</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">363</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 782</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Balances as of December 31, 2002 </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">4,474</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 847</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">74,324</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(66,016)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">2,784</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">16,413</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Comprehensive income:</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' style="margin-top:0;margin-bottom:0">Net income for the year</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">11,045</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">11,045</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p style='margin-left:.25in;text-indent:-3.4pt' style="margin-top:0;margin-bottom:0">Translation gains</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">120</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 120</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Total comprehensive income</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">11,165</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Cash dividends
 (Note 17)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,751)</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,751)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Accretion to redemption value of Preferred Stock
 subject to mandatory redemption</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,309)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(1,309)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">Issuance of capital stock</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">31</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">196</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"> 227</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.3pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b>Balances as of </b><b>December 31, 2003</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>4,505</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>847</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>74,520</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(58,031)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,904</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:15.3pt'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>24,745</b></p>
 </td>
 </tr>
</table></center></div>

<p style='margin-top:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>See accompanying Notes to Consolidated Financial
Statements.</i></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<b><br clear=all
style='page-break-before:always'>
</b>

<p align=center style=';text-align:center;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY AND SUBSIDIARIES</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>CONSOLIDATED
STATEMENTS OF CASH FLOWS</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>FOR
THE YEARS ENDED </b><b>DECEMBER 31, 2003</b><b>, 2002 AND 2001</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in
millions of pesos)</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.96%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>CASH FLOWS FROM OPERATING ACTIVITIES</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net income (loss)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,045</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,158)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(27,782)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Adjustments to reconcile net loss from
 operations to net cash provided by operating activities:</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Depreciation</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>21,882</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,566</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,218</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Unrealized foreign exchange losses</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,527</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,301</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,996</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Provision for doubtful accounts</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,092</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,160</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,221</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Provision for (benefit from) deferred
 income taxes</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(3,731)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">849</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,446)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Amortization of goodwill and other
 intangible assets </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>766</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">766</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,177</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Asset impairment charges</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>675</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,279</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,735</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Amortization of debt issuance costs</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>591</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">497</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">280</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Gain on disposal of property and equipment</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(463)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(87)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(83)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Provision for inventory obsolescence</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>254</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">476</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">211</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Minority interest in net income of
 consolidated subsidiaries</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>114</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">126</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">108</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Equity in net losses of investees</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>88</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">142</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,268</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Provision for permanent decline in
 value of investment</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,052</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:18.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>336</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(234)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(262)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border:none;background:#E0E0E0;padding:
 0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Operating cash flows before working capital changes </p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>47,176</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">36,683</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24,693</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Changes in assets and liabilities, net
 of effect from purchase of subsidiaries: </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Decrease (increase) in:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accounts receivable</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(6,026)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,005</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,112)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Inventories and supplies</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,576</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">353</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,168)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Prepaid expenses and other current
 assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>306</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(186)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,065)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Increase (decrease) in:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:9.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accounts payable</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(3,231)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,507)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,134)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrued expenses and other current
 liabilities</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,215</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,558</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,276</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Unearned revenues on sale of prepaid
 cards</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>787</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,276</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Income tax payable</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(280)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">627</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(101)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.4pt;text-indent:12.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Deferred credits and other noncurrent
 liabilities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(2,603)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(813)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(552)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net cash provided by operating activities</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>40,920</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">39,722</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">20,113</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border:none;background:#F3F3F3;padding:
 0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>CASH FLOWS FROM INVESTING ACTIVITIES</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Additions to property, plant and equipment</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(17,943)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(17,239)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(28,201)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Proceeds from disposal of property and equipment</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>226</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">252</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">113</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Payments for purchase of investments, net of cash acquired</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(197)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(772)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash disbursements for lease deposits and others</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(404)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(210)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(49)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash of disposed subsidiary</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(93)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Proceeds from disposal of investments</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>52</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">150</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Payments for purchase of investments</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(617)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net cash used in investing activities</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(18,359)</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(17,167)</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,376)</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-top:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>(Forward)</i></p>

<br clear=all
style='page-break-before:always'>

<p align=center style=';text-align:center;
page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY AND SUBSIDIARIES</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>CONSOLIDATED
STATEMENTS OF CASH FLOWS <i>(Continued)</i></b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>FOR
THE YEARS ENDED </b><b>DECEMBER 31, 2003</b><b>, 2002 AND 2001</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(in
millions of pesos)</b></p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.84%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>CASH FLOWS FROM FINANCING ACTIVITIES</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Payments of long-term borrowings</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(31,548)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(43,870)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(16,990)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Proceeds from long-term borrowings</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>17,507</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">36,011</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21,823</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Proceeds from notes payable</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,135</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,872</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,483</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Repayments of notes payable </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,698)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(13,600)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(11,970)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Dividends paid</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,603)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,582)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,819)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Debt issuance costs paid</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(120)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,206)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(979)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Increase in capital lease liabilities</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>98</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">29</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">61</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Proceeds from issuance of capital stock</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>94</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">464</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">232</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Redemption of preferred stock</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(72)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net cash provided by (used in)
 financing activities</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(14,135)</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15,954)</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,841</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-8.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>EFFECT OF EXCHANGE RATE CHANGES ON
 CASH <br>
 AND CASH EQUIVALENTS</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(28)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">97</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>8,398</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,698</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.7pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5,398)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>CASH AND CASH EQUIVALENTS AT
 BEGINNING OF YEAR</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10,974</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,276</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,674</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>CASH AND CASH EQUIVALENTS AT END OF
 YEAR</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>19,372</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,974</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,276</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-top:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>See accompanying Notes to Consolidated Financial
Statements.</i></p>

<p style='margin-top:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p align=center style='text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<i><br clear=all
style='page-break-before:always'>
</i>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>PHILIPPINE LONG DISTANCE TELEPHONE COMPANY AND
SUBSIDIARIES</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS</b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b><b>Corporate Information</b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Philippine Long Distance
Telephone Company, or PLDT, was incorporated under the old Corporation Law of
the Philippines (Act 1459, as amended) on November 28, 1928, following the merger of four telephone companies under common United States ownership.  In
1967, effective control of PLDT was sold by General Telephone and Electronics
Corporation (a major stockholder since PLDT&#146;s incorporation) to a group of
Filipino businessmen.  In 1981, in furtherance of the then existing policy of
the Philippine government to integrate the Philippine telecommunications
industry, PLDT purchased substantially all of the assets and liabilities of the
Republic Telephone Company. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The common shares of PLDT are
listed and traded on the Philippine Stock Exchange, or PSE, and prior to October 19, 1994, were listed and traded on the American Stock Exchange and Pacific
Exchange in the United States of America.  On October 19, 1994, an American Depositary Receipts, or ADRs, facility was established pursuant to which Citibank
N.A., as depositary, issued ADRs evidencing American Depositary Shares, or
ADSs, with each ADS representing one PLDT common share.  JP Morgan Chase Bank
has been appointed as successor depositary for PLDT&#146;s ADRs effective February 10, 2003.  The ADSs are listed and traded on the New York Stock Exchange and the
Pacific Exchange in the United States.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT&#146;s charter, like those of all
other Philippine corporations, was initially limited to a period of 50 years
but has since been extended twice for 25 years each, the last extension being
for an additional 25-year period to 2028.  Under its amended charter (Republic
Act No. 7082), which became effective on August 24, 1991, PLDT is authorized to
provide virtually every type of telecommunications service, both within the
Philippines and between the Philippines and other countries.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT operates under the
jurisdiction of the Philippine National Telecommunications Commission, or NTC,
which jurisdiction extends, among other things, to approving major services
offered by PLDT and certain rates charged by PLDT. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We had 18,191 and 19,139 employees
as of December 31, 2003 and 2002, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT has three employee unions. The
three unions are in aggregate composed of 8,775 members as of December 31, 2003. The union members represent 48% of the employees of the PLDT Group on a
consolidated basis as of December 31, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The registered office address of
PLDT is Ramon Cojuangco Building, Makati Avenue, Makati City, Philippines.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Basis of Consolidated Financial Statement Preparation</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated financial
statements have been prepared in conformity with accounting principles
generally accepted in the United States of America, or U.S. GAAP.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated financial
statements include the financial statements of PLDT and those of the following
subsidiaries (collectively, the PLDT Group), which were all incorporated in the
Philippines except for PLDT Global Corporation, or PLDT Global, which was
incorporated in the British Virgin Islands.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.98%;border-collapse:collapse;border-collapse:collapse !msorm'>

 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-top:solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-top:solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:1.45pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='margin-top:0in;;
 margin-bottom:0in;margin-left:13.75pt;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Percentage
 of Ownership</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0"><b>Name of Subsidiary/Investee</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:1.45pt' style="margin-top:0;margin-bottom:0"><b>Principal Activity</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>

 <tr>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-top:6.0pt' style="margin-top:0;margin-bottom:0"><b>Wireless</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 0in;margin-left:.15in;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-top:6.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-top:6.0pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-top:6.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Smart
 Communications, Inc., or Smart, <br>
 and subsidiaries</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Cellular mobile services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>100.0</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-indent:9.0pt' style="margin-top:0;margin-bottom:0">Telesat, Inc., or Telesat</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Satellite communications services</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>94.4</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">94.4</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">94.4</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">ACeS Philippines Cellular Satellite<br>
 Corporation, or ACeS Philippines</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Satellite phone services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>93.7</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">93.7</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">93.7</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Mabuhay Satellite Corporation <br>
 (formerly Mabuhay Philippines Satellite Corporation), or Mabuhay Satellite</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Satellite communications services</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>67.0</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">67.0</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">67.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Pilipino Telephone Corporation, or Piltel, and subsidiaries</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Cellular mobile and telecommunications services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>45.3</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">45.3</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">45.3</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-top:9.0pt' style="margin-top:0;margin-bottom:0"><b>Fixed Line</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">PLDT Clark
 Telecom, Inc., or <br>
 Clark Telecom</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Telecommunications
 services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>100.0</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Subic
 Telecommunications Company, Inc., <br>
 or Subic Telecom</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Telecommunications
 services</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>100.0</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Smart-NTT
 Multimedia, Inc., or SNMI</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Data and
 network services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>100.0</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">PLDT Global
 and subsidiaries</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Telecommunications
 services</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>100.0</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">PLDT-Maratel,
 Inc. (formerly Maranao Telephone Company, Inc.), or Maratel</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Telecommunications
 services</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>97.5</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">97.5</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">92.3</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Bonifacio
 Communications Corporation, <br>
 or BCC<br>
 <br>
 </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Telecommunications,
 infrastructure and related value-added services</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>75.0</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">37.5</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 0in;margin-left:9.4pt;margin-bottom:.0001pt;text-indent:-9.4pt' style="margin-top:0;margin-bottom:0"><b>Information
 and Communications <br>
 Technology </b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
 0in;margin-left:.15in;margin-bottom:.0001pt;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-top:6.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-top:6.0pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-top:6.0pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">ePLDT, Inc., or ePLDT, and subsidiaries</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:.15in;text-indent:-9.35pt' style="margin-top:0;margin-bottom:0">Information
 and communications <br>
 infrastructure for internet-based <br>
 services, e-commerce, call centers and IT-related services</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>100.0</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The
method of accounting applied to investments, whether consolidated, equity or
cost, involves an evaluation of all significant terms of the investments that
explicitly grant or suggest evidence of control or influence over the operations
of the investee.  The consolidated financial statements include our controlled
subsidiaries. Investments in businesses which we do not control, but we have
the ability to exercise significant influence over operating and financial
policies, are accounted for using the equity method.  Investments in which we
do not have the ability to exercise significant influence over operating and
financial policies are accounted for using the cost method.  Equity and cost
method investments are included in the &#147;Investments&#148; account in our
consolidated balance sheets.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our consolidated financial
statements are prepared using uniform accounting policies for like transactions
and events with similar circumstances.  Intercompany balances and transactions,
including intercompany profits and unrealized profits and losses, are
eliminated.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Minority interests represent the
equity interests in Maratel, BCC (in 2003), Telesat, and Mabuhay Satellite not
held by the PLDT Group.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<b><i><br
clear=all style='page-break-before:always'>
</i></b>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b><i>Acquisition of Smart</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT completed the acquisition of
the entire issued share capital of Smart on March 24, 2000 valued at
approximately Php38,188 million through the issuance of PLDT common shares
(issue price of Php1,088 per share) to Smart&#146;s shareholders representing 22.5%
of the issued common shares of PLDT (as enlarged by such issue of shares).
Accordingly, the operating results of Smart have been included in the
consolidated results of operations from the date of acquisition.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The excess of the total acquisition
cost over the fair value of the net assets acquired was Php23,096 million.
Based upon management estimates and review, Php5,900 million was recorded as
the value of customers acquired (Php2,705 million and Php3,195 million were
attributed to Global System for Mobile Communication, or GSM, and analog
subscribers, respectively).  Prior to 2002, the excess of the total acquisition
cost over the fair value of the net assets acquired was amortized on a
straight-line basis over five years.  Prior to 2001, the customers list for the
GSM and analog subscribers was amortized over five years, which at that time
was the expected average period of the customer relationship. Beginning in
2001, we revised our estimated useful life of the acquired GSM customers list,
based on our analysis of customer churn rates, to three years.  The unamortized
balance of the analog customers list was fully impaired in 2001.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:.5in;text-indent:-.5in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Summary of Significant Accounting Policies and Practices</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our significant accounting policies
and practices are discussed below to facilitate the understanding of our
consolidated financial statements:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Revenue Recognition</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Revenue for services is stated at
amounts invoiced to customers and excludes value-added tax.  We provide
wireless communication services, fixed line communication services, and
information and communications technology services.  We provide such services
to business, residential, payphone and mobile customers.  Revenue represents
the value of fixed consideration that has been received or is receivable.
Revenue is recognized when there is evidence of an arrangement, collectibility
is reasonably assured, and the delivery of the product or service has
occurred.  In certain circumstances, revenue is split into separately
identifiable components and recognized when the related components are
delivered in order to reflect the substance of the transaction.  The value of
components is determined using verifiable objective evidence.  We do not
provide our customers with the right to a refund.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0"><i>Products and services</i></p>

<p style='text-indent:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Subscriptions.  </i>We provide
telephone and data communication services under postpaid and prepaid payment
arrangements.  Revenue includes fees for installation and activation.
Installation and activation-related fees and the corresponding costs, not
exceeding the activation revenue, are deferred and recognized over the expected
average period of the customer relationship of seven years and three years for
fixed line and cellular service, respectively.  Postpaid service arrangements
include subscription fees, typically fixed monthly fees, which are recognized
over the subscription period on a pro rata basis. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Air time, traffic and
value-added services.  </i>Prepaid service revenue collected in advance is
deferred and recognized based on the earlier of actual usage or upon expiration
of the usage period.  Payphone service revenue is recognized when the service
is provided.  Interconnection revenue for call termination, call transit, and
network usage are recognized in the period the traffic occurs.  Revenues
related to local, long distance, network-to-network, roaming and international
call connection services are recognized when the call is placed or the
connection is provided, net of amounts payable to other telecommunication
carriers for terminating calls in their territories.  Revenue related to
products and value-added services is recognized upon delivery of the product or
service.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Equipment sales.  </i>Sales of
communication equipment are recognized upon delivery to the customer.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Directory services.  </i>Revenue
related to published directory services is recognized on a pro rata basis over
the period in which the publication expires, which is generally 12 months.
Telephone-based directory service revenue is recognized when the service is
provided.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Incentives.  </i>We record
commission expense based on the number of new subscriber connections initiated
by certain dealers.  All other cash incentives provided to dealers and
customers are recorded as a reduction from revenue.  Product-based incentives
provided to dealers and customers as part of a transaction are accounted for as
multiple element arrangements and recognized when earned.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Others.  </i>Interest income
from cash deposits is recognized on a time proportion basis taking into account
the principal amount outstanding and the effective interest rate.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Cash and
Cash Equivalents</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Cash includes cash on hand and in
banks.  Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash with original maturities of three
months or less and that are subject to an insignificant risk of change in
value.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Accounts
Receivable </i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Accounts receivable are stated at
face value, net of allowance for doubtful accounts.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Allowance
for Doubtful Accounts</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Allowance for doubtful accounts is
maintained at a level considered adequate to provide for uncollectible
receivables.  The level of allowance is based on historical collections,
write-off experience, current economic trends, changes in our customer payment
terms and other factors that may affect collectibility.  An evaluation of the
receivables, designed to identify potential charges to the allowance, is
performed on a continuous basis during the year.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Customers</i>.  Full allowance
is provided for receivables from permanently disconnected subscribers.
Permanent disconnections are made after a series of collection steps following
non-payment by subscribers.  Such permanent disconnections generally occur
within 105 days from due date.  Partial allowance is provided for active
subscribers based on the age status of the receivable.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Traffic Settlement Receivables &#150;
net</i>.  Full allowance is provided for carrier accounts which have been past
due for over 360 days from transaction date and after a review of the status of
settlement with other carriers.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Inventories
and Supplies</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0">Inventories and supplies are valued at the lower of cost or
market value.  These are items of cellular phone units, materials, spare parts,
terminal units and accessories.  Cost is determined using the moving average
method.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Property,
Plant and Equipment</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Property, plant and equipment are
stated at cost less accumulated depreciation and any impairment in value.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The initial
cost of property, plant and equipment comprises its purchase price and any
costs directly attributable in bringing the asset to its working condition and
location for its intended use.  Expenditures incurred after the assets have
been put into operation, such as repairs and maintenance and overhaul costs,
are normally charged to income in the period the costs are incurred.  In situations
where it can be clearly demonstrated that the expenditures have resulted in an
increase in the future economic benefits expected to be obtained from the use
of an item of property, plant and equipment beyond its originally assessed
standard of performance, the expenditures are capitalized as additional costs
of property, plant and equipment.  Cost also includes interest on borrowed
funds used during the construction period.  When assets are sold or retired,
their costs, accumulated depreciation and any impairment in value are
eliminated from the accounts and any gain or loss resulting from their disposal
is included in the statements of income of such period.</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation
is calculated on a straight-line basis over the following estimated useful lives
of the assets:</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:83.34%;margin-left:41.4pt;border-collapse:collapse'>
 <tr>
 <td   valign=bottom style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0"><b><u>Property, Plant and Equipment</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>Estimated<u><br>
 Useful Lives</u></b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0">Buildings</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">25 &#150; 40 years</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0">Cable and wire facilities </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">20 &#150; 25 years</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0">Central office equipment</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">15 &#150; 20 years</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0">Information origination/termination equipment</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">5 &#150; 15 years</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0">Communications satellite</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">15
 years</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0">Vehicles, furniture and other work equipment</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">3 &#150; 10 years</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0">Cellular facilities</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">10 years</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-indent:.9pt' style="margin-top:0;margin-bottom:0">Land improvements</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">10 years</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The useful lives and depreciation
method are reviewed periodically to ensure that the periods and method of
depreciation are consistent with the expected pattern of economic benefits from
items of property, plant and equipment.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Property under construction is
stated at cost.  This includes cost of construction, plant and equipment and
other direct costs.  Property under construction is not depreciated until such
time that the relevant assets are completed and put into operational use.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Interest costs are capitalized
during the construction of plant and equipment as part of the cost of acquiring
assets, see<i> Note 7 &#150; Property, Plant and Equipment.</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Capitalized
Leases</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">The PLDT Group leases several
facilities under long-term leases and has the option to purchase the facilities
for a nominal cost at the termination of the lease.  </p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Impairment
of Assets</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Effective January 1, 2002, in
conformity with Statement of Financial Accounting Standards, or SFAS 144,
&#147;Accounting for the Impairment or Disposal of Long-Lived Assets&#148; and prior to
January 1, 2002, SFAS 121, &#147;Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of,&#148; long-lived assets and
identifiable intangible assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.  Assets, which are held and used in operations, would be
impaired if the book value of the asset exceeded the undiscounted future net
cash flows without interest charges expected to result from the use of the
asset.  If an impairment exists, the amount of the impairment recorded is based
on the fair value of the assets.  Assets, which are to be disposed of, would be
impaired to the extent the net book value of the asset exceeds fair value less
disposal costs.  The PLDT Group considers relevant cash flows, estimated future
operating results, trends and other available information in assessing whether
the carrying values of assets are recoverable.</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Asset Retirement Obligations</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Under U.S.
GAAP SFAS 143, &#147;Accounting for Asset Retirement Obligations,&#148; the fair value of
legal obligations associated with the retirement of a tangible long-lived asset
that resulted from the acquisition, construction or development and the normal
operation of a long-lived asset is required to be recognized in the period in
which it is incurred.  This Statement is effective for fiscal years after June 15, 2002.  The PLDT Group adopted this Statement in 2003.  Previously, the PLDT Group
has not been recognizing amounts related to asset retirement obligations.
Under the new accounting method, the PLDT Group now recognizes asset retirement
obligations in the period in which they are incurred if a reasonable estimate
of a fair value can be made.  The related asset retirement costs are
capitalized as part of the carrying amount of the corresponding long-lived
asset.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The PLDT Group is legally required
under various lease agreements to dismantle the installations and restore the
leased sites at the end of the lease contract term.  The PLDT Group recognized
the fair value of the liability for these obligations and capitalized the
present value of these costs as part of the balance of the related property and
equipment accounts, which are being depreciated on a straight-line basis over
the useful lives of the related assets or the contract periods, whichever is
lower.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The cumulative effect of the change
on prior years resulted in a charge to income of Php61 million </p>

<p style="margin-top:0;margin-bottom:0">(net of income taxes of Php29 million) (Php0.36 per share),
which is included in the net income for the year ended December 31, 2003.  The effect of the change for the year ended December 31, 2003 was to decrease
income before the cumulative effect of the change in accounting principle by
Php111 million (Php0.66 per share).  The pro forma effects of the application
of SFAS 143 as if the Statement had been adopted on January 1, 2001 (rather than January 1, 2003) are presented below:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(in millions of
 pesos, except per share amounts)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Net income
 (loss)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">As reported</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>11,045</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(6,158)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(27,782)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Pro forma</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>11,106</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(6,189)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(27,812)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Earnings
 per common share &#150; basic</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">As reported</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>47.20</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Pro forma</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>47.56</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(52.27)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(177.02)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Earnings
 per common share &#150; diluted</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">As reported</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>45.72</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Pro forma</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>46.05</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(52.27)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">(177.02)</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The following table describes all
changes to the asset retirement obligations liabilities as of December 31, 2003:</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style=';margin-right:
 1.8pt;text-align:right' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Asset
 retirement obligations at beginning of year</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:37.8pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Liability recognition in transition</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:37.8pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>360</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Accretion expense</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:37.8pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>35</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Asset retirement obligations at end of year</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:37.8pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 395</b></p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<br clear=all
style='page-break-before:always'>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The pro forma balances of asset
retirement obligations as if SFAS 143 had been adopted on January 1, 2001 (rather than January 1, 2003) are as follows:</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:62.15pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Pro forma amounts of liabilities for asset retirement obligations at
 beginning of year</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>360</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">338</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Pro forma amounts of liabilities for asset retirement obligations at
 end of year</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>395</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">360</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Goodwill
and Other Intangible Assets</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Goodwill is the excess of the
acquisition cost of a business, including investments accounted for using the equity
method, over the fair value of the identifiable net assets acquired.  Effective
 January 1, 2002, we adopted SFAS 142, &#147;Goodwill and Other Intangible Assets&#148;
and, as required, we no longer amortize goodwill (including goodwill recorded
on our equity method investments).  Goodwill is reviewed annually (or more
frequently under various conditions) for impairment using the fair value
approach. Intangible assets that do not have indefinite lives are amortized over
their useful lives and reviewed for impairment in conformity with SFAS 144,
&#147;Accounting for the Impairment or Disposal of Long-Lived Assets.&#148;  We have no
indefinite-lived intangibles.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Prior
to January 1, 2002, we generally amortized goodwill and other identifiable
intangibles on a straight-line basis over their estimated useful lives, not
exceeding five years.  We assessed the impairment of other identifiable
intangibles and goodwill related to our consolidated subsidiaries under SFAS
121, &#147;Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of,&#148; whenever events or changes in circumstances indicate
that the carrying value of an asset may not be recoverable. A determination of
impairment (if any) was made based on estimates of future cash flows.  In
instances where goodwill was recorded for assets that were subjected to an
impairment loss, the carrying amount of the goodwill was eliminated before any
reduction was made to the carrying amounts of impaired long-lived assets and
identifiable intangibles.  On a quarterly basis, we assessed the impairment of
enterprise level goodwill under Accounting Principles Board, or APB, Opinion
No. 17, &#147;Intangible Assets.&#148;  A determination of impairment (if any) was made
based primarily on estimates of fair value.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Debt
Issuance Costs</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Issuance costs, underwriting fees
and related expenses incurred in connection with the issuance of debt
instruments are deferred and amortized using the effective interest rate method
over the terms of the instruments.  Unamortized debt issue costs are charged to
operations when the related debt is extinguished.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Borrowing
Costs</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Borrowing costs are generally
expensed as incurred.  Borrowing costs are capitalized if they are incurred
during the acquisition, construction or production of a qualifying asset and
such costs could have been avoided if expenditures for the assets have not been
made.  Capitalization of borrowing costs commences when the activities to
prepare the asset are in progress and expenditures and borrowing costs are
being incurred.  Borrowing costs are capitalized until the assets are ready for
their intended use.  If the resulting carrying amount of the asset exceeds its
recoverable amount, an impairment loss is recognized.  Borrowing costs include
interest charges and other costs incurred in connection with the borrowing of
funds, excluding exchange differences arising from foreign currency borrowings
used to finance these projects.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Retirement Costs</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT and
Smart have funded noncontributory retirement plans, administered by the
respective companies&#146; Trustee, covering regular employees.  Retirement costs
are actuarially determined using the projected unit credit of accrued benefit
valuation method.  This method reflects services rendered by employees to the
date of valuation and incorporates assumptions concerning employees&#146; projected
salaries.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Stock-Based
Compensation</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We have historically accounted for
stock-based employee compensation plans under APB Opinion No. 25, &#147;Accounting
for Stock Issued to Employees,&#148; and related interpretations, and followed the
disclosure-only provisions of SFAS 123, &#147;Accounting for Stock-Based
Compensation.&#148;  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under APB Opinion No. 25,
compensation cost is measured at the intrinsic value, which is the difference
between market price and exercise price, if any, on the measurement date.
Under SFAS 123, compensation cost is calculated based on the fair value of the
options granted.  Fair value is determined using an acceptable option-pricing
model based on certain management assumptions.  Compensation expense is
recognized over the performance period. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.2in;text-indent:21.05pt' style="margin-top:0;margin-bottom:0"><i>Executive
Stock Option Plan</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Stock options granted under the
Plan vest over five years and have a maximum contractual life of ten years from
the date of grant.  The exercise price of the options granted under the Plan
shall not be lower than the average of the closing price of our common stock on
the PSE for 30 calendar days immediately preceding the date of grant.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The stock options granted under the
Plan shall vest each year, beginning two years from the grant date at a per
year rate of 25% of the options granted.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The number of shares reserved under
this Plan should not exceed 1.2% of the total issued common shares of PLDT, and
the number of shares reserved for issuance under this Plan is increased to
include any shares of PLDT&#146;s common stock issuable upon exercise of options
granted under the Plan that expire or lapse for any reason without having been
exercised in full. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Executive Stock Option Plan
will terminate on December 10, 2009, unless PLDT&#146;s Board of Directors
terminates it earlier. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On December 10, 1999, PLDT granted approximately 1.3 million options to purchase PLDT&#146;s common stock under the
Executive Stock Option Plan.  Stock option activity under the Plan for the
years ended December 31, 2003 and 2002 is summarized below:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Options
 Outstanding</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Number of <br>
 Options</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Weighted Average
 Exercise Price Per Share</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Balances as of December 31, 2001</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.55in;text-align:right' style="margin-top:0;margin-bottom:0">1,157,258</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6in;text-align:right' style="margin-top:0;margin-bottom:0">Php814</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Options granted in 2002</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.55in;text-align:right' style="margin-top:0;margin-bottom:0">144,428</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6in;text-align:right' style="margin-top:0;margin-bottom:0">814</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Options cancelled in:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.55in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6in;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:36.7pt;text-align:right' style="margin-top:0;margin-bottom:0">(75,291)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6in;text-align:right' style="margin-top:0;margin-bottom:0">814</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:8.1pt' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:36.7pt;text-align:right' style="margin-top:0;margin-bottom:0">(326,277)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6in;text-align:right' style="margin-top:0;margin-bottom:0">814</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Balances as of </b><b>December 31, 2003</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.55in;text-align:right' style="margin-top:0;margin-bottom:0"><b>900,118</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.6in;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php814</b></p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">All the above grants under the
Executive Stock Option Plan were made to executives of PLDT.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The number of options exercisable
at December 31, 2003 and 2002 was 681,358 shares and 613,102 shares,
respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In conformity with the provisions
of SFAS 123, the fair value of each option is estimated using the Black-Scholes
valuation model with the following assumptions for grants under the Executive
Stock Option Plan during the year ended December 31, 1999: volatility of 71.3%, risk-free interest rate of 8.94% at the date of grant and an expected
term of five years.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The weighted average per share fair
value of common stock options granted in 2002 was Php582.59.  The remaining
weighted average contractual life was six years as of December 31, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">During the years ended December 31, 2003, 2002, and 2001, there were no options exercised.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Employee
Stock Purchase Plan</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Beginning January 3, 2000 to March 31, 2000, we made our ninth offering under the PLDT Stock
Purchase Plan, under which we made available up to 991,200 shares of common
stock to all eligible employees as of January 3, 2000.  The shares were offered
at a discounted price of Php877.63 per share, which was 85% of the average
market price of our common share on the PSE on January 3, 2000.  The 36-month installment payment period began on April 30, 2000 and will end on April 15, 2003.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">A certain amount for every share
each employee elects to purchase will be deducted from the employee&#146;s salary
beginning with the first payroll on April 30, 2000 and ending with the last
payroll period of April 15, 2003.  No prepayment of the purchase price is
allowed.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The maximum number of shares that
may be issued and sold under the Plan is 5.6 million.  There were no sales
under the Plan for the years ended December 31, 2003, 2002 and 2001.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
estimated grant date fair value was calculated using the Black-Scholes
valuation model.  The following weighted average assumptions were included in
the estimated grant date fair value calculations for rights to purchase stock
under PLDT&#146;s Employee Stock Purchase Plan: volatility of 34.5%, risk-free
interest rate of 8.78% at the date of grant and an expected term of five years.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The weighted average estimated fair
value, as defined by SFAS 123, at grant date of the rights to purchase stock
under the Employee Stock Purchase Plan was Php371.93 per share.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<br clear=all
style='page-break-before:always'>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Pro forma information regarding net
income (loss) and earnings per share is required by SFAS 123.  This information
is required to be determined as if PLDT had accounted for its employee stock
options (including shares issued under the Employee Stock Purchase Plan) using
the fair value method.  Under SFAS 123, employee stock options are valued at
the grant date using the Black-Scholes valuation model, and this compensation
cost is recognized ratably over the vesting period.  Had compensation expense
for PLDT&#146;s stock option plan and stock purchase plan been determined based on
the fair value at the grant date of awards for years 2003, 2002 and 2001,
consistent with the provision of SFAS 123, PLDT&#146;s net income in 2003 would have
decreased whereas 2002 and 2001 net loss would have increased the pro forma
amounts indicated below:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:102.18%;;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:7.1pt'>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Basic</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Diluted</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos, except per share amounts)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net income (loss)
 attributable to common shareholders </p>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">   (Note 22)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,997</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>8,251</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,827)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,827)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:31.5pt;text-indent:-31.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Add:   Total stock-based employee compensation expense included in
 income (loss)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>14</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>14</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:45.0pt;text-indent:-45.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Deduct:   Total stock-based employee compensation expense determined
 under fair value based method</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(51)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(51)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(127)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(127)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(208)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(208)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Pro forma net income (loss) attributable to common shareholders</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,960</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>8,214</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,919)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,919)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(30,020)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(30,020)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Earnings per common share:</p>
 </td>
 <td   colspan=6 valign=bottom style=' border:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">As
 reported</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>47.20</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>45.72</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Pro forma</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>46.99</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>45.51</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.75)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.75)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(177.99)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(177.99)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Advertising
and Promotion Expenses</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Advertising and promotions are
expensed as incurred.  Advertising and promotion expenses were Php2,982
million, Php1,940 million and Php1,939 million in 2003, 2002 and 2001,
respectively. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Foreign Currency Transactions and Translations</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">For each entity in the group,
transactions in foreign currencies are recorded in the functional currency of
the entity by applying to the foreign currency amount the spot exchange rate
prevailing at the transaction date.  Foreign exchange gains or losses arising
on the spot settlements or restatement of monetary items at rates different
from those at which they were initially recorded during the period or presented
in the previous consolidated financial statements are recorded in the
consolidated statements of income in the period in which they arise.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Certain subsidiaries of our
consolidated group have functional currencies different from our reporting
currency.  The assets and liabilities of such entities are translated to our
reporting currency using exchange rates at the balance sheet date and the
statement of income is translated using the weighted average rate for the
period.  The resulting translation adjustments are recorded as a component of
accumulated other comprehensive income.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Derivatives and Hedging Instruments</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The PLDT Group adopted SFAS 133,
&#147;Accounting for Derivative Instruments and Hedging Activities,&#148; as amended in
2001.  SFAS 133 requires the PLDT Group to recognize all derivatives on the
consolidated balance sheet at fair value.  Derivatives that are not hedges must
be adjusted to fair value through earnings.  If the derivative is a hedge,
depending on the nature of the hedge, and to the extent of the hedge&#146;s
effectiveness, changes in the fair value of derivatives are either offset
against the change in fair value of hedged assets, liabilities, or firm
commitments through earnings or recognized in other comprehensive income until
the hedged item is recognized in earnings.  The ineffective portion of a
derivative&#146;s change in fair value will be immediately recognized in earnings.
The PLDT Group has elected not to designate its derivative instruments as
hedges. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Income Taxes</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Deferred
income tax is provided using the liability method.  Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to: (a)
temporary differences between the financial reporting bases of assets and
liabilities and their related tax bases and (b) carryforward benefits of net
operating loss carryover, or NOLCO, and minimum corporate income tax, or MCIT.
Deferred tax assets and liabilities are measured using the tax rate applicable
to taxable income in the years in which those temporary differences are
expected to be recovered or settled, and the carryforward benefits of NOLCO and
MCIT are expected to be applied.  A valuation allowance is provided for
deferred tax assets when it is more likely than not that some or all of the
deferred tax assets will not be realized in the future.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Earnings
Per Common Share</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Basic earnings per common share, or
EPS, is calculated by dividing the net income or loss for the year attributable
to common shareholders by the weighted average number of common shares
outstanding during the year, after giving retroactive effect to any stock
dividend declarations.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Diluted EPS is calculated in the
same manner assuming that, at the beginning of the year or at the time of
issuance during the year, all outstanding options are exercised and convertible
preferred shares are converted to common shares.  Outstanding stock options
will have a dilutive effect under the treasury stock method only when the
average market price of the underlying common share during the period exceeds
the exercise price of the option.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Where the effect of the assumed
conversion of the preferred shares and the exercise of all outstanding options
is anti-dilutive, basic and diluted EPS are stated the same.</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Segment Reporting</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Segment
assets include operating assets used by a segment and consist principally of
operating cash and cash equivalents, receivables, inventories and supplies and
property, plant and equipment.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Segment revenues, segment expenses
and segment performance include transfers between business segments.  The
transfers are accounted for at competitive market prices charged to
unaffiliated customers for similar products.  Such transfers are eliminated in
our consolidation.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Use of
Estimates</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The preparation of our consolidated
financial statements in conformity with U.S. GAAP, requires us to make
estimates and assumptions that affect the reported amounts of our assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements, and the reported amounts of revenues and
expenses during the period reported.  Actual results could differ from those
estimates.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Examples of
significant estimates include the allowance for doubtful accounts, inventory
obsolescence, depreciation rate, impairment of intangibles, investments and
other long-lived assets, valuation allowance on tax assets and pension benefit
assumptions.</p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Concentrations</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The PLDT
Group&#146;s results of operations and financial performance and condition may be
influenced by the general political situation in the Philippines.  The Philippines
experienced several <i>coup d&#146;&#233;tat</i> attempts against the government
administration between 1986 and 1989, and July 2003.  Political conditions in
the Philippines were generally stable during the 1990&#146;s.  In the past three
years, an increasing number of kidnapping, criminal and terrorist activities
have occurred in Mindanao, principally led by the extremist &#147;Abu Sayyaf&#148; group,
which reportedly has ties to the Al-Qaeda terrorist network.  There were series
of bombing incidents in key cities in Mindanao, including Davao City.  The
armed conflict between the Philippine military and the Moro Islamic Liberation
Front also continues in Mindanao.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">The PLDT Group&#146;s results of
operations may be negatively affected by slow or negative growth rates and
economic instability in the Philippines and in Asia.  In the past, the
Philippines has experienced periods of slow or negative growth, high inflation,
significant devaluation of the peso, imposition of exchange controls, debt
restructuring and electricity shortages and blackouts.  From mid-1997 to 1999,
the economies of a number of Asian countries experienced significant
downturns.  The regional economic turbulence affected the Philippine economy in
a number of ways, including the depreciation of the peso, increases in interest
rates, increases in unemployment and inflation, increased volatility and a
decline in prices in the domestic stock market, the downgrading of the
Philippines&#146; local currency rating and the ratings outlook for the Philippine
banking sector and the reduction of foreign currency reserves.  </p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">As of December 31, 2003, other than the concentration of our wireless services on prepaid subscribers, we do
not have any significant concentration of business transacted with a particular
supplier, lender or former affiliate that could, if suddenly adversely
impacted, severely impact our operations.  We also do not have a concentration
of available sources or other rights that could, if suddenly eliminated,
severely impact our operations.  We invest our cash and cash equivalents with
many high-quality financial institutions.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Impact of Recently Issued Accounting Pronouncements</i></b></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">In June 2002, the Financial
Accounting Standard Board, or FASB, issued SFAS 146, &#147;Accounting for Costs
Associated with Exit or Disposal Activities.&#148;  SFAS 146 provides guidance
related to accounting for costs associated with disposal activities covered by
SFAS 144 or with exit or restructuring activities previously covered by
Emerging Issues Task Force, or EITF, Issue No. 94-3, &#147;Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring).&#148;  SFAS 146 supersedes
EITF Issue No. 94-3 in its entirety.  SFAS 146 requires that costs related to
exiting an activity or to a restructuring should not be recognized until the
liability is incurred. SFAS 146 will be applied prospectively to exit or
disposal activities that are initiated after December 31, 2002.</p>

<p style='text-indent:35.3pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.3pt' style="margin-top:0;margin-bottom:0">In January 2003, the FASB issued
FASB Interpretation No., or FIN, 46, &#147;Consolidation of Variable Interest Entities.&#148;
The primary objective of FIN 46 is to provide guidance on the identification
of, and financial reporting for, entities over which control is achieved
through means other than voting rights; such entities are known as variable
interest entities.  FIN 46 requires variable interest entities to be
consolidated by the primary beneficiary of the variable interest entities and
expands disclosure requirements for variable interest entities that are
consolidated as well as those within which an enterprise holds a significant
variable interest.  For variable interests in entities commonly referred to as
&#147;special purpose entities&#148;, implementation of this statement is required by January 1, 2004.  And for all other variable interest entities, implementation is required
by December 31, 2004.</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In April
2003, the FASB issued SFAS 149, Amendment of SFAS 133 on Derivative Instruments
and Hedging Activities.  This Statement amends and clarifies financial
accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under SFAS 133.  This Statement is
effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In May 2003, the FASB issued SFAS
150 &#147;Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity&#148;.  SFAS 150 establishes standards on how companies
classify and measure certain financial instruments with characteristics of both
liabilities and equity.  The Statement requires that the Company classify as
liabilities the fair value of all mandatorily redeemable financial instruments
that had previously been recorded as equity or elsewhere in the consolidated
financial statements.  This Statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise effective for all
existing financial instruments, except for minority interests in limited-life entities,
beginning of the first interim period beginning after June 15, 2003.  Certain provisions of this Statement relating to noncontrolling interests in
limited-life subsidiaries were deferred indefinitely.  We continue to monitor
the deferral status of SFAS 150.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The adoption of FIN 46, SFAS 146,
SFAS 149 and SFAS 150 did not have a material impact on PLDT Group&#146;s
consolidated financial statements.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In May 2003, EITF Issue No. 00-21,
&#147;Accounting for Revenue Arrangements with Multiple Deliverables,&#148; was
finalized. EITF No. 00-21 provides guidance on how to account for arrangements
that involve the delivery or performance of multiple products, services and/or
rights to use assets.  The provisions of EITF No. 00-21 apply to revenue
arrangements entered into in fiscal periods beginning after June 15, 2003.  In December 2003, the U.S. Securities and Exchange Commission issued Staff
Accounting Bulletin, or SAB, No. 104, &#147;Revenue Recognition,&#148; which codifies and
rescinds certain sections of SAB No. 101, &#147;Revenue Recognition&#148;, in order to
make this interpretive guidance consistent with EITF No. 00-21.  We are
currently in the process of evaluating any effect the adoption of EITF No.
00-21 will have on our consolidated financial statements.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In December 2003, the FASB revised
SFAS 132, &#147;Employers&#146; Disclosures about Pensions and Other Postretirement
Benefits.&#148;  It requires additional disclosures to those in the original SFAS
132 about the plan assets, benefit obligations, cash flows and net periodic
benefit cost of defined benefit plans and other postretirement benefit plans.
The new disclosures are generally effective for 2003 calendar yearend financial
statements of public companies, with a delayed effective date for certain
disclosures and for foreign plans.  The requirements of this Statement are
included in <i>Note 19 &#150; Employees&#146; Benefit Plans</i>.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:.5in;text-indent:-.5in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Cash and Cash
Equivalents</b></p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of:</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.28%;;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:13.0pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:4.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:4.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash on
 hand and in banks</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,736</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,982</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Temporary
 investments</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>16,636</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,992</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>19,372</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,974</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Cash in banks earns interest at the
prevailing bank deposit rates.  Temporary investments are made for varying
periods of up to one month depending on our immediate cash requirements, and
earn interest at the prevailing short-term deposit rates.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:.5in;text-indent:-.5in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Accounts Receivable</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of receivables from:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.28%;;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:13.0pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Customers
 and carriers</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>30,106</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">25,805</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,174</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,262</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>33,280</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">28,067</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less allowance for doubtful
 accounts</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>14,214</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,750 </p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>19,066</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,317</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Movements in
the allowance for doubtful accounts during the years are as follows:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=top style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='height:12.75pt'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Balance at beginning of
 year</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10,750</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,697</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,386</p>
 </td>
 </tr>
 <tr style='height:12.75pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision for the year</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,092</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,160</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,221</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Write-offs</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(628)</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,107)</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,910)</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Balance at end of year</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>14,214</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,750</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,697</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Receivables
from carriers represent receivables arising from interconnection agreements
with other telecommunications carriers.  The aforementioned receivable balances
are shown net of related payables to the same telecommunications carriers
because an established right of offset exists.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unbilled
receivables of Php974 million and Php848 million in 2003 and 2002,
respectively, represent recognized revenue for services rendered to fixed line
and wireless subscribers that have not been billed at the balance sheet dates.
The unbilled amounts are billed upon completion of the corresponding
subscribers&#146; billing cycles.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On June 30, 1999, PLDT entered into a Master Receivables Purchase and Sale Agreement, or
MRPSA, with a foreign financial institution, or the Purchaser, under which PLDT
sold to the Purchaser eligible receivables from certain foreign carriers in
several discrete sales.  Under this agreement, PLDT services, administers and
collects the receivables on behalf of the Purchaser, and transfers all of its
rights and risks of ownership to the Purchaser upon sale.  This facility was
terminated on June 27, 2002.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On September 21, 2000, PLDT entered into a similar MRPSA with another foreign financial
institution covering foreign carriers that were not included in the June 30, 1999 agreement.  This second facility was terminated on September 18, 2002.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On October 10, 2002, PLDT entered into a Receivables Purchase Deed, or RPD, with a foreign
financial institution, or the Purchaser, under which PLDT agreed (1) to sell
its receivables from certain eligible foreign carriers for an advance payment
of US$50 million and (2) to service, administer and collect the receivables on
behalf of the Purchaser.  The Purchaser shall have no recourse to PLDT should
the eligible carrier fail or refuse to settle the assigned/purchased
receivables, except when PLDT commits a breach on its representations and
warranties under the RPD.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In 2003 and
2002, sale of receivables under the RPD amounted to US$11 million (Php608
million), with resulting losses of US$1.5 million (Php84 million) and US$3
million (Php165 million), with resulting losses of US$0.5 million (Php25
million), respectively.  There was no sale of receivables under the MRPSA in
2002.  In 2001, sale of receivables under the MRPSA amounted to US$59 million
(Php3,029 million), with resulting losses of US$2 million (Php103 million).  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:.5in;text-indent:-.5in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Inventories and
Supplies</b></p>

<p style='margin-left:.25in;text-align:justify;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of:</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.28%;;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:8.85pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:8.85pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:8.85pt'>
 <p align=right style='margin-right:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:8.85pt'>
 <p align=right style='margin-right:8.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Spare parts and supplies </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,318</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,281</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Terminal and cellular phone units </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,601</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,383</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>486</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">456</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,405</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,120</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Less allowance for inventory obsolescence</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>729</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">614</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:9.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,676</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,506</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Movements in
the allowance for inventory obsolescence during the years are as follows:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=top style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>
 <tr style='height:12.75pt'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p style="margin-top:0;margin-bottom:0">Balance at beginning of year</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>614</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">286</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">590</p>
 </td>
 </tr>
 <tr style='height:12.75pt'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p style="margin-top:0;margin-bottom:0">Provision for the year</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt;height:12.75pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>254</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">476</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 height:12.75pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">211</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Write-offs</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>(139)</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(148)</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(515)</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Balance at end of year</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 729</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"> 614</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:.05in;text-align:right' style="margin-top:0;margin-bottom:0">286</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003 and 2002,
spare parts and supplies issued to various projects, included as part of
property under construction shown under <i>Note 7 &#150; Property, Plant and
Equipment</i>, amounted to Php3,018 million and Php6,270 million,
respectively.  </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:.5in;text-indent:-.5in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Property, Plant and
Equipment</b></p>

<p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.56%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:13.0pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">        (in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cable
 and wire facilities</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>91,898</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">88,378</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Central
 office equipment</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>67,778</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">65,708</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cellular
 facilities</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>52,026</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">44,381</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Vehicles,
 furniture and other work equipment</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>22,815</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,770</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Buildings</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>18,611</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">17,500</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Communications satellite</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>13,108</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">16,185</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Information
 origination/termination equipment</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>3,331</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">3,254</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Land and land improvements</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,801</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">2,835</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>272,368</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">258,011</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Less accumulated depreciation</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>94,997</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">80,433</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>177,371</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">177,578</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Property under construction</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>12,846</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">17,086</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>190,217</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0">194,664</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Interest capitalized for the years
ended December 31, 2003, 2002 and 2001 amounted to Php887 million, Php1,343
million and Php2,404 million, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Certain
property, plant and equipment include the following amounts for capitalized
leases as of December 31, 2003 and 2002:</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.82%;margin-left:.4pt;border-collapse:collapse;border-collapse:
 collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>December 31, 2003</b></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">December 31, 2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.95pt' style='page-break-inside:
 avoid !msorm;height:3.95pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:3.95pt'>
 <p style='line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:3.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Central
 office equipment</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:3.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Vehicles,
 furniture and other work equipment</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:3.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p align=center style=';text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:3.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:3.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Central
 office equipment</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:3.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Vehicles,
 furniture and other work equipment</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:3.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=center style='margin-right:2.9pt;text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=center style=';text-align:center;
 line-height:80%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:3.95pt' style='page-break-inside:
 avoid !msorm;height:3.95pt !msorm'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 border:none !msorm;padding:0in 0in 0in 0in !msorm;height:3.95pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>
 </td>
 <td   colspan=8 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:3.95pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cost</p>
 </td>
 <td   style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style=';margin-right:
 13.45pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>354</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>574</b></p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>928</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style=';margin-right:
 13.45pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">354</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">289</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">643</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less accumulated
 depreciation</p>
 </td>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style=';margin-right:
 13.45pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>244</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>153</b></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>397</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style=';margin-right:
 13.45pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">221</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">66</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">287</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' border:none;border-bottom:double windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style=';margin-right:
 13.45pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 110</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 421</b></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 531</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:13.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' border:none;border-bottom:double windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style=';margin-right:
 13.45pt;text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 133</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:22.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 223</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.2in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 356</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The future minimum payments for
capitalized leases were as follows as of December 31, 2003:</p>

<p align=right style='text-align:right;text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='margin-left:5.4pt;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0"><b>Year</b></p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(in
 millions of pesos)</b></p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td  valign=top style=' border:none;background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">413</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">352</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">288</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">685</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Total minimum lease payments</p>
 </td>
 <td  valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">1,738</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Less amount representing interest</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">714</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Present value of net minimum lease payments</p>
 </td>
 <td  valign=top style=' border:none;background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt;border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">1,024</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Less current maturities</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0">295</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">Long-term lease obligations</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-bottom:
 double windowtext 2.25pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.25in;text-align:right' style="margin-top:0;margin-bottom:0"> 729</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Assets impaired in 2003 and 2002
consist of assets of the wireless segment.  When impairment charges are
recognized, a new cost basis for the assets is established.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In 2001,
Piltel recorded an impairment charge of Php12,938 million on assets with a
carrying value of Php13,562 million, which was a result of Piltel&#146;s decision to
scale down its Advanced Mobile Phone System, or AMPS, and Code Division
Multiple Access System, or CDMA networks, beginning the second half of 2001 due
to Piltel&#146;s success in marketing its GSM prepaid service using the GSM network
of Smart and the difficulty experienced in sourcing analog/CDMA handsets.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Also, Smart carried out an
impairment review on its analog assets in 2001 as a result of declining
subscriber numbers, decreasing average revenue per user and the general
migration of analog subscribers to Smart&#146;s GSM service.  This resulted in an
asset impairment charge of Php2,281 million in June 2001 and Php1,502 million
in December 2001 based on the estimated discounted future cash flows from
continued use and eventual disposition of these assets.  The net book value at December 31, 2001 was Php189 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As discussed further in <i>Note 8 &#150;
Investments</i>, ACeS Philippines has experienced less than expected consumer
demand for its services.  Accordingly, we recognized an impairment loss on the
assets of ACeS Philippines, primarily the ground station and related facilities,
of Php673 million during 2001.  The remaining cost basis of these assets was
nil as of December 31, 2002.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In December
2002, Piltel recognized impairment losses of Php13,204 million in respect of
its E.O. 109 limited mobility wireless local loop prepaid assets with a
carrying value of Php14,019 million.  The impairment of E.O. 109 assets brought
down the net book value of these assets to their recoverable value of Php815
million, which was estimated using the discounted future cash flows from the
E.O. 109 assets.  Cash flows from the </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">E.O. 109 prepaid or limited
mobility service were no longer considered in computing the recoverable value
of the E.O. 109 assets as Piltel terminated this service in February 2003.
Revenues from the E.O. 109 prepaid or limited mobility service, which uses
N-AMPS cellular technology, were unfavorably affected by the success of
Piltel&#146;s and other cellular operators&#146; prepaid GSM cellular service.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In 2003,
ePLDT and certain of its subsidiaries recognized impairment losses amounting to
Php362 million representing the write-down of certain computer equipment and
peripherals following the abandonment of a reloadable chip-based cash card
project, and certain software and computer equipment following a change in
software platforms and applications.  The recoverable amounts were based on
value in use and were determined at the cash-generating unit level.  In
determining value in use for the cash-generating unit, the cash flows were
discounted at a nominal rate of 11% on a pre-tax basis.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In 2003,
Smart changed the estimated useful life of certain network assets owing to
continuing network expansion and upgrade.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Below is the
pro forma financial information assuming no changes in accounting estimates
were made during 2003:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.46%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-top:0in;margin-right:30.55pt;
 margin-bottom:0in;margin-left:17.45pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(in
 millions of pesos,</b></p>
 <p align=right style='margin-top:0in;margin-right:30.55pt;
 margin-bottom:0in;margin-left:17.45pt;margin-bottom:.0001pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>except
 per share amounts)</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Net income</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:62.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">As reported</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:62.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>11,045</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Pro forma</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:62.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>12,346</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Earnings
 per common share &#150; basic</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:62.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">As reported</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:62.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>47.20</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Pro forma</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:62.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>54.88</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">Earnings
 per common share &#150; diluted</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">As reported</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:62.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>45.72</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:13.5pt' style="margin-top:0;margin-bottom:0">Pro forma</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:62.05pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>52.92</b></p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the terms of certain loan
agreements, PLDT may not create, incur, assume, permit or suffer to exist any
mortgage, pledge, lien or other encumbrance or security interest over the whole
or any part of its assets or revenues or suffer to exist any obligation as
lessee for the rental or hire of real or personal property in connection with
any sale and leaseback transaction.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:.5in;text-indent:-.5in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Investments</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.92%;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Investments in shares of
 stock:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Acquisition
 cost:</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Common</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,648</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,640</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Preferred</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>748</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">819</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,396</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,459</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Less accumulated equity in net losses of investees </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,830</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,800</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-9.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Carrying value</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,566</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,659</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Investment in debt
 securities:</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.35pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Acquisition
 cost </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,150</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.35pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less
 accumulated impairment losses</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,052</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.35pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">98</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.35pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,566</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,757</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Investments in shares of
 stock:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">At
 equity:</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Mabuhay
 Space Holdings Limited, or MSHL</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>764</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">808</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>54</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 818</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 840</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">At cost:</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Stradcom
 International Holdings, Inc.</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>629</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">616</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>119</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">203</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 748</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 819</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,566</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,659</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Investment of ACeS </i></b><b><i>Philippines</i></b><b><i> in AIL</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">As of December 31, 2003, ACeS Philippines has a 20% investment in ACeS International Limited, or
AIL, a company incorporated under the laws of the island of Bermuda.  AIL owns
the Garuda I satellite and the related system control equipment in Batam, Indonesia.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In December
1998, AIL and its 95% owned subsidiary, PT Asia Cellular Satellite, entered
into an Amended and Restated Credit Agreement, or Amended Agreement, to amend
the original Credit Agreement entered into by PT Asia Cellular Satellite and
its bank creditors in 1997.  Under the Amended Agreement, AIL has, among
others, assigned to the banks as collateral all of its intangible properties,
including the Garuda Satellite, the system control facilities and system
control equipment.  On September 30, 2002, PT Asia Cellular Satellite, AIL, as
guarantor, P.T. Bank International Indonesia, as security agent, and various
banks signed the Rescheduling Agreement, which amended the terms of the Amended
and Restated Credit Agreement dated December 29, 1998, moving the principal
repayment dates to agreed periods with the final maturity date on January 31,
2012.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 2001, AIL had
incurred recurring significant losses, negative operating cash flows, and
significant levels of debt.  The financial condition of AIL was partly due to
the National Service Provider&#146;s, or NSPs, inability to generate the amount of
revenues originally expected as the growth in subscriber numbers have been
significantly lower than budgeted.  These factors raise substantial doubt about
AIL&#146;s ability to continue as a going concern.  On this basis, we recognized an
impairment provision in respect of our investment in AIL and ground station
equipment of ACeS Philippines in relation to the business of AIL in 2001 of
Php673 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2001, total impairment charges
relating to AIL amounted to Php3,314 million due to an other than temporary
decline in the carrying value of our investment in AIL.  Other comprehensive
income related to foreign currency translation of AIL of Php1,801 million, will
be recorded to operations upon disposal of investment.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Investment
of  Mabuhay Satellite in  MSHL</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On July 18, 1996, Mabuhay Satellite entered into a Joint Venture Agreement with Space Systems/Loral Inc., or SS/L,
to form MSHL for the purpose of providing high-power Ku-Band satellite
transmission services using the payload which was added by SS/L aboard Agila
II.  Under the terms of the Joint Venture Agreement, or JVA, SS/L is required
to convey title to the Additional Payload to MSHL in consideration for SS/L&#146;s
35% equity interest in MSHL and Mabuhay Satellite is required to pay SS/L US$19
million for a 65% equity interest in MSHL.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In 2000, SS/L filed a Notice of
Default and Termination against Mabuhay Satellite arising from the latter&#146;s
alleged failure to amicably resolve its alleged unpaid obligation to SS/L under
the JVA.  In 2002, the arbitration panel handed down its decision and provided
for payment by Mabuhay Satellite to SS/L of the principal amount of US$10 million
plus accrued interest at 9% per annum.  On June 30, 2003, Mabuhay Satellite and
SS/L concluded a settlement agreement whereby Mabuhay Satellite will lease two
(2) transponders under a transponder agreement on a full-time basis to SS/L and
offset the lease charges from Loral Skynet Network Services, Inc. (formerly
Loral Cyberstar, Inc., an affiliate of SS/L), among others, for a full and
final settlement of the arbitration decision.  The settlement agreement
provides that notwithstanding any provision therein to the contrary, the
settlement agreement, and the transponder agreement may terminate upon failure
by Mabuhay Satellite, within nine months from the execution of the settlement
agreement or such other period as the parties may agree upon, to secure the
consent of the Philippine creditors of Mabuhay Satellite pursuant to the
Omnibus Credit and Security Agreement (Omnibus Agreement) dated December 14,
1995, as amended, between Mabuhay Satellite and such creditors.  Under the
Omnibus Agreement, approval of creditors holding at least 51% of the
outstanding principal amount of the loan obligations of Mabuhay Satellite is
required for purposes of transfer or disposition of any collateral under the
Omnibus Agreement.  As of December 31, 2003, the consent of the said creditors
has not been obtained, hence, the transaction, which would have resulted in a
net gain of Php139 million, was not recognized by Mabuhay Satellite.  On March 18, 2004, the majority of the creditors has given their consent to the settlement
agreement.</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Investment of ePLDT in Stradcom International Holdings, Inc.</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On May 8, 2001, ePLDT subscribed for 172.8 million shares of Convertible Preferred Stock
through a subscription agreement entered into with Stradcom International
Holdings, Inc., or Stradcom.  Stradcom is a holding company, which owns 100% of
Stradcom Corporation. These equity securities do not have a readily
determinable fair values.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Stradcom Corporation has a ten-year
Build, Own and Operate project with the Land Transportation Office for
computerized issuance of drivers&#146; licenses and motor vehicle registrations.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Investmens in Debt Securities</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Home
Cable/Unilink</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT&#146;s total
investment in convertible notes of Unilink Communications Corporation, or
Unilink, amounted to Php2,052 million.  These notes are convertible into common
stock of Unilink or exchangeable into shares of common stock of Home Cable at
the option of the holder, if and when the law limiting the ownership of cable
television systems to Philippine citizens or corporations, which are 100% owned
by Philippine citizens, is changed.  Unilink is a Philippine corporation owning
all the outstanding common stocks of Philippine Home Cable Holdings, Inc., or
Home Cable, which is also a Philippine corporation licensed to own, maintain
and operate a cable television system in the Philippines. </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">All of
Unilink&#146;s shares in Home Cable have been pledged to a group of lenders as
security for a loan to Home Cable.  On December 6, 2001, Home Cable defaulted
on the principal and interest payments in respect of certain of its loan
obligations.  On April 10, 2002, the loan agent, at the request of the lenders,
delivered a notice to Home Cable declaring an event of default and accelerating
the loan repayment.  Consequently, the lenders are entitled to foreclose on or
sell the collateral granted as security for the loan, including Unilink&#146;s
shares in Home Cable.  In the event that Home Cable&#146;s lenders were to foreclose
on Unilink&#146;s Home Cable shares, the lenders would be entitled to the proceeds
from the sale thereof or, if such shares were not sold, to the shares, and
Unilink would be subrogated to the lenders&#146; claims against Home Cable.  Home
Cable is currently engaged in negotiations with the lenders to restructure its
debt.  </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On the basis
of Home Cable&#146;s default on certain of its loan obligations, the uncertainty
surrounding the negotiations with its creditors and equity holders, and its
financial condition of Home Cable, we provided for a full permanent decline in
value of our investment totaling to Php2,052 million in 2001.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Due to our
employees beneficial trust fund&#146;s ownership of the shares of Mediaquest
Holdings, Inc., or Mediaquest, whose primary asset is the ownership of
Unilink&#146;s shares, the impairment in value of Unilink also had a significant
impact on the value of the retirement fund&#146;s assets. </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In June
2003, PLDT assigned and ceded unto the PLDT Beneficial Trust Fund, or BTF, all
of its rights, interest and participation in respect of its investment in
convertible notes of Unilink with a fair value of zero and effectively for zero
consideration under U.S. GAAP.  In addition, PLDT also ceded its rights,
interest and participation to certain other assets unrelated to Unilink for and
in consideration of partial payment of the contributions which PLDT is required
to make to the BTF under PLDT&#146;s employee benefit plan.</p>

<p style='margin-right:1.8pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='margin-right:1.8pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Summarized
Financial Information of Equity Investees</i></b></p>

<p style='margin-right:1.8pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-right:1.8pt;text-indent:35.45pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">The following table presents summarized financial information in
conformity with U.S. GAAP for equity investees for which we have significant
influence as of December 31, 2003 and 2002 and for the years ended December 31, 2003, 2002 and 2001. <b> </b></p>

<p style='margin-right:1.8pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0  style='width:489.45pt;;border-collapse:collapse;border-collapse:
 collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-left:.25in;text-align:right;
 text-indent:-.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' border:none;padding:0in 0in 0in 0in;
 border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=top style=' border:none;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style=';margin-right:
 3.05pt;text-align:right;text-indent:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Current assets</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>754</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">750</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Noncurrent assets</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,672</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,808</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Current liabilities</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,082</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">589</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Noncurrent liabilities</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>12,583</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,282</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Total stockholders&#146; equity (capital deficiency)</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(11,239)</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(10,313)</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-right:1.8pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<b><br clear=all
style='page-break-before:always'>
</b>

<p style='margin-right:1.8pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0  style='width:489.45pt;;border-collapse:collapse;border-collapse:
 collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">               (in millions
 of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Revenues</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,182</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">953</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">347</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Revenues
 less cost of revenues</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>600</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">269</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Operating
 expenses</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>758</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">23,163</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,091</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net loss</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(926)</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(20,214)</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,698)</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-right:1.8pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='margin-right:1.8pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:.5in;text-indent:-.5in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Information with
Respect to Piltel</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Piltel has
experienced significant operational and financial difficulties in recent
years.  On June 4, 2001, Piltel completed the restructuring of approximately
Php41 billion of indebtedness and other claims owed to banks, trade creditors,
bondholders and preferred shareholders, or the aggregate financial debt of
Piltel, representing approximately 98% of its total liabilities as of that
date.  On June 27, 2001, we transferred 208 million common shares of Piltel,
representing approximately 12.3% of Piltel&#146;s outstanding common shares, to
financial advisors of Piltel to settle part of their fees in connection with
the debt restructuring.  As a result, our ownership of Piltel&#146;s outstanding
common stock decreased from 57.6% to approximately 45.3%. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">Piltel continues to be treated
as a consolidated subsidiary because PLDT has the ability to control Piltel by
acquiring a majority ownership interest, in excess of 90%, of Piltel&#146;s common
stock through the conversion of Piltel&#146;s preferred shares into common shares.
PLDT has no restrictions or costs to exercise the conversion feature.  In
addition, pursuant to Piltel debt restructuring agreements, PLDT issued a
Letter of Support for the benefit of Piltel and its creditors under which PLDT
has agreed to cover any funding shortfalls of Piltel up to a maximum amount of
US$150 million less all amounts paid or committed to be paid to or on behalf of
Piltel by PLDT on or after March 23, 2000.  Under the Letter of Support, PLDT
will provide funding to Piltel in the event that the cash flows from Piltel&#146;s
operations falls short of amounts required by it to discharge in full its
obligations to any creditor of Piltel or any of its operating and financing
subsidiaries and affiliates.  PLDT is subject to contractual restrictions
limiting the amount of financial support it can provide to Piltel subsequent to
the US$150 million Letter of Support.  The undrawn balance under the Letter of
Support was US$50 million (approximately Php2,793 million) as of December 31,
2003, after taking into account PLDT&#146;s investments in Piltel as of and
subsequent to March 23, 2000.  The continued operations of Piltel as a going
concern is dependent upon amounts available to it under the Letter of Support
and its ability to generate sufficient cash flows to meet its obligations on a
timely basis, to comply with the provision of the restructuring agreements as
discussed in <i>Note 14 &#150; Long-term Debt</i>.  As of December 31, 2003, Piltel had total assets of Php5,957 million and capital deficiency of Php31,501
million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Until all amounts owed to creditors
participating in the debt restructuring plan have been paid or discharged, PLDT
will not be permitted to demand or receive any payment, redemption, or
distribution in respect of any present and future liability owed by Piltel to
PLDT or any affiliate of PLDT, subject to specified exceptions.  These
liabilities include amounts owed on Piltel preferred shares owned by PLDT and
other financial indebtedness owed by Piltel to PLDT or any affiliate of PLDT,
but exclude payments due in respect of transactions having arm&#146;s-length terms
and/or in which the pricing is based on market terms.  These severe long-term
restrictions significantly impair Piltel&#146;s ability to transfer funds to PLDT.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In the accompanying U.S. GAAP
consolidated financial statements, PLDT&#146;s stockholders&#146; equity of Php24,745
million includes Piltel&#146;s capital deficiency of Php31,501 million as of
December 31, 2003 notwithstanding that under Piltel debt restructuring
agreements, the amount of financial support that PLDT can still provide to
Piltel was limited to US$50 million as of December 31, 2003. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Condensed
consolidated balance sheets as of December 31, 2003 and 2002 and consolidated
statements of operations for the years ended December 31, 2003, 2002 and 2001
of Piltel included in the consolidated financial statements are as follows:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:10.35pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:10.35pt'>
 <p align=right style='text-align:right;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:10.35pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.55pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:11.55pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;height:11.55pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='margin:0in;margin-bottom:.0001pt;text-indent:0in' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">Consolidated
 Balance Sheets</h3>
 </td>
 <td   colspan=3 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Current
 assets</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,034</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,017</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Noncurrent
 assets</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,923</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,677</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.35pt' style='page-break-inside:
 avoid !msorm;height:15.35pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.35pt'>
 <p align=right style='margin-bottom:12.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.35pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,957</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.35pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,694</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 border:none !msorm;padding:0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 border:none !msorm;padding:0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Current
 liabilities</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,654</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,920</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Long-term
 debt </p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>23,397</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21,673</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Deferred
 credits and other noncurrent liabilities</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>9,407</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,470</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Capital
 deficiency</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:.6in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(31,501)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:.6in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,369)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.85pt' style='page-break-inside:
 avoid !msorm;height:15.85pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.85pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.85pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,957</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.85pt'>
 <p align=left style='margin-top:0in;margin-right:0in;
 margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:left;
 text-indent:-.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.85pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,694</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.5pt;background:white;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.5pt;background:white;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.5pt;background:white;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.5pt;background:white;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=right style='margin-right:.65in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.2pt' style='page-break-inside:
 avoid !msorm;height:13.2pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 white;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.2pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=7 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:white;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.2pt'>
 <p align=center style='margin-top:0in;margin-right:2.9pt;
 margin-bottom:0in;margin-left:61.45pt;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Years Ended December 31,</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:white;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:white;padding:0in 0in 0in 0in;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.0pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 white;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=7 valign=bottom style=' border:none;
 background:white;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=center style='text-align:center;text-indent:56.95pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Consolidated
 Statements of Operations</b></p>
 </td>
 <td   colspan=7 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Operating
 revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,639</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,035</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,893</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Operating
 expenses</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(5,281)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15,974)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(20,280)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.6pt' style='page-break-inside:
 avoid !msorm;height:12.6pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Other
 expenses</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,401)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,574)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,003)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.6pt' style='page-break-inside:
 avoid !msorm;height:12.6pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.6pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Income
 tax</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.6pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(79)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.6pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.6pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.6pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:14.95pt' style='page-break-inside:
 avoid !msorm;height:14.95pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Net
 loss</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,122)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(15,513)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;height:14.95pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(20,390)</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

</div>

<p style='margin-left:.5in;text-indent:-.5in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>10.&nbsp;&nbsp;&nbsp;&nbsp; </b><b>Goodwill and Other Intangible Assets</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">This account consists of:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.2pt;text-align:right' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Goodwill</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>23,800</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">23,628</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Customers list</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,705</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2,705</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>26,505</b></p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">26,333</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Less accumulated amortization</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>11,041</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">10,275</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.6pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:7.6pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:7.6pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>15,464</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in;height:7.6pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">16,058</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Movements in goodwill per
reportable segments are as follows:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.94%;margin-left:.4pt;border-collapse:collapse;border-collapse:
 collapse !msorm'>
 <tr>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;border-top:
 solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Wireless</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;border-top:
 solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Fixed Line</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;border-top:
 solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:8.25pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Information and Communications Technology</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;border-top:
 solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 valign=top style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-top:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:31.5pt;text-align:center;
 text-indent:49.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Balances as of January 1, 2001</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,233</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">495</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">184</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,912</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Addition during the year</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortization during the
 year</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,464)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(69)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(87)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,620)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Balances as of December 31, 2001</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,769</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 426</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">  97</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,292</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Addition during the year</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortization during the
 year</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Balances as of December 31, 2002</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,769</p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 426</p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">  97</p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,292</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Addition during the year</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">172</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 172</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortization during the
 year</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Balances as of December 31, 2003</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,941</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 426</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">  97</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,464</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Movements in accumulated
amortization of goodwill and other intangible assets during the year are as
follows (there were no amortization of goodwill in 2003 and 2002):</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;width:100.0% !msorm;border-collapse:
 collapse !msorm'>
 <tr style='page-break-inside:avoid;height:14.55pt' style='page-break-inside:
 avoid !msorm;height:14.55pt !msorm'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=center style='margin-right:7.75pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:16.05pt' style='page-break-inside:
 avoid !msorm;height:16.05pt !msorm'>
 <td   valign=bottom style=' background:white;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:16.05pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=bottom style=' background:white;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:16.05pt'>
 <p align=left style='margin-left:82.75pt;text-align:left;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Balance
 at beginning of year</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10,275</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,509</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,451</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortizations</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>766</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">766</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,177</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.0pt' style='page-break-inside:
 avoid !msorm;height:12.0pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Write-offs</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:12.0pt'>
 <p align=right style='margin-right:3.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,119)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:14.95pt' style='page-break-inside:
 avoid !msorm;height:14.95pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Balance
 at end of year</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,041</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,275</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:14.95pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,509</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The customers
list was fully amortized as of December 31, 2003.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We
adopted SFAS 142 &#147;Goodwill and Other Intangible Assets&#148; on January 1, 2002.  Goodwill amortization expense and net loss attributable to common shareholders for
the years ended December 31, 2003, 2002 and 2001 follow (we recognized no
extraordinary items in those years):</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;width:100.0% !msorm;border-collapse:
 collapse !msorm'>
 <tr style='page-break-inside:avoid;height:14.55pt' style='page-break-inside:
 avoid !msorm;height:14.55pt !msorm'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:white;padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 0in 0in 0in !msorm;height:14.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:15.6pt' style='page-break-inside:
 avoid !msorm;height:15.6pt !msorm'>
 <td   valign=bottom style=' border:none;background:
 white;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.6pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=5 valign=bottom style=' border:none;
 background:white;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm;
 height:15.6pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">             (in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.6pt' style='page-break-inside:
 avoid !msorm;height:12.6pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Goodwill
 amortization</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:12.6pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,620</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.05pt' style='page-break-inside:
 avoid !msorm;height:13.05pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">Income
 (loss) attributable to common shareholders (Note 22):</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='margin-right:2.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='margin-right:2.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.05pt' style='page-break-inside:
 avoid !msorm;height:13.05pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">     Basic</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,997</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='margin-right:2.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.05pt'>
 <p align=right style='margin-right:2.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,827)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.05pt' style='page-break-inside:
 avoid !msorm;height:13.05pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.05pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">     Diluted</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.05pt'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>8,251</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.05pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.05pt'>
 <p align=right style='margin-right:2.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.05pt'>
 <p align=right style='margin-right:.4in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:13.05pt'>
 <p align=right style='margin-right:2.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,827)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<br clear=all
style='page-break-before:always'>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In
conformity with SFAS 142, we have disclosed below the pro forma impact of
non-amortization of goodwill for 2001, as if goodwill was not amortized during
that period:</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.82%;;border-collapse:collapse;border-collapse:
 collapse !msorm'>
 <tr style='page-break-inside:avoid;height:7.1pt' style='page-break-inside:
 avoid !msorm;height:7.1pt !msorm'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Basic</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Diluted</b></p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=8 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos, except per share amounts)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Income (loss) attributable to common shareholders (Note 22)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,997</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>8,251</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,827)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,827)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Add back goodwill
 amortization</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,620</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,620</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Adjusted income (loss) attributable to common shareholders</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,997</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>8,251</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(25,207)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(25,207)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Earnings per common share</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>47.20</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>45.72</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in;border:none !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Add back goodwill
 amortization</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27.39</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">27.39</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Adjusted earnings per
 common share</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>  47.20</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>  45.72</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;border:none !msorm;border-bottom:
 double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(149.46)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(149.46)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our goodwill is almost entirely
related to the wireless business segment due to our acquisition of Smart.  We
completed our transitional and annual evaluation of the goodwill value in
conformity with SFAS 142 and consistent with our increase in wireless
subscribers and revenues, there is no impairment in the goodwill value.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart carried out an impairment
review of its analog assets in 2001 as a result of declining subscriber
numbers, decreasing average revenue per user and the general migration of
analog subscribers to Smart&#146;s GSM services.  In 2001, Smart wrote-off the
unamortized intangible assets (customer list) amounting to Php2,077 million
relating to analog subscribers.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In October
2003, Smart acquired a majority 80%-interest in Wolfpac Mobile, Inc., or
Wolfpac for a total consideration of Php180 million.  Prior to the acquisition,
Wolfpac (then known as &#147;Wolfpac Communications, Inc.&#148;) was one of Smart&#146;s
leading content providers and the only Philippine content provider to have been
nominated twice at the annual GSM Congress for their successes in application
development.  The acquisition provides Smart with the opportunity to have a
direct link to the content development community, a key differentiator in
cellular service.  Wolfpac has been included in the 2003 consolidated financial
statements using the purchase method of accounting, which resulted in goodwill
amounting to Php172 million.  Since the acquisition was consummated towards the
end of the year, Smart is in the process of determining valuations of certain
intangible assets.  Thus, the allocation of the purchase price is subject to
refinement.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>11.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Other Noncurrent
Assets</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> (in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Debt
 issuance costs &#150; net of accumulated amortization</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,023</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,494</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Refundable
 deposits</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>430</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">459</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,468</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,492</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.2pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:11.2pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:11.2pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,921</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:11.2pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,445</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in'>

<p style='page-break-after:avoid;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='line-height:50%;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>12.&nbsp;&nbsp;&nbsp;&nbsp; </b><b>Accrued Expenses and Other Current Liabilities</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='height:14.1pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:14.1pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;height:14.1pt'>
 <p align=right style='margin-right:2.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">           (in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrued utilities and general expenses</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,452</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,120</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Accrued
 taxes and other expenses</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,194</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,626</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrual for payment for unused sick leave and other employee benefits</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,628</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,448</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrued interest on various loans</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,377</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,542</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Accrued
 satellite air time cost and provision (Notes 18 and 23)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,992</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unearned
 revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,064</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,118</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,339</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,222</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.55pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:7.55pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:7.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>16,046</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:7.55pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,076</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Over the
past years, PLDT has been implementing a manpower rightsizing program, or MRP,
in line with its continuing effort to reduce the cost base of the fixed line
business.  The MRP cost charged to compensation and benefits for the years
ended December 31, 2003, 2002 and 2001 amounted to Php1,885 million, Php324
million and Php279 million, representing 1,862, 374 and 661 employees affected
by the program, respectively.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The decision
to implement the MRP was anchored on the challenges being faced by the fixed
line business as significant changes in technology, increasing competition, and
shifting market preferences to cellular use have reshaped the future of the
fixed line business.  The MRP was implemented under the New Labor Code and is
in compliance with all other relevant labor laws and regulations.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Movements in
the accrued MRP cost accounts during the years are as follows:</p>

<p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:14.1pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:14.1pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;height:14.1pt'>
 <p align=center style='margin-right:2.2pt;text-align:center' style="margin-top:0;margin-bottom:0">
 (in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt' style="margin-top:0;margin-bottom:0">Balance at
 beginning of year</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>87</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Cost for the year</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1,904</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">324</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">279</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt' style="margin-top:0;margin-bottom:0">Payments</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(</b><b>1,975</b><b>)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(237)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">(302)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt' style="margin-top:0;margin-bottom:0">Balance at
 end of year</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>16</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">87</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
</table></center></div>

<p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>13.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Notes Payable</b></p>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of Philippine peso and U.S. dollar-denominated short-term bank loans
and trust receipts at weighted average interest rates, or WAIR, of 10.030% and
7.250% at December 31, 2003 and 2002, respectively, for Philippine peso
borrowings, and 2.606% and 3.238% at December 31, 2003 and 2002, respectively,
for U.S. dollar borrowings.</p>

<p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On April 28, 2003 and May 14, 2003, PLDT issued, at a discount, Php1,600 million and Php400 million One-Year
Peso Notes, respectively, under its Php2,000 million Peso Notes program registered
with the Philippine Securities and Exchange Commission, or Philippine SEC.  Net
proceeds of the issue totaled Php1,803 million. The Php1,600 million One-Year
Peso Note matured on April 22, 2004 and the Php400 million One-Year Peso Note
matured on May 11, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>14.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Long-term Debt </b></p>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of outstanding long-term debt of the following:</p>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">          (in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>135,403</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">140,387</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Piltel</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>23,433</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,082</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>20,586</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,891</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Mabuhay Satellite</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,722</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,356</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">ePLDT</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>105</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">150</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Maratel</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>26</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">42</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>184,275</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">190,908</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less current portion</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>23,816</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,625</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>160,459</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">171,283</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The scheduled maturities of
outstanding long-term debt as of December 31, 2003 are as follows:</p>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.92%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Year</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.5pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(in
 millions of pesos)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.4in;text-align:right' style="margin-top:0;margin-bottom:0">23,816</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.4in;text-align:right' style="margin-top:0;margin-bottom:0">30,172</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.4in;text-align:right' style="margin-top:0;margin-bottom:0">28,762</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.4in;text-align:right' style="margin-top:0;margin-bottom:0">29,059</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2008</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.4in;text-align:right' style="margin-top:0;margin-bottom:0">5,733</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2009 and onwards</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:.4in;text-align:right' style="margin-top:0;margin-bottom:0">66,733</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>PLDT</i></b></p>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT&#146;s
aggregate outstanding indebtedness is broken down as follows:</p>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Description</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:13.1pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:13.1pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:.25in;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>U.S. Dollars</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.35pt;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Export Credit Agencies-Supported Loans:</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Kreditanstalt f&#252;r Wiederaufbau</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US$398</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Php22,099</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$437</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php23,265</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:28.75pt;text-indent:-10.75pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japan Bank for
 International Cooperation/<br>
 Co-financing Banks</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>65</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,644</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">87</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,657</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Others </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>136</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,569</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">161</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,575</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>599</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>33,312</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 685</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">36,497</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Fixed Rate Notes</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,414</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>78,581</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,487</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">79,160</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Term Loans</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>167</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>9,290</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">172</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,166</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US$</b><b>2,180</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>121,183</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$2,344</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">124,823</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Japanese Yen</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Term Loans </p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>JP&yen;10,914</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,668</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">JP&yen;15,641</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,019</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">JBIC OIL</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>9,760</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,068</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,760</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,379</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>JP&yen;</b><b>20,674</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10,736</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">JP&yen;25,401</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,398</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Philippine Pesos</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Peso Fixed Rate Corporate Notes</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,180</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,540</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Term Loans</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,304</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,626</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,484</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,166</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>135,403</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">140,387</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less current portion</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>15,850</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,962</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Php</b><b>119,553</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php128,425</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The effective average interest
rates applicable to the above indebtedness are as follows:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.96%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style='text-indent:.4pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Dollar-denominated loans</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>8.1%</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">8.3%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Yen-denominated loans</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2.2%</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">1.2%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:6.3pt'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 6.3pt'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">Peso-denominated loans</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 6.3pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>13.7%</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 6.3pt'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">13.8%</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>Export
Credit Agencies-Supported Loans</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In order to obtain imported
components for our network infrastructure in connection with our expansion and
service improvement programs, we have obtained loans extended and/or guaranteed
by various export credit agencies.  These financings account for a significant
portion of PLDT&#146;s indebtedness.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Kreditanstalt f&#252;r Wiederaufbau, or KfW, a German state-owned
development bank, is our largest single creditor.  As of December 31, 2003, PLDT owed US$398 million aggregate principal amount of debt to KfW, as follows:</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp; US$298
million provided under various export credit agency-backed facilities, of which<br>
US$221 million was in connection with our expansion and service improvement programs
and US$77 million in connection with the US$149 million refinancing facility
discussed below; and</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp; US$100
million provided for the 15% downpayment portion and credit facilities without
guarantee/insurance cover from the export credit agencies, of which US$22
million was in connection with the US$149 million refinancing facility
discussed below.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On January 25, 2002, PLDT signed two loan agreements with KfW that provided PLDT with a US$149 million facility to
refinance in part the repayment installments under PLDT&#146;s existing loans from
KfW due from January 2002 to December 2004.  The facility is composed of a
nine-year loan, inclusive of a three-year disbursement period and a two-year
grace period during which no principal is payable.  It partly enjoys the
guarantee of HERMES, the export credit agency of the Federal Republic of
Germany.  Disbursements under this facility, which are made as the KfW loans to
be repaid fall due, are currently available.  We have drawn US$99 million
(Php5,520 million) under this facility as of December 31, 2003.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">After giving effect to the
refinancing facility, US$38 million of our KfW loans matures in 2004, US$82
million matures in 2005, US$57 million matures in 2006, US$78 million matures
in 2007, US$58 million matures in 2008 and US$85 million matures in 2009 and
onwards.  Principal amortization on these loans is generally payable in equal
semi-annual installments.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT has also obtained loans
extended and/or guaranteed by other export credit agencies, including Japan
Bank for International Cooperation, or JBIC, (formerly known as the
Export-Import Bank of Japan), the Export-Import Bank of the United States, and
respective export credit agencies of France, Italy, Israel, Sweden, Denmark,
Canada, Australia, Singapore and the United Kingdom, in the aggregate
outstanding principal amount of US$201 million as of December 31, 2003.  Of the
amounts outstanding under these loans, US$63 million matures in 2004, US$52
million matures in 2005, US$42 million matures in 2006, US$32 million matures
in 2007, US$8 million matures in 2008 and US$4 million matures in 2009 and
onwards.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Fixed Rate Notes</i></p>

<p style='text-indent:27.35pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT has
eight series of non-amortizing fixed rate notes outstanding as of December 31, 2003, as follows:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:98.46%;margin-left:4.5pt;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';margin-top:3.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>Principal Amount</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-top:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-top:3.0pt;margin-right:9.0pt;margin-bottom:
 0in;margin-left:0in;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>Issue
 Date</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-top:3.0pt;margin-right:0in;margin-bottom:
 0in;margin-left:.25in;margin-bottom:.0001pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>Interest
 Rate</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style=';margin-top:
 3.0pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><u>&nbsp;</u></b></p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-top:3.0pt;margin-right:22.5pt;margin-bottom:
 0in;margin-left:.05pt;margin-bottom:.0001pt;text-indent:-.05pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b><u>Maturity</u></b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$77,002,000</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">June 2, 1994</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10.625%</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">June 2, 2004</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$138,210,000</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">July 31, 1995</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">9.875%</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">August 1, 2005</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$175,000,000</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">June 28, 1996</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">9.250%</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">June 30, 2006</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$200,000,000</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">March 6, 1997</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">7.850%</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">March 6, 2007</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$100,000,000</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">May 2, 2002</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10.625%</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">May 15, 2007</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$175,000,000</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">April 13, 1999</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10.500%</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">April 15, 2009</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$250,000,000</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">May 2, 2002</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">11.375%</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">May 15, 2012</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$300,000,000</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">March 6, 1997</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">8.350%</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">March 6, 2017</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On May 2, 2002, PLDT issued 10.625%
Notes due 2007 in the aggregate principal amount of US$100 million and 11.375%
Notes due 2012 in the aggregate principal amount of US$250 million.  The net
proceeds from the issuance of the notes were used to effect the repurchase of
(1) US$63 million in principal amount of our 8.5% Notes due 2003 and US$117
million in principal amount of our 10.625% Notes due 2004 validly tendered by
holders in our tender offer and (2) US$10 million in principal amount of our
10.625% Notes due 2004 and US$12 million in principal amount of our 9.875%
Notes due 2005 from the open market, and to prepay or repay various loans in
the aggregate amount of US$125 million, of which US$53 million (JP&yen;6,260
million) pertained to the Japanese yen term loan which matured on June 18, 2003
and US$52 million in connection with the US$150 million term loan which matured
on December 22, 2003.  </p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>Term Loans</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Local
Exchange Transfer Loans</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In
connection with the transfer to PLDT of Smart&#146;s local exchange business, PLDT
entered into loan agreements with Nederlandse Financierings-Maatschappij Voor
Ontwikkelingslanden N.V., or FMO, of the Netherlands, Exportkreditnamden, or
EKN, of Sweden and Export Credits Guarantee Department, or ECGD, of the United
Kingdom for loans in the principal amounts of US$135 million, US$36 million and
US$27 million, respectively. These loans were amended in August and September
2001 to increase the maximum total debt to earnings before interest, income
tax, depreciation and amortization, or EBITDA, ratio that PLDT on a
non-consolidated basis and calculated on the basis of Philippine GAAP is
permitted to maintain during the terms of the respective loans.  Approximately
US$108 million of these loans was outstanding as of December 31, 2003.  The FMO loan will mature on September 1, 2007, and the EKN and ECGD loans on December 31, 2007. </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$150 Million Term Loan</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In connection with PLDT&#146;s fixed
line expansion projects, PLDT obtained a US$150 million term loan, which was
subsequently assigned to Norddeutsche Landesbank Girozentrale, Singapore Branch.
This loan matured on December 22, 2003 and the principal balance of US$52
million then outstanding was partly refinanced by Tranche B of US$145 million
multicurrency refinancing facility in the amount of JP&yen;3,191 million and US$19
million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>JP&yen;19,807 Million Term Loan</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In December 1997, in connection
with a refinancing of its maturing debt, PLDT obtained a Japanese yen term loan
from a syndicate of foreign banks.  This loan matured on June 18, 2003 and the principal balance of JP&yen;12,359 million then outstanding was partly refinanced by
Tranche A of US$145 million multicurrency refinancing facility in the amount of
JP&yen;7,723 million and US$34 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>JBIC JP&yen;9,760 Million Overseas
Investment Term Loan</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On July 26, 2002, PLDT signed a loan agreement with JBIC for a credit facility of JP&yen;9,760 million under the
JBIC&#146;s Overseas Investment Loan (OIL) program.  The loan, which was drawn on July 31, 2002, will be amortized semi-annually beginning March 21, 2005 and will mature on March 21, 2008.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Multicurrency
Refinancing Facility</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On September 4, 2002, PLDT signed a loan agreement with a syndicate of banks for a US$145
million multicurrency term loan facility consisting of Japanese yen and U.S.
dollar commitments of JP&yen;10,914 million and US$53 million, respectively.  This
facility was split into two tranches.  Tranche A was drawn on June 18, 2003 in the amount of JP&yen;7,723 million and US$34 million to refinance a portion
of the outstanding principal balance of the Japanese yen syndicated term loan
which matured on the same date.  Tranche B was drawn on December 22, 2003 in the amount of JP&yen;3,191 million and US$19 million to refinance a portion of US$52
million principal amount outstanding under the U.S. dollar term loan which
matured on the same date.  The new syndicated facility will be amortized
semi-annually beginning June 2004 and will mature in December 2006.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:27.0pt' style="margin-top:0;margin-bottom:0"><i>US$12 Million Term Loan
Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On May 29, 2003, PLDT obtained a US$12 million term loan facility from DEG-Deutsche Investitions und Entwicklungsgesellschaft
mbH.  As of December 31, 2003, this loan has an outstanding balance of US$4
million.  This loan will mature in December 2009 and is payable in semi-annual
installments starting June 15, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>JP&yen;5,615
Million</i> <i>Syndicated Term Loan Facility</i></p>

<p style='text-indent:27.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On June 11, 2003, PLDT signed a JP&yen;5,615 million syndicated term loan facility supported by
Nippon Export and Investment Insurance of Japan, or NEXI.  As of December 31, 2003, we have not made any drawdowns under this facility.  An initial
drawdown of JP&yen;960 million was made on April 5, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:27.0pt' style="margin-top:0;margin-bottom:0"><i>JBIC 4 Program of the
Development Bank of the </i><i>Philippines</i></p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In connection with the Asia Pacific
Cable Network 2 project, PLDT entered into a loan agreement with Citibank,
N.A., as facility agent, and a syndicate of banks in the aggregate principal
amount of Php1,700 million, of which about Php1,284 million was outstanding as of December 31, 2003.  The loan, which is funded under the JBIC Facility for Private Sector
Development of the Development Bank of the Philippines, will mature on October
26, 2005, and since April 2002, is payable in quarterly installments as set
forth below: </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:87.28%;margin-left:40.5pt;border-collapse:collapse'>
 <tr>
 <td   valign=bottom style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0"><b><u>Quarterly Payment Number</u></b></p>
 </td>
 <td   valign=bottom style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Percentage of
 Principal <br>
 Payable on Each <br>
 <u>Quarterly Payment Date</u></b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 4.5pt 0in 4.5pt'>
 <p align=right style=';margin-right:
 40.5pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">Payments 1&#150;7 </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style=';;text-align:center' style="margin-top:0;margin-bottom:0">3.500%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">Payments 8&#150;11</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style=';;text-align:center' style="margin-top:0;margin-bottom:0">8.875%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p style="margin-top:0;margin-bottom:0">Payments 12&#150;15</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 4.5pt 0in 4.5pt'>
 <p align=center style=';;text-align:center' style="margin-top:0;margin-bottom:0">10.000%</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:27.0pt' style="margin-top:0;margin-bottom:0"><i>Php2,770
Million Peso Fixed Rate Corporate Notes</i></p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In connection with PLDT&#146;s service
improvement and expansion programs, PLDT has entered into two loan agreements,
pursuant to each of which PLDT issued fixed rate corporate notes in three
tranches.  Interest on each tranche is payable semi-annually.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the first loan agreement,
PLDT borrowed an aggregate amount of Php1,500 million, of which Php230 million
matured on November 11, 2002, Php500 million will mature on November 9, 2004, and Php770 million on November 9, 2006.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the second loan agreement,
PLDT borrowed an aggregate amount of Php1,270 million, of which <br>
Php360 million matured on June 9, 2003, Php100
million will mature on June 9, 2005, and Php810
million on June 9, 2010.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Covenants</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our debt instruments contain
restrictive covenants and require us to comply with specified financial ratios
and other financial tests, calculated in conformity with accounting principles
generally accepted in the Philippines, at relevant measurement dates,
principally at the end of each quarterly period.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The financial tests under our debt
instruments, as amended, include maintaining a positive tangible net worth and
compliance with the following ratios:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
interest coverage ratio, calculated on a non-consolidated basis
and excluding PLDT&#146;s equity share in net earnings or losses of investees, of
not less than 180% or 200%;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
total debt to EBITDA on a non-consolidated basis of not more than
5.5:1 on December 31, 2003, not more than 5.0:1 from March 2004 to June 2004,
not more than 4.5:1 from September 2004 to December 2004 and not more than
4.0:1 from March 2005 and thereafter;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
long-term indebtedness to appraised value of equity/tangible net
worth on a non-consolidated basis, ranging from not more than 1.1:1 to not more
than 3.0:1; </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
current ratio on a non-consolidated basis, ranging from not less
than 0.9:1 to not less than 1.2:1;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
debt service coverage ratio on a non-consolidated basis of at
least 1.1:1; and</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
debt to free cash flow ratio on a non-consolidated basis of not
more than 5.5:1 from September 30, 2003 to June 30, 2004, not more than 5.0:1
from September 30, 2004 to June 30, 2005, not more than 4.5:1 from September
30, 2005 to June 30, 2006, and not more than 4.0:1 from September 30, 2006 onwards.</p>

<p style='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In addition, some of PLDT&#146;s debt
instruments contain covenants requiring PLDT to comply with specified financial
tests on a consolidated basis calculated in conformity with the accounting
principles generally accepted in the Philippines.  These include:</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
long-term debt to appraised value of equity/tangible net worth of
not more than 2.33:1;</p>

<p style='margin-left:.3in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
total debt to EBITDA of not more than 4.5:1 in 2003 and 2004, and
not more than 4.0:1 in 2005 and thereafter; </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
current ratio ranging from not less than 0.75:1 to 0.9:1; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
interest coverage ratio of not less than 200%.</p>

<p style='margin-left:17.1pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">For purposes
of deriving appraised value of equity/tangible net worth, we determined the
revaluation surplus in respect of PLDT&#146;s properties.  PLDT&#146;s properties in
service as of December 31, 1997 were reappraised by an independent firm of
appraisers to reflect their sound value, as part of NTC&#146;s financial reporting
requirements, based on the December 29, 1997 exchange rate of Php40.116 to US$1.00.  As of December 31, 1997, the sound value was Php225,966 million and the
revaluation surplus was Php82,723 million.
This reappraisal was approved by the NTC on January 28, 2000 under NTC Case No. 98-183.  As of December 31, 2003 and 2002, the revaluation surplus on
PLDT&#146;s 1997 appraised properties still in service, net of a 5% disallowance
factor, amounted to Php38,441 million and Php44,984 million, respectively.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
principal factors that can negatively affect our ability to comply with these
financial ratios and other financial tests are depreciation of the peso
relative to the U.S. dollar, poor operating performance of PLDT and its
consolidated subsidiaries, impairment or similar charges in respect of
investments or other long-lived assets that may be recognized by PLDT and its
consolidated subsidiaries and increases in our interest expenses.  Interest
expense may increase as a result of various factors including issuance of new
debt, the refinancing of lower cost indebtedness by higher cost indebtedness,
depreciation of the peso, the lowering of PLDT&#146;s credit ratings or the credit
ratings of the Philippines, increase in reference interest rates, and general
market conditions.  Since approximately 96% of PLDT&#146;s total debt is denominated
in foreign currencies, principally in U.S. dollars, many of these financial
ratios and other tests are negatively affected by any weakening of the peso.  As
of December 31, 2003, the peso depreciated by 4% to Php55.586
to US$1.00, from Php53.254 to US$1.00 as of December 31, 2002.  The peso has been subjected to significant fluctuations.  In 2003, the
peso depreciated to Php55.075 to US$1.00 on March 12, 2003 then recovered to a high of Php52.021 to
US$1.00 on May 8, 2003 only to depreciate again to a low of Php55.767 to US$1.00 on November 27, 2003.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT&#146;s ability to maintain
compliance with financial covenant requirements measured on a non-consolidated
basis is principally affected by the performance of its fixed line business.
PLDT cannot be assured of the benefit of net revenues and cash flows generated
by Smart and PLDT&#146;s other investees in assisting in complying with
non-consolidated covenants.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have maintained compliance
with all of our financial ratios and covenants as measured under our loan
agreements and other debt instruments.  However, if negative factors adversely
affect our financial ratios, we may be unable to maintain compliance with these
ratios and covenants or be unable to incur new debt.  Under some of our loan
agreements, certain of our financial ratios have become more restrictive at the
end of the second and fourth quarters of 2003 and the first quarter of 2004 and
will continue to become more restrictive in increments thereafter, which will
make it more difficult for PLDT to maintain compliance with this ratio in the
future.  Inability to comply with our financial ratios and covenants or raise
new financing could result in a declaration of default and acceleration of some
or all of our indebtedness.  The terms of some of our debt instruments have no
minimum amount for cross-default.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under PLDT&#146;s loan agreements that
require maintenance of an interest coverage ratio of at least 180%, interest
coverage ratio is the ratio calculated on the basis of Philippine GAAP of (x)
our after-tax net income for the 12 months immediately preceding the calculation
date after: (a) adding back interest charges, depreciation, amortization and
other non-cash charges (including equity share in net earnings or losses of
investees but excluding provision for doubtful accounts) and provision for
income taxes, and (b) deducting capitalized subscriber acquisition costs, to
(y) the estimated aggregate interest charges payable during the 365-day period
following the calculation date on all of PLDT&#146;s indebtedness outstanding on
such calculation date.  Our interest coverage ratio calculated on the basis of
Philippine GAAP under these agreements for the 12 months period ended December 31, 2003 was 300% as against the required threshold of not less than 180%.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under PLDT&#146;s loan agreements that
require maintenance of an interest coverage ratio of at least 200%, interest
coverage ratio is the ratio calculated on the basis of Philippine GAAP of (x)
our after-tax net income after adding back reserves for higher plant
replacement costs, income taxes, interest charges, depreciation, amortization
and non-cash charges (including equity share in net earnings or losses of
investees and provision for doubtful accounts) during 12 consecutive months
within the 15 calendar months immediately preceding the calculation date, to
(y) the sum of (a) the estimated aggregate interest charges on all
indebtedness, net of interest capitalized to construction, plus (b) dividends
on mandatorily redeemable preferred stock, in each case scheduled to be paid
during the 12 months following the calculation date.  Our interest coverage
ratio calculated on the basis of Philippine GAAP under these agreements for the
12 months period ended December 31, 2003 was 388% as against the required
threshold of not less than 200%.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Non-consolidated total debt to
EBITDA is the ratio calculated on the basis of Philippine GAAP of (x) PLDT&#146;s
total indebtedness (not including amounts payable by PLDT to Piltel under the
Letter of Support) to (y) net income for the preceding 12 months, after adding
back interest accrued on all indebtedness, depreciation, amortization and other
non-cash charges (including equity share in net earnings or losses of
investees, but excluding provision for doubtful accounts) and provision for
income taxes and deducting any capitalized subscriber acquisition costs.  As of
 December 31, 2003, our non-consolidated total debt to EBITDA calculated on the
basis of Philippine GAAP was 4.68:1 as against the required threshold of not
more than 5.5:1.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Non-consolidated long-term
indebtedness to appraised value of equity (or under some covenants, to tangible
net worth) is the ratio calculated on the basis of Philippine GAAP of (x)
PLDT&#146;s aggregate indebtedness (or portion of such indebtedness) due more than
one year following the calculation date and par value of all mandatorily
redeemable preferred stock to (y) the sum of the aggregate par value of all of
PLDT&#146;s outstanding common and convertible preferred stock (other than preferred
stock subject to mandatory redemption), paid-in capital in excess of the par
value of such stock, PLDT&#146;s retained earnings, reserve for higher plant
replacement costs and revaluation increment arising from independent certified
appraisals of PLDT&#146;s telephone plant approved by the NTC.  As of December 31,
2003, our non-consolidated long-term indebtedness to appraised value of
equity/tangible net worth calculated on the basis of Philippine GAAP was 0.88:1
as against the most restrictive threshold of not more than 1.10:1.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Non-consolidated
current ratio is the ratio calculated on the basis of Philippine GAAP of (x)
non-consolidated current assets to (y) non-consolidated current liabilities,
excluding from current liabilities 50% of the portion of long-term indebtedness
due within one year of the calculation date.  As of December 31, 2003, our non-consolidated current ratio calculated on the basis of Philippine GAAP was
1.28:1 as against the most restrictive threshold of not less than 1.20:1.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Debt service coverage ratio is the
ratio calculated on the basis of Philippine GAAP of (x) PLDT&#146;s cash flow from
operations after adding back interest charges (to the extent previously
deducted) plus (1) dividends received from investees, cash received upon any
redemption of redeemable preferred shares issued by Smart, any cash received
under PLDT&#146;s Subscriber Investment Plan, or SIP and interest income received
less (2) capital expenditures (excluding capitalized interest) and investments
in investees for the 12 months immediately preceding the calculation date plus
(3) PLDT&#146;s closing cash balance as of the last day of the calculation period to
(y) the sum of the projected interest charges and principal debt repayments
(excluding debt to be repaid with a refinancing facility) during the 12 months
following the calculation date.  Our debt service coverage ratio for the 12
months period ended December 31, 2003 calculated on the basis of Philippine
GAAP was 1.15:1 as against the required threshold of not less than 1.10:1.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Debt to free cash flow ratio is the
ratio calculated on the basis of Philippine GAAP of (x) PLDT&#146;s debt less PLDT&#146;s
closing cash balance of the last day of the calculation period to (y) PLDT&#146;s
cash flow from operations after adding back interest charges (to the extent
previously deducted) plus (1) dividends received from investees, cash received
upon any redemption of redeemable preferred shares issued by Smart, any cash
received under PLDT&#146;s SIP and interest income received less (2) capital
expenditures (excluding capitalized interest) and investments in investees for
the 12 months immediately preceding the calculation date.  Our debt to free
cash flow ratio for the 12 months period ended December 31, 2003 calculated on the basis of Philippine GAAP was 4.95:1 as against the required threshold of
not more than 5.5:1.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Our
consolidated long-term debt to appraised value of equity/tangible net worth,
consolidated total debt to EBITDA, consolidated interest coverage and
consolidated current ratios during the year 2003, each to be calculated
pursuant to Philippine GAAP, remained within the limits stipulated in the
various loan agreements, including the most restrictive current ratio threshold
of not less than 0.9:1.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT&#146;s debt
instruments contain a number of other negative covenants that, subject to
certain exceptions and qualifications, restrict PLDT&#146;s ability to take certain
actions without lenders&#146; approval, including:  (1) incurring additional
indebtedness; (2) prepaying other debt; (3) making investments;<br>
(4) extending loans; (5) extending guarantees or assuming the obligations of
other persons; (6) paying dividends or other distributions or redeeming,
repurchasing or otherwise acquiring shares of PLDT&#146;s capital stock;<br>
(7) disposing of all or substantially all of its assets or of assets in excess
of specified thresholds of its tangible net worth; (8) entering into management
contracts providing for the management of its business or operations by a third
party; (9) creating any lien or security interest; (10) permitting set-off
against amounts owed to PLDT; (11) merging or consolidating with any other company;
(12) entering into transactions with shareholders and affiliates; and (13)
entering into sale and leaseback transactions.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the indenture of PLDT&#146;s
10.625% Notes due 2007 and 11.375% Notes due 2012, PLDT is required to comply
with a number of additional covenants, including covenants that, subject to
certain exceptions, restrict PLDT&#146;s ability to (a) incur debt unless its ratio
of debt to EBITDA calculated on the basis of Philippine GAAP (calculated on a
non-consolidated basis based on definitions provided in the same indenture,
except under certain circumstances), after giving effect to the incurrence of
such debt, would be less than 5.5:1 on or prior to December 31, 2003, 5.0:1
from January 1, 2004 to December 31, 2004 and 4.5:1 thereafter and <br>
(b) pay dividends, repurchase or redeem its capital stock, make investments and
prepay subordinated debt, among other things.  Subject to certain exceptions,
these covenants also restrict our ability to sell assets and to use the
proceeds of these asset sales.  Our consolidated leverage ratio at December 31, 2003 calculated on the basis of Philippine GAAP was 5.4:1 as against the
required threshold of not more than 5.5:1.  We expect that we will have
difficulty meeting our debt payment obligations if we do not continue to
receive cash dividends from Smart.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Under the
terms of the US$149 million facility with KfW, PLDT is prohibited from paying
any dividends on common stock until after December 31, 2004.  In addition, under the terms of PLDT&#146;s US$145 million multicurrency term facility agreement
and JP&yen;5,615 million syndicated term loan facility, PLDT is restricted from
distributing dividends to common stockholders unless (i) no default has
occurred which is continuing, and (ii) its debt to free cash flow ratio, after
giving effect to the distribution of such dividends and, under certain
circumstances, other adjustments to PLDT&#146;s closing cash balance, would be less
than 4.0:1.  Under other loan agreements, PLDT may not declare or pay dividends
on any of its capital stock without the prior written consent of the lenders
(i) if PLDT is in default in the payment of any amounts due and payable under
such loan agreement or after the occurrence and during the continuance of any
other event of default or potential event of default under such agreements,
(ii) if after giving effect to such action the current ratio would be less than
1.2:1 or (iii) in an amount greater than PLDT&#146;s net income after taxes during
the fiscal year to which such payment or distribution relates.  </p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In case of a change in control of
PLDT, PLDT may be required to repurchase or prepay certain indebtedness.  Under
the terms of the 10.625% Notes due 2007 and 11.375% Notes due 2012, we are
required to offer to purchase all outstanding notes due 2007 and notes due 2012
for cash at a price of 101% of their principal amounts plus accrued interest in
the event that (a) the aggregate of NTT Communications&#146; and First Pacific&#146;s
direct and indirect voting interest in PLDT&#146;s outstanding capital stock having
voting rights falls below 35% of such capital stock, (b) any person or, in
certain instances, group of persons, which is not controlled directly or
indirectly by First Pacific or NTT Communications acquires a direct or indirect
voting interest in PLDT&#146;s outstanding capital stock having voting rights which
equals or exceeds 35% of such capital stock and (c) if a rating agency at such
time maintains a rating on either series of notes, the rating agency downgrades
its credit rating on the series within 90 days (or more, in certain
circumstances) following notice of the occurrence of the events specified in
(a) and (b) above.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Under the
terms of PLDT&#146;s JPY9,760 million loan
from JBIC, in the event of any proposed sale or transfer of PLDT&#146;s stock that
would result in NTT Communications holding less than 14.95% of PLDT&#146;s voting
stock, we will be required to prepay, immediately upon effectiveness of such
sale or transfer, all principal outstanding under the loan, together with
accrued interest.  However, prepayment will not be required if, following such
sale or transfer, (a) NTT Communications continues to have prior approval
rights with respect to all matters as to which NTT Communications has approval
rights under the stock purchase agreement pursuant to which it acquired its
shares in PLDT, or (b) JBIC, in its sole discretion, determines that NTT
Communications&#146; participation in the expansion of Smart&#146;s GSM network capacity
to extend PLDT&#146;s cellular business in Smart would not be reduced below its
level of participation as of the date of the loan agreement.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the terms of both PLDT&#146;s
US$145 million multicurrency term facility agreement and JPY5,615 million syndicated term loan facility, if
any lender so requests in writing, PLDT shall prepay in full such lender&#146;s participation
in the loan within 45 days from notification of the change in control and no
later than the date on which PLDT is required to repurchase its 10.625% Notes
due 2007 and 11.375% Notes due 2012 (&#147;Bonds&#148;) from bondholders accepting the
change in control offer.  A change in control is deemed to occur when (a) the
aggregate of NTT Communications&#146; and First Pacific&#146;s direct and indirect voting
interest in PLDT&#146;s outstanding capital stock having voting rights fall below
35% of such capital stock, (b) any person or, in certain instances, group of
persons, which is not controlled directly or indirectly by First Pacific or NTT
Communications acquires a direct or indirect voting interest in PLDT&#146;s
outstanding capital stock having voting rights which equals or exceeds 35% of
such capital stock and (c) if a rating agency at such time maintains a rating
on the Bonds, the rating agency downgrades its credit rating on the Bonds
within 90 days (or more, in certain circumstances) following notice of the
occurrence of the events specified in (a) and (b) above.</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT&#146;s debt
instruments contain customary and other default provisions that permit the
lender to accelerate amounts due or terminate their commitments to extend
additional funds under its debt instruments. These default provisions include:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
cross-defaults and cross-accelerations that permit a lender to
declare a default if PLDT is in default under another debt instrument; in some
cases, the cross-default provision is triggered upon a payment or other default
permitting the acceleration of PLDT&#146;s debt, whether or not the defaulted debt
is accelerated.  In other cases, the cross-default provision requires the
defaulted loan to be accelerated.  In some debt instruments, the cross-default
provision will be triggered only if the principal amount of the defaulted
indebtedness exceeds a threshold amount specified in these debt instruments;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
failure by PLDT to meet certain financial ratio covenants
referred to above;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the occurrence of any material adverse change in circumstances
that a lender reasonably believes materially impairs PLDT&#146;s ability to perform
its obligations under its debt instrument with the lender; </p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the revocation, termination or amendment of any of the permits or
franchises of PLDT in any manner unacceptable to the lender;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the abandonment, termination or amendment of the project financed
by a loan in a manner unacceptable to the lender;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the nationalization or sustained discontinuance of all or a
substantial portion of PLDT&#146;s business; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
other typical events of default, including the commencement of
bankruptcy, insolvency, liquidation or winding up proceedings by PLDT.</p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Piltel</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Piltel&#146;s
long-term debt consists of:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>

 <tr style='page-break-inside:avoid;height:11.55pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:11.55pt'>
 <p style='margin-top:3.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:11.55pt'>
 <p align=center style='margin-top:3.0pt;margin-right:0in;
 margin-bottom:0in;margin-left:.4pt;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:11.55pt'>
 <p align=center style='margin-top:3.0pt;margin-right:0in;
 margin-bottom:0in;margin-left:.4pt;margin-bottom:.0001pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=4 valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Restructured debt</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Philippine
 Pesos</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10-year
 Tranche B</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Php2,166</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php2,166</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15-year
 Tranche C</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,166</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,166</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15-year
 Term Notes Facility</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>293</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">293</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,625</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,625</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S.
 Dollars</p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10-year
 Tranche B</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US$35</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,932</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$33</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,769</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15-year
 Tranche C</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>35</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,932</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">33</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,769</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15-year
 Conversion Notes Facility</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>122</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>6,769</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">121</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,448</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US$</b><b>192</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10,633</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$187</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,986</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Japanese
 Yen</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10-year
 Tranche B</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>JPY7,822</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,062</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">JPY7,822</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,510</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15-year
 Tranche C</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,822</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,062</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,822</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,510</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>JPY15,644</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>8,124</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">JPY15,644</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,020</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>23,382</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21,631</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Unrestructured debt</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S.
 Dollars</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Convertible
 Bonds</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US$1</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>51</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$2</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">120</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Banks</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">331</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US</b><b>$1</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>  51</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$8</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 451</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>23,433</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,082</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less current portion</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>74</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">446</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Php</b><b>23,359</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php21,636</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On June 4,
2001, Piltel completed the restructuring of approximately Php41 billion of
indebtedness and other claims owed to banks, trade creditors, bondholders and
preferred shareholders, or the aggregate financial debt of Piltel, representing
approximately 98% of its total liabilities as of that date.  As of December 31, 2003, approximately 99.8% of Piltel&#146;s debt have been restructured except for
convertible bonds with a principal value of US$0.9 million.  Under the terms of
the debt restructuring, 50% of Piltel&#146;s debt was cancelled in exchange for
Piltel convertible preferred shares, which were mandatorily exchanged for PLDT
convertible preferred shares, and the balance was restructured into 10-year and
15-year loans secured by substantially all of the present and future assets of
Piltel.  See <i>Note 16 &#150; Preferred Stock Subject to Mandatory Redemption </i>for
the terms of the PLDT convertible preferred share.</p>

<br clear=all
style='page-break-before:always'>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Summarized
below are the principal terms of the restructured debt of Piltel: </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=1 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;border:none'>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';margin-top:3.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';margin-top:
 3.0pt;;margin-bottom:0in;margin-left:0in;margin-bottom:
 .0001pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10-Year Tranche B Loans</b></p>
 </td>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';margin-top:
 3.0pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>15-Year Tranche C Loans</b></p>
 </td>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';margin-top:
 3.0pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Term Notes Facility</b></p>
 </td>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-left:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';margin-top:
 3.0pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Conversion Notes Facility</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';margin-top:3.0pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Final maturity</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';margin-top:
 3.0pt;;margin-bottom:0in;margin-left:0in;margin-bottom:
 .0001pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">10 years from Effective<br>
 Date</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';margin-top:
 3.0pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15
 years from Effective<br>
 Date</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';margin-top:
 3.0pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15
 years plus 10 days<br>
 from Effective Date</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';margin-top:
 3.0pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">15
 years from Effective<br>
 Date</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   rowspan=2 valign=top style=' border-top:none;
 border-left:solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortization</p>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">per annum</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 1 and 2 &#150;  0.00%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 1 and 2  &#150;  0.00%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 1 and 2  &#150;  0.00%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 1 and 2  &#150;  0.00%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 3 to 9  &#150;  0.10%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 3 and 4  &#150;  0.10%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 3 to 14  &#150;  0.10%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 3 and 4  &#150;  0.10%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border-top:none;border-left:
 solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Year 10  &#150;  99.30%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Year 5  &#150;  2.00%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Year 15  &#150;  98.80%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Year 5  &#150;  1.05%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border-top:none;border-left:
 solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 6 to 14  &#150;
 10.00%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 6 to 9  &#150;  5.05%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border-top:none;border-left:
 solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Year 15  &#150;  7.80%</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Year 10  &#150;  54.65%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border-top:none;border-left:
 solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Years 11 to 14  &#150;
 5.00%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Year 15  &#150;  3.90%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest rate</p>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border-top:none;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Peso
 facility</b> &#150; Philippine 91-day
 treasury bill rate (T-Bill Rate) or the average of the 91-day T-Bill Rate and
 the 90-day Philippine Interbank Offered Rate (PHIBOR), if 90-day PHIBOR is
 different from the T-Bill Rate by more than 2.50%, plus 1.00% p.a.</p>
 <p style=';;
 text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p style=';;
 text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>U.S.
 dollar facilities</b> &#150; London Interbank
 Offered Rate (LIBOR) for three-month U.S. dollar deposits plus 1.00% p.a.</p>
 <p style=';;
 text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p style=';;
 text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Yen
 facility</b> &#150; LIBOR for three-month Yen
 deposits plus 1.00% p.a.</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">181-day
 T-Bill Rate or the average of the 181-day T-Bill Rate and the six-month
 PHIBOR, if six-month PHIBOR is different from the T-Bill Rate by more than
 2.50%, plus 1.00% p.a.</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style=';;
 text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">LIBOR
 for three-month U.S. dollar deposits plus 1.00% p.a.</p>
 <p style=';text-align:justify;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style=';page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest payment dates</p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:none;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';text-align:
 center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Quarterly in
 arrears</p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:none;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style=';text-align:
 center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Semi-annually</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, Piltel is currently not in compliance with the terms of convertible bonds with principal
amount of US$0.7 million (approximately US$0.9 million redemption price at the
option of the holders).</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Piltel may not be able to
restructure or otherwise pay the claims relating to its unrestructured debt.
However, default on and acceleration of Piltel&#146;s unrestructured indebtedness do
not create a cross-default provision under Piltel&#146;s restructured indebtedness
or any indebtedness of PLDT.  See <i>Note 28 &#150; Other Matters</i> for Smart&#146;s
invitations to the creditors of Piltel to offer to sell their indebtedness to
Smart.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">If Piltel&#146;s non-participating
creditors take forceful measures to enforce their claims, it is possible that
Piltel would be required to submit itself to a court-supervised rehabilitation
proceeding or an involuntary insolvency proceeding seeking liquidation.  All of
Piltel&#146;s creditors that participated in the debt restructuring agreed in
connection with the debt restructuring that they would submit Piltel to a
rehabilitation proceeding in those circumstances and petition for the adoption
of a plan of rehabilitation that includes the financial terms of the debt
restructuring plan.  However, the laws and procedures governing a
rehabilitation proceeding in the Philippine courts remain untested in
significant respects.  It cannot be assured that a rehabilitation plan which
incorporates the financial terms of the debt restructuring would be adopted
promptly or at all.  Even if such a rehabilitation plan were adopted, it cannot
be assured that Piltel would prove to be viable thereafter and that it will be
able to meet obligations, including its obligations owed to PLDT or its
affiliates.</p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Smart</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart&#146;s
long-term debt consists of:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:7.05pt'>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.05pt'>
 <p style='margin-top:3.0pt;text-align:justify;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.05pt'>
 <p align=center style='margin-top:3.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.05pt'>
 <p align=center style='margin-top:3.0pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">U.S.
 Dollars</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US$361</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Php20,053</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$408</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php21,724</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Philippine
 Pesos</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>533</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,167</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>20,586</b></p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,891</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less current
 portion</p>
 </td>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,104</b></p>
 </td>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,173</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Php13,482</b></p>
 </td>
 <td   style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' border:none;border-bottom:double windowtext 2.25pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php16,718</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart&#146;s bank loan facilities, which
are being used to finance its purchases of telecommunications equipment, are
availed of through one or more drawdowns.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$224 Million Term Loan
Facilities</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The loan facilities for Phases 1 to
4 of the GSM network expansion, under which US$106 million was outstanding as
of December 31, 2003, are repayable in ten equal semi-annual installments with
final repayments due in October 2005 and April 2006.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>US$195
Million Term Loan Facility</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On June 8, 2001, Smart signed its GSM Phase 5A financing comprised of US$195 million loans.
The US$195 million loans, of which US$121 million was outstanding as of December 31, 2003, are payable over five to six years, with final repayments due in
September 2006, March 2007 and June 2007.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Php1 Billion Term Loan Facility</i></p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On June 14, 2001, Smart signed its GSM Phase 5A financing of Php1,000 million term loan.  The Php1,000 million
facility, of which Php533 million was outstanding as of December 31, 2003, is payable quarterly with final repayment in December 2005.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$6 Million Term Loan Facility</i>
</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On September 25, 2001, Smart obtained a US$6 million term loan facility from Electro Banque S.A., which was later
assigned to Alcatel SVF 1999A-Trust fee effective December 3, 2002.  The loan facility, of which US$3 million was outstanding as of December 31, 2003, is payable semi-annually, with final repayment due in May 2005.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>US$11
Million Term Loan Facility</i></p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">On October 26, 2001, Smart obtained a US$11 million term loan facility from Credit Lyonnais S.A., of which the
undrawn balance of US$4 million was cancelled upon expiry of the availability
period on April 26, 2003.  The loan facility, comprised of three tranches of
which US$5 million was outstanding as of December 31, 2003, is payable
semi-annually with final repayments due in January 2007, November 2007 and May
2008.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$100 Million Term Loan
Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On December 13, 2001, Smart signed its GSM Phase 5B financing of US$100 million, of which US$61 million was
outstanding as of December 31, 2003. The loan is payable over five years with
final repayment due in September 2006.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Php300
Million Term Loan Facility</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On January 9, 2002, Smart signed a loan facility in the amount of Php300 million.  This loan
has been fully drawn and is payable quarterly with final repayment in February
2007.  However, the outstanding balance of Php280 million was prepaid on November 4, 2003. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$7 Million Term Loan Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On April 14, 2002, for the purpose
of financing the purchase of certain equipment, Smart obtained a US$7 million
term loan facility from Bayerische Hypo-und Vereinsbank Aktiengesellschaft
pursuant to the standard loan agreement No. 1 dated August 14, 2002 under the
&#128;50 million Framework Agreement for the financing of individual export
contracts dated November 8 and 13, 2001. The outstanding balance as of December 31, 2003 was US$6 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>US$100 Million Term Loan
Facility</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On November 28, 2002, Smart signed a US$100 million term loan facility supported by NEXI, of which US$60 million
was drawn on November 28, 2003 and was outstanding as of December 31, 2003.  The US$40 million undrawn balance was drawn on April 5, 2004.  This loan is payable semi-annually over four years in eight equal installments starting May 28, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Facilities under GSM Phases 1 to 4,
the Finnish Export Credit plc tranche of GSM Phase 5A facility and GSM Phase 5B
facility are covered by guarantees from Finnvera, the Finnish export credit
agency, for 95% of political risk and 50% of commercial risk.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Interest on Smart&#146;s
dollar-denominated loans is either fixed or based on LIBOR plus premium.  The
Php1,000 million loan accrues interest based on the WAIR plus Participating
Financial Institution, or PFI, premium.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart is subject to loan covenants
that restrict its ability to pay dividends, redeem preferred shares, make
distributions to PLDT or otherwise provide funds to PLDT or any affiliate
without the consent of its lenders.  Some of these covenants contain an
absolute prohibition on paying dividends before December 2002, while others
require that a portion of the loan equal to the amount of the dividend be
prepaid.  After receiving approvals from Finnvera and certain lenders for the
payment of dividends to PLDT in an amount not to exceed 40% of Smart&#146;s net
income under Philippine GAAP in 2001, Smart made its first dividend payment of
Php1,540 million to PLDT in December 2002.  In addition, Smart paid dividends in the amount of Php4,300 million to PLDT in June 2003, representing 70% of
Smart&#146;s 2002 net income under Philippine GAAP and paid additional dividends in
the amount of Php1,866 million to PLDT in
November 2003, equivalent to the remaining 30% of its 2002 net income under
Philippine GAAP.  Further, after receiving similar approvals from
Finnvera and certain lenders, Smart paid dividends amounting to Php11,280
million to PLDT in May 2004, representing 70% of Smart&#146;s 2003 net income under
Philippine GAAP.  Smart will be required to obtain further waivers from
Finnvera and certain lenders to pay additional dividends in future periods.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart&#146;s loan agreements contain
certain restrictive covenants that require Smart to comply with specified
financial ratios and other financial tests calculated on the basis of
Philippine GAAP at semi-annual measurement dates.  The financial tests under
Smart&#146;s loan agreements include compliance with a debt-to-equity ratio of not
more than 1.50:1 and a debt service coverage ratio of not less than 1.50:1.
Smart has maintained compliance with all of its financial covenants.  The
agreements also contain customary and other default provisions that permit the
lender to accelerate amounts due under the loans or terminate their commitments
to extend additional funds under the loans.  These default provisions include:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
cross-defaults and cross-accelerations that permit a lender to
declare a default if Smart is in default under another loan agreement.  These
cross-default provisions are triggered upon a payment or other default
permitting the acceleration of Smart debt, whether or not the defaulted debt is
accelerated;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
failure by Smart to comply with certain financial ratio
covenants;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any reduction in PLDT&#146;s ownership of Smart&#146;s shares below 51% of
the total of each class of Smart&#146;s issued shares;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any reduction in First Pacific&#146;s and Metro Pacific Corporation&#146;s
collective direct and/or indirect ownership of PLDT&#146;s common stock below 17.5%
of the total common stock outstanding or 17.5% of the voting power of the total
common stock outstanding; and</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the occurrence of any material adverse change in circumstances
that the lender reasonably believes materially impairs Smart&#146;s ability to
perform its obligations under its loan agreements with the lender or that the
lender believes materially impairs an applicable guarantors&#146; ability to perform
its obligations under an applicable guaranty.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In addition, some of these loan
agreements restrict Smart&#146;s ability to enter into transactions with affiliates
except on arm&#146;s-length terms and for valuable consideration.</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b><i>Mabuhay
Satellite</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Mabuhay Satellite&#146;s long-term debt
consists of:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.02%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:7.05pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.05pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.05pt'>
 <p align=center style='margin-top:3.0pt;;
 margin-bottom:0in;margin-left:8.3pt;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.05pt'>
 <p align=center style='margin-top:3.0pt;;
 margin-bottom:0in;margin-left:8.3pt;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.7pt'>
 <td   valign=top style=' padding:0in 0in 0in 0in;
 height:8.7pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 valign=top style=' padding:0in 0in 0in 0in;
 height:8.7pt'>
 <p align=center style='margin-top:0in;margin-right:2.5pt;
 margin-bottom:0in;margin-left:17.95pt;margin-bottom:.0001pt;text-align:center' style="margin-top:0;margin-bottom:0">(in
 millions)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">U.S. Dollars</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:12.3pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:12.3pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-right:12.3pt' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">      Credit Agreement </p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$42</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php2,319</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$55</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php2,925</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">   Omnibus Agreement</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>43</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,403</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">46</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">2,431</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>85</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>4,722</b></p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"> 101</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">5,356</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Less current portion</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>13</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>713</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">18</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">980</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>US$</b><b>72 </b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php</b><b>4,009</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">US$83 </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right' style="margin-top:0;margin-bottom:0">Php4,376</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>Credit
Agreement</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Mabuhay Satellite has an existing
Credit Agreement with the Export-Import Bank of the United States, or Ex-Im
Bank, to finance a portion of the cost of purchasing the Agila II Satellite.
In 2003, Ex-Im Bank approved, in principle, the re-profiling of Mabuhay
Satellite&#146;s US$42 million debt with them by extending the maturity of the loan
by 1 and &#189; years to July 15, 2007 and reducing the interest rate by 1%, to 5.6%
from 6.6%.  The revised repayment terms have been approved by the majority of
the local creditor banks.  Subsequently on January 15, 2004, Mabuhay Satellite paid US$5 million in principal amortization, thereby reducing its debt to
US$37 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><i>Omnibus
Agreement</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Mabuhay Satellite also has an
existing Omnibus Agreement with a syndicate of local banks, or the Banks, which
includes issuance of irrevocable standby Letters of Credit with an aggregate
stated value not exceeding US$42 million (Php2,319
million) in favor of Ex-Im Bank, as security under the Credit Agreement and a
term loan to Mabuhay Satellite in the aggregate amount of US$43 million (Php2,403 million), which will mature on various dates from
2004 to 2007. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">As security, Mabuhay Satellite has constituted in favor of the
Banks:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A first mortgage on its leasehold rights under a lease agreement
entered into with the Subic Bay Metropolitan Authority, or SBMA, and the
components of the satellite system;</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An assignment of its rights under its purchase contract for the
satellite system;</p>

<p style='margin-left:.5in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An assignment of its rights under the transponder lease contracts
to be entered into with its stockholders and other parties and the revenues
therefrom; and</p>

<p style='margin-left:.5in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An assignment of the applicable proceeds of insurance to be taken
on the satellite system.</p>

<p style='margin-left:.5in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">The Credit and Omnibus Agreements
impose negative covenants which, among others, restrict material changes in
Mabuhay Satellite&#146;s nature of business and ownership structure, any lien upon
or with respect to any of its assets or to any right to receive income,
acquisition of capital stock, declaration and payment of dividends, merger,
consolidation and sale with another entity and incurring or guaranteeing
additional long-term debt beyond prescribed amounts.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>ePLDT</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Php150 Million
</i><i>Term Loan Facility</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On March 4, 2002, ePLDT entered into a three-year loan facility with Philippine Bank of
Communications amounting to Php150 million
with a grace period of one year.  The loan facility was fully drawn as of December 31, 2002.  The quarterly principal payments of Php15
million started in June 2003 with a balloon payment of Php45
million in March 2005.  Interest on this loan is equivalent to 91-day T-bill
rate plus 4% per annum payable quarterly in arrears.  The loan is secured by
ePLDT&#146;s investment in an associate with a carrying value of Php629 million as of December 31, 2003 and a deed of assignment of receivables of a subsidiary from a foreign customer.  As of December 31, 2003, the outstanding balance of this loan amounted to Php105 million, of which Php60
million will mature in 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The loan agreement imposes negative
covenants which, among other things, restrict ePLDT in regard to payment of
cash dividends or any other income of any capital distribution to PLDT,
voluntary suspension of its entire business operations for a period of 60
consecutive days of dissolution of its legal existence, and creation of any
encumbrances on the shares pledged.</p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Php100 Million Term Loan
Facility</i></p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On March 15, 2004, ePLDT entered into another three-year term loan facility with Asia United Bank amounting to
Php100 million for the payment of its outstanding short-term bank loan facility
and for other working capital requirements.  Php50 million was drawn from the
facility as of March 31, 2004.  The loan shall be repaid in nine equal
quarterly installments starting March 2005 and will end in March 2007.
Interest on the loan is equivalent to 90-day PHIBOR plus 3% per annum payable
quarterly in arrears.  The loan is secured by a Mortgage Trust Indenture
Agreement on a parcel of land with a carrying value of Php279 million as of March 31, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The loan agreement also imposes
special covenants which, among other things, restrict ePLDT in regard to
voluntary suspension of its entire business operations for a period of 60
consecutive days, dissolution of its legal existence, and creation of any
encumbrances on the property pledged.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The loan agreement also requires
ePLDT to comply with specified financial ratios and other financial tests at
quarterly measurement dates.  The financial tests under the agreement include,
among others, compliance with a current ratio of not less than 1:1, an interest
coverage ratio of not less than 1.5:1, debt to equity ratio of not more than
1.50:1, and a debt service coverage ratio of not less than 1.1:1.  The
agreement also contains customary and other default provisions that permit the
lender to accelerate amounts due under the loan or terminate their commitments
to extend additional funds under the loan.  As of March 31, 2004, ePLDT has complied with all of its financial covenants.</p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style="margin-top:0;margin-bottom:0"><b><i>Maratel</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Maratel&#146;s long-term debt consists
of a Php60 million loan obtained on October 20, 1997 and a Php19 million loan
drawn on July 19, 1999.  The Php60 million loan carries an interest rate ranging
from 11.5% to 11.7% per annum and will mature on October 16, 2005, while the Php19 million loan bears a fixed interest rate of 14.7% per annum and will mature
on July 30, 2004.  As of December 31, 2003, the outstanding balances of these
loans totaled Php26 million, of which Php15 million will mature in 2004.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:31.5pt;text-indent:-31.5pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>15.&nbsp;&nbsp;&nbsp;&nbsp; </b><b>Deferred Credits and Other Noncurrent Liabilities</b></p>

<p style='margin-right:2.15pt;text-indent:.5in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">This account
consists of:</p>

<p style='margin-right:2.15pt;text-indent:.5in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.06%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Remaining excess of debt forgiven over value of Piltel&#146;s preferred
 shares &#150; net<br>
 (Note 16)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>8,784</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,417</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrual of capital expenditures under long-term financing </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,130</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,516</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.6pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrued pension cost (Note 19)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,313</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:12.6pt'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,957</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Customers&#146; deposits</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,194</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,288</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Advance payment under a receivables purchase facility (Note 5)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,058</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,530</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Capital lease liability &#150; net of current portion (Note 7)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>729</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">765</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Liabilities on asset retirement obligations </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>395</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Others (including derivative instruments) (Note 26)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,959</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,901</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:.25in;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>23,562</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">22,374</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:31.5pt;text-indent:-31.5pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>16.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Preferred Stock
Subject to Mandatory Redemption</b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On June 4,
2001, PLDT issued 3 million shares of Series V Convertible Preferred Stock, 5
million shares of Series VI Convertible Preferred Stock and 4 million shares of
Series VII Convertible Preferred Stock in exchange for a total of 58 million
shares of Series K, Class I Convertible Preferred Stock of Piltel, pursuant to
the debt restructuring plan of Piltel.  Shares of Series V, VI and VII
Convertible Preferred Stock are entitled to receive annual dividends of
Php18.70 per share, US$0.397 per share and JP&yen;40.7189 per share, respectively.
In addition, in 2002, PLDT issued 30,100 shares of Series V Convertible
Preferred Stock and 14,087 shares of Series VI Convertible Preferred Stock in exchange
for a total of 220,935 shares of Series K, Class I Convertible Preferred Stock
of Piltel.  In 2003, PLDT issued additional 110,908 shares of Series VI
Convertible Preferred Stock in exchange for 554,540 shares of Piltel&#146;s Series
K, Class I Convertible Preferred Stock.  Each share of Series V, VI and VII
PLDT Convertible Preferred Stock is convertible at any time at the option of
the holder into one PLDT&#146;s common share.  On the date immediately following the
seventh anniversary of the issue date of the Series V and Series VI Convertible
Preferred Stock and on the eighth anniversary of the issue date of the Series
VII Convertible Preferred Stock, the remaining outstanding shares under these
series will be mandatorily converted to shares of PLDT&#146;s common stock.  For 30
days thereafter, the holders of these mandatorily converted common shares have
the option to sell such common shares back to PLDT for Php1,700 per share,
US$36.132 per share and JPY4,071.89 per
share for Series V, VI and VII, respectively.  Due to the foreign currency
component of the call option embedded in the Series VI and VII Convertible
Preferred Stock, such call options were bifurcated and accounted for separately
in conformity with SFAS 133, as amended (see <i>Note 26</i> &#150; <i>Derivatives
and Hedging Instruments</i>).  The aggregate fair value of the issued Series V,
VI and VII Convertible Preferred Stock as of date of issuance &#150; net of the
bifurcated option values &#150; is included under the &#147;Preferred Stock Subject to
Mandatory Redemption&#148; account in the consolidated balance sheets.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">As of June 4, 2001, the aggregate fair value of the issued
Series V, VI and VII Convertible Preferred Stock (inclusive of the option
values) amounted to Php10,165 million, as determined using an independent
party&#146;s valuation model.  The remaining difference between this aggregate fair
value amount and the Php20,080 million Piltel restructured debt was deferred
and included as part of &#147;Deferred Credits and Other Noncurrent Liabilities&#148; in
the consolidated balance sheets in conformity with the accounting for troubled
debt restructuring, such that no gain was recorded on the restructuring.
Thereafter, interest incurred on the remaining restructured debt is recorded as
an offset against deferred credits.  Total interest incurred related to the
restructured debt for the years ended December 31, 2003 and 2002 and the period
from June 4, 2001 to December 31, 2001 amounted to Php688 million, Php758
million and Php497 million, respectively.  As of December 31, 2003 and 2002, the deferred credit balance amounted to Php8,784 million and Php9,417 million,
respectively, after giving effect to the above interest expense and the
additional issuances in 2003 and 2002 of convertible preferred shares to
restructure Piltel&#146;s debt.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The difference
between the aggregate fair value of the Series V, VI and VII Convertible
Preferred Stock at issue date (net of the bifurcated option values for Series
VI and VII) and the aggregate redemption value is accreted over the period up
to the call option date using the effective interest rate method.  Accretions
added to &#147;Preferred Stock Subject to Mandatory Redemption&#148; and charged against
accumulated deficit for the years ended December 31, 2003 and 2002 amounted to Php1,309 million and Php1,004 million, respectively.  Unaccreted
balance as of December 31, 2003 and 2002 amounted to Php8,570 million and
Php9,170 million, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&#147;Preferred Stock Subject to
Mandatory Redemption&#148; amounted to Php13,321 million and Php10,939 million as of
 December 31, 2003 and 2002, respectively, after revaluation of Series VI and
VII to the exchange rates at balance sheet dates and after giving effect to the
above accretions, conversions and additional issuances.  As of December 31, 2003 and 2002, 676,571 shares and 669,163 shares, respectively, of the
Convertible Preferred Stock have been converted into PLDT common shares.  The
aggregate redemption value of the outstanding Series V, VI and VII Convertible
Preferred Stock amounted to Php21,898 million as of December 31, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:31.5pt;text-indent:-31.5pt;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>17.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Stockholders&#146; Equity</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The movement of PLDT&#146;s capital
stock account excluding preferred stock subject to mandatory redemption
follows:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0  style='width:501.85pt;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:.15in'>
 <td  valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=5 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Preferred Stock - </b>Php10 par value</p>
 </td>
 <td  colspan=2 valign=top style=' border:none;
 border-top:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;height:.15in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='margin-left:8.8pt;text-align:center' style="margin-top:0;margin-bottom:0"><b>Series <br>
 A to DD</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>III</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>IV</b></p>
 </td>
 <td  valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Common Stock &#150; <br>
 </b>Php5 par
 value</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">
 No. of Shares</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Total Preferred Shares</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>No. of Shares</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=7 valign=top style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">(in millions)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:4.5pt'>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;height:4.5pt'>
 <p style="margin-top:0;margin-bottom:0">Authorized</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:solid windowtext 1.0pt;
 padding:0in 5.4pt 0in 5.4pt;height:4.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:4.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:4.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:4.5pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">823</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:4.5pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">Php8,230</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:4.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">234</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:4.5pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php1,170</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Outstanding</b></p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-bottom:0in;margin-bottom:.0001pt;
 text-align:right;line-height:normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Balances at January 1, 2001</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">351</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">36</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"> 392</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">Php3,921</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">168</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php843</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Issuance</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">23</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">  23</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">232</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Conversion</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(24)</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Balances at </b><b>December 31, 2001</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 372</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>   5</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>  36</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 413</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php</b><b>4,129</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b> 168</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>Php845</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Balances at January 1, 2002</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"> 372</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">   5</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">  36</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"> 413</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">Php4,129</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"> 168</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php845</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Issuance</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">37</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">7</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">  44</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"> 440</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Conversion</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(23)</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">1</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">2</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Redemption</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(7)</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(7)</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(72)</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Balances at </b><b>December 31, 2002</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 407</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>   5</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>  36</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 448</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php4,474</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b> 169</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>Php847</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style='margin-bottom:0in;margin-bottom:.0001pt;line-height:
 normal' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Balances at January 1, 2003</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"> 407</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">   5</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">  36</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"> 448</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">Php4,474</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"> 169</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">Php847</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Issuance</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">   5</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">Conversion</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(2)</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">(21)</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0"><b>Balances at </b><b>December 31, 2003</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 410</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>   5</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>  36</b></p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 451</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:2.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>Php4,505</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b> 169</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:double windowtext 1.5pt;border-right:none;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"><b>Php847</b></p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Preferred Stock</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
Preferred Stock is non-voting, except as specifically provided by law, and is
preferred as to liquidation.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Series A to DD 10% cumulative
convertible preferred stock earn cumulative dividends at an annual rate of
10%.  These series of preferred stock are convertible into common stock a year
after the year of share issuance, at a price equivalent to 10% below the
average market price of PLDT&#146;s common stock at the PSE over a period of 30
consecutive trading days before the conversion date.  The conversion price,
however, shall not be less than the conversion price set by the Board of
Directors, which as of December 31, 2003, is Php5 per share.  At PLDT&#146;s option,
the Series A to DD 10% Cumulative Convertible Preferred Stock are redeemable at
par value plus accrued dividends five years after the year of issuance.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On January 22, 2002, the Board of Directors designated 10 million shares of serial preferred stock as Series CC
10% Cumulative Convertible Preferred Stock for issuance throughout 2002.  In
addition, on February 26, 2002, the Board of Directors designated an additional
15 million shares of serial preferred stock as Series AA 10% Cumulative
Convertible Preferred Stock.  The issuances of the 10 million shares of Series
CC 10% Cumulative Convertible Preferred Stock and the additional 15 million
shares of Series AA 10% Cumulative Convertible Preferred Stocks are exempt
transactions under Section 10.2 of the SRC, as confirmed by the Philippine SEC
on March 13, 2002 and July 31, 2002, respectively.  The PSE approved the
listing of the 10 million shares of Series CC 10% Cumulative Convertible
Preferred Stock and the additional 15 million shares of Series AA 10% Cumulative
Convertible Preferred Stock on August 14, 2002.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On December 2, 2002, the Board of Directors designated 10 million shares of serial preferred stock as Series DD
10% Cumulative Convertible Preferred Stock for issuance throughout 2003 and an
additional 10 million shares of serial preferred stock as Series CC 10%
Cumulative Convertible Preferred Stock.  The issuances of the 10 million shares
of Series DD 10% Cumulative Convertible Preferred Stock and the additional 10
million shares of Series CC 10% Cumulative Convertible Preferred Stocks are
exempt transactions under Section 10.2 of the SRC, as confirmed by the
Philippine SEC on January 30, 2003.  In an earlier letter dated October 24, 2002, PSE allowed PLDT to utilize 24,287,455 unissued preferred shares
remaining listed with the PSE in order to cover the issuance requirement of the
other series under PLDT&#146;s SIP.  The issuance requirement for the 10 million
shares of Series DD 10% Cumulative Convertible Preferred Stock and the
additional 10 million shares of Series CC 10% Cumulative Convertible Preferred
Stock will be taken from the said remaining listed and unissued preferred
shares. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On January 27, 2004, the Board of Directors designated 1 million
shares of serial preferred stock as Series EE 10% Cumulative Convertible
Preferred Stock for issuance throughout 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Series III Convertible
Preferred Stock earns cumulative dividends at an annual rate of US$3.50 a share
payable quarterly, free and clear of Philippine withholding taxes.  It is
convertible into common stock at the option of the holder at any time, at the
conversion price of US$29.19 per share of common stock (equivalent to a
conversion ratio of 1.7129 shares of common stock for each share of Series III
Convertible Preferred Stock, each share of Series III Convertible Preferred
Stock being valued for this purpose at its reference amount of US$50 a share),
subject to adjustment in certain events; and are not redeemable.  Upon
liquidation of PLDT, holders of the Series III Convertible Preferred Stock will
be entitled to receive liquidating distributions equivalent to Php11 a share,
plus accrued and unpaid dividends to the date of distribution, subject to the
prior rights of creditors.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<br clear=all
style='page-break-before:always'>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The Series IV Cumulative Non-Convertible Redeemable Preferred
Stock earns cumulative dividends at an annual rate of 13.5% based on the
paid-up subscription price.  It is redeemable at the option of PLDT at any time
one year after subscription and at the actual amount paid for such stock, plus
accrued dividends.  On February 26, 2002, the Board of Directors called for the
payment of a portion of the balance of the subscription price of the Series IV
Cumulative Non-Convertible Redeemable Preferred Stock amounting to Php72
million, which was paid on March 5, 2002.  On March 22, 2002, PLDT redeemed 60
million shares out of the 360 million subscribed shares of its Series IV
Cumulative Non-Convertible Preferred Stock and paid Php72 million, representing
the redemption price plus unpaid dividends up to the date of redemption.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The shares of preferred stock,
except shares of Series V, VI and VII Convertible Preferred Stock, redeemed or
converted into common stock shall revert to and form part of the unissued
preferred stock, and may be reissued in any other series that the Board of
Directors may, from time to time, establish and designate.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The provisions of certain
subscription agreements involving preferred stock have an effect on the ability
of PLDT to, without written consent, sell certain assets and pay cash dividends
unless all dividends for all past quarterly dividend periods have been paid and
provision has been made for the currently payable dividends.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On January
31, 2003, the Board of Directors approved the dividend declaration of: (a) Php1.00 per share of Series CC 10% Cumulative
Convertible Preferred Stock Series CC payable on March 31, 2003 to the holders
of record as of February 27, 2003; and (b) Php12.15
million on the outstanding shares of Series IV Cumulative Non-Convertible
Redeemable Preferred Stock payable on March 15, 2003 to the holders of record
as of February 17, 2003.  On February 26, 2003, the Board of Directors approved
the dividend declaration to the holders of record as of March 17, 2003 of: (a)
US$1.029412 per outstanding share of Series III Cumulative Convertible
Preferred Stock; (b) Php4.675 per outstanding
share of Series V Convertible Preferred Stock; (c) US$.09925 per outstanding
share of Series VI Convertible Preferred Stock; and (d) JP&yen;10.179725 per
outstanding share of Series VII Convertible Preferred Stock, respectively.  In
addition, on June 10, 2003, the Board of Directors approved the dividend
declaration to the holders of record as of June 27, 2003 of: (a) US$1.029412
per outstanding share of Series III Cumulative Convertible Preferred Stock; (b)
Php4.675 per outstanding share of Series V
Convertible Preferred Stock; (c) US$0.09925 per outstanding share of Series VI
Convertible Preferred Stock; and (d) JP&yen;10.179725 per outstanding share of
Series VII Convertible Preferred Stock, respectively.  On July 8, 2003, the
Board of Directors approved the dividend declaration of: Php1.00 per outstanding share of Series A, I, R, W,
AA and BB 10% Cumulative Convertible Preferred Stock payable on August 29, 2003
to the holders of record as of July 24, 2003.  On September 2, 2003, the Board
of Directors approved the dividend declaration of: (a) US$1.029412 per
outstanding share of Series III Convertible Preferred Stock; (b) Php12.42 million on the outstanding shares of Series
IV Cumulative Non-Convertible Redeemable Preferred Stock; (c) Php4.675 per outstanding share of Series V
Convertible Preferred Stock; (d) US$0.09925 per outstanding share of Series VI
Convertible Preferred Stock; (e) JPY10.179725
per outstanding share of Series VII Convertible Preferred Stock; and (f) Php1.00 per outstanding share of Series B, F, Q, V
and Z 10% Cumulative Convertible Preferred Stock payable on September 30, 2003
to the holders of record as of September 16, 2003 and Series E, K, O and U 10%
Cumulative Convertible Preferred Stock payable on October 31, 2003 to the
holders of record as of September 25, 2003.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">On November 4, 2003, the Board of Directors approved the
dividend declaration of: Php1.00 per outstanding share of Series C, D, J, T and
X 10% Cumulative Convertible Preferred Stock payable on November 28, 2003, to
the holders of record as of November 18, 2003 and Series G, N, P and S 10%
Cumulative Convertible Preferred Stock payable on December 29, 2003, to the
holders of record as of November 29, 2003.  On November 28, 2003, the Board of
Directors approved the dividend declaration of (a) US$1.029412 per outstanding
share of Series III Convertible Preferred Stock payable on January 15, 2004, to
the holders of record as of December 19, 2003; (b) Php12.29 per outstanding
share of Series IV Cumulative Non-Convertible Redeemable Preferred Stock
payable on December 15, 2003, to the holders of record as of December 12, 2003;
(c) Php4.675 per outstanding share of Series V Convertible Preferred Stock
payable on January 15, 2004, to the holders of record as of December 19, 2003;
(d)  US$0.09925 per outstanding share of Series VI Convertible Preferred Stock
payable on January 15, 2004, to the holders of record as of December 19, 2003;
(e) JP&yen;10.179725 per outstanding share of Series VII Convertible Preferred
Stock payable on January 15, 2004, to the holders of record as of December 19,
2003; and (f) Php1.00 per outstanding share of Series H, L, M and Y 10%
Cumulative Convertible Preferred Stock payable on January 30, 2004 to the
holders of record as of December 24, 2003.  On January 27, 2004, the Board of
Directors approved the dividend declaration of: (a) Php12.29 million on the
outstanding Series IV Cumulative Non-Convertible Redeemable Preferred Stock
payable on March 15, 2004, to the holders of record on February 17, 2004; and
(b) Php1.00 per outstanding Series DD 10% Cumulative Convertible Preferred
Stock payable on February 27, 2004, to the holders of record on February 12,
2004 and Series CC 10% Cumulative Convertible Preferred Stock payable on March
31, 2004, to the holders of record on February 25, 2004.  On February 19, 2004,
the Board of Directors approved the dividend declaration of: (a) US$1.029412
per outstanding Series III Convertible Preferred Stock payable on April 15,
2004, to the holders of record on March 17, 2004; (b) Php4.675 per outstanding
Series V Convertible Preferred Shares payable on April 15, 2004, to the holders
of record on March 17, 2004; (c) US$.09925 per outstanding Series VI
Convertible Preferred Shares payable on April 15, 2004, to the holders of
record on March 17, 2004; and (d) JPY10.179725
per outstanding Series VII Convertible Preferred Stock payable on April 15,
2004, to the holders of record on March 17, 2004.  On May 4, 2004, the Board of Directors approved the dividend declaration of Php12.42 million on the
outstanding Series IV Cumulative Non-Convertible Redeemable Preferred Stock
payable on June 15, 2004, to the holders of record as of May 26, 2004.</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Accumulated Deficit</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The most
recent dividend declaration made by PLDT in respect of its common shares was in
March 2001.  PLDT continues to pay dividends in respect of its preferred
shares.  The current policy of PLDT is to determine its ability to declare and
pay dividends taking into consideration the interest of its stockholders as
well as PLDT&#146;s working capital, capital expenditures and debt servicing
requirements.  Also taken into account the prohibitions and restrictions under
certain of PLDT&#146;s debt instruments with respect to declaration and payment of
dividends.  The retention of earnings is necessary to meet the funding
requirements of our business expansion, service improvement and development
programs.  The statutory unappropriated retained earnings balance of PLDT
determined under Philippine GAAP as of December 31, 2003 which is available for
distribution as dividends amounted to Php27,182 million.</p>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Related Party Transactions</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Companies
within the PLDT Group are engaged in transactions with each other in the
ordinary course of business.  We believe that the terms of these transactions
are comparable with those available to unrelated parties. </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.4in;text-indent:.1in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Transactions with/between Related Parties </i></b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='margin-left:.3in;text-indent:.2in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>Telecommunications Services Provided within the PLDT Group</i></p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Telecommunications
carriers within the PLDT Group (namely, PLDT, Smart, Piltel, Clark Telecom,
Subic Telecom, Maratel and PLDT Global) have existing intercompany agreements,
such as interconnection agreements with one another under terms similar with
those agreed with other telecommunications providers outside the PLDT Group
(see <i>Note 28 &#150; Other Matters</i>).  Each of these carriers recognizes
revenues, net of interconnection charges, for calls terminating with the
customer of the other carriers. </p>

<p style='margin-left:24.65pt;text-indent:.15in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:24.65pt;text-indent:.15in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>Transponder Lease Agreement between PLDT and Mabuhay Satellite</i></p>

<p style='margin-left:24.65pt;text-indent:.15in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On December 28, 1995, PLDT and Mabuhay Satellite entered into a Transponder Lease Agreement,
as amended on May 10, 2000, pursuant to which Mabuhay Satellite leases to PLDT
C-band transponders on board the Agila II satellite, in consideration of a
basic rent.  This agreement has a term of ten years commencing on December 18, 1997, unless earlier terminated in accordance with the terms thereof.
Originally, the lease covered 14 C-band transponders. However, on December 18, 2000, PLDT terminated the Transponder Lease Agreement with respect to four
transponders which service was interrupted and not restored resulting in PLDT&#146;s
inability to access and use the transponders.  This was further reduced to
eight C-band transponders on December 18, 2002.  The annual basic rent for the
transponders is approximately US$14 million with US$1.8 million annual lease
per transponder.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">Under an Acknowledgment and
Consent Agreement dated January 4, 1996, PLDT acknowledged and consented to
Mabuhay Satellite&#146;s:</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
transfer and assignment of all amounts payable by PLDT under the
Transponder Lease Agreement; and</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
grant of a continuing security interest of first priority in all
of Mabuhay Satellite&#146;s rights, title and interest in, to and under the
Transponder Lease Agreement, in favor of the collateral agent for the benefit
of the lenders who are parties to the Omnibus Credit and Security Agreement
dated December 14, 1995, as amended.</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total fees
under these agreements amounted to Php747
million, Php925 million and Php927 million for
the years ended December 31, 2003, 2002 and 2001, respectively.  Outstanding
obligations of PLDT under these agreements amounted to Php26 million and Php270 million as of December 31, 2003 and 2002,
respectively.</p>

<p style='margin-left:24.65pt;text-indent:.15in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:24.65pt;text-indent:.15in' style="margin-top:0;margin-bottom:0"><i>Facilities
Management Agreement between PLDT and Piltel</i></p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">On July 19, 2001, PLDT entered
into a Facilities Management Agreement with Piltel under which PLDT undertakes
the management, operation and maintenance of Piltel&#146;s regional
telecommunication and    E.O. 109, network operations and services, including
E.O. 109 fixed line build-out installations, public calling offices and
payphone facilities and the systems required to support these services.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">The agreement covers Piltel&#146;s
regional telecommunication services in Baguio, Puerto Princesa, Masbate, and
Boac and E.O. 109 services in Alabel, Banga, Dapitan, Davao, Digos, Dipolog,
General Santos, Kiamba, Koronadal, Pagadian, Polomolok and Surallah in Mindanao.</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under the agreement, PLDT also
undertakes the management of the computer system, billing, revenue assurance
and inter-carrier settlements reporting of Piltel&#146;s regional telecommunication
services in Olongapo and Subic.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The monthly management fee payable
by Piltel is based on cost, and for cost components where margin is allowed,
15% is applied.  All third party invoices are passed on to Piltel at cost,
including value-added tax.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The agreement supersedes the
Facilities Management Agreement between PLDT and Piltel, dated May 12, 2000,
under which PLDT undertook the management, maintenance and operation of the
regional telecommunication services of Piltel, including public calling offices
and payphone operations located in Baguio City, Puerto Princesa, Boac and
Masbate.  The new agreement is effective for three years from July 2001 to July
2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Total management fees under these
agreements amounted to Php52 million for each of the years ended December 31, 2003 and 2002 and Php118 million for the year ended December 31, 2001.  Fees for billing services amounted to Php18 million, Php19 million and Php17
million for the years ended December 31, 2003, 2002 and 2001, respectively.
Outstanding receivables of PLDT under these agreements amounted to Php329
million and Php258 million as of December 31, 2003 and 2002, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.45in;text-indent:.05in' style="margin-top:0;margin-bottom:0"><i>Facilities Management
Agreement between Piltel and </i><i>Subic</i><i> Telecom</i></p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On September 5, 2001, Piltel and Subic Telecom entered into a Facilities Management Agreement of the regional
telephone network, customer operations, network operations and payphones of
Piltel in Subic and Olongapo City.  The monthly management fee payable by
Piltel is based on cost, and for cost components where margin is allowed, 15%
is applied.  In addition, Piltel pays a monthly variable cost per account in
the amount of Php44 for repairs and maintenance.  All third party invoices are
passed on to Piltel at cost, including value-added tax.  This agreement
supersedes the facilities management agreement entered into by Piltel and Subic
Telecom on May 29, 2000.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Total management fees under this
agreement amounted to Php21 million, Php22 million and Php24 million for the
years ended December 31, 2003, 2002 and 2001, respectively.  The new agreement
is effective for three years until September 2004.  Outstanding receivables of
Subic Telecom under this agreement amounted to Php11 million and Php2 million
as of December 31, 2003 and 2002, respectively.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Agreements
between Smart and Piltel</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In connection with the integration
of their operations, Smart and Piltel have entered into the following
agreements:</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;
An agreement for the
co-location, or sharing, of cellular sites selected at the option of Smart,
whereby Piltel is paid a usage fee of Php45,000 per shared site per month, subject to a 10% annual increase.  Co-location
expenses under this agreement amounted to Php139 million in 2003 and Php151
million in 2002.  On December 18, 2003, Smart made an advance payment of co-location fees under this agreement
amounting to Php783 million covering the period from January 1, 2004 up to December 31, 2008.  The advance payment was based on the rate applicable to 2003
on which the annual escalation rate was applied over the five-year period and
discounted at 10%;</p>

<p style='margin-left:.75in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp; An agreement whereby Smart manages the operation
of Piltel&#146;s cellular system.  This agreement is divided into three
sub-agreements as follows:</p>

<p style='margin-left:45.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">i.    A Facilities Management Agreement under which Smart operates,
maintains and manages the physical facilities and technical services of
Piltel&#146;s existing cellular system.  Piltel pays Smart a fixed monthly fee of
Php4 million and a variable monthly fee of Php13,735 per site covered by the
agreement.  Additional fees of Php186,878 per month and Php624 per site per
month are payable at the end of each calendar year upon rendition of the
services in conformity with the agreement.  This agreement was amended in May
2001 to include the management, operation and maintenance of Piltel&#146;s prepaid
wireless telecommunications network in the E.O. 109 areas in Mindanao including
the business and central offices, base stations, and public calling offices of
Piltel located in South Cotabato, Saranggani and General Santos, Davao City,
Davao del Sur, Zamboanga del Norte, Zamboanga del Sur and Misamis Occidental.
In November 2003, the agreement was further amended to eliminate the monthly
fixed costs of Php4 million and the additional fees of Php186,878 per month and
increase the monthly variable cost to Php27,470 per site and the additional
fees to Php1,248 per site per month;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">ii.    A
Customer Service Management Agreement under which Piltel outsources the
operation of its customer service and billing functions for its cellular system
to Smart for a fixed monthly fee of Php9 million and a variable cost of Php17
per prepaid cellular subscriber.  An additional fee of Php399,926 per month and
Php1.00 per prepaid subscriber per month is payable at the end of each calendar
year upon rendition of the services in conformity with the agreement; and</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">iii.   An
Administrative Support and Management Services Agreement under which Smart
provides administrative support and services to Piltel including payroll
administration and training, finance and financial accounting, audit, legal,
purchasing and materials management, public affairs, information technology,
rates and tariffs administration, sales and marketing, product development and
carrier services for a fixed monthly fee of Php8 million.  An additional fee of
Php353,764 per month is payable at the end of each calendar year upon rendition
of the services in accordance with the agreement. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt' style="margin-top:0;margin-bottom:0">This agreement
was amended in December 2002 to include the provision of sales and distribution
services for Piltel&#146;s products and services.  Piltel pays Smart the residual
percentage discount between Piltel&#146;s prescribed distributor discount rate and
the discount rate that Smart gives to its retailers and wholesalers for the
sale of prepaid cards and the residual commission between Piltel&#146;s prescribed
discount and the discount that Smart extends to its retailers and wholesalers
for phonekit and SIM pack sales.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">Total management fees under these three sub-agreements totaled
Php721 million, Php661 million and Php540 million for the years ended December 31, 2003, 2002 and 2001, respectively.  Under these agreements, outstanding
receivables of Smart as of December 31, 2003 and 2002 amounted to Php906
million and Php569 million, respectively.</p>

<p style='margin-left:42.55pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp; A
Facilities Service Agreement under which Piltel accesses Smart&#146;s existing GSM
network and facilities to enable Piltel to offer prepaid cellular service using
GSM technology in exchange for approximately 50% of Piltel&#146;s revenues, net of
interconnection expenses.  In December 2003, this agreement was amended to
change the basis of computation of the facility service fee from card sales to
usage, retroactive to January 1, 2003.  Total fees under this agreement
amounted to Php4,247 million, Php2,494 million and Php1,647 million for the
years ended December 31, 2003, 2002 and 2001, respectively.  Under this
agreement, outstanding receivables of Smart amounted to Php633 million and
Php247 million as of December 31, 2003 and 2002, respectively. </p>

<p style='margin-left:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&bull;&nbsp;
A Billing Service Agreement for the printing and delivery of the
billing statements of Piltel&#146;s LEC subscribers.  Under the agreement, Piltel
agrees to pay Smart an average of Php4.60 per
bill printed and an average of Php5.40 per
bill delivered.  Total fees under this agreement amounted to Php6 million and
Php4 million for the years ended December 31, 2003 and 2002, respectively.</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:31.75pt;text-indent:4.25pt' style="margin-top:0;margin-bottom:0"><i>Air Time
Purchase Agreement between PLDT and PT Asia Cellular Satellite and Related
Agreements</i></p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">In March 1997, PLDT entered into a Founder NSP Air Time Purchase
Agreement with PT Asia Cellular Satellite, as amended in December 1998, under
which PLDT was granted the exclusive right to sell ACeS services in the Philippines.
In exchange, the Air Time Purchase Agreement states that PLDT is required to
purchase from PT Asia Cellular Satellite at least US$5 million worth of air
time annually over ten years, commencing on the commercial operations date,
which has been set as January 1, 2002.  The commercial operations date is
defined as the earlier of:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp; the
day on which PT Asia Cellular Satellite places the Garuda I satellite in
commercial operation; and</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the date of final acceptance of the Garuda I satellite and
associated equipment under the terms of the Spacecraft Contract, dated August
28, 1995, between PT Asia Cellular Satellite and Martin Marietta Overseas
Corporation.</p>

<p style='margin-left:.75in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">However, the commercial operations date may not occur without
the consent of PLDT if there is a constructive total loss or partial loss of
the satellite under its launch insurance contract and the satellite cannot
provide commercial service in the Philippines. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In the event that PT Asia Cellular
Satellite&#146;s aggregate billing revenue is less than US$45 million in any given
year, the Air Time Purchase Agreement states that PLDT has to make supplemental
air time purchase payments not to exceed US$15 million per year during the
ten-year term.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">PLDT and the other founder NSPs are endeavoring to amend the Air
Time Purchase Agreement due to the occurrence of partial satellite loss,
changes in the primary business of ACeS and other events affecting the
business.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In March 2003, PLDT, together with
the other founder NSPs, entered into a Standstill Agreement with AIL suspending
the application and enforcement of the minimum and supplemental air time
payments under the original Air Time Purchase Agreement.  In lieu of these
payments, the parties agreed that AIL shall provide PLDT and the other founder
shareholders, with unlimited use of air time for the year 2003 in exchange for
a fixed fee in the amount of US$3.8 million for PLDT.  PLDT was also obliged to
purchase from AIL 13,750 satellite phone units in 2003 at US$395 F.O.B. per
unit, subject to quarterly price adjustment.  The parties to the Standstill
Agreement also agreed to negotiate in good faith and use their best efforts to
reach an agreement on a revised Air Time Purchase Agreement before November 15,
2003 that will cover, among other matters, the amended minimum and supplemental
air time payment provisions subject to the approval of AIL&#146;s creditors.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On February 10, 2004,
notwithstanding the on-going negotiations, AIL advised PLDT of the termination
of the Standstill Agreement and the reinstatement of the terms under the original
Air Time Purchase Agreement following the lapse of the deadline set in the
Standstill Agreement for the establishment of a revised Air Time Purchase
Agreement. </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT also
entered into a Founder NSP Operating Agreement with PT Asia Cellular Satellite on
 March 12, 1997, under which PLDT may:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
authorize distributors to
resell ACeS services in the Philippines upon prior approval from PT Asia Cellular
Satellite; and</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
appoint agents to solicit and
bill PLDT&#146;s or its authorized distributors&#146; subscribers for ACeS services and
to sell terminals on behalf of PLDT.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under an Assignment and Assumption
Agreement dated December 29, 1998, PT Asia Cellular Satellite agreed to assign
and transfer to AIL all of PT Asia Cellular Satellite&#146;s rights under the
Founder NSP Air time Purchase Agreement and Founder NSP Operating Agreement.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Under an Acknowledgment of
Assignment of Air time Purchase Agreement entered into on December 29, 1998, by
and among PLDT, P.T. Bank Internasional Indonesia and AIL, PLDT consented to
the assignment by AIL of the Founder NSP Air time Purchase Agreement to P.T.
Bank Internasional Indonesia, as security agent, for the benefit of the secured
parties under the Security Agreement dated as of December 29, 1998, which was
executed in connection with the Amended and Restated Credit Agreement dated
December 29, 1998 among PT Asia Cellular Satellite, AIL, P.T. Bank
Internasional Indonesia and various other banks.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On September
30, 2002, PT Asia Cellular Satellite, AIL, as guarantor, P.T. Bank Internasional
Indonesia, as security agent, and various other banks signed a Rescheduling
Agreement, which amended the terms of the Amended and Restated Credit Agreement
dated December 29, 1998, moving the principal repayment dates to agreed periods
with the final maturity date on January 31, 2012.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Agreements between Smart and
ACeS </i><i>Philippines</i></p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On July 18, 2000, Smart entered
into a Service Distribution Agreement with ACeS Philippines under which ACeS
Philippines appointed Smart as an authorized service provider of ACeS Global
Mobile Personal Communication by Satellite Services, or GMPCS Services, in the
Philippines having the task of exerting its best efforts to market and sell
access to usage of the said services to prospective subscribers.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">An amendment to this Service
Distribution Agreement was made on February 16, 2001, whereby Smart shall remit
to ACeS Philippines a Facility Usage Fee based on a revenue sharing formula.
ACeS Philippines shall in turn pay Smart&#146;s charges for the payphone-related
services.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Also on February 16, 2001, Smart entered into a Facilities Management Agreement, or FMA, and
Administrative Support and Management Services Agreement, or the Service
Agreement, with ACeS Philippines.  In exchange for its services, Smart shall
receive fixed and variable monthly fees from ACeS Philippines.  Under the FMA,
Smart undertakes the management, maintenance and operation of the ACeS GMPCS
Services, which are currently ready and available for actual use or operation.
Under the Service Agreement, Smart shall provide certain administrative support
and services in certain aspects of ACeS Philippines&#146; business operations such
as payroll administration and training, finance, audit, legal, purchasing and
materials management, public affairs, information technology, sales and
marketing, ACeS Philippines NSP relations, AIL relations and other support
services.</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Total fees under these agreements,
net of Smart&#146;s share, amounted to Php12
million for the years ended December 31, 2003 and 2002 and Php17 million for the
year ended December 31, 2001.  Smart had no outstanding obligation as of December 31, 2003 and 2002. </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b><i>Transactions with Major Shareholders, Directors and Officers </i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Transactions
between PLDT or its subsidiary and a director or key officer or owner of more
than 10% of the common shares of PLDT, or any member of the immediate family of
a director or key officer or owner of more than 10% of the common shares of
PLDT, who has a direct or indirect material interest in PLDT or its subsidiary,
as of and for the years ended December 31, 2003, 2002 and 2001 are as follows:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><i>a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </i><i>Agreements
with NTT Communications and/or its Affiliates</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT is a
party to the following agreements with NTT Communications and/or its
affiliates:</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Advisory Services
Agreement</i>.  <i> </i>On March 24,
2000, PLDT entered into an agreement with NTT Communications, as amended on
December 31, 2003, under which NTT Communications provides PLDT with technical,
marketing and other consultants for various business areas of PLDT starting
April 1, 2000;</p>

<p style='margin-left:.5in;text-indent:-13.5pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Domestic Fiber Optic
Network Submerged Plant Maintenance Agreement</i>.   On July 4, 2000, PLDT entered into an agreement with NTT World
Engineering Marine Corporation, or NTT WEMC, for the submarine cable repair and
other allied services for the maintenance of PLDT&#146;s domestic fiber-optic
network, or DFON, submerged plant for a period of five years up to July 4, 2005.
Under the agreement, PLDT shall pay NTT WEMC a fixed annual standing charge of
US$2 million, excluding cost for the use of a remotely operated submersible
vehicle at US$5,000 for every day of use and repair cost computed at US$19,000
per day of actual repair; </p>

<p style='margin-left:.3in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Arcstar Licensing
Agreement and Arcstar Service Provider Agreement.   </i>On March
 24, 2000, PLDT entered into an
agreement with NTT Worldwide Telecommunications Corporation under which PLDT
markets managed data and other services under NTT Communications&#146; &#147;Arcstar&#148;
brand to its corporate customers in the Philippines.  PLDT also
entered into a Trade Name and Trademark Agreement with NTT Communications under
which PLDT has been given the right to use the tradename &#147;Arcstar&#148; and its
related trademark, logo and symbols, solely for the purpose of PLDT&#146;s
marketing, promotional and sales activities for the Arcstar services within the
Philippines; and</p>

<p style='margin-left:.3in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Conventional International
Telecommunications Services Agreement.</i>   On March 24, 2000, PLDT entered into an agreement with NTT
Communications under which PLDT and NTT Communications agreed to cooperative
arrangements for conventional international telecommunications services to
enhance their respective international businesses.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Total fees under these agreements
amounted to Php288 million, Php289 million and Php362 million for the years
ended December 31, 2003, 2002 and 2001, respectively.  As of December 31, 2003 and 2002, outstanding obligations of PLDT amounted to Php40 million and
Php36 million, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><i>b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </i><i>Agreement
between Smart and </i><i>Asia</i><i> Link B.V., or ALBV</i><i> </i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart has an existing Technical
Assistance Agreement with ALBV for the latter to provide technical support
services and assistance in the operations and maintenance of CMTS for a period
of five years, subject to renewal upon mutual agreement between the parties.
The agreement provides for quarterly payments of technical service fees
equivalent to 2% of the net revenues of Smart.  In January 2003, the agreement
was amended, reducing the technical service fees to be paid by Smart to ALBV to
1% of net revenues effective January 1, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart also
has an existing Services Agreement with ALBV for a period of 25 years starting January 1, 1999, which shall automatically expire unless renewed by mutual agreement of
both parties.  Under the agreement, ALBV provides advice and assistance to
Smart in sourcing capital equipment and negotiating with international
suppliers, arranging international financing and other services therein
consistent with and for the furtherance of the objectives of the services.
Services Agreement fees were prepaid for the whole 25-year period.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">ALBV is a subsidiary of the First
Pacific Group.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Total fees under these agreements
amounted to Php429 million for each of the years ended December 31, 2003 and 2002 and Php249 million for the year ended December 31, 2001.  Outstanding obligations of Smart under the Technical Service Agreement amounted to Php228
million and Php31 million as of December 31, 2003 and 2002, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><i>c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </i><i>Agreements
relating to insurance companies</i></p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Gotuaco del Rosario and Associates,
or Gotuaco, acts as the broker for certain insurance companies to cover certain
insurable properties of the PLDT Group.  Insurance premiums are remitted to
Gotuaco and the brokers&#146; fees are settled between Gotuaco and the insurance
companies.  In addition, PLDT has signed an insurance policy with Malayan
Insurance Co. Inc., or Malayan, wherein premiums are paid directly to Malayan.
Total payments to Gotuaco and Malayan in 2003 covering the 12-month period
ending July 31, 2004 amounted to Php447 million.  Two directors of PLDT have a
direct/indirect interest in or serve as director/officer of Gotuaco and
Malayan.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>19.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Employees&#146; Benefit
Plans</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.25in;text-align:justify;text-indent:
- -.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>PLDT</i></b></p>

<p style='margin-left:.25in;text-align:justify;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT has a
trustee-managed, noncontributory defined benefit plan, or the Benefit Plan,
providing for retirement and death benefits and service terminal pay to
substantially all permanent and regular employees.  Benefits under the Benefit
Plan are based on final salary and length of service.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In
conformity with SFAS 132, &#147;Employers&#146; Disclosures about Pensions and Other
Postretirement Benefits,&#148; the following table sets forth the Plan&#146;s funded status
and pension amounts recognized as of December 31, 2003, 2002 and 2001 based on
the latest actuarial valuation dated February 2004:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.44%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p style='margin-right:5.15pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:5.15pt;text-align:center;
 text-indent:33.8pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.7pt'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in;height:11.7pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Change in benefit
 obligation:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:11.7pt'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Benefit
 obligation at beginning of year</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,984</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,637</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,264</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Service
 cost</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>515</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">452</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">697</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest
 cost</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>716</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">794</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,108</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Benefits
 paid</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(17)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(495)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(669)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Actuarial
 loss (gain)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,227)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">596</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,763)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Curtailment</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>274</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Settlement</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(2,274)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Benefit obligation at end
 of year</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,971</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">7,984</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,637</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Change in plan assets:</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fair
 value of plan assets at beginning of year</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,915</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,781</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,007</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Actual
 return on plan assets</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>250</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">159</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(1,898)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Employer&#146;s
 contribution</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,703</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">470</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">341</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Benefits
 paid</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(17)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(495)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:1.45pt;text-align:right' style="margin-top:0;margin-bottom:0">(669)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Settlement</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(2,274)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fair value of plan assets
 at end of year</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,577</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,915</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,781</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Funded status</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(2,394)</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0">(5,069)</p>
 </td>
 <td   valign=top style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0">(3,856)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unrealized net transition
 obligation</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>229</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">275</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">289</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unrecognized net actuarial
 loss (gain)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(148)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">837</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">31</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Accrued benefit cost</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(2,313)</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0">(3,957)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0">(3,536)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Components of net periodic
 benefit cost:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Service
 cost</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>515</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">452</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">697</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest
 cost</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>716</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">794</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,108</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Expected
 return on plan assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(303)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0">(369)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.0pt;text-align:right' style="margin-top:0;margin-bottom:0">(665)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Amortizations of:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unrecognized
 net transition obligation</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>13</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unrecognized
 net loss</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net periodic benefit cost</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b> 943</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 891</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,168</p>
 </td>
 </tr>
</table></center></div>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">The accumulated benefit obligations amounted to Php4,330
million, Php2,552 million and Php1,571 million as of December 31, 2003, 2002 and 2001, respectively.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
significant assumptions used in determining the actuarial present value of the
projected benefit obligations as of December 31, 2003, 2002 and 2001 are as
follows:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.98%;border-collapse:collapse'>
 <tr>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Weighted average
 assumptions:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Discount
 rate</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>9%</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9%</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Expected
 return on plan assets</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>9%</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Rate of
 compensation increase</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>6%</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9%</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10%</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The allocation of the fair value of
plan assets follows:</p>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.98%;border-collapse:collapse'>
 <tr>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Investments in debt securities</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>36%</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">39%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">39%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Investments in equity securities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>42%</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">52%</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">57%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>22%</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">9%</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">4%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>100%</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">100%</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">100%</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, investments in equity securities in the plan assets include shares of stocks of PLDT and
its affiliated companies with a total fair value of Php1,405 million, or 36% of
the total fair value of plan assets (47% in 2002 and 45% in 2001).</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Plan&#146;s Board of Trustees adopts
an investment approach of mixed equity and fixed income investments to maximize
the long-term return of plan assets.  The investment portfolio has been
structured to achieve the objective of regular income with capital growth and
out- performance of benchmarks.  Majority of the investment portfolio consists
of fixed income debt securities and various equity securities while the
remaining portion consists of multi-currency investments.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">SFAS 87 requires the use of an
average rate of earnings expected on funds invested or to be invested,
considering returns being earned by plan assets in the fund and rates of return
expected to be available for reinvestment.  Due consideration was given not
only to historical performance of plan investments, but also to the current
investment mix and anticipated rates of return.   Thus, the expected rate of
return on assets was set at 9% per annum.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT expects to make approximately
Php350 million of cash contributions to its pension plan in 2004.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The table below presents the
expected compulsory retirement benefits of PLDT to be paid out of the fund for
the next ten years:</p>

<p align=right style='text-align:right;text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0"><b>Year</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(in
 millions of pesos)</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right' style="margin-top:0;margin-bottom:0">9</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right' style="margin-top:0;margin-bottom:0">19</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right' style="margin-top:0;margin-bottom:0">50</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2008</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right' style="margin-top:0;margin-bottom:0">13</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">2009 and onwards</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:38.2pt;text-align:right' style="margin-top:0;margin-bottom:0">612</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Smart</i></b></p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart has a
trustee-managed, tax-qualified Provident Plan providing for retirement, death
or service terminal pay to substantially all permanent and regular employees.
Under the Provident Plan, Smart contributes to the provident fund for the
credit of each member&#146;s Personal Retirement Account, or PRA, a percentage of
such member&#146;s monthly salary.  Net earnings of the Provident Fund are credited
every nine months to the PRAs of the members based on their proportionate share
in the total value of the Provident Fund as of the end of the preceding period.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In October
2003, Smart&#146;s board of directors approved enhancements to the retirement plan.
The enhanced retirement plan gives a member the option to contribute to the
fund up to a maximum of 10% of his monthly salary.  On top of its current
contribution, Smart will provide an additional contribution up to 50% of the
member&#146;s contribution, depending on his tenure in the company.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Any benefit payable under this Plan
shall be in lieu of or in compliance with, but not in addition to, the payment
of similar benefits Smart is required to pay its employees under existing or
future laws, employment contracts or collective bargaining agreements, it being
understood that the employee shall be entitled only to the higher of the
benefits and not to both.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The following are the minimum
additional disclosures as required by SFAS 132 based on the latest actuarial
valuation dated February 2004:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>

 <tr>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-right:6.1pt;text-align:center;
 text-indent:40.7pt' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Change in benefit obligation:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Benefit obligation at beginning
 of year</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>159</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">125</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">79</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Service cost</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>44</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Interest cost</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>16</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">12</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Benefits paid</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(2)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(1)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Actuarial loss (gain)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>9</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(22)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Benefit obligation at end of year</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 226</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"> 159</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"> 125</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Change in plan assets:</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Fair value of plan assets at
 beginning of year</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>197</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">119</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">80</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Actual return on plan assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>28</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">25</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">11</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Employer&#146;s contribution</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>71</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">54</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">28</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Fund transfers due to
 transferees from Telecoms Solutions, Inc.</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>24</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Benefits paid</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(2)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(1)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Fair value of plan assets at end of year</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b> 318</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"> 197</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"> 119</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Funded status</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>92</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">38</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(6)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Unrecognized net transition obligation</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(7)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(7)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(7)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Unrecognized net actuarial loss (gain) </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(19)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(23)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">10</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Prepaid (accrued) benefit cost</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>  66</b><b> </b> </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">   8</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(3)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Components of net periodic benefit cost:</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Service cost</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>44</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">32</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Interest cost</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>16</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">12</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">8</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt' style="margin-top:0;margin-bottom:0">Expected return on plan assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(23)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(14)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(10)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Net periodic benefit cost</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>  37</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">  43</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.1pt;text-align:right' style="margin-top:0;margin-bottom:0">  30</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The accumulated benefit obligations
amounted to Php38 million, Php25 million and Php16 million as of December 31, 2003, 2002 and 2001, respectively.</p>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
significant assumptions used in determining the actuarial present value of the
projected benefit obligations as of December 31, 2003, 2002 and 2001 are as
follows:</p>

<p style='text-indent:27.35pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.72%;border-collapse:collapse'>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Weighted average
 assumptions:</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Discount
 rate</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10%</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10%</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Expected
 return on plan assets</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10%</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10%</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Rate of
 compensation increase</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>10%</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9%</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10%</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The allocation of the fair value of
plan assets follows:</p>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.98%;border-collapse:collapse'>
 <tr>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Investments in debt securities</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>86%</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">89%</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">96%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Investments in equity securities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>12%</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">5%</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2%</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">6%</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2%</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>100%</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">100%</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:6.3pt;text-align:right' style="margin-top:0;margin-bottom:0">100%</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart expects to make approximately
Php71 million of cash contribution to its pension plan in 2004.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>20.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Other Expenses</b></p>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">This account consists of:</p>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.78%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.55pt;text-align:right' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-top:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:4.3pt;text-align:center' style="margin-top:0;margin-bottom:0">
 (in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Foreign exchange losses - net </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0"><b>10,840</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0">5,878 </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0">4,467</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Loss (gain) from derivative transactions (Note 26)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0"><b>1,616</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.15pt;text-align:right' style="margin-top:0;margin-bottom:0">(603)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0">42</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='margin-left:9.0pt;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0">Provision for
 permanent decline in value of investment (Note 8)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0">2,052</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='text-align:justify' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0"><b>12,456</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right' style="margin-top:0;margin-bottom:0">5,275</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0">6,561</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>21.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Income Taxes</b></p>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The net current and noncurrent
components of deferred income tax recognized in the consolidated balance sheets
follow:</p>

<p style='text-indent:27.35pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0"> </p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.2pt;text-align:right' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Net current deferred tax assets</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.95pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>7,932</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0">5,690</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style="margin-top:0;margin-bottom:0">Net noncurrent deferred tax assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.95pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>12,780</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:7.1pt;text-align:right;
 text-indent:5.95pt' style="margin-top:0;margin-bottom:0">11,163</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The components of the consolidated net deferred tax assets and
liabilities are as follows:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.02%;border-collapse:collapse'>

 <tr style='height:5.7pt'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;height:5.7pt'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;height:5.7pt'>
 <p align=right style='margin-top:3.0pt;margin-right:5.2pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;height:5.7pt'>
 <p align=right style='margin-top:3.0pt;margin-right:5.2pt;
 margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Current
 assets:</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">NOLCO</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,965</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,413</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Allowance
 for doubtful accounts</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,822</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,802</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">MCIT</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,351</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">645</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unearned
 prepaid card revenues </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>890</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">782</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unearned
 revenues &#150; others</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>589</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">424</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Allowance
 for inventory obsolescence </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>232</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">196</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Capital
 lease</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>173</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">179</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Past
 service pension cost</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>163</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">55</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Others</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>807</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">199</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>13,992</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,695</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Current
 liabilities&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unrealized
 gains on financial instruments</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(84)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(18)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>13,908</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,677</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:18.4pt;text-indent:-.25in;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Less valuation allowance </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5,976</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,987</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net current assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,932</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,690</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Noncurrent assets:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <p style='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">     </p>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>Unrealized
 foreign exchange losses</td>
 </tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>16,556</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,157</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Asset impairment</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>9,472</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,848</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Excess of debt forgiven</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,812</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,013</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Unrealized
 losses on financial instruments</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>1,196</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">250</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Past service pension cost</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>978</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">108</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accrued pension cost</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>792</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,462</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accelerated depreciation</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>734</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">879</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Deferred charges</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>327</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">347</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Asset retirement obligations</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>64</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Provision for decline in value of investments</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">205</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:7.55pt'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:7.55pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 7.55pt'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>32,931</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in;height:7.55pt'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32,269</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Less
 valuation allowance</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>13,614</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,270</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>19,317</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">18,999</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Noncurrent liabilities:</p>
 </td>
 <td   valign=bottom style=' border:none;background:
 #E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:5.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest
 charges capitalized, net of amortization</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(5,320)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5,921)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Taxes and
 duties capitalized, net of amortization</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(650)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(717)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:.3in;text-indent:-12.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Unrealized gains on financial instruments</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(364)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(522)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Undistributed
 earnings of a subsidiary</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(203)</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(333)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Customer
 lists</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(343)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=top style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(6,537)</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(7,836)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:12.1pt'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:12.1pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Net
 noncurrent assets</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:12.1pt'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>12,780</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 height:12.1pt'>
 <p align=right style='margin-right:4.35pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,163</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Provision for (benefit from) income
tax consists of:</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.56%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;border:none !msorm;border-top:
 solid windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=3 valign=top style=' border:none;
 border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in;border:none !msorm;
 border-top:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:31.5pt;text-align:right;
 text-indent:49.45pt' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Current</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>2,331</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0">589</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0">876</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">Deferred</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(3,731)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0">849</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.1pt;text-align:right' style="margin-top:0;margin-bottom:0">(3,446)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(1,400)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right' style="margin-top:0;margin-bottom:0">1,438</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:5.1pt;text-align:right' style="margin-top:0;margin-bottom:0">(2,570)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The MCIT in 2003 and 2002 amounting
to Php706 million and Php645 million, respectively, were charged directly to
&#147;Deferred income tax&#148;.  The benefit of MCIT in 2003 and 2002, can be claimed as
deductions against income tax payable until 2006 and 2005, respectively.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Mabuhay Satellite and Subic Telecom
are registered as Subic Bay Freeport Enterprises and Clark Telecom is
registered as a Clark Special Economic Zone Enterprise under Republic Act No.
7227, otherwise known as the Bases Conversion and Development Act of 1992, or
the Act.  As registrants, Mabuhay Satellite and Clark Telecom are entitled to
all the rights, privileges and benefits established thereunder including tax
and duty-free importation of capital equipment and special income tax rate of
5% of gross income, as defined in the Act. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On December 22, 2000, the Philippine Board of Investments, or BOI, approved ePLDT&#146;s registration as a new information
technology service firm in the field of services related to its internet data
center on a pioneer status.  As such, ePLDT enjoys, among other incentives, a
six-year income tax holiday from January 2001.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On May 3, 2001, the BOI awarded Smart pioneer status for its GSM expansion projects entitling it to a three-year
tax holiday up to May 2004.  The tax incentive is availed on the basis of
incremental income generated from the said expansion project.  In addition, on July 12, 2001, the BOI awarded Smart pioneer status for its payment infrastructure
projects entitling it to enjoy a six-year tax holiday.  In this case, the tax
incentive is availed for the entire taxable income of the project.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The balance
of NOLCO as of December 31, 2003 may be used by the particular entities that
incurred the losses as deductions against future taxable income.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:102.2%;;border-collapse:collapse;border-collapse:
 collapse !msorm'>
 <tr>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p style=';text-indent:1.0in;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p style=';text-indent:1.0in;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Year Incurred</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:13.6pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Carryforward Benefits Up To</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.5pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-top:0in;margin-right:31.55pt;
 margin-bottom:0in;margin-left:14.05pt;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p align=right style='margin-top:0in;margin-right:31.55pt;
 margin-bottom:0in;margin-left:14.05pt;margin-bottom:.0001pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Amount </b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in;border:none !msorm;border-top:solid windowtext 1.0pt !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">December 31, 2004</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:31.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,177</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">December 31, 2005</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:31.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,251</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">December 31, 2006</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:31.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">86</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total NOLCO</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.65pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 2.25pt !msorm;padding:
 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:31.55pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,514</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The reconciliation between the
provision for income tax at the applicable statutory tax rates and the actual
provision for income tax follows:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td  valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td  valign=top style=' border:none;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  colspan=3 valign=top style=' border:none;
 padding:0in 5.4pt 0in 5.4pt'>
 <p style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Provision at statutory tax
 rate</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,123</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,470)</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9,661)</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Tax effects of:</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:14.2pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Tax exempt income and non-deductible expenses</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,695</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(253)</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(22)</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:14.2pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Equity in net losses of investees</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>28</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,366</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:14.2pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Results of operations subject to income tax holiday</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(5,975)</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,405)</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(724)</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:14.2pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Tax rate differences</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(490)</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(117)</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(127)</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:14.2pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Goodwill amortization</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,527</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#F3F3F3;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:14.2pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Provision for impairment in value of investment</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=top style=' background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">451</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' background:#E0E0E0;padding:
 0in 5.4pt 0in 5.4pt'>
 <p style='margin-left:14.2pt;text-indent:-7.1pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Others - net </p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(114)</b></p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">174</p>
 </td>
 <td  valign=top style=' background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Changes in valuation
 allowance</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(667)</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,464</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,609</p>
 </td>
 </tr>
 <tr>
 <td  valign=top style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Actual provision for
 (benefit from) income tax</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,400)</b></p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,438</p>
 </td>
 <td  valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt'>
 <p align=right style='margin-right:5.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,570)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>22.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Earnings Per Common
Share</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table presents information necessary to calculate the earnings per
share:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:102.18%;;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:7.1pt'>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   colspan=2 valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:7.1pt'>
 <p align=center style='margin-right:2.9pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Basic</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Diluted</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Basic</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Diluted</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos, except per share amounts)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net income (loss) before cumulative effect of change in accounting
 principles</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,106</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,106</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,158)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,158)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(27,728)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(27,728)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:31.5pt;text-indent:-31.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cumulative effect of change in accounting principles</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(61)</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(61)</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(54)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(54)</p>
 </td>
 </tr>
 <tr style='height:10.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p style='margin-left:45.0pt;text-indent:-45.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Dividends on preferred stock</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,739)</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,485)</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,645)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,645)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,503)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in;
 height:10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,503)</p>
 </td>
 </tr>
 <tr style='height:10.35pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.35pt'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Accretion to redemption value of Preferred Stock Subject to Mandatory
 Redemption</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,309)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(1,309)</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,004)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,004)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(542)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;height:
 10.35pt'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(542)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Net income (loss) attributable to common shareholders</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>7,997</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>8,251</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(8,807)</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:double windowtext 1.5pt;
 background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,827)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(29,827)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=6 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">(in thousand shares)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:45.0pt;text-indent:-45.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Outstanding common shares, beginning</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>169,361</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>169,361</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,895</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,895</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,498</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,498</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:45.0pt;text-indent:-45.0pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Effect of issuance of common shares during the year</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>52</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>52</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">200</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">200</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">162</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Common shares equivalent of preferred shares deemed dilutive:</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">     Preferred Stock Series V</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,576</b></p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">     Preferred Stock Series VI</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>4,651</b></p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:13.5pt;text-indent:-13.5pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">     Preferred Stock Series VII</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3,842</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Weighted average number of common shares, end</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>169,413</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>180,482</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">169,095</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">169,095</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">168,660</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;background:
 #F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Earnings per common share</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border:none;background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Earnings per common share before cumulative effect of change in
 accounting principles</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>47.56</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>46.06</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.53)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.53)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cumulative effect of change in accounting principles</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(0.36)</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>(0.34)</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:solid windowtext 1.0pt;
 background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(0.32)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(0.32)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='margin-left:9.4pt;text-indent:-9.4pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Earnings per common share</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>47.20</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>45.72</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52.08)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='text-align:right;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(176.85)</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Series V, VI
and VII Convertible Preferred Stock were deemed dilutive based on a calculation
of the required dividends on these preferred shares divided by the number of
equivalent common shares assuming such preferred shares are converted into
common shares and compared against the basic EPS.  Since the amount of
dividends on the Series V, VI and VII Convertible Preferred Stock over its
equivalent number of common shares decreased the basic EPS, these convertible
preferred stock were deemed dilutive.  </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
computations of diluted earnings per common share were anti-dilutive for the years
ended December 31, 2002 and 2001; therefore, the amounts reported for basic and
diluted earnings per common share were the same.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<br clear=all
style='page-break-before:always'>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>23.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Contractual
Obligations and Commercial Commitments</b></p>

<p style='margin-left:.25in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Contractual Obligations</i></b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following table discloses the PLDT Group&#146;s contractual obligations outstanding
as of December 31, 2003: </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse'>
 <tr>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Year</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:6.4pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Long-term debt</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:6.4pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Long-term lease obligations</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Unconditional purchase obligations</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:6.4pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Other long-term obligations</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in'>
 <p align=center style='margin-left:6.4pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2004</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">23,816</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">978</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:12.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,629</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">26,423</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2005</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,172</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">829</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:12.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,132</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:3.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">32,133</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">2006</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">28,762</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">625</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:12.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,121</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:3.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,508</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2007</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">29,059</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">482</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:12.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,112</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:3.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">30,653</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2008</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,733</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">280</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:12.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,112</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,774</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">20,899</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2009 and
 onwards</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">66,733</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,154</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:12.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,447</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">8,124</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">80,458</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total </p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">184,275</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.8pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">4,348</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:12.4pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,553</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:3.0pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21,898</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:8.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">221,074</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0"><i>Long-term Debt Obligations</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">For discussion of our long-term
debt obligations<i>,</i> see<i> Note 14 &#150; Long-term Debt.</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Long-term Lease Obligations</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Municipal Telephone Projects</i>.
In 1993, PLDT entered into two lease agreements with the Philippine Department
of Transportation and Communications, or DOTC, covering telecommunications
facilities established under the Municipal Telephone Act.  Under these
agreements, PLDT was granted the exclusive right to perform telecommunications
management services, to expand services, and to promote the use of the
DOTC-contracted facilities in certain covered areas for a period of 15 years.  Title
to the properties shall be transferred to PLDT upon expiration of the lease
term.  As of December 31, 2003, PLDT&#146;s aggregate remaining obligation under
these agreements was approximately Php875 million.  In case of cancellation,
PLDT is liable to pay Php100 million under each of the two contracts as
liquidated damages.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Domestic Fiber Optic Network, or
DFON, Submerged Plant Agreement</i>.  As discussed in <i>Note 18 &#150; Related
Party Transactions</i>, PLDT entered into an agreement with NTT World
Engineering Marine Corporation on July 4, 2000, for the submarine cable repair
and related services for the maintenance of PLDT&#146;s DFON submerged plant for a
period of five years up to July 4, 2005.  Under this agreement, PLDT is
required to pay NTT World Engineering Marine Corporation a fixed annual
standing charge of US$2 million, excluding cost for the use of a
remotely-operated submersible vehicle at US$5,000 for every day of use and
repair cost computed at US$19,000 per day of actual repair.  As of December 31, 2003, PLDT&#146;s aggregate remaining obligation under this agreement was
approximately Php185 million.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Digital Passage
Service Contracts</i>.  PLDT has existing Digital
Passage Service Contracts with foreign telecommunication administrations for
several dedicated circuits to various destinations for ten to 25 years expiring
at various dates.  As of December 31, 2003, PLDT&#146;s aggregate remaining
obligation under these contracts amounted to approximately Php41 million.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>License
Agreement with Mobius Management Systems (</i><i>Australia</i><i>) Pty Ltd., or
Mobius.</i>  PLDT entered into a license agreement with Mobius pursuant to
which Mobius has granted PLDT a non-exclusive, non-assignable and
non-transferable license for the use of computer software components.  Under
this agreement, Mobius is also required to provide maintenance services for a
period of one year at no additional maintenance charge.  PLDT may purchase
maintenance services upon expiration of the first year for a fee of 15% of the
current published license fee.  As of December 31, 2003, PLDT&#146;s aggregate
remaining obligation under this agreement was approximately Php65 million.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Other Long-term Lease
Obligations</i>.   The PLDT Group has various long-term lease contracts for
periods ranging from two to ten years covering certain offices, warehouses,
cell sites, telecommunication equipment locations and various office
equipment.  In particular, Smart has lease obligations aggregating Php2,309
million as of December 31, 2003 in respect of office and cell site rentals with
over 2,000 lessors nationwide.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Unconditional Purchase
Obligations</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Air Time Purchase Agreement with
ACeS International Limited. </i>  As discussed in <i>Note 18 &#150; Related Party
Transactions</i>, PLDT entered into a Founder NSP Air Time Purchase Agreement
with AIL in March 1997, which was amended in December 1998, under which PLDT is
granted the exclusive right to sell AIL services in the Philippines.  In
exchange, the Air Time Purchase Agreement states that PLDT is required to
purchase from AIL a minimum of US$5 million worth of air time annually over ten
years commencing on the date of commercial operations of the Garuda I
satellite.  In the event AIL&#146;s aggregate billing revenue is less than US$45
million in any given year, the Air Time Purchase Agreement also states that
PLDT is required to make supplemental air time purchase payments not to exceed
US$15 million per year during the ten-year term.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT and the other founder NSPs are
endeavoring to amend the Air Time Purchase Agreement due to the occurrence of
partial satellite loss, changes in the primary business of ACeS and other
events affecting the business.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In March 2003, PLDT, together with
the other founder NSPs, entered into a Standstill Agreement with AIL suspending
the application and enforcement of the minimum and supplemental air time
payments under the original Air Time Purchase Agreement.  In lieu of these
payments, the parties agreed that AIL shall provide PLDT and the other founder
shareholders, with unlimited use of air time for the year 2003 in exchange for
a fixed fee in the amount of US$3.8 million for PLDT.  Moreover, PLDT was also
obliged to purchase from AIL 13,750 satellite fixed phone units in 2003 at
US$395 F.O.B. per unit, subject to quarterly price adjustments.  On February
10, 2004, notwithstanding the ongoing negotiations, AIL advised PLDT of the
termination of the Standstill Agreement and the reinstatement of the terms of
the original Air Time Purchase Agreement following the lapse of the November
15, 2003 deadline for the negotiation of the revised Air Time Purchase
Agreement.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, PLDT&#146;s aggregate remaining minimum obligation under the original Air Time Purchase
Agreement was approximately Php10,081 million. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>International
Affiliate Agreement with VeriSign, Inc., or VeriSign.</i>   On September 15, 2000, ePLDT entered into an agreement with VeriSign for the non-exclusive,
non-transferable right and license to use the VeriSign software, brand and
Certification Practice Statement for the purpose of approving, issuing,
suspending or revoking digital certificates for users of the internet or
similar open systems in the Philippines for a period of seven years.  Under
this agreement, ePLDT is required to pay VeriSign a certain percentage of the
revenue derived from the services subject to minimum annual royalty payments
aggregating to US$1.18 million, which was subsequently reduced to US$0.9
million, for the seven-year contract period.  In addition, ePLDT was required
to pay an annual support fee totaling US$0.5 million during the first year and
US$0.3 million in each year thereafter.  </p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Effective July 1, 2003, VeriSign has agreed to amend the
Agreement and issued Addendum 6 to write-off all past due invoices and payments
owed to VeriSign, which were invoiced or scheduled to be invoiced under the
agreement prior to this Addendum 6.  All royalty payments and annual support
fees due through June 2003 will be part of the write-off in the amount of US$0.8 million.  For contract year 4 (September
2003-August 2004), the annual support fee will
be reduced from US$0.3 million to US$40,000 and for contract years 5-7
(September 2003-August 2007) from US$0.3 million to US$0.16 million.  In
addition, VeriSign agreed to reduce the affiliate revenue sharing rates from
50% of suggested retail price to 25% of suggested retail price for both
enterprise and internet products for 12 months starting July 2003 and
negotiable thereafter.  As of December 31, 2003, ePLDT&#146;s aggregate
remaining minimum obligation under this agreement was approximately Php26
million pertaining to annual support fee.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>License Purchase Agreement with
I-Contact Solutions Pte. Ltd.</i>  On April 2, 2003, iPlus Intelligent Network
Inc., or iPlus, a wholly-owned subsidiary of ePLDT, entered into an Application
Services Provider, or ASP, and Reseller Contract with I-Contact Solutions Pte.
Ltd., or I-Contact, of Singapore.  Under the agreement, iPlus will purchase
licenses of the CosmoCall Universe &#153; IP-based
contact center solution.  CosmoCall Universe supports
multi-channel customer interactions including telephone, web chat, web voice,
web video, web collaboration, e-mail and voicemail in one high capacity, high
availability, multi-tenant platform.  CosmoCall Universe is a complete, unified
contact center suite that includes ACD, IVR, CTI, predictive dialing,
multimedia recording and a complement of other management applications.  The
aggregate value of these licenses is US$2.1 million and these licenses will be
granted quarterly over a two-year period.  Further to the agreement, I-Contact
will appoint iPlus as the exclusive reseller and ASP for the Philippine market
and will provide iPlus with all the necessary support in terms of sales,
marketing, and technical services.  As of December 31, 2003, iPlus&#146; aggregate remaining obligation under this agreement was US$1.5 million (approximately
Php83 million).</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Other Unconditional Purchase
Obligations</i>.   PLDT has various purchase contracts for periods ranging from
two to three years covering the use of fraud management system and satellite
hub and remote Very Small Aperture Terminal, or VSAT, network systems.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Other Long-term Obligations</i></p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Mandatory Conversion and
Purchase of Shares</i>.  As discussed in <i>Note 16 &#150; Preferred Stock Subject
to Mandatory Redemption</i>, on June 4, 2001, PLDT issued a total of 3 million
shares of Series V Convertible Preferred Stock, 5 million shares of Series VI
Convertible Preferred Stock and 4 million shares of Series VII Convertible Preferred
Stock in exchange for a total of 58 million shares of Series K, Class I
Convertible Preferred Stock of Piltel pursuant to the debt restructuring of
Piltel.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">As of December 31, 2003, 145,320 shares of Series V Convertible Preferred Stock and 531,251
shares of Series VI Convertible Preferred Stock were converted to shares of
PLDT&#146;s common stock.  As of December 31, 2002, PLDT had 3 million shares of
Series V Convertible Preferred Stock, 5 million shares of Series VI Convertible
Preferred Stock and 4 million shares of Series VII Convertible Preferred Stock
issued and outstanding.  The aggregate value of the put option based on
outstanding shares as of December 31, 2003 was Php21,898 million, of which
Php13,774 million is payable on June 4, 2008 and Php8,124 million on June 4,
2009, if all of the outstanding shares of Series V, VI and VII Convertible
Preferred Stock were mandatorily converted and all the underlying shares of
common stock were put to PLDT.  The market value of the underlying shares of
common stock was Php10,763 million, based on the market price of PLDT&#146;s common
stock of Php970 per share as of December 31, 2003.</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style="margin-top:0;margin-bottom:0"><b><i>Commercial Commitments</i></b></p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003 and 2002, our outstanding commercial commitments, in the form of letters of credit, amounted
to Php2,640 million and Php3,610 million, respectively.  These commitments will
expire within one year.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In October 1998, Smart entered into a Frame Supply
Contract with Nokia Telecommunications OY for the supply of hardware, software
and documentation for its GSM cellular network.  In the same month, Smart and
Nokia (Philippines), Inc., or Nokia, signed a Frame Services Contract that
covers the design, planning, installation, commissioning, integration,
acceptance testing, training and handling over of the GSM network.  In August
2001, Smart issued a Master Purchase Order, or MPO, in the amount of US$200
million in favor of Nokia Networks OY for the purchase of additional equipment
to expand its GSM cellular network.  The US$200 million MPO was completed in
November 2003.  On May 30, 2003, Smart entered into a Technical Support
Services Order, or TSSO, with Nokia in the amount of US$8 million.  This TSSO
has been fully served as of December 31, 2003.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In January 2004, Smart signed a new
MPO in favor of Nokia amounting to US$117 million (Phase 7 under the Frame
Supply Contract between Smart and Nokia).  Smart is, however, under no legal
obligation to incur these expenditures.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, Smart had no guarantee obligations, standby repurchase obligations or other commercial
commitments.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.5in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other;border:none;
padding:0in' style="margin-top:0;margin-bottom:0"><b>24.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Provisions and
Contingencies</b></p>

<p style='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other;
border:none;padding:0in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

</div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>NTC supervision and regulation
fees, or SRF</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Since 1976, PLDT has received
assessments from NTC for permit, SRF and other charges pursuant to Section 40
of Commonwealth Act 146, otherwise known as the Public Service Act.  As of December 31, 2003, PLDT has paid a total amount of Php1,483 million in SRF, of which
Php1,301 million was paid under protest.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT is contesting the manner by
which these assessments were calculated and the basis for such calculations.
The case is now with the Supreme Court and upon the rules and practice of
court, now stands submitted for decision.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Smart and Piltel have similarly
received assessments from NTC for permit, SRF and other charges which were paid
under protest.  Total payments made by Smart amounted to Php122 million in
2003, Php114 million in 2002 and Php86 million in 2001.  Total payments made by
Piltel amounted to Php9 million in 2002 and Php68 million in 2001.  There was
no payment made by Piltel in 2003.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have made
a reasonable estimate of the amount necessary to pay or settle the contested
assessment in the event of an unfavorable judgment against us and have made the
appropriate provisions in our consolidated financial statements as of December 31, 2003.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0"><i>Local business and franchise tax
assessments</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT is presently a party to
several cases involving the issue of exemption of PLDT from local franchise and
business taxes.  PLDT believes, based on the opinion of its legal counsel, that
it is exempt from payment of local franchise and business taxes. </p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The Local Government Code of 1991,
or R.A. 7160, which took effect on January 1, 1992, extended to local
government units, or LGUs, the power to tax businesses within their territorial
jurisdiction granted under Batas Pambansa No. 337 and withdrew tax exemptions
previously granted to franchise grantees under Section 12 of R.A. 7082. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT
believes, based on the opinion of its legal counsel, that Public
Telecommunications Policy Act, or R.A. 7925, which took effect on March 16,
1995, and the grant of similar local franchise and business taxes exemption
privileges to other franchise holders subsequent to the effectivity of R.A.
7160, implicitly restored its local franchise and business taxes exemption
privilege under Section 12 of R.A. 7082, or the PLDT Franchise pursuant to
Section 23 thereof, or the quality of treatment clause. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">To confirm this position, PLDT
sought and obtained on June 2, 1998 a ruling from the Bureau of Local
Government Finance, or BLGF, of the Philippine Department of Finance, which
ruled that PLDT is exempt from the payment of local franchise and business
taxes imposable by LGUs under R.A. 7160.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">By virtue of the BLGF Ruling, PLDT
stopped paying local franchise and business taxes starting with the fourth
quarter of 1998 and has filed with certain LGUs claims for tax refund covering
the period from the second quarter of 1995 to the third quarter of 1998.  PLDT
has received assessments for local franchise and business taxes from several
cities and provinces following PLDT&#146;s decision to stop payment of local
franchise and business taxes.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Following a decision of the Supreme
Court on March 25, 2003, a judgment in the amount of Php4 million against PLDT
involving the City of Davao became final and executory on April 9, 2003, pursuant to which PLDT was not exempt from the local franchise tax.  Although PLDT
believes that it is not liable to pay local franchise and business taxes, PLDT
has taken steps to arrive at compromise settlements with several LGUs in order
to maintain and preserve its good standing and relationship with these LGUs.
PLDT has paid a total amount of Php170 million as of December 31, 2003 for local franchise tax covering the fourth quarter of 1998 to 2003 to certain LGUs
which have agreed to a compromise settlement. </p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT continues to contest
assessments amounting to Php5,142 million as of December 31, 2003, a number of which were based on the gross revenues of PLDT derived from its operations within
the entire Philippines.  PLDT claims that assuming that it is liable for local
franchise tax, R.A. 7160 provides that local franchise tax shall be based on
the gross receipts of the preceding year received or collected for services
rendered within the jurisdiction of the taxing authority.  Therefore, the use
by some LGUs of gross revenues as the basis for computation of franchise tax is
in gross violation of the law because it pertains to all income earned
regardless of whether it was received or not, unlike gross receipts which are
essentially the amount of money or its equivalent actually or constructively
received.  Moreover, gross revenues refer to all income earned by PLDT within
and outside the jurisdiction of the local taxing authority; thus, the use
thereof as a basis of computation will exceptionally overstate the local
franchise tax.</p>

<p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In a
petition recently filed with the Supreme Court involving another LGU, PLDT has
appealed to the Supreme Court for a re-examination of its decision in the City
of Davao case in light of the strong dissenting opinion in that case concurred
in by four (4) other Members of the Supreme Court.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Smart has,
likewise, received assessments for local franchise and business taxes from
certain cities and provinces in the aggregate amount of Php313 million, which
Smart continues to contest.  Smart believes, based on the opinion of its legal
counsel, that Smart is not liable to pay the local franchise and business taxes
by virtue of (i) the opinion issued by the BLGF dated August 13, 1998; and (ii)
Smart&#146;s exemption under its legislative franchise which took effect after the
effective date of R.A. 7160.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Piltel also received assessments
from the local government of the City of Makati in the aggregate amount of
Php45 million covering the period from 1999 to 2001.  Piltel has formally
protested the assessments, based on: (1) Piltel&#146;s belief that the opinion
rendered by the BLGF for Smart should likewise hold true for Piltel; and (2)
the effective date of the legislative franchise of Piltel (R.A. 7293) which
came after the effectivity of R.A. 7160.  The franchise tax prescribed under
Section 137 of the Local Government Code is deemed part of the Piltel franchise
(the later law) which states, among other things, that Piltel shall pay only a
franchise tax equivalent to three percent of all gross receipts of the business
transacted under its franchise and such percentage shall be in lieu of all
taxes on the franchise or earnings thereof.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have made
a reasonable estimate of the amount necessary to pay or settle the contested
assessment in the event of an unfavorable judgment against us and have made the
appropriate provisions in our consolidated financial statements as of December 31, 2003.</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>25.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Fair Value of
Financial Instruments</b></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Financial
Assets and Liabilities</i></p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
following methods and assumptions were used to estimate the fair value of each
class of financial instrument for which it is practicable to estimate such
value:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Cash and cash equivalents: The
carrying amount reported in the consolidated balance sheets approximates fair
value.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Accounts receivable: The net
carrying value represents the fair value due to the short-term maturities of
these receivables.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Accounts payable and accrued
expenses, dividends payable and notes payable: The carrying value reported in
the consolidated balance sheets approximates fair value due to the short-term
maturities of these liabilities.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Long-term debt: Fair value is based
on the following:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=1 cellspacing=0 cellpadding=0
 style='width:100.0%;border-collapse:collapse;border:none'>
 <tr>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-top:solid windowtext 1.5pt;padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Debt Type</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Fair Value
 Assumptions</b></p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:2.9pt' style="margin-top:0;margin-bottom:0">Fixed Rate Loans:</p>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">U.S. dollar notes/convertible
 debt</p>
 <p style='margin-left:.25in' style="margin-top:0;margin-bottom:0">Other loans in all other
 currencies</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:2.9pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 <p style='margin-left:2.9pt' style="margin-top:0;margin-bottom:0">Quoted market price.</p>
 <p style='margin-left:2.9pt' style="margin-top:0;margin-bottom:0">Estimated fair value is based on
 the discounted value of future cash flows using the applicable rates for
 similar types of loans.</p>
 </td>
 </tr>
 <tr>
 <td   valign=top style=' border:solid windowtext 1.0pt;
 border-top:none;padding:0in 0in 0in 0in'>
 <p style='margin-left:2.9pt' style="margin-top:0;margin-bottom:0">Variable Rate Loans</p>
 </td>
 <td   valign=top style=' border-top:none;border-left:
 none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
 padding:0in 0in 0in 0in'>
 <p style='margin-left:2.9pt' style="margin-top:0;margin-bottom:0">The carrying value approximates
 fair value because of recent and frequent repricing based on market
 conditions.</p>
 </td>
 </tr>
</table></center></div>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Preferred stock subject to
mandatory redemption: the fair values were determined using an independent
third party valuation model.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Forward exchange contracts and
bifurcated foreign currency forwards: The fair values were determined using
forward exchange market rates at the balance sheet date.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Foreign currency options:  The fair
values were computed using an option pricing model.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Foreign currency and interest rate
swaps:  The fair values were computed as the present value of estimated future
cash flows. </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Bifurcated equity call options: The
fair values were based on the calculation of an independent third party.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
estimated fair values of the financial instruments included in the respective
account captions as of December 31, 2003 are as follows:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:99.92%;border-collapse:collapse'>

 <tr style='height:15.35pt'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:15.35pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:15.35pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Carrying Value</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:15.35pt'>
 <p align=right style='text-align:right;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Fair Value</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:11.5pt'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in;
 height:11.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in;height:11.5pt'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">(in millions of pesos)</p>
 </td>
 </tr>

 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Financial assets:</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='height:13.45pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash and
 cash equivalents</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,372</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,372</p>
 </td>
 </tr>
 <tr style='height:15.35pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.35pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Accounts
 receivable - net</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,066</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:15.35pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">19,066</p>
 </td>
 </tr>
 <tr style='height:13.45pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p style='text-indent:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Foreign
 currency swaps (Note 26)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,361</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,361</p>
 </td>
 </tr>
 <tr style='height:13.45pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p style='text-indent:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Foreign
 currency options (Note 26)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">247</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">247</p>
 </td>
 </tr>
 <tr style='height:13.45pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Financial liabilities:</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Accounts
 payable</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,655</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,655</p>
 </td>
 </tr>
 <tr style='height:13.45pt'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Accrued
 expenses and other current liabilities</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,046</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,046</p>
 </td>
 </tr>
 <tr style='height:13.45pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Dividends payable</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">577</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">577</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Notes payable</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,133</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,133</p>
 </td>
 </tr>
 <tr style='height:13.45pt'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Long-term
 debt (including current portion)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">184,275</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:13.45pt'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">187,613</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Foreign
 exchange contracts (Note 26)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">62</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">62</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest
 rate swaps </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,587</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,587</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Bifurcated
 foreign currency forwards (Note 26)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Bifurcated
 equity call options (Note 26)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,145</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,145</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Preferred
 stock subject to mandatory redemption (Note 16):</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">   Series
 V</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,505</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,655</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">   Series
 VI</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,528</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in;height:.2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,983</p>
 </td>
 </tr>
 <tr style='height:.2in'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 .2in'>
 <p style='margin-left:9.0pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">   Series
 VII</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 .2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,288</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;height:
 .2in'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">5,448</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;border:none;padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>26.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Derivatives and
Hedging Instruments</b></p>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The PLDT Group uses currency
forwards, currency swaps, currency options, and interest rate swaps to manage
their market risks associated with their foreign currency denominated loans,
and their exposures to interest rate fluctuations.  The PLDT Group has elected
not to designate these derivatives, as well as the embedded derivatives
bifurcated from their various contracts, as hedge instruments under the
provisions of SFAS 133.  In conformity with the provisions of SFAS 133, the
changes in the fair value of derivative instruments not designated as hedging
instruments are recognized directly through earnings. </p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Following
are the outstanding derivative transactions of the PLDT Group as of December 31, 2003 and 2002:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i><u>&nbsp;</u></i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b><i>Freestanding
Derivatives</i></b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>Forward Exchange Contracts</i></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">PLDT and
Smart use forward exchange contracts to hedge foreign currency-denominated
assets, liabilities and firm commitments.  Following are the outstanding
forward exchange contracts as of December 31, 2003 and 2002:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td  colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Aggregate Notional Amount<br>
 </b><b>(in millions)</b></p>
 </td>
 <td  colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Aggregate Mark-to-market Loss<br>
 (in millions)</b></p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Forward buy US$ sell peso</p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US$197</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$216</p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Php62</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php103</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Forward buy JPY sell US$</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>JPY&#150;</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">JPY3,296</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Php&#150;</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:5.75pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Php60</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The above forward contracts have
maturities ranging from one to six months.  Cash deposits amounting to about
Php1,662 million collateralize certain of the forward exchange contracts
outstanding as of December 31, 2003.  </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Foreign Currency
Options</i></h2>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In 2003,
PLDT utilized structures incorporating currency options to hedge the maturing
principal on its fixed rate notes due June 2003 and June 2004 and other
short-term foreign currency obligations.   As of December 31, 2003, PLDT has outstanding currency option contracts with aggregate notional amount of US$79
million.  The estimated net mark-to-market gain on these currency option
contracts amounted to about Php247 million as of December 31, 2003.</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0"><i>Foreign Currency
and Interest Rate Swaps</i></h2>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT entered into long-term
principal-only currency swap agreements with various foreign counterparties to
hedge the currency risk on its fixed rate notes maturing in 2009, 2012 and 2017.
As of December 31, 2003 and 2002, these long-term currency swaps have an
aggregate notional amount of US$725 million and US$550 million, respectively.
Under the swaps, PLDT effectively exchanges the principal of its U.S.
dollar-denominated fixed rate notes into peso-denominated loan exposures at
agreed swap exchange rates.  The agreed swap exchange rates are reset to the
lowest US$/Php spot exchange rate during the term of the swaps, subject to a
minimum exchange rate.  As of December 31, 2003 and 2002, the outstanding swap
contracts have been reset to average exchange rate of Php51.22 and Php51.27,
respectively.  In addition, PLDT is required to make semi-annual fixed or
floating swap cost payments to its counterparties, which averaged to about 2.10%
and 2.35% per annum in 2003 and 2002, respectively.   Following are the
outstanding balances of the long-term currency swaps as of December 31, 2003 and 2002:</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Aggregate
 Notional Amount<br>
 </b><b>(in millions of U.S. dollars)</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Maturity</b></p>
 </td>
 <td  colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Aggregate
 Mark-to-market Gain (Loss)<br>
 (in millions of pesos)</b></p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0"><b>300</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0">300</p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">2017</p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0"><b>688</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:17.1pt;text-align:right' style="margin-top:0;margin-bottom:0">(399)</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0"><b>250</b></p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0">250</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">2012</p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0"><b>563</b></p>
 </td>
 <td  valign=bottom style=' background:#F3F3F3;
 padding:0in 5.4pt 0in 5.4pt 0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:17.1pt;text-align:right' style="margin-top:0;margin-bottom:0">(62)</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0"><b>175</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">2019</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0"><b>110</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:.3in;text-align:right' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Due to the
amounts of PLDT&#146;s foreign currency hedging requirements and the large interest
differential between the Philippine Peso and the US$, the costs to book
long-term currency swaps can be significant.  In order to manage such hedging
costs, PLDT utilizes structures that include currency option contracts, credit
linkage, and fixed to floating coupon-only swaps.  </p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The
currency swap agreement relating to the 2009 fixed rate notes has been
structured to include currency option contracts.  If the US$/Php spot exchange
rate on maturity date settles beyond an agreed threshold, PLDT will have to
purchase US$ at the minimum exchange rate plus the excess above the agreed
threshold rate.  On the other hand, if on maturity, the US$/Php spot exchange
rate is lower than the minimum exchange rate, PLDT will have the option to
purchase at the prevailing US$/Php spot exchange rate. </p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$575
million and US$400 million of the long-term currency swaps outstanding as of December 31, 2003 and 2002, respectively, have been structured to include credit-linkage
with PLDT as the reference entity.  The specified credit events include
bankruptcy, failure to pay, obligation acceleration, moratorium/repudiation,
and restructuring of PLDT bonds or all or substantially all of PLDT&#146;s
obligations.  Upon the occurrence of any of these credit events, subject to
agreed threshold amount where applicable, the obligations to both PLDT and its
counterparty under the swap contracts terminate without further settlements to
either party, including any mark-to-market value of the swaps. </p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">A portion
of PLDT&#146;s currency swap agreements to hedge its 2017 fixed rate notes carry
fixed rate swap cost payments.  To effectively lower the running cost of such
swap agreements, PLDT, in April 2003, entered into an agreement to swap the
coupon on US$125 million of its 2012 fixed rate notes into a floating rate JP&yen;
amount.  Under this agreement, PLDT is entitled to receive the full equivalent
of the fixed coupon provided the US$/JP&yen; exchange rate stays above a
predetermined level.  Below this level, only a fraction of the fixed coupon
will be due PLDT.  In order to mitigate the risk of the JP&yen; strengthening below
the agreed threshold, PLDT, in December 2003, entered into an overlay swap
transaction to effectively lower the portion of the coupon indexed to the US$/JP&yen;
rate.  As of December 31, 2003, the estimated net mark-to-market loss on the
interest rate swaps amounted to Php2,587 million.</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">In 2001,
PLDT also entered into a US$/JP&yen; swap agreement to swap the coupon on US$175
million of its fixed rate notes for a floating rate JP&yen; amount.  The swap was
terminated in 2002 at a realized gain of Php633 million.</p>

<p style='text-indent:35.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><b><i>Bifurcated Embedded Derivatives</i></b></p>

<p style="margin-top:0;margin-bottom:0"><b><i>&nbsp;</i></b></p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">Following are the embedded
derivatives bifurcated from various purchase and service contracts of the PLDT
Group as of December 31, 2003 and 2002: </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Bifurcated Foreign Currency Forwards</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Aggregate Notional Amount <br>
 (in millions of U.S. dollars</b><b>)</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Maturity</b></p>
 </td>
 <td  colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Aggregate Mark-to-market Gain (Loss)<br>
 (in millions of pesos)</b></p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=bottom style=' border:none;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:17.1pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:26.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>20</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:30.6pt;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Less than 1 year</p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:26.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(13)</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-top:solid windowtext 1.0pt;
 background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;border-top:
 solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:17.1pt;text-align:right' style="margin-top:0;margin-bottom:0">5</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:26.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>1</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:30.6pt;text-align:right' style="margin-top:0;margin-bottom:0">3</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">Over 1 year (up to 2005)</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:26.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>(4)</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:12.6pt;text-align:right' style="margin-top:0;margin-bottom:0">(18)</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0"><i>Bifurcated Foreign Currency Options</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td  colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Aggregate Notional Amount <br>
 (in millions of U.S. dollars)</b></p>
 </td>
 <td  valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Maturity</b></p>
 </td>
 <td  colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 5.4pt 0in 5.4pt;border-top:solid windowtext 1.5pt !msorm;
 border-left:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;
 border-right:none !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>Aggregate Mark-to-market Gain<br>
 (in millions of pesos)</b></p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;border:none !msorm;
 border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:17.1pt;text-align:right' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 </tr>
 <tr>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:26.1pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:30.6pt;text-align:right' style="margin-top:0;margin-bottom:0">6</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=center style='text-align:center' style="margin-top:0;margin-bottom:0">2003</p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:30.6pt;text-align:right' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td  valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 5.4pt 0in 5.4pt;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 5.4pt 0in 5.4pt !msorm'>
 <p align=right style='margin-right:17.1pt;text-align:right' style="margin-top:0;margin-bottom:0">37</p>
 </td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">The bifurcated currency options
matured in 2003 at a net realized gain of Php1.8 million.</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;page-break-after:auto' style="margin-top:0;margin-bottom:0" style="margin-top:0;margin-bottom:0">&nbsp;</h2>

<p style="margin-top:0;margin-bottom:0"><i>Bifurcated Equity Call Options</i></p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:35.45pt' style="margin-top:0;margin-bottom:0">Pursuant to Piltel&#146;s debt
restructuring plan, PLDT issued its Series VI and VII Convertible Preferred
Stock (see <i>Note 14 &#150; Long-term Debt</i> and <i>Note 16 &#150; Preferred Stock
Subject to Mandatory Redemption</i>).  Each share of Series VI and VII
Convertible Preferred Stock is convertible at any time at the option of the
holder into one share of PLDT&#146;s common stock.  On the date immediately
following the seventh anniversary of the issue date of the Series VI
Convertible Preferred Stock and on the eighth anniversary of the issue date of
the Series VII Convertible Preferred Stock, the remaining outstanding shares
under these series will be mandatorily converted to shares of PLDT&#146;s common
stock.  For 30 days thereafter, the holders of these mandatorily converted
common shares have the option to sell such common shares back to PLDT for
US$36.132 per share and JP&yen;4,071.89 per share for Series VI and VII,
respectively.  As of December 31, 2003 and 2002, the net negative
mark-to-market value of these embedded call options amounted to about Php1,145
million and Php38 million, respectively.  Such mark-to-market values are based
on the independent calculation of a third party.</p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<p style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>27.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Reportable Segments </b></p>

<p style='text-indent:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Our operating businesses are
organized and managed separately according to the nature of the products and
services, with each segment representing a strategic business unit that offers
different products and serves different markets.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">We have organized our business into
three main segments:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Wireless &#151;
wireless telecommunications services provided through our cellular service
providers, namely PLDT&#146;s subsidiaries Smart and Piltel, and satellite and VSAT
operators, namely PLDT&#146;s subsidiaries Mabuhay Satellite, ACeS Philippines and
Telesat; </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed Line &#151;
fixed line telecommunications services primarily provided through PLDT.  We
also provide fixed line services through PLDT&#146;s subsidiaries Clark Telecom,
Subic Telecom, SNMI, and Maratel, which together account for approximately 1%
of our consolidated fixed lines in service, BCC (in 2003) and PLDT Global;
and</p>

<p style='margin-left:.5in;punctuation-wrap:hanging;text-autospace:
ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.75in;text-indent:-.25in;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information and
Communications Technology &#151; information and communications infrastructure
and services for internet applications, internet protocol-based solutions and
multimedia content delivery provided by PLDT&#146;s subsidiary, ePLDT, internet
access services provided by ePLDT&#146;s subsidiary, Infocom, and e-commerce, call
centers and IT-related services provided by other subsidiaries and affiliates
of ePLDT<i>. </i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">The results of the reportable segments are
derived directly from the PLDT Group&#146;s management reporting system. The results
are based on the PLDT Group&#146;s method of internal reporting.  The segment
assets as of December 31, 2003, 2002 and 2001 and results of operations of our
reportable segments for the years ended December 31, 2003, 2002 and 2001
reported under Philippine GAAP and reconciled to U.S. GAAP are as follows:</p>

<p align=right style='text-align:right;text-indent:.5in;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.04%;border-collapse:collapse;border-collapse:collapse !msorm'>

 <tr>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Wireless </b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Fixed Line </b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Information and <br>
 Communications Technology</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Eliminations</b></p>
 </td>
 <td   valign=top style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Reconciliation</b></p>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Adjustments</b></p>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>(see Notes below)</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=center style='text-align:center;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0"><b>Total</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   colspan=6 valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:.15in;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   colspan=4 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:.35in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>As of and for the year ended </i><i>December 31, 2003</i></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:7.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Operating revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">51,371 (a)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,465</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,783</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,896)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,313 (b)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">112,036</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">External revenues</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">50,383</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45,831</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,509</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,313 (b)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">112,036</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:28.75pt;text-indent:-15.25pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Inter-segment
 revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">988</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">634</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">274</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,896)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:27.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:13.3pt;text-indent:-13.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Segment profit (loss) before income tax</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,518</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,295</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:21.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(442)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(12,854)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,697) (c)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,820 </p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Segment assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">82,632</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">262,211</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,040</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(52,501)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(39,466)
 (d)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">255,916</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Goodwill (Note 10)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">60</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,404 (e)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,464</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,907</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,262</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">313</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,600) (f)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">21,882</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cost of manpower rightsizing
 program</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,904</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:27.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,904</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:14.6pt;text-indent:-14.2pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Income tax expense (benefit)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">881</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(575)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:21.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(64)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,642) (h)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,400)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest expense</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,329</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,044</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">52</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">736 (g)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,161</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   colspan=7 valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=center style='margin-right:8.15pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   colspan=4 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:.35in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>As of and for the year ended </i><i>December 31, 2002</i><i> </i></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Operating revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">34,627 (a)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45,852</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 977</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,286)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,630 (b)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">92,800</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">External revenues</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">33,703</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">45,519</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">948</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,630 (b)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">92,800</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:28.75pt;text-indent:-15.25pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Inter-segment
 revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">924</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">333</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">29</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> (1,286)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:27.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Segment profit (loss) before income tax</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,732</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,930</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:21.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(652)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5,458)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9,146) (c)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(4,594)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Segment assets</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">76,014</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">262,141</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,527</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(42,836)</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(46,312)
 (d)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">252,534</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Goodwill (Note 10)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">96</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,196 (e)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,292</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation </p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,644</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,133</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">418</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(6,629) (f)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">17,566</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cost of manpower rightsizing
 program</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">324</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:27.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 324</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Income tax expense (benefit)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">716</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">876</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> (154) (h)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,438</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest expense</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,806</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,843</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">116 (g)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,780</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>&nbsp;</i></p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   colspan=4 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-right:.35in;page-break-after:avoid' style="margin-top:0;margin-bottom:0"><i>As of and for the year ended </i><i>December 31, 2001</i><i> </i></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Operating revenues</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style=';text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">24,632 (a)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,420</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 469</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(984)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,757 (b)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">80,294</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:13.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">External revenues</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">23,705</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">46,363</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">469</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">9,757 (b)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">80,294</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:28.75pt;text-indent:-15.25pt;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">Inter-segment
 revenues</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">927</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">57</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(984)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:27.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-top:0in;margin-right:13.6pt;margin-bottom:
 0in;margin-left:13.3pt;margin-bottom:.0001pt;text-indent:-13.3pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Segment profit (loss) before income tax</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:11.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(9,250)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(1,356)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:20.95pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(394)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.5pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">12,957</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(32,147) (c)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(30,190)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Segment assets</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">75,640</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">263,229</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3,007</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.2pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(35,824)</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(21,391)
 (d)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">284,661</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Goodwill (Note 10)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">403</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">97</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,792 (e)</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">15,292</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Depreciation </p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">6,515</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,894</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">138</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(5,329) (f)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,218</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Cost of manpower rightsizing
 program</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">279</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:27.05pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 279</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p style='margin-left:14.6pt;text-indent:-14.6pt;page-break-after:
 avoid' style="margin-top:0;margin-bottom:0">Income tax expense (benefit)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">308</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">725</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(3,603) (h)</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:6.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(2,570)</p>
 </td>
 </tr>
 <tr>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest expense</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:15.1pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,376</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">11,070</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.35in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">-</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:.15in;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,251 (g)</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:8.15pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">14,697</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;text-indent:-.25in' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Notes:</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A significant portion of our wireless revenues is derived from our
cellular prepaid service.  The predominance of prepaid service reflects one of
the distinguishing characteristics of the Philippine cellular market.  Our
prepaid service has enabled us to increase and broaden our subscriber base
rapidly while controlling credit risk and reducing billing and other
administrative costs on a pre-subscriber basis.</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Adjustments to revenues resulted from the net effect of recording of
handset sales as revenue instead of as an offset against selling and promotions
expense and certain incentives provided to dealers and customers as part of
multiple element arrangements and the amortization of activation fees. </p>

<p style='margin-left:.5in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments
to segment profit and loss resulted from the net effects of adjustments for
impairment of operating assets, purchase accounting adjustments, reversal of
capitalized foreign exchange losses and related revenue adjustments. </p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">d.   Adjustments
to segment assets resulted from the impairment of certain operating assets,
purchase accounting adjustments, reversal of capitalized foreign exchange
losses and deferred tax assets not allocable to specific segments.</p>

<p style='margin-left:.5in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">e.   Adjustments for goodwill resulted from purchase accounting
adjustments and reversal of amortization.</p>

<p style='margin-left:.5in;text-indent:-.25in;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">f.    Adjustments
for depreciation resulted from purchase accounting adjustments, impairment of
certain operating assets and the reversal of depreciation on capitalized
foreign exchange losses.</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">g.   Adjustments
to interest expense are related to the capitalization of interest; the upward
adjustment relates to the additional interest on Piltel&#146;s unrestructured debt.</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:.5in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">h.   Adjustments
to income tax expense (benefit) are related to other adjustments mentioned
above.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>28.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Other Matters</b></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-bottom:0in;margin-bottom:.0001pt;page-break-after:
avoid' style="margin-top:0;margin-bottom:0">a.   Supplemental Disclosures of Cash Flow Information</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.36%;border-collapse:collapse;border-collapse:collapse !msorm'>

 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.2pt' style='page-break-inside:
 avoid !msorm;height:13.2pt !msorm'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:13.2pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:13.2pt'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 text-indent:22.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>

 <tr style='page-break-inside:avoid;height:13.2pt' style='page-break-inside:
 avoid !msorm;height:13.2pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash paid during the year for:</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.2pt' style='page-break-inside:
 avoid !msorm;height:13.2pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p style='text-indent:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Income tax </p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2,453</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">351</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,009</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:14.1pt' style='page-break-inside:
 avoid !msorm;height:14.1pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:14.1pt'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest:  </p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:14.1pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:14.1pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:14.1pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:14.1pt' style='page-break-inside:
 avoid !msorm;height:14.1pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:14.1pt'>
 <p style='margin-left:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">   Capitalized to property, plant and equipment</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:14.1pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>887</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:14.1pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,343</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:14.1pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2,404</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.2pt' style='page-break-inside:
 avoid !msorm;height:13.2pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p style='text-indent:18.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Charged to operations</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p align=right style='margin-right:4.25pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>11,777</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,956</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:13.2pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">16,071</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt' style='page-break-inside:
 avoid !msorm;height:8.55pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p style='text-indent:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Interest income received</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>484</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">735</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,031</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt' style='page-break-inside:
 avoid !msorm;height:8.55pt !msorm'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt' style='page-break-inside:
 avoid !msorm;height:8.55pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Supplemental schedule of noncash investing and financing activities:</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt' style='page-break-inside:
 avoid !msorm;height:8.55pt !msorm'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p style='text-indent:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Preferred stock subject to mandatory redemption
 issued</p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>152</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">36</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">10,165</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt' style='page-break-inside:
 avoid !msorm;height:8.55pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p style='text-indent:9.4pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Long-term debt restructured</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>208</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">82</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#E0E0E0;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">20,080</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">In connection with the
acquisition of investments, liabilities were assumed as follows:</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.36%;border-collapse:collapse;border-collapse:collapse !msorm'>
 <tr style='page-break-inside:avoid' style='page-break-inside:avoid !msorm'>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:2.9pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>2003</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2002</p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;border-top:solid windowtext 1.5pt !msorm;border-left:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;border-right:none !msorm;
 padding:0in 0in 0in 0in !msorm'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2001</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.2pt' style='page-break-inside:
 avoid !msorm;height:13.2pt !msorm'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:13.2pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=5 valign=bottom style=' padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;
 height:13.2pt'>
 <p align=center style='margin-right:4.3pt;text-align:center;
 text-indent:22.5pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in
 millions of pesos)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt' style='page-break-inside:
 avoid !msorm;height:8.55pt !msorm'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Fair value of assets acquired</p>
 </td>
 <td   colspan=2 valign=top style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in 0in 0in 0in 0in !msorm;height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1,290</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt' style='page-break-inside:
 avoid !msorm;height:8.55pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash paid for the capital stock</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in;border:
 none !msorm;border-bottom:solid windowtext 1.0pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:1.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">(813)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt' style='page-break-inside:
 avoid !msorm;height:8.55pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Liabilities assumed</p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   colspan=2 valign=top style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p style='margin-right:4.3pt;page-break-after:avoid' style="margin-top:0;margin-bottom:0">                 &#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#E0E0E0;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"> 477</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:8.55pt' style='page-break-inside:
 avoid !msorm;height:8.55pt !msorm'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Acquisition of property and equipment through long-term debt
 availment</p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>&#150;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border:none;
 border-bottom:double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&#150;</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 1.5pt;background:#F3F3F3;padding:0in 0in 0in 0in;
 border:none !msorm;border-bottom:double windowtext 1.5pt !msorm;padding:0in 0in 0in 0in !msorm;
 height:8.55pt'>
 <p align=right style='margin-right:4.3pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">13,259</p>
 </td>
 </tr>
 <tr height=0>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 <td  style='border:none'></td>
 </tr>
</table></center></div>

<p style='margin:0in;margin-bottom:.0001pt;line-height:normal;
page-break-after:avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">b.     Interconnection
Agreements</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">PLDT has existing interconnection
agreements with nine International Gateway Facilities, or IGF operators, six
Inter Exchange Carriers, or IXCs, six Cellular Mobile Telephone Systems, or
CMTS operators, 70 Local Exchange Carriers, or LECs, (including members of the
Philippine Association of Private Telephone Companies, Inc.), and 12 paging and
trunk radio operators.  These interconnection agreements include provisions for
settlement and payment of charges.  Settlements with interconnecting IGF
operators and CMTS operators for local calls are in the form of access
charges.  Settlement with interconnecting IXCs and LECs for toll calls are based
on hauling and access charges, and to some extent, revenue sharing.  Settlement
also involves payment of access charges, but settlement for toll calls is on a
revenue-sharing basis.  LEC to LEC interconnection with hauling from one
service area to another service area is settled based on trunk charges, while
overlay LEC to LEC interconnection in a given service area is without charges.
Paging and trunk radio interconnection settlements are based on fixed charges.
</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">c.     Proposed
Metering of Local Exchange Service</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The proposed metering of PLDT&#146;s
local exchange service has been temporarily suspended for further review by the
NTC.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:22.5pt;text-indent:-22.5pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">d.
    U.S. Federal Communications Commission, or FCC, Ruling versus Philippine
Telecommunications Companies </p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Effective as of February 1, 2003, PLDT stopped terminating traffic sent directly by each of AT&amp;T and
MCI, because PLDT&#146;s termination rate agreements with AT&amp;T and MCI lapsed in
December 2002 without either agreeing with PLDT on any provisional arrangement
or final agreement on new termination rates.  In separate orders dated February
7 and 26, 2003, the National Telecommunications Commission, or NTC, confirmed
that &#147;absent any provisional or interim agreement&#148; with U.S. carriers, there
would be no provision of termination services between the parties &#147;who are
thereby encouraged to seek other routes or options to terminate traffic to the
Philippines.&#148;  Upon petitions of AT&amp;T and MCI, on March 10, 2003, the
International Bureau of the U.S. FCC issued an Order which directed all facilities-based
carriers subject to U.S. FCC jurisdiction to suspend payments for termination
services to Philippine carriers, including PLDT, Smart and Subic Telecom, until
such time as the U.S. FCC issues a Public Notice that AT&amp;T&#146;s and MCI&#146;s circuits
on the U.S.&#150;Philippine route are fully restored.  The Order also removed the Philippines
from the list of U.S.&#150;international routes approved for the provision of
International Simple Resale, or ISR.  In response to the International Bureau&#146;s
Order, the NTC issued a Memorandum Order dated March 12, 2003, directing all
affected Philippine carriers &#147;(1) not to accept terminating traffic via direct
circuits from U.S. facilities-based carriers who do not pay Philippine carriers
for services rendered; and (2) to take all measures necessary to collect
payments for services rendered in order to preserve the viability, efficiency,
sustained growth and development and continued competitiveness of the
Philippine telecommunications industry.&#148;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">On October 17, 2003, based on
negotiations between the NTC and the U.S. FCC to resolve the issue regarding
termination rates, the NTC, in the expectation that the U.S. FCC would fully
lift the March 10, 2003 Order, lifted its March 12, 2003 Order and directed all
Philippine carriers to immediately accept terminating traffic via direct
circuits from U.S. facilities-based carriers at mutually acceptable final or
interim termination rates and other terms and conditions agreed upon by the
parties.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On November 17, 2003, after Smart
reached interim agreements with each of AT&amp;T and MCI on September 30 and
November 12, 2003, respectively, the International Bureau of the U.S. FCC
lifted its March 10, 2003 Order with respect to Smart and ordered the U.S.
carriers to resume making payments to Smart.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On January 15, 2004, after PLDT
reached interim agreements with each of MCI and AT&amp;T and reopened its
circuits with these carriers on November 12, 2003 and January 9, 2004,
respectively, the International Bureau of the U.S. FCC lifted its March 10,
2003 Order also with respect to PLDT and ordered the U.S. carriers to resume
making payments to PLDT.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">On May 13, 2004, the U.S. FCC
partially dismissed and partially denied applications by Philippine carriers,
including PLDT, and certain U.S. carriers for review of the March 10, 2003
Order of the International Bureau of the U.S. FCC.  In particular, the U.S. FCC
affirmed the March 10, 2003 Order&#146;s finding that &#147;Philippine carriers engaged
in collective action to &#147;whipsaw&#148; AT&amp;T and MCI.&#148; The U.S. FCC stated,
however, that the findings of the March 10, 2003 Order were not findings under
the U.S. anti-trust laws and that the U.S. Department of Justice is
independently &#147;investigating the possibility of anticompetitive practices among
Philippine carriers under its authority pursuant to U.S. anti-trust laws.&#148;  The
U.S. FCC also upheld the March 10, 2003 Order in respect of the suspension of
payments for termination services to the Philippine carriers pending
restoration of the circuits.  In addition, the U.S. FCC denied a request to
modify the March 10, 2003 Order of the International Bureau of the U.S. FCC to
restore the Philippines to the list of U.S.-international routes approved for
the provision of ISR and to eliminate the current requirement that U.S. carriers
make payments in accordance with the U.S. FCC&#146;s International Settlements
Policy.  Moreover, in a recently announced order, the U.S. FCC has omitted the Philippines
from the list of countries exempted from the U.S. FCC&#146;s International
Settlements Policy.  These requests were dismissed because the U.S. FCC&#146;s
recently adopted International Settlements Policy Reform Order eliminated ISR
policies and identified the U.S.-Philippines route as eligible for the newly
established process of removing the International Settlements Policy.  This
process will begin with an opportunity for the public to file comments with the
U.S. FCC on June 28, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of December 31, 2003, the
remaining receivables from U.S. carriers amounted to approximately US$28
million, of which US$17 million was attributable to PLDT, US$6 million to Smart
and US$5 million to Subic Telecom.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:22.5pt;text-indent:-22.5pt;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">e.       Investigation
by U.S. Department of Justice </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In January 2004, PLDT, a PLDT
employee and an employee of Smart received grand jury subpoenas seeking documents
and testimony in connection with a criminal investigation being conducted by
the U.S. Department of Justice with respect to alleged antitrust violations
relating to the provision of international termination services in the Philippines.
The U.S. Department of Justice has also requested testimony and documents from
Smart in connection with this investigation.  Moreover, in March 2004, PLDT
(U.S.) Ltd., a subsidiary of PLDT Global, also received a grand jury subpoena
seeking documents in connection with this investigation. At this time, the PLDT
Group cannot predict the outcome of this investigation. </p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:22.5pt;text-indent:-22.5pt;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">f.     PLDT CBA
Negotiations Concluded with a MOA</p>

<p style='margin-left:22.5pt;text-indent:-22.5pt;punctuation-wrap:
hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">The negotiations on the Collective
Bargaining Agreement for the years 2003-2006 for PLDT&#146;s rank-and-file employees
were concluded with the signing of a Memorandum of Agreement between the
bargaining parties, the Manggagawa ng Komunikasyon sa Pilipinas Union, or MKP,
and the PLDT Management panel, on February 13, 2004.  On March 23, 2004, the MKP and the PLDT Management ratified the new three-year CBA. </p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:22.5pt;text-indent:-22.5pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0">g.     Smart&#146;s
Proposed Exchange Offer to Piltel Creditors</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">On March 23,
2004, Smart sent out invitations to the creditors of Piltel, subject to certain
terms and conditions, to offer to sell their indebtedness to Smart in exchange
for: (a) cash (in U.S. Dollars or Philippine Pesos); and/or (b) U.S.
dollar-denominated loan obligations of Smart; and/or (c) in consideration of
delivery of U.S. dollar-denominated bonds guaranteed by the Republic of the
Philippines.  This offer is only being extended to persons outside of the United
 States and no jurisdictional means of the United States are being used in
connection with the offer.  The options available to Piltel creditors are as
follows:</p>

<p style='margin-left:.25in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cash settlement up to an aggregate amount of US$20 million at a
maximum exchange price of US$0.40 for each US$1.00 equivalent of Piltel debt
exchanged;</p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$ Smart debt maturing in December 2007 at the rate of US$0.525
for each US$1.00 equivalent of Piltel debt exchanged, with interest at US$
LIBOR plus 1% per annum, payable quarterly;</p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$ Smart debt maturing in December 2008 at the rate of US$0.575
for each US$1.00 equivalent of Piltel debt exchanged, with interest at US$
LIBOR plus 1% per annum, payable quarterly;</p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$ Smart 10-year debt maturing in June 2014, at par by reference
to the US$1.00 equivalent of Piltel debt exchanged, with fixed interest at
2.25% per annum, payable quarterly; </p>

<p style='margin-left:.75in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For Yen Trade creditor, US$ Smart 10-year debt maturing in June
2014, at par by reference to the US$1.00 equivalent of Piltel debt exchanged,
with fixed interest at 2.25% per annum, payable quarterly and with an option to
elect, by not less than 15 months&#146; prior notice, for an early repayment at a
discount either on December 2007 at 52.5% of the relevant debt amount or on
December 2008 at 57.5% of the relevant debt amount; and</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12-year US$ Republic of the Philippines-guaranteed bonds, at par,
with a 2% coupon per annum, payable semi-annually (this option is not available
to Piltel bondholders).</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Piltel creditors were initially
given four weeks from the date the letters of invitation were issued to respond
to Smart&#146;s offer.  Smart stated in the invitations to the creditors of Piltel
that it will only proceed with the debt transaction if the following conditions
are met:</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At least 75% in aggregate of existing Piltel debt by value
offered by the creditors is exchanged for one or more of the menu of options;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Minimum acceptance thresholds for each facility are met, as
follows:</p>

<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.55in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
100% by principal amount of Yen Trade Facility;</p>

<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.55in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
67% by principal amount of the Peso and US$ Facility Agreements;</p>

<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.55in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
US$65 million face value of the bonds (Conversion Notes);</p>

<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.55in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
67% by principal amount of the US$ Trade Facilities; and</p>

<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:0in;
margin-left:1.55in;margin-bottom:.0001pt;text-indent:-.25in' style="margin-top:0;margin-bottom:0">-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
50.01% by principal amount of the Term Notes Facility Agreement. <br>
<br>
</p>

<p style='margin-left:1.0in;text-indent:-.25in' style="margin-top:0;margin-bottom:0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain waivers/amendments relating to Piltel&#146;s existing
indebtedness are obtained, including the termination of the PLDT Letter of
Support.</p>

<p style='margin-left:57.75pt' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">On April 24, 2004, Smart extended the deadline for Piltel creditors to make an offer to sell their Piltel debt for
10 days until April 30, 2004.  On May 3, 2004, Smart granted one further
extension of the deadline for Piltel creditors to make offers to sell their
Piltel debt until May 31, 2004.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">As of June 8, 2004, Smart had received offers from Piltel creditors representing approximately 69% in aggregate of
the outstanding restructured Piltel debt, to sell their Piltel debt to Smart.  </p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Some Piltel creditors who opted not
to participate in the transaction nonetheless have indicated that they will
consent to certain amendments to the agreements governing Piltel&#146;s restructured
indebtedness, thus permitting Smart to achieve its overall commercial
objectives in proceeding to close the transaction.  Given this development, the
Board of Directors of PLDT has authorized Smart to proceed with the transaction
despite not having met the abovementioned 75% aggregate acceptance level.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Based on the
offers received by Smart, the following is a breakdown of the options to be
allocated to the participating Piltel creditors and their percentages of the
total amount of Piltel&#146;s outstanding restructured debt: </p>

<p align=right style='text-align:right;text-indent:.5in;
page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div align='center'><center><table style='font-family:arial,helvetica,sans-serif;font-size:9pt'  border=0 cellspacing=0 cellpadding=0
 style='width:101.28%;;border-collapse:collapse'>
 <tr style='page-break-inside:avoid;height:13.0pt'>
 <td   valign=bottom style=' border:none;border-top:
 solid windowtext 1.5pt;padding:0in 0in 0in 0in;height:13.0pt'>
 <p style="margin-top:0;margin-bottom:0"><b>&nbsp;</b></p>
 </td>
 <td   colspan=2 valign=bottom style=' border-top:solid windowtext 1.5pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=center style='margin-right:4.55pt;text-align:center;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Allocation</b></p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-top:solid windowtext 1.5pt;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid;height:13.0pt'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:13.0pt'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Option</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Amount</b></p>
 </td>
 <td   valign=bottom style=' border-top:solid windowtext 1.0pt;
 border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
 padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>%</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Exchange</b></p>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>Ratio (%)</b></p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:13.0pt'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>New Debt/Cash Outlay of Smart</b></p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   colspan=4 valign=bottom style=' border:none;
 padding:0in 0in 0in 0in'>
 <p align=center style=';margin-right:
 13.45pt;text-align:center;page-break-after:avoid' style="margin-top:0;margin-bottom:0">(in millions, except percentage)</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=bottom style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2014
 Smart Debt<i>*</i></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US$271.5</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">65.4</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">100.0</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$271.5</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2007
 Smart Debt</p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>6.9</b></p>
 </td>
 <td   valign=bottom style=' background:#F3F3F3;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.7</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">52.5</p>
 </td>
 <td   valign=top style=' background:#F3F3F3;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">3.6</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">2008
 Smart Debt</p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>5.0</b></p>
 </td>
 <td   valign=bottom style=' background:#E0E0E0;
 padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.2</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">57.5</p>
 </td>
 <td   valign=top style=' background:#E0E0E0;padding:
 0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">2.9</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">Cash</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>3.8</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">0.9</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">40.0</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 solid windowtext 1.0pt;background:#F3F3F3;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">1.5</p>
 </td>
 </tr>
 <tr style='page-break-inside:avoid'>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p style='text-align:justify;page-break-after:avoid' style="margin-top:0;margin-bottom:0">Total</p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0"><b>US</b><b>$287.2</b></p>
 </td>
 <td   valign=bottom style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">  69.2</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>
 </td>
 <td   valign=top style=' border:none;border-bottom:
 double windowtext 2.25pt;background:#E0E0E0;padding:0in 0in 0in 0in'>
 <p align=right style='margin-right:13.45pt;text-align:right;
 page-break-after:avoid' style="margin-top:0;margin-bottom:0">US$279.5</p>
 </td>
 </tr>
</table></center></div>

<p style='margin-left:.25in;text-indent:-9.0pt' style="margin-top:0;margin-bottom:0"><i>*  Included in Other Creditors are creditors
representing 9.2% of Piltel&#146;s outstanding restructured debt equivalent to
US$38.1 million who had chosen the Republic of the Philippines-guaranteed bond
option and are going to be allocated their chosen alternative option.  After
intensive efforts to arrange an appropriate Republic of the
Philippines-guaranteed facility, Smart has determined that it would not be
possible to arrange this facility in time for the proposed closing of the
transaction.  Accordingly, Smart will be advising those creditors who chose the
Republic of the Philippines-guaranteed bond option of its decision to provide
them with their alternative selection, which in all cases, is the 2014 Smart
debt.  </i></p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">Based on the allocation above,
Smart will be issuing US$278 million of new debt and paying US$1.5 million of
cash upfront.  Smart currently plans to close this debt transaction in the
month of July 2004.  Closing is subject to, among other things, the trustees
and agents of the various Piltel debt facilities confirming their ability to
act in the manner contemplated by the invitation, including to enable
implementation of the relevant waivers and amendments.</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">In anticipation of the successful
closure of the debt exchange transaction and after having now received consents
from its creditors, Smart intends to commence the process of acquiring PLDT&#146;s
equity interests in Piltel consisting of 767 million common shares
(representing 45.3% of Piltel&#146;s outstanding common shares) and 59 million
shares of Series K, Class I Convertible Preferred Stock (convertible into
Piltel common stock at a ratio of 170:1).  The consideration for the share
transfer will be determined at a later date.  Smart expects to complete this
part of the transaction later in the second half of 2004 and expressed no
intention to enter into a statutory merger with Piltel or to use Piltel as a
backdoor listing vehicle.</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<div style='border:none;border-top:solid windowtext 1.0pt;padding:1.0pt 0in 0in 0in'>

<p style='line-height:50%;page-break-after:avoid;border:none;
padding:0in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

<p style='margin-left:27.0pt;text-indent:-27.0pt;page-break-after:
avoid;punctuation-wrap:hanging;text-autospace:ideograph-numeric ideograph-other' style="margin-top:0;margin-bottom:0"><b>29.&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>Changes in
Presentation of Comparative Consolidated Financial Statements</b></p>

<p style='page-break-after:avoid' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in;page-break-after:avoid' style="margin-top:0;margin-bottom:0">We have
reclassified certain accounts in 2002 and 2001 audited consolidated financial
statements to conform with our 2003 financial statements presentation.</p>

<p style='margin-left:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style='text-indent:.5in' style="margin-top:0;margin-bottom:0">&nbsp;</p>

<p style="margin-top:0;margin-bottom:0">&nbsp;</p>

</div>

</body>

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